Patna High Court
Kamladitya Construction Pvt. Ltd vs The State Of Bihar And Ors on 13 May, 2019
Equivalent citations: AIR 2019 PATNA 145, AIRONLINE 2019 PAT 602
Author: Mohit Kumar Shah
Bench: Mohit Kumar Shah
IN THE HIGH COURT OF JUDICATURE AT PATNA
CIVIL REVIEW No.20 of 2019
In
Civil Writ Jurisdiction Case No.19802 of 2018
======================================================
Kamladitya Construction Pvt. Ltd. resident of Plot No- 201, Cooperative
Colonyt, Bokaro Steel City, Bokaro Jharkhand and local address at Shivpuri,
Road No.-23, Patna, Bihar.
... ... Petitioner/s
Versus
1. The State of Bihar through Principal Secretary, Water Resources
Department, Govt. of Bihar, Patna
2. The Engineer-in-Chief Central, Water Resources Department, Govt. of
Bihar, Patna
3. The Chief Engineer Water Resources Department, Siwan, Bihar
4. The Executive Engineer Saran Canal Division, Siwan, Bihar
5 The Executive Engineer, Saran Canal Division, Bhore, District Gopalganj,
Bihar.
6 Sri Arun Kumar Singh, Father's name not known to the petitioner, at present
Principal Secretary, Water Resources Department, Government of Bihar,
Patna.
7 Sri Arun Kumar, Father's name not known to the petitioner, At present
posted as Engineer in Chief (Head Quarters) cum Registering Authority,
Water Resources Department, Government of Bihar, Patna.
... ... Opposite Party/s
======================================================
Appearance :
For the Petitioner/s : Mr. Y. V. Giri, Sr. Adv.
Mr.Ashish Giri, Adv.
Mr. Rajat Kumar Tiwary, Adv.
Mr. Sumit Kumar Jha, Adv.
For the Opposite Party/s : Mr.Anjani Kumar (AAG 4)
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
C.A.V. JUDGMENT
Date : 13-05-2019
The present review petition has been filed seeking
review of the order dated 04.10.2018 passed in CWJC No.
19802 of 2018 whereby and whereunder the writ petition was
disposed of with a direction to the petitioner to move before the
Bihar Public Works Contract Disputes Tribunal (hereinafter
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referred to as the "Tribunal") within one month for resolution of
the disputes, which has arisen between the parties, arising out of
the agreement in question.
2. It appears that thereafter, the petitioner had moved
the Tribunal by filing a petition bearing Reference Case No. 313
of 2018 on 01.11.2018, however, the learned Tribunal, during
the course of hearing of the said reference case, observed that
the said reference case is not maintainable in view of the
decision rendered by the Hon'ble Apex Court dated 22.03.2018
passed in Civil Appeal No. 3344 of 2018 (State of Bihar &
Ors. vs. M/S Brahmaputra Infrastructure Ltd.), paragraphs
no.2 to 6 whereof are reproduced herein below:-
"(2) The State is aggrieved by the
appointment of arbitrator under Section 11(6)
of the Arbitration and Conciliation Act, 1996
(the Central Act) on the ground that the said
Act is excluded by the Bihar Public Works
Contracts Arbitration Tribunal Act, 2008 (Bihar
Act 21 of 2008) (the State Act).
(3) To appreciate the plea raised, it is
necessary to refer to the scheme of the State
Act as reflected in some of the key provisions.
Sections 8, 9 and 22 of the State Act are as
follows:
"8. Act to be in addition to Arbitration &
Conciliation Act, 1996. - Notwithstanding
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anything contained in this Act, and of the
provisions Shall be in addition to and
supplemental to Arbitration & Conciliation Act,
1996 and in case any of the provision contained
herein is construed to be in conflict with
Arbitration Act, then the latter Act shall prevail
to the extent of conflict.
9. Reference to Tribunal and making of
award. -
(1) Where any dispute arises between the
parties to the contract, either party shall,
irrespective of whether such contract contains
an arbitration clause or not refer, within one
year from the date on which the dispute has
arisen, such dispute in writing to the Tribunal
for arbitration in such form and accompanied
by such documents or other evidence and by
such fees, as may be prescribed.
(2) On receipt of a reference under sub-
section (10) the Tribunal may deem fit to make,
that the requirements under this Act in relation
to the reference are complied with, admit such
reference and where the Tribunal is not so
satisfied, it may reject the reference summarily.
