Jharkhand High Court
M/S Deoraj Singh Having Its Registered ... vs Central Coalfields Limited Through Its ... on 4 July, 2022
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Application No. 47 of 2021
------
M/s Deoraj Singh having its registered office at Naya More, P.O. and P.S. - Kuju, Dist- Ramgarh through its Partner Mr. Deoraj Singh S/o Late Dineshwar Singh aged about 71 years R/o Village - Rabodh, P.O and P.S. - Mandu, Dist. - Hazaribagh.
... ... Petitioner Versus
1.Central Coalfields Limited through its General Manager, having its office at Kuju, P.O. and P.S.-Kuju, Dist.-825330.
2.Engineer Incharge, Pindra Project, Central Coalfields Limited, having its office at Kuju, P.O. and P.S.-Kuju, Dist.-825330.
3.Project Officer, Central Coalfields Limited, having its office at Kuju, P.O. and P.S.-Kuju, Dist.-825330.
... ... Respondents
----
CORAM:HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
----
For the Petitioner : Ms. Shivani Jaluka, Advocate For the Respondents : Mr. Amit Kumar Das, Advocate
-------
Order No. 05/Dated 4 July, 2022 th Today, the matter has been listed under the heading 'for orders (with defect)'.
2. Perused the office note.
3. Office has pointed out the defect, as defect no. 2, to the effect that typed copy of page no. 26 has not been filed. However, from perusal of page no. 26, it appears that page no. 26 of the memo of application is legible one, as such defect, as pointed out by the office, is ignored.
2
4. With the consent of learned counsel for the parties, the matter is being heard on merit.
5. The instant application has been filed by the petitioner invoking the jurisdiction conferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator for adjudication of the dispute between the petitioner and respondents- CCL arising out of contract agreement.
6. It is the case of the petitioner that the petitioner entered into a contract with the respondents on 14th February, 2018 for the work "Hiring of Equipment for Removal and Extraction of Overburden (including Interburden) and Extraction of Coal at Rabodh Patch Phase-III (Sector-I) of Pindra Colliery of Kuju Area" for the value of Rs. 35,24,58,110.90/- (INR Thirty-Five Crores Twenty Four Lakhs Fifty-Eight Thousand One Hundred and Ten Rupees Ninety Paise Only).
It is the case of the petitioner that since the very beginning of the contract, he faced many problems which were communicated by him to the respondents- CCL time to time. The problems faced by the petitioner, as mentioned in the arbitration application, are as under:
(a).The petitioner was not given area as per the specification. The contract stipulated an area of 345m 3 X 300m, while the area provided to us was 275mX106m. This was further reduced as opening permission for the VI/VII seem was not granted as such the workable area shrinked to only 275m X 60m.
(b).The site was not encumbrance free and there were several impediments. The population would often disrupt the site as they came up with their grievance for rehabilitation which was to be addressed by CCL.
(c).As per NIT, the de-watering of the allotted area was to be done by the Employer, which was not done.
(d).There was deficiency in lighting and water-pumps, despite prior assurance from the employer that such equipment would be provided in sufficient quantity at the worksite.
In spite of all these odds, the petitioner took all steps to move ahead with the execution of the work, but all of a sudden the contract was placed under temporary suspension by the respondents w.e.f. 30.07.2018, communicating the petitioner that work was to be stopped due to lack of statutory permission from the Directorate General of Mines Safety, which is still continuing and as such the agreement remained under suspension for almost three years, which led huge loss to the petitioner.
4
It is the case of the petitioner that since the dispute had arisen as such the petitioner, taking recourse to the mechanism prescribed under the Contract dated 14th February, 2018, submitted application on 21.07.2021 for resolution of dispute, stating therein that the respondents were under statutory obligation to take the required clearances and obtain 'Consent to Operate' the mines, but it was not done by the respondents, due to which, the execution of the work in the entire area allotted to the petitioner was to shut down and contract was placed under 'temporary suspension, causing huge loss to the petitioner. Therefore, the petitioner is entitled for the damages caused to the petitioner on account of breach of fundamental terms and conditions of the contract.
It has been submitted that when no reply to the application submitted by the petitioner was made, the petitioner made second step as provided under Clause 13 of the Contract and requested the respondent to constitute a committee as per Clause 13 of the Contract and take a decision regarding the claims submitted by the petitioner but no action was taken on the part of the respondents.
It has further been submitted that after exhausting all the pre-arbitration steps, as provided 5 under the contract, the petitioner vide letter dated 19th October, 2021 requested the respondents to initiate arbitration process as per terms of the contract and Arbitration and Conciliation Act, 1996, but no response has come from the respondent side.
In the backdrop of these facts, the petitioner left with no remedy approached this Court to exercise its power under Section 11(6) of the Act, 1996 for appointment of arbitrator.
7. The matter was taken up on 27th June, 2022, and, at the request of learned counsel for the respondents, the matter was adjourned for seeking instruction in the matter.
8. Today, Mr. Amit Kumar Das, learned counsel for the respondents, on instruction, submitted at Bar that on 30th April, 2022 conciliation has failed.
9. Ms. Shivani Jaluka, learned counsel appearing for the applicant-petitioner, has submitted that it is admitted case that the dispute has arisen in between the parties and further conciliation has also failed, therefore, it is a fit case to appoint Arbitrator by allowing the instant application.
