Supreme Court - Daily Orders
M/S Ujjani Highways Private Limited vs Rail India Technical And Economic ... on 4 March, 2025
Author: Abhay S. Oka
Bench: Abhay S. Oka
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3559 OF 2025
(Arising out of S.L.P.(Civil) No.36368 of 2017)
M/S UJJANI HIGHWAYS PRIVATE LIMITED ... APPELLANT(S)
VS.
RAIL INDIA TECHNICAL AND ECONOMIC
SERVICES (RITES LTD) ... RESPONDENT(S)
O R D E R
Leave granted.
Heard the learned counsel appearing for the parties.
By the impugned judgment, a petition filed by the respondent invoking Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Arbitration Act”) has been allowed. The alleged arbitration clause which is clause (10.0), reads thus:
"10.0 Arbitration If at any time any question, dispute or difference whatsoever shall arise between the M/s. UHPL and the Rites Ltd with regard to or in relation to or in connection with the offer, whether during the progress of the work or after Signature Not Verified its completion, the provisions of Govt.of India, Digitally signed by ANITA MALHOTRA Date: 2025.03.07 20:40:32 IST Reason: 1 Ministry of Industry, Department of Public enterprises Notification No.3/5/93-PMA, dt. 30.6.1993 or its amendments for arbitration shall be applicable. this is reproduced as below:
"In the event of any dispute or difference relating to the interpretation and application of the provisions of the contracts, such dispute or difference shall be referred by either party to the arbitration of one of the arbitration in the department of public enterprises to be nominated by the secretary to the Govt. of India, incharge of the bureau of public enterprises. the arbitration Act, 1940, shall not be applicable to the arbitration under this clause. The award of the arbitration shall be binding upon the parties to the dispute, provided however, any party aggrieved by such award may make a further reference for setting aside or revision of the award to the law secretary, department of legal affairs, Ministry of law and justice, Govt. of India. Upon such reference the dispute shall be decided by the secretary when so authorized by the law secretary, whose decision shall bind parties finally and conclusively. The parties in the dispute will share equally the cost of arbitration as intimated by the arbitrator."2
On a plain reading of clause (10.0), it is provided therein that if at any time, any question, dispute or difference whatsoever shall arise between the parties, the provisions of Government of India Notification dated 30th June, 1993 will be applicable. The Notification is made a part of clause (10.0). The Notification provides that:
(a) The provisions of Arbitration Act, 1940 shall not be applicable; and
(b) After a reference is decided by the persons described as arbitrators, the award can be challenged by making a further reference or revision to the Law Secretary of the Department of Legal Affairs. Therefore, a separate Grievance Redress Mechanism has been created under clause (10.0).
The learned counsel appearing for the respondent relies upon a decision of this Court in the case of Enercon (India) Limited & Ors. v. Enercon GMBH & Anr.1 This decision deals with the cases where arbitration clauses in the agreements to which the Arbitration Act is applicable are unworkable. In the present case, on plain
1. (2014) 5 SCC 1 3 reading of clause (10.0), the applicability of the Arbitration Act is excluded.
The learned counsel appearing for the respondent tries to submit that clause (10.0) is not happily worded. This argument is irrelevant, as the parties are bound by the said clause.
Hence, the impugned judgment dated 15th September, 2017 of the High Court of Judicature at Bombay, Bench at Nagpur cannot be sustained and the same is set aside. Miscellaneous Civil Application No.243 of 2017 is hereby dismissed.
However, the remedy of the respondent in accordance with law is kept open.
The appeal is allowed on the above terms.
..........................J. (ABHAY S.OKA) ..........................J. (UJJAL BHUYAN) NEW DELHI;
March 04, 2025
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ITEM NO.1 COURT NO.4 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 36368/2017
[Arising out of impugned final judgment and order dated 15-09-2017 in MCA No. 243/2017 passed by the High Court of Judicature at Bombay at Nagpur] M/S UJJANI HIGHWAYS PRIVATE LIMITED Petitioner(s) VERSUS RAIL INDIA TECHNICAL AND ECONOMIC SERVICES (RITES LTD)Respondent(s) (FOR ADMISSION and I.R. and IA No.139831/2017-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) Date : 04-03-2025 This petition was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE ABHAY S. OKA HON'BLE MR. JUSTICE UJJAL BHUYAN For Petitioner(s) :
Ms. Rukhmini Bobde, Adv. Mr. Jatin Dhamija, Adv. Mr. Amlaan Kumar, Adv. Mr. Vinayak Aren, Adv. Mr. Vishal Prasad, AOR For Respondent(s) :
Mr. Udit Seth, Adv.
Mr. Anil Seth, Adv.
Mr. Ravi Shankar, AOR UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeal is allowed in terms of the signed order. Pending application also stands disposed of.
(ANITA MALHOTRA) (AVGV RAMU)
AR-CUM-PS COURT MASTER
(Signed order is placed on the file.) 5