(3) Where the Tribunal admits the reference
under sub-section (2), it shall, after recording
evidence if necessary, and after perusal of the
material on record and on affording an
opportunity to the parties to submit their
argument, make an award or an interim award,
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giving its reasons therefor.
(4) The Tribunal shall use all reasonable
dispatch in entering on and proceeding with the
reference admitted by it and making the award,
and an endeavour shall be made to make an
award within four months from the date on
which the Tribunal had admitted the reference.
(5) The award including the interim award
made by the Tribunal shall, subject to an order,
if any made under Section- 12 or 13, be final
and binding on the parties to the dispute.
(6) An award including an interim award as
confirmed or varied by an order, if any, made
under section- 12 or 13 shall be deemed to be a
decree within the meaning of section-2 of the
Code of Civil Procedure, 1908 of the Principal
Court of original jurisdiction within the local
limits whereof the award or the interim award
has been made and shall be executed
accordingly.
(22). Overriding effect of this Act.-
Notwithstanding any thing contained in any
other Law, Rule, Order, Scheme, or Contract
Agreement entered into before or after
commencement of this Act, any dispute as
defined in Section 2(e) of this Act shall be
regulated under the provisions of this Act,
Rules and Regulations framed thereunder, and
absence of arbitration clause in any contract
agreement shall not have effect excluding any
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dispute from the purview of this Act."
(4) It is not in dispute that the parties have
executed agreement dated 22nd June, 2012,
providing for appointment of an arbitrator as
per provisions of the Central Act. Relevant
portion of Clause 25 of the said Agreement is
as follows:-
" The arbitration shall be conducted
in accordance with provisions of the
Arbitration and Conciliation Act,
1996 (26 of 1996) or any statutory
modification or re-enactment thereof
and the rules made there under and
for the time being in force shall
apply to the arbitration proceeding
under the clause."
(5) The scheme of Sections 8, 9 and 22 of
the State shows that in the absence of an
agreement stipulating the applicability of the
Central Act, the State Act applies to works
contracts. Since in the present cases, an
arbitration agreement exists and stipulates
applicability of the Central Act, the State Act
will not apply. We, thus, do not find any ground
to interfere with the impugned order.
(6) The appeals are dismissed. It will,
however, be open to the appellant- State to
move the High Court for change of Arbitrator,
if a case to this effect is made out on an
objection of neutrality, as submitted by learned
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counsel for the State."
3. It is in view of the aforesaid judgment rendered by
the Hon'ble Apex Court in the case of M/S Brahmaputra
Infrastructure Ltd. (supra), that the arbitral Tribunal has
refused to adjudicate the reference case filed by the petitioner
herein, hence, left with no other efficacious remedy, the
petitioner has approached this Court for review of the earlier
order dated 04.10.2018 passed by this Court and for appointing
an independent Arbitrator for adjudicating the disputes between
the parties, arising out of the agreement in question.
Nonetheless, the learned Senior Counsel Sri Y.V. Giri , appearing
for the petitioner has simultaneously canvassed before this
Court that the State Arbitral Tribunal is fully competent to
adjudicates the dispute arising in between the petitioner and the
State Government, emanating from the agreement in question
entered into between them. In this regard, the learned counsel
for the petitioner has relied upon two judgments rendered by the
Hon'ble Apex Court, which are being discussed herein below.
4. The first judgment is the one rendered by the
Hon'ble Apex Court in the case of Madhya Pradesh Rural
Road Development Authority & Anr. vs. L.G. Chaudhary
Engineers and Contractor, reported in (2012) 3 SCC 495. In
the said judgment there has been some divergence of views,
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hence both the views are being reproduced herein below,
paragraphs no. 25 to 28, 37, 38, 39, 41 and 42 being the view
expressed by Hon'ble A.K. Ganguly, J. and paragraphs no. 53,
54, 55 and 58 being the view expressed by Hon'ble Mrs. Gyan
Sudha Mishra, J.:-
"25. In para 28 of the judgment, this Court while
referring to the provisions of the M.P. Act held:
(Anshuman Shukla case5, SCC pp. 497-98)
"28. The provisions of the Act referred to
hereinbefore clearly postulate that the State of
Madhya Pradesh has created a separate forum
for the purpose of determination of disputes
arising inter alia out of the works contract. The
Tribunal is not one which can be said to be a
domestic tribunal. The Members of the Tribunal
are not nominated by the parties. The disputants
do not have any control over their appointment.
