Telangana High Court
M/S Tsr Constructions, Hyd vs Union Of India And Another on 19 July, 2019
Author: M.S.Ramachandra Rao
Bench: M.S.Ramachandra Rao
THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
Arbitration Application No.124 of 2017
JUDGMENT :
This Arbitration Application is filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator for resolving disputes between the applicant and respondents in connection with Agreement No.03/EE/NSGPD/2012-13 between the parties, (herein referred to as 'the Agreement').
2. The said agreement was entered into in respect of work of 'Renovation & Re-carpeting of Internal Roads (Phase-I)' for National Institute of Technology, Warangal for a total value of Rs.2,06,76,200/-.
3. According to applicant, the said work was completed successfully by it and only some payments were made, last of which was on 04.06.2016 for Rs.4,51,054/-.
4. The applicant contended that due to defaults committed by respondents during execution of the said work, the applicant had claimed a further amount of Rs.57,09,559/- with interest through its letter dt.04.11.2016, but the same was rejected by the 1st respondent on 23.11.2016. The applicant alleged that through another letter dt.30.11.2016, the applicant asked the Superintending Engineer to give a favourable decision in its favour by rejecting the stand of the Executive Engineer of the 1st respondent, and the Superintending MSR,J ::2:: Arbappl_124_2017 Engineer also rejected the claims on 07.12.2016. It is contended that since Clause (25) of the Agreement between the parties contemplated arbitration, petitioner gave a request on 05.01.2017 to the Chief Engineer (SZ)-II, Central Public Works Department, Hyderabad, seeking appointment of an Arbitrator for settlement of disputes, but the same was rejected by him on 27.03.2017 pointing out that Schedule-F of the Agreement contemplates a Dispute Redressal Committee (D.R.C.) to be constituted under Clause (25) to whom the matter is to be referred, and so, petitioner's application is liable to be rejected. The petitioner further contended that only on 10.04.2017, the D.R.C had been constituted, but the petitioner did not agree for referring all the disputes to it, and again invoked Clause (25) in its letter dt.17.04.2017.
5. The petitioner contended that on 24.04.2017, the respondents again refused to refer it for arbitration, and insisted that the matter should go only to the D.R.C.
6. After issuing legal notice on 10.07.2017, the applicant filed the present Arbitration Application.
7. Counter-affidavit was filed by the respondents opposing the said application, and contending that only the D.R.C. should adjudicate the dispute, and the matter cannot be referred to arbitration.
8. Copy of the Agreement dt.13.09.2012 providing for amendment to clause (25) states as under :
MSR,J ::3:: Arbappl_124_2017 "Clause 25: Constitution of Dispute Redressal Committee (DRC) (A) For total claims more than Rs.25.00 lac.
(a) One Chief Engineer (Chairman) (other than under whose jurisdiction work falls)
(b) Superintending Engineer (TLCQA) / Director works.
(c) One Superintending Engineer (other than under whose jurisdiction work falls)
(d) The S.E.-in-charge of the work shall present case before D.R.C. but shall not have any part in decision-
making.
(B) For total claims up to 25.00 lac.
(a) Superintending Engineer (TLCQA) Director Works, (Chairman)
(b) Two Executive Engineers other than EE under whose jurisdiction the work falls.
(c) The Executive Engineer in-charge of the work shall present the case before DRC but will not have any part in decision-making."
9. Since the petitioner has also signed in the agreement consenting to the dispute resolution through the DRC constituted by the respondent, the said mechanism for resolution of disputes must be first exhausted and only when it fails, matter can be referred to arbitration under clause 25 of the agreement.
10. Accordingly, the respondent shall within one month from the date of receipt of copy of this order constitute a DRC in terms of Clause 25 of the agreement dt.13.09.2012 between the parties and the applicant shall, within 2 weeks of constitution of the DRC make it's claims before it. If the decision of the DRC is not acceptable to the applicant or to the respondent, parties shall approach Sri Justice G. MSR,J ::4:: Arbappl_124_2017 Yethirajulu, Former Judge of the A.P.High Court, R/o.Flat No.501, Pruthvi Block, My Home Navadweepa Apartments, Hi-Tech City, Madhapur, Hyderabad - 500 081, Telephone Nos.040 23111958, 9491038440, who shall act as arbitrator for adjudication.
11. The Arbitration Application is accordingly allowed. No order as to costs.
12. As a sequel, miscellaneous applications pending if any in this Arbitration Application, shall stand closed.
__________________________________ JUSTICE M.S.RAMACHANDRA RAO Date: 19.07.2019 Ndr/*