Madhya Pradesh High Court
Uppal Engineering Co. Pvt. Ltd. Thru. ... vs Union Of India on 23 November, 2015
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HIGH COURT OF MADHYA PRADESH BENCH AT INDORE
(S.B.: HON. SHRI JUSTICE PRAKASH SHRIVASTAVA)
A.C. No. 6 of 2015
Uppal Engineering Company Pvt. Ltd. Applicant
Vs.
Union of India Respondent
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Shri Ritesh Khatri, learned counsel for applicant.
Shri H.Y. Mehta, learned counsel for respondent.
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Whether approved for reporting :
ORDER
(Passed on 23rd November 2015 ) 1/ This petition under Section 11(6) of Arbitration and Conciliation Act, 1961 has been filed by the applicant for appointment of independent arbitrator for resolving the dispute between the parties.
2/ In brief the case of applicant is that applicant was awarded the contract of earth work in bank/cutting for formation including side drain, trolley refuges, toe wall and left over work between Km 437.00 to Km 454.00 and protection work of minor bridges 520 to 535 in connection with Ratlam-Mhow (Phase-I) Gauge Conversion on Ratlam-Khandwa Section of Western Railway by the Deputy Chief Engineer (Construction) and contract agreement dated 6/6/13 was signed at Indore. According to the applicant, there was a delay in submission of complete set of drawing hence the work was delayed and bills of applicant were not properly paid. The contract was terminated vide notice dated 10/1/14 and the claim raised by 2 the applicant was not decided. The applicant therefore, had sent the letter dated 10/6/14 invoking clause 36.2 of the contract agreement, since as per said clause the Western Railway was the final authority to give decision upon the claim and dispute raised by the contractor but no reply to the letter dated 10/6/14 was given, therefore, vide letter dated 26/11/14 applicant had invoked the arbitration clause and had requested the respondent to appoint the arbitrator but no action was taken on the said request nor any reply was given, therefore, the applicant has approached this court.
3/ A reply has been filed by respondent taking the objection that application is barred by time. The claim being more than 20% of the value of the contract is not arbitrable and the applicant has not made the valid claim for referring the dispute to the arbitrator by following the procedure prescribed under Clause 64(1)(i) and claim falls within the excepted matter in terms of clause 63.
4/ I have heard the learned counsel for parties and perused the record.
5/ The contract agreement dated 6/6/13 is not in dispute. Clause 63 of general condition of contract provides for matters which are to be finally determined by the Railway. Clause 64 is the arbitration clause. Clauses 63 & 64 read as under:-
63. Matters finally determined by the Railway -
All disputes and differences of any kind whatsoever arising out of or in connection with the contract, whether during the progress of the work or after its completion and whether before or after the determination of the contract, shall be referred by the contractor to the GM and the GM shall within 120 days after receipt of the contractor's 3 representation make and notify decisions on all matters referred to by the contractor in writing provided that matters for which provision has been made in clauses 8, 18, 22(5), 39, 43(2), 45(a), 55, 55-A(5), 57, 57A, 61(1), 61(2) and 62(1) to (xiii) (B) of General Conditions of contract or in any clause of the special conditions of the contract shall be deemed as 'excepted matters' (matters not arbitrable) and decisions of the Railway authority, thereon shall be final and binding on the contractor; provided further that 'excepted matters' shall stand specifically excluded from the purview of the arbitration clause.
64(1) (i) - Demand for Arbitration - In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the "excepted matters"
referred to in Clause 63 of these conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration. 64 (1) (ii) - The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item wise. Only such dispute(s) or difference(s) in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference.4
64 (1) (ii) - (a) The Arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway."
6/ In terms of the aforesaid clause the dispute raised by the contractor is to be referred to the General Manager and the General Manager is required to make and notify the decision within 120 days of receipt of the dispute and in case if no decision is taken within a period of 120 days, then the contractor is required to demand in writing within 180 days of presenting his final claim for referring the dispute to the arbitrator. In the present case the applicant had raised the dispute and submitted the claim on 18.2.2014 and the 120 days calculated from this date comes to an end on 20.6.2014 and since no decision was taken by the competent authority within this period, therefore, the applicant was required to make a request in writing for referring the dispute to arbitration within further period of 60 days, i.e. within 180 days from 18.2.2014 and the said period also expired on some time in 20.8.2014 but the applicant had made a request for appointment of arbitrator vide communication dated 26.11.2014 which was beyond a period of 180 days from the date of submission of claim. Hence the applicant has not acted in terms of the procedure prescribed in the arbitration clause 63 & 64, therefore, under Section 11(6)
(a) of the Act the prayer for appointment of arbitrator by this Court cannot be allowed.
7/ The other issue is the claim of the applicant being more than 20% of the value of the contract but since counsel for the applicant has made a statement before this Court that the applicant will file his claim before the arbitrator to the extent of 20% of the value of the contract, therefore, this Court is not 5 required to go into that aspect of the case.
8/ But the matter does not end here. In the reply the respondents have stated that they have sent the panel of arbitrator to be appointed to resolve the dispute between the parties. In view of this clear stand of the respondents, the parties are permitted to resolve the dispute through the panel of arbitrator which is being appointed by the respondents for resolution of the dispute.
9/ The Arbitration Case is accordingly disposed off.
(Prakash Shrivastava) Judge BDJ