The Tribunal may reject a reference at the
threshold. It has the power to summon records.
It has the power to record evidence. Its functions
are not limited to one Bench. The Chairman of
the Tribunal can refer the disputes to another
Bench. Its decision is final. It can award costs. It
can award interests. The finality of the decision
is fortified by a legal fiction created by making
an award a decree of a civil court. It is
executable as a decree of a civil court. The
award of the Arbitral Tribunal is not subject to
the provisions of the Arbitration Act, 1940 and
the Arbitration and Conciliation Act, 1996. The
provisions of the said Acts have no application."
26. It is clear, therefore, that in view of the
aforesaid finding of a coordinate Bench of this
Court on the distinct features of an Arbitral
Tribunal under the said M.P. Act in Anshuman
Shukla case5 the provisions of the M.P. Act
are saved under Section 2(4) of the AC Act,
1996. This Court while rendering the decision
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in Va Tech1 has not either noticed the previous
decision of the coordinate Bench of this Court
in Anshuman Shukla5 or the provisions of
Section 2(4) of the AC Act, 1996. Therefore,
we are constrained to hold that the decision of
this Court in Va Tech1 was rendered per
incuriam.
27. This was the only point argued before
us by the learned counsel for the appellant.
28. The principle of per incuriam has been
very succinctly formulated by the Court of
Appeal in Young v. Bristol Aeroplane Co.
Ltd.6 Lord Greene, Master of Rolls
formulated the principles on the basis of
which a decision can be said to have been
rendered "per incuriam". The principles are:
(KB p. 729)
"... Where the court has construed a
statute or a rule having the force of a
statute its decision stands on the same
footing as any other decision on a
question of law, but where the court is
satisfied that an earlier decision was
given in ignorance of the terms of a
statute or a rule having the force of a
statute the position is very different. It
cannot, in our opinion, be right to say
that in such a case the court is entitled
to disregard the statutory provision and
is bound to follow a decision of its own
given when that provision was not
present to its mind. Cases of this
description are examples of decisions
given per incuriam."
37. The said argument cannot be accepted. The
provision for repeal under Section 85 of the AC
Act, 1996 does not show that there is any express
repeal of the M.P. Act. Apart from that, the
provision of Section 2(4) of the AC Act clearly
militates against the aforesaid submissions.
38. The argument of repugnancy is also not
tenable. Entry 13 of the Concurrent List in the
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Seventh Schedule of the Constitution runs as
follows:
"13. Civil procedure, including all
matters included in the Code of Civil
Procedure at the commencement of this
Constitution, limitation and arbitration."
In view of the aforesaid entry, the State
Government is competent to enact laws in
relation to arbitration.
39. The M.P. Act of 1983 was made when
the previous Arbitration Act of 1940 was in
the field. That Act of 1940 was a Central law.
Both the Acts operated in view of Section 46
of the 1940 Act. The M.P. Act, 1983 was
reserved for the assent of the President and
admittedly received the same on 17-10-1983
which was published in the Madhya Pradesh
Gazette Extraordinary dated 12-10-1983.
Therefore, the requirement of Article 254(2)
of the Constitution was satisfied. Thus, the
M.P. Act of 1983 prevails in the State of
Madhya Pradesh. Thereafter, the AC Act,
1996 was enacted by Parliament repealing
the earlier laws of arbitration of 1940. It has
also been noted that the AC Act, 1996 saves
the provisions of the M.P. Act, 1983 under
Sections 2(4) and 2(5) thereof. Therefore,
there cannot be any repugnancy.
41. It is clear from the aforesaid observations
that in the instant case the latter Act made by
Parliament i.e. the AC Act, 1996 clearly
showed an intention to the effect that the State
law of arbitration i.e. the M.P. Act should
operate in the State of Madhya Pradesh in
respect of certain specified types of arbitrations
which are under the M.P. Act, 1983. This is
clear from Sections 2(4) and 2(5) of the AC
Act, 1996. Therefore, there is no substance in
the argument of repugnancy and is accordingly
rejected.
42. Therefore, the appeal is allowed and the
judgment of the High Court which is based
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on the reasoning of Va Tech2 is set aside.
This Court holds that the decision in Va
Tech1 has been rendered per incuriam. In
that view of the matter the arbitration
proceeding may proceed under the M.P. Act
of 1983 and not under the AC Act, 1996.
