Orissa High Court
Banalata Sahoo vs State Of Orissa And Ors. on 19 January, 2001
Author: P.K. Misra
Bench: P.K. Misra
JUDGMENT P.K. Misra, J.
1. These two applications filed under section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the "Act"), have been filed by the very same petitioner for appointment of Arbitrator to decide the disputes arising in respect of two separate contracts. Since the main question to be decided in the two applications is the same, both the matters are being disposed of by this common judgment.
2. The main question which arises for determination is as to whether there is an arbitration clause in the two contracts. The essential terms of both the contracts are same. The petitioner relies upon Clause-11 of the F2 Agreement and contends that such Clause contains provision relating to arbitration. Clause-11 of the Conditions of Contract is extracted hereunder :--
"Clause-11. The Engineer-in-Charge shall have the power to make any alterations in or additions to the original specification, drawings, designs and instructions that may appears to him necessary and advisable during the progress of work, and the contractor shall be bound to catty out the work in accordance with any instructions which may be given to him in writing signed by the Engineer-in-Charge and such alteration shall not invalidate the contract, and any additional work which the the contractor may be directed to do in the manner above specified as part of the work shall be carried out by the contractor on the same conditions in all respects on which he agreed to do the main work, and at the same rates as are specified in the tender for main work. The time for the completion of the work shall be extended in the proportion that the additional work bears to the original contract work and the certificate of the Engineer-in-Charge shall be conclusive as to such proportion. And if the additional work includes any class of work, for which no rate is specified in this contract, then such class of work shall be carried out at the rates entered in the sanctioned schedule of rates of the locality during the period when the work is being carried on and if such last mentioned class of work is not entered on the schedule of rates of the district then the contractor shall within seven days of the date of his receipt of the order to carry out the work inform the Engineer-in-Cbarge of the rate which it is his intention to charge for such class of work, and if the Engtneer-in-Charge does not agree to this rate he shall by notice in writing be at liberty to cancel his order to carry out such class of work and arrange to carry it out in such manner as he may consider advisable.
No deviations from the specification stipulated in the contract nor additional items of work shall ordinarily be carried out by the contractor, nor shall any altered, additional or substituted work be carried out by him, unless the rates of the substituted, altered or additional items have been approved and fixed in writing by the Engineer-in-Charge. The contractor shall be bound to submit his claim for any additional work done during any month on or before the 15th day of the following month accompanied by a copy of the order in writing of the Engineer-in-Cbarge for the additional work arid that the contractor shall not be entitled to any payment in respect of such additional work if he fails to submit his claim within the aforesaid period.
Provided always that if the contractor shall commence work or incur any expenditure in respect thereof before the rates shall have been determined as lastly hereinbefore mentioned, in such case he shall only be entitled to be paid in respect of the work carried out or expenditure incurred by him prior to the date of the determination of the rates as aforesaid according to such rate or rates as shall be fixed by the Engineer-in-Charge. In the event of a dispute, the decision of the Superintending Engineer of the Circle will be final."
3. The learned counsel appearing for the State, on the other hand, contends that the aforementioned Clause in F2 Form which is a standardized form is applicable to all the contracts between the State and the Contractor in the State of Orissa. Previously, such F2 contract had contained an arbitration clause in Clause-23. However, it is not disputed that such Clause-23 has been deleted under the specific order of th e State Government dated 24th. December, 1981. In the contract between the parties also Clause-23 had been deleted and as such, it cannot be said that there is an arbitration clause.
4. It is true that an arbitration clause need not be expressed in a particular manner. The contents of the entire contract are to be read in order to come to a conclusion as to whether ah arbitration clause is contained in the contract, or not. Judicial notice can be taken of the fact that in Orissa all contracts are executed in a standardized form known as "F2" contract wherein initially an arbitration clause was incorporated in the shape of Clause-23. Subsequently, as evident from Annex-ute-B, it was decided by the Government to delete such arbitration clause from all such contracts and it must be taken that all contracts executed after such decision of the Government did not contain a formal arbitration clause, as indicated in original Clause-23 of the standard F2 form of agreement. Thus, it appears that the contract between the petitioner and opposite party did not contain an arbitration clause.
5. Learned counsel appearing for the petitioner, however, contended that Clause-11 of the contract must be interpreted to be an arbitration clause. Learned counsel for the petitioner .has relied upon the decisions reported in A. I. R. 1981 Orissa 104 (M/s. Praharaj Partners v. State of Orissa and another); 1991(2) O. L. R. 218 (The Managing Director, Orissa State Cashewnut Development Co. Ltd. v. Ramesh Chandra Swain and others); A.I.R. 1981 Supreme Court, 479 (Smt. Rukmanibai Gupta v. The Collector, Jabalpur and others) and A. I. R. 1990 Calcutta 83 (State of West Bengal and others v. Haripada Santra) and contended that similar clauses had been interpreted to include an "arbitration clause".
6. As already indicated, all the terms of the contract are to be perused together for the purpose of finding out as to whether arbitration clause is incorporated or not. In the present case, as already indicated, the arbitration clause which was there in all the standardized F2 agreements had been specifically deleted. It is thus apparent that the clear intention was not to include any arbitration clause in the agreement. The decisions relied upon by the counsel for the petitioner were rendered in a different context and the clauses interpreted in those decisions were in a different setting.
7. The learned counsel further contended that the Chief Justice of the High Court, or the authority/person designated by the Chief Justice acts in an administrative manner while dealing with requests for appointment of Arbitrator under section 11 of the Act and should not decide the question as to whether there is arbitration clause or not and such a question should be left to the Arbitrator. Similar question raised before the designated authority in the Supreme Court has been answered in the negative and it has been observed that if the authority on the face of the agreement comes to a conclusion that there is no arbitration clause, he need not appoint an arbitrator and any such direction appointing an arbitrator in the absence of any arbitration clause would be merely an exercise in futility (See, 2000 A. I. R. S.C.W. 1165 (Wellington Associates Ltd. v. Kirit Mehta) ).
8. For the aforesaid reasons, I am of the view that no arbitration clause has been incorporated in the agreement and as such, the application for appointment of arbitrator is misconceived. In such view of the matter, it is not necessary to consider the other objection raised by the counsel for the State relating to the claim application being barred by limitation. Since it is held that there is no arbitration clause, it is needless to point out that it is open to the petitioner to pursue her remedy if available under law. Both the applications are accordingly dismissed.
9. Applications dismissed.