10. Mr. Amit Kumar Das, learned counsel appearing for the respondent, has not opposed such submission about existence of dispute and submitted that 6 conciliation has failed in between the parties on 30th April, 2022.
11. The instant application has been filed invoking the jurisdiction conferred under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator under Clause 13A of the Contract Agreement dated 14th February, 2018, which reads as under:
"13.SETTLEMENT OF DISPUTES It is incumbent upon the contractor to avoid litigation and disputes during the course of execution. However, if such disputes take place between the contractor and the department, effort shall be made first to settle the disputes at the company level.
The contractor should make request in writing to the Engineer-in-Charge for settlement of such disputes/ claims within 30 (thirty) days of arising of the cause of dispute/claim failing which no disputes/claim of the contractor shall be entertained by the company. Efforts shall be made to resolve the dispute in two stages. In first stage dispute shall be referred to Are CGM, GM. If difference still persists the dispute shall be referred to a committee constituted by the owner. The committee shall have one member of the rank of Director of the company who shall be chairman of the company.
If differences still persist, the settlement of the dispute shall be resolve in the following manner. Disputes relating to the commercial contracts with Central Public Sector Enterprises/Govt. Departments (except Railways, Income Tax, Customs & excise duties)/State Public Sector Enterprises shall be referred by either party for arbitration to the PMA (Permanent Machinery of Arbitration) in the department of Public Enterprises.7
In case of parties other than Govt. Agencies the redressal of the dispute may be sought through Arbitration (THE ARBITRATION AND CONCILIATION ACT, 1996) as amended by the AMENDMENT ACT OF 2015).
13A.Settlement of Disputes through Arbitration:
If the parties fail to resolve the dispute/differences by the in house mechanism, then, depending on the position of the case, either the employer/owner or the contractor shall give notice to the other party to refer the matter to arbitration instead of directly approaching court. The contractor shall however, be entitled to invoke arbitration clause only after exhausting the remedy available under the case of parties rather than Govt. Agencies, the redressal of disputes differences shall be sought through Sole Arbitration as under:
Sole Arbitration: In the event of any question, dispute or difference arising under these terms & conditions or any condition contained in this contract or interpretation of the terms of or in by these conditions), the same shall be referred to the sole arbitration of a person, appointed to be the arbitrator by the Competent Authority of CIL/CMD or Subsidiary Company (as the case may be). The award of the arbitrator shall be final and binding on the parties of the Contract.
(a).In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his/her award being set aside by the court for any reason it shall be lawful for the Competent Authority of CIL/CMD of Subsidiary Company (as the case may be) to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid.
(b).It is further a terms this contract that no person other than the person appointed by the competent Authority of CIL/CMD of Subsidiary Company (as the case may be) as aforesaid should act as arbitrator and that, if for any reason that is not possible, the matter is not to be referred to Arbitration at all.8
Subject as aforesaid, Arbitration and Conciliation Act, 1996 as amended by Amendment Act of 2015, and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the Arbitration proceedings under this clause. It appears from the pleadings available on record as also the Arbitration Clause, as quoted hereinabove, that pre-arbitration remedy available under the Arbitration Clause under Clause No. 13 has been availed by the petitioner-applicant.
12. It has submitted by Mr. Das, learned counsel for the respondents-CCL that during pendency of this application, the conciliation has failed on 30th April, 2022. In such view of the matter, the petitioner has exhausted the alternative remedy before filing the instant application, is not in dispute.
13. Admittedly herein, the work has been allotted in favour of the applicant-petitioner and a contract has been entered in between the parties, which contains the Arbitration Clause. From the Arbitration Clause it is evident that before resorting to refer the dispute before the Arbitrator, the course which is required to be taken for resolution of dispute to be settled by conciliation, has admittedly failed.
Therefore, this Court, considering the aforesaid fact and taking into consideration the Arbitration 9 Clause as under Clause 13, is of the view that it is a fit case to exercise power conferred under Section 11(6)(c) of the Act, 1996.
14. Accordingly, the instant application stands allowed.
15. In view thereof and with the consent of the learned counsel for the parties, Hon'ble Mrs. Justice (Retd.) Jaya Roy, Former Judge, High Court of Jharkhand, residing at Roy Compound, Dr. Fatullah Road, Near Lower Bazar Thana, Ranchi, is appointed as sole arbitrator to adjudicate the dispute between the parties, subject to provision as stipulated under Section 12 (5) of Arbitration and Conciliation Act, 1996.
Learned Arbitrator would be free to lay down fees and other expenses towards conduct of the arbitration proceedings, however, keeping into account the ceiling prescribed under Schedule IV of the Act of 1996 as amended.
Learned Arbitrator would endeavour to conclude the proceedings expeditiously, and preferably within a period of six months from the date of arbitration proceeding so begins, also taking into regard the mandate of the Legislature under Section 29-A of the Act of 1996.
10
The Registrar General of this Court is directed to send copy of the entire pleadings along with copy of the entire order sheet to the learned Arbitrator.
16. Accordingly, the instant Arbitration Application stands disposed of.
(Sujit Narayan Prasad, J.) Alankar/ A.F.R.