53. In order to clarify the point further, what
needs to be emphasised is that if the nature
of dispute referred to the arbitrator like the
instant matter, related to a dispute pertaining
to construction, repair, maintenance of any
building or superstructure, dam or for the
reasons stated within the definition of
"works contract", the matter may be referred
to the M.P. Tribunal in view of the fact that if
there is a dispute in relation to execution of a
works contract, then irrespective of the fact
whether the agreement contains an
arbitration clause or not, the dispute is
required to be referred to the M.P. State
Arbitration Tribunal for adjudication. But
when the contract itself has been terminated,
cancelled or repudiated as it has happened in
the instant case, then the nature of dispute
does not fall within the definition of "works
contract" for the sole reason that it does not
include any dispute pertaining to cancellation
of a works contract implying that when the
works contract itself is not in existence by
virtue of its cancellation, the dispute cannot
be referred to the M.P. State Arbitration
Tribunal but may have to be decided by an
arbitrator appointed under the Arbitration
and Conciliation Act, 1996.
54. Hence, if the nature of the dispute is
such which falls within the definition of
"works contract" under Section 2(i) of the
M.P. Act, 1983 and one of the contracting
parties to the agreement is the State of M.P.,
then irrespective of an arbitration agreement
the dispute will have to be referred to the
Tribunal in terms of Section 7 of the Act of
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1983. But if the works contract itself has
been repudiated and hence not in existence at
all by virtue of its cancellation/termination,
then in my considered view, the dispute will
have to be referred to an independent
arbitrator to be appointed under the
Arbitration and Conciliation Act, 1996 since
the M.P. Act, 1983 envisages reference of a
dispute to the State Tribunal only in respect
of certain specified types of arbitration
enumerated under Section 2(i) of the M.P.
Act, 1983.
55. As a consequence and fallout of the
aforesaid discussion, the impugned order of
the High Court by which the dispute relating
to termination of works contract by the M.P.
Rural Road Development Authority itself was
referred to an independent arbitrator appointed
by the High Court under the Arbitration and
Conciliation Act, 1996 needs to be sustained
and there is no need for a de novo reference of
the dispute to the M.P. State Arbitration
Tribunal. In the alternative, the consequence
would have been otherwise and the matter
could have been referred to the State
Arbitration Tribunal if the dispute between the
parties related to any dispute emerging out of
execution of works contract which could fall
within the definition of "works contract" given
out within the definition of "works contract"
under Section 2(i) of the M.P. Act of 1983.
58. Thus, while holding that the M.P. Act,
1983 should operate in the State of M.P. in
respect of certain specified types of
arbitration, the appointment of an
independent arbitrator by the High Court
under the Arbitration and Conciliation Act,
1996 needs to be sustained since the works
contract itself is not in existence by virtue of
its cancellation and hence this part of the
dispute could not have been referred to the
M.P. State Tribunal."
5. By referring to the aforesaid judgment rendered in
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the case of L.G. Chaudhary Engineers and Contractors
(supra), the learned Senior Counsel has submitted that more or
less similar provisions, as contained in Bihar Public Works
Contracts Arbitration Tribunal Act, 2008 (hereinafter referred to
as the "Bihar Act, 2008" also exist in the M.P. Madhyastham
Adhikaran Adhiniyam, 1983 and the Hon'ble Supreme Court,
by virtue of the aforesaid judgment rendered in the case of L.G.
Chaudhary Engineers and Contractor (supra) has held that
the State Government is competent to enact laws in relation to
arbitration and the disputes can very well be referred to the State
Arbitration Tribunal, if the disputes between the parties relate to
any dispute emerging out of execution of works contract which
could fall within the definition of "works contract", as defined
in the M.P. Madhyastham Adhikaran Adhiniyam, 1983 and the
said Adhiniyam, 1983 would not be hit by the principles of
repugnancy despite the existence of Arbitration and Conciliation
Act, 1996.
6. On account of two separate judgments being
rendered by the two Members of the Division Bench and there
being some divergence of view in the aforesaid judgments
rendered in the case of L.G. Chaudhary Engineers and
Contractors (supra), the matter was directed to be placed
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before the Hon'ble Chief Justice of India for constituting a
larger Bench to resolve the divergence whereupon the matter
was placed before the larger Bench to resolve the divergence,
which had then delivered its own judgments, reported in (2018)
2 SCC 826 at 833.
7. The larger Bench by a judgment dated 8.3.2018
reported in (2018) 10 SCC 826 at 833 has held that the view
expressed by Hon'ble A.K. Gaguly, J. in the aforesaid judgment
rendered in the case of L.G. Chaudhary Engineers and
Contractors (supra) is the correct interpretation and not the
contra view of the other Hon'ble Judge of the said Bench. It has
also been held that M.P. Madhyastham Adhikaran Adhiniyam,
1983 i.e. the State Act will prevail in terms of Section 2(4) of
the Arbitration and Conciliation Act, 1996 and reference to the
M.P. Arbitration Tribunal under the said law is valid. It would be
apt to reproduce paragraphs no. 5,8, 10, 12, 14 and 37 of the
said judgment rendered by the larger Bench herein below:-
"5. We find from the definition under Section
2(d) of the Arbitration and Conciliation Act,
1996 that even after a contract is terminated, the
subject matter of dispute is covered by the said
definition. The said provision has not been
even referred to in the judgment rendered
by Hon'ble Gran Sudha Mishra, J.
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8. We are, thus, in agreement with the
proposed opinion of Hon'ble Ganguly, J. in
para 42 of the reported judgment which reads
as follows: (M.P. Rural Road Development
case, SCC p. 509, para 42.).
"42. Therefore, appeal is allowed and the
judgment of the High Court which is based on
the reasoning of VA Tech Escher Wyass Flovel
Ltd. vs. M.P. SEB is set aside. This Court
holds the decision in VA Tech Escher Wayss
Flovel Ltd. v. M.P. SEB has been rendered in
per incuriam. In that view of the matter the
arbitration proceeding may proceed under the
M.P. Act of 1983 and not under the Arbitration
and Conciliation Act, 1996".
10. Proceedings under the M.P.
Madhyastham Adhikaran Adhiniyam, 1983
( the State Act) were pending before the M.P.
Arbitration Tribunal at Bhopal. The
respondent raised an objection that in view of
VA Tech Escher Wyass Flovel Ltd. v. M.P.
SEB, the Arbitration and Conciliation Act,
1996 will apply and the State Act will not
apply. This objection was rejected. The
respondent preferred a writ petition. The High
Court has upheld the objection and quashed
the proceedings under the State Act.
11. The learned counsel for the State has
drawn our attention to Section 2(4) of the
Central Act, which ios as follows:-
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"2(4) This Part except sub-section (1) of
Section 40, Sections 41 and 43 shall apply to
every arbitration under any other enactment
for the time being in force, as if the arbitration
were pursuant to an arbitration agreement and
as if that other enactment were an arbitration
agreement, except insofar as the provisions of
this Part are inconsistent with that other
enactment or with any rules made thereunder."
12. It was pointed out that the above
provision was in pari materia with Section 46
of the Arbitration Act, 1940 which was
interpreted by this Court in Dhanrajamal
Gobindram v. Shamji Kalidas & Co. This
Court held: (FIR p 1293, para 24).
"24.... Section 46 makes the provisions of
any other enactment or any rules made
thereunder to prevail over the Arbitration Act,
if inconsistent with the latter. In viw of these
several provisions, it is clear that the
Arbitration Act applies to all Arbitrations and
Chaper II makes it applicable also to
arbitrations, in which the arbitration
agreement is asked to be filed in Court under
Section 20 subject, however, to this that the
provisions of any other enactment or rules
made thereunder, if inconsistent with the
Arbitration Act, are to prevail.
14. In view of the above, we are of the view
that the State law will prevail in terms of
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Section 2(4) of the Central Act. The reference
under the State law was valid and could be
decided in accordance with the State.
Accordingly, we set aside the impugned order
and restore the proceedings before the
Tribunal. The appeal is accordingly, allowed
in above terms.
37. In the circumstances, pending arbitration
proceedings shall stand transferred to the M.P.
Arbitration Tribunal under the M.P. Act, to be
dealt with as per provisions of the M.P. Act in
accordance with law. The proceedings may be
carried out in continuation of earlier
proceedings. The parties may take steps by
moving the High Court or any other forum for
transfer of records to the transferee courts in
the light of this order. The appeal is
accordingly disposed of. The parties may
appear before the High Court/ Tribunal for
further proceedings on 0.7.2018."
8. Having regard to the aforesaid judgment rendered
by a three Judges Bench of the Hon'ble Supreme Court dated
8.3.2018, as reported in 2018(10) SCC 826 at 833, it is contended that the judgment rendered by the Hon'ble Apex Court in the case of M/S Brahmaputra Infrastructure Ltd.
(supra) dated 22.3.2018 is per incuriam. It is further pointed out by the learned Senior counsel for the petitioner that the three Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 17/27 Judges Bench rendering the aforesaid judgment dated 8.3.2018, though comprise of the same Hon'ble Judges, but surprisingly two contradictory judgments have been passed. Reference has been made by the learned Senior counsel for the petitioner to a judgment reported in 2013(3) PLJR (SC) 225 (Rattiram & Ors. v. State of M.P. & Ors.), (2014) 16 SCC 623 ( Sundeep Kumar Bafna vs. State of Maharashtra & Anr.) and the one reported in (2004) 1 SCC681 (Babu Parasu Kaikadi (dead) by LRS Vs. Babu (dead) through L.).
9. I have heard the learned counsel for the parties and I find that earlier also this Court had an occasion to deal with the issue under consideration and had set at rest the issue of maintainability of a request case by a judgment dated 17.10.2014 passed in Request Case No. 1 of 2014 (M/S Nilkamal Ltd. vs. The State of Bihar & Ors.), paragraphs No. 25, 26, 27, 31, 39, 40 and 42 whereof are reproduced herein below:-
"25. The second issue has been raised by learned counsel for the State that the present writ petition is not maintainable in view of the State Act petitioner should approach the Tribunal which has been created under the State Act. He has further submitted that there is non-obstante clause in section 22 of the State Act, the only re-course left to the petitioner, to approach the Tribunal and office has rightly raised the objection about the maintainability of the case. The counter for the Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 18/27 petitioner disputed the objection of the office.
26. Part XI of the Constitution of India deals with distribution of legislative power of Union and State. In terms of constitutional scheme Parliament would make legislation with respect to the subjects mentioned in List I of seventh schedule. State legislature has jurisdiction to legislate with respect to the matter of List II of seventh schedule and List III of seventh schedule is the concurrent list where Parliament as well as the State has equal jurisdiction to frame the law with regard to subjects mentioned therein. Article 245 provides that the Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. Article 246 provides that notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in Seventh Schedule, Article 246(2) of the Constitution provides that notwithstanding anything in clause (3), Parliament and, subject to clause(1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule and clause (3) of Article 246 provides that subject to clauses (1) and (2), the Legislature of any state has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh schedule. Article 254 of the Constitution deals with inconsistency between the laws made by the Parliament and law made by legislature of State provides that if any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament, which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 19/27 the Legislature of the State shall, to the extent of the repugnancy, be void. But the law made by the Legislature of State if it has been reserved for consideration for President and has received his assent, would prevail in that State even if it is repugnant to the law made by Parliament.
27. In the present case the Arbitration and Conciliation Act, 1996 has been legislated by the Parliament whereas Bihar Public Works Contract Disputes Arbitration Tribunal Act, 2008 has been legislated by the State legislature. The Arbitration Act has been enacted following the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985 and the same was placed before the General Assembly of the United Nations recommended that all countries gave due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice.
On the recommendation of Law Commission of India and of several bodies, to deal with domestic as well as International Commercial Dispute, the Parliament enacted Arbitration Act, 1996 adopting UNCITRAL Model. This Arbitration Act is complete code which provides in a case of commercial dispute in what manner the arbitrator will be appointed for resolution of Commercial Dispute. This Central Act provides in case of agreement comprises clause for arbitration, in the event of dispute the parties to the dispute would place the demand for appointment of arbitrator, in failure, the aggrieved party would approach the High Court or the Hon‟ble Supreme Court in terms of the power conferred under Section 11 of Act, 1996, accordingly independent arbitrator would be appointed by the Court for resolution of commercial dispute. But the State Legislature in its wisdom, for resolution of commercial dispute relating to works contract enacted the State Act where it has been provided that for the works Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 20/27 contract in a case of dispute the Tribunal constituted by the State Legislature will have a jurisdiction to resolve the inter party dispute.
28. For proper consideration it will be relevant to consider certain provisions of the State Act such as Sections 2(e), 2(k). 8, 9, 10, 11, 12, 13, 14 and 22. Section 2(e) of the definition section defines that dispute means any difference relating to any claim arising out of the execution or non-execution of the whole or part of a contract for works or services or both including the rescinding thereof. Section 2(k) as explained very elaborately, not required to be dealt with again. Section 8 of the State Act is very important for this case which is as follows:
"8. Act to be in addition to Arbitration & Conciliation Act, 1996.- Notwithstanding anything contained in this Act, any of the provisions shall be in addition to and supplemental to Arbitration and Conciliation Act, 1996 and in case any of the provision contained herein is construed to be in conflict with Arbitration Act, then the latter Act shall prevail to the extent of conflict."
29. The section starts with the word, notwithstanding anything in the State Act any of the provisions shall be in addition to and supplemental to Arbitration and Conciliation Act, 1996 and in case of any provision is in conflict with the Arbitration Act, 1996 to the extent of conflict Arbitration Act, 1996 the Central Act, would prevail. This Section itself denotes that State Act is supplemental not supplanting the Arbitration and Conciliation Act, 1996 and to the extent of repugnancy, Central Act will prevail over State Act. So in this situation, certainly, either in terms of the constitution, formulation and mechanism of the State Act can not prevail upon Central Act and to the extent of repugnancy the Central Act will prevail over the State Act. Legislature Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 21/27 with its full knowledge has enacted Section 8 where specifically mentioned that the State Act is supplemental and in case of repugnancy Central Act will prevail and as such the argument of the State that in view of Section 22 of the State Act to the extent of nature of work falls under the category of works contract excluded is very hard to be accepted.
30. Sections 9, 10, 11, 12 and 13 of the State Act provide, the establishment of the Tribunal, its practice and procedure. Section 11 of the Act deals with the power of Tribunal. Section 12 provides that Tribunal has power to review its award and revision lies to the High Court. Another important section is Section 22 of the State Act which is as follows:
"22. Overriding effect of this Act.- Notwithstanding any thing contained in any other Law, Rule, Order, Scheme, or Contract Agreement entered into before or after commencement of this Act, any dispute as defined in Section 2(e) of this Act shall be regulated under the provisions of this Act, Rules and Regulations framed thereunder, and absence of arbitration clause in any contract agreement shall not have effect of excluding any dispute from the purview of this Act."
31. Section 22 of the State Act starts with non-obstante clause and on that strength counsel for the State has submitted that to the extent of agreement related to the works contract only the State Tribunal has a jurisdiction to resolve the dispute. If it will so read as has suggested by the State then provisions of section 8 of the State Act will be nugatory and in that circumstances Sections 8 and 22 of the State Act will incoherent to each other and for giving harmonious construction of the Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 22/27 whole statute it has to be read in such a manner that provisions of Sections 8 and 22 of the State Act must operate cumulatively to achieve the object for which the statute has been framed. This Court is of the view that if the agreement is silent or if there is specific stipulation about the resolution of dispute through the State Tribunal in that circumstances the parties will have a forum of Tribunal under the Act for resolution of the dispute.
39. In view of the judgments aforesaid it is apparently clear from the State Act and Central Act both are supplemental to each other and State Act is no derogation to the Central Act. In this situation it is very difficult to arrive to the conclusion of excluding the jurisdiction of this Court in entertaining the application for appointment of arbitrator when the agreement provides that the dispute will be resolved through Arbitration Act, 1996.
40. In support of his contention learned counsel for the respondent has relied on the judgment of the Hon‟ble Supreme Court in the case of Madhya Pradesh Rural Road Development Authority (supra) where similar Arbitration Act has been enacted by the State of Madhya Pradesh. The question arose about the applicability of the State Act vis-à-vis Central Act. The two Judges Bench of Hon‟ble Supreme Court could not arrive to a conclusion, matter referred to larger Bench, there the State Act received the assent of the President of India as provided under Article 254 of the Constitution of India but in the present case the State Act was not reserved for assent of President of India and so much so Section 8 of the State Act makes it clear that in case of conflict Central Act will prevail.
41. Let the case be tested from another Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 23/27 angle, if the agreement to contract provides a clause of international arbitration relates to work contract, provides the place of arbitration outside India and the law of Britain would apply, directing the party to move to Tribunal under the State Act will be highly inappropriate against the terms of agreement.
42. In this view of the matter, the objection raised by the office about the maintainability of the petition is not sustainable and this Court will proceed with the matter in terms of the provisions of Central Act."
10. Thus, from a bare reading of the aforesaid judgment rendered in the case of Nilkamal Ltd. (supra), it is apparent that firstly in the present case pertaining to the State of Bihar, the Bihar Public Works Contract Dispute Arbitration Act, 2008 was not reserved for the asset of a President of India, hence, the same has not received the asset of the President of India, as provided for under Article 254 of the Constitution of India, secondly it is clear that in case of conflict between the State Act and the Central Act, Central Act would prevail in view of Section 8 of the Bihar Public Works Contract Dispute Arbitration Act, 2008, thirdly, only in cases where the agreement in between the parties is silent with regard to the arbitration being conducted in accordance with the provisions of Arbitration and Conciliation Act, 1996 or in case there is Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 24/27 specific stipulation of resolution of the dispute by reference to the State Tribunal, the parties would have a forum of Tribunal under the Bihar State Act, 2008 for resolution of the dispute.
11. The aforesaid view expressed by the judgment dated 17.10.2014 rendered by this Court in the case of Nilkamal Ltd.(supra) was also expressed in a judgment dated 29.3.2017 passed in Request Case No. 45 of 2017 ( M/S Brahmaputra Infrastructure Ltd. Vs. The State of Bihar & Ors.), following the law laid down in the case of Nilkamal Ltd. (supra), however, the State Government had challenged the aforesaid judgment dated 29.3.2017 before the Hon'ble Apex Court and the Hon'ble Apex Court, by the aforesaid judgment dated 22.3.2018 has upheld the view taken by this Court in the case of Nilkamal Ltd. (supra) as also has upheld the judgment dated 29.3.2017 passed in the case of M/S Brahmaputra Infrasture Ltd. (supra) by a co-ordinate Bench of this Court and has held that in cases where arbitration agreement exists and stipulates applicability of the Central Act, the Bihar Act, 2008 will not apply, however, in absence of an agreement stipulating the applicability of the Central Act, the Bihar Act, 2008 will apply to the works contract. This Court finds that there is no inconsistency in the judgment rendered by the Hon'ble Apex Court dated 22.3.2018 passed in the case of Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 25/27 Brahmaputra Infrastructure Ltd. (supra) and the one dated 8.3.2018 passed in the case of M.P. Rural Road Development Authority & Anr. vs. L.G. Chaudhary Engineers and Contractors, inasmuch as both the judgments are based on the provisions of the State Act of both the respective States as also have been rendered considering the fact that the M.P. Madhyastham Adhikaran Adhiniyam, 1983 has received the presidential assent whereas the Bihar Public Works Contract Dispute Arbitration Act, 2008 has not received presidential assent.
12. In any view of the matter, judicial propriety and judicial discipline requires this Court to follow the decision rendered by the Hon'ble Apex Court in identical matters and since the Hon'ble Apex Court by the aforesaid judgment dated 22.3.2018, rendered in the case of M/s Brahmaputra Infrastructure Ltd. (supra) has authoritatively laid down the law to be followed with regard to the recourse to be taken in case such as the present one, especially in paragraph-5 thereof, which has already been reproduced herein above in the preceding paragraph, the same is required to be followed in the present case as well.
13. Having regard to the facts and circumstances of Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 26/27 the case and the law laid down by the Hon'ble Apex Court in the case of M/S Brahmputra Infrastructure Ltd. (supra), it is held that since the agreement in question dated 26.2.2015, governed by the provisions of the Standard Bidding document and Clause-25 of the General Condition of contract, provides for settlement of dispute and arbitration to be conducted in terms of the provisions of the Arbitration and Conciliation Act, 1996, the Bihar Public Works Contract Dispute Arbitration Act, 2008 will not apply and the provisions of the Arbitration and Conciliation Act, 1996 will apply. Therefore, since the parties have agreed to resolve the disputes amongst them by taking recourse to the remedy available under Clause-25 of the agreement, i.e in terms of the provisions of the Arbitration and Conciliation Act, 1996, this Court deems it fit and proper to recall the order dated 4.10.2018 passed in CWJC No. 19802 of 2018, whereby and whereunder the petitioner was directed to move the Bihar Public Works Contract Disputes Arbitration Tribunal, and grants liberty to the petitioner to take recourse to appropriate remedy available under the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator for resolving the dispute, which has arisen in between the parties. It is directed accordingly.
14. In view of the fact that interim protection had Patna High Court C. REV. No.20 of 2019 dt.09-05-2019 27/27 been granted by this Court not only in the order dated 4.10.2018 passed in CWJC No. 19802 of 2018, but also by an order dated 10.4.2019 passed in the present case, this Court deems it fit and proper to extend the same protection to the petitioner herein for a period of eight weeks from today, so that in the meantime, the petitioner can take recourse to the appropriate remedies available to it under the law, without any prejudice being caused to it.
15. The review petition stands allowed on the aforesaid terms.
(Mohit Kumar Shah, J) Tiwary/-
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