Jharkhand High Court
M/S Sital And Sons vs Union Of India Through The Secretary on 11 March, 2024
IN THE HIGH COURT OF JHARKHAND AT RANCHI
(Original Arbitration Jurisdiction)
Arbitration Application No. 7 of 2023
M/s Sital and Sons, through one of its partners Jag Mohan Singh, aged about
50 years, son of Gurdev Singh, having office at 421(P), Shakti Puram, Shiv
Katra, Harzindar Nagar, Kanpur, Uttar Pradesh-208007
...... Petitioner
Versus
1.Union of India through the Secretary, Ministry of Defence, 101-A, South
Block, PO+PS South Avenue, New Delhi-110011
2.The Chief Engineer, Military Engineering Services (MES) Jabalpur Zone,
1 Ridge Road, PO+PS Jabalpur, District Jabalpur, Madhya Pradesh
3.The Commander Works Engineer, Ranchi, Dipatoli Cantt. PO Bariatu, PS
Sadar, District Ranchi 834009, Jharkhand
4.The Garrison Engineer (MES), Ramgarh Cantt, PO+PS+District Ramgarh
829122, Jharkhand .... ... Respondents
CORAM: HON'BLE THE ACTING CHIEF JUSTICE
For the Petitioner : Mr. Shresth Gautam, Advocate
For the Respondents : Mr. Anil Kumar, ASGI
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Order No.10/Dated: 11th March 2024 This Arbitration Application has been filed for appointment of an Arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996 (in short, AC Act).
2. Pursuant to Tender Reference dated 13th February 2017 and 17th February 2017, an agreement was signed between the parties on 6th April 2017 but certain disputes cropped up as regards hindrances and other problems at the site on account of restrictions by the Government of Jharkhand on mining and transportation of sand etc. On 23 rd August 2018, the Garrison Engineer Services terminated the contract and the Board of Officers was constituted for final measurement of the subject work under the aforementioned Tender References. Mr. Shresth Gautam, the learned counsel for the petitioner submits that the dispute with respect to final measurement of the subject works is an arbitrable issue which in terms of clause-70 of GCC shall be referred for arbitration because the respondents have refused for appointment of a mutually agreed Arbitrator under sub- section 2 to section 11 of the AC Act. Mr. Shresth Gautam, the learned counsel for the petitioner has also referred to paragraph nos. 150 to 152 and 159 to 163 of the reported judgment in "In Re: Interplay between 2 Arbitration Application No. 7 of 2023 Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899" reported in 2023 SCC OnLine SC 1666 to lay support to the present Arbitration Application.
3. This Arbitration Application has been opposed by the Union of India by filing supplementary affidavit on 5th October 2023 whereunder a specific stand has been taken that after final payment vide DV No. 10 dated 5th December 2020 the petitioner-Firm did not lodge any protest and, therefore, no claim can be raised as per condition 65 of IAFW-2249-General Conditions of Contract (in short, GCC) and all further claim after submission of the final bill shall be deemed to have been waived and extinguished.
4. In paragraph no. 4 of the supplementary counter affidavit dated 5th October 2023, the Union of India has taken the following stand:
"4.That it is stated that Garrison Engineer vide letter no. 8300/1938/160/E8 dated 29th November, 2022 communicated to the petitioner that the Final Bill bearing no. Vr. No. 04/BR/169/RMG dated 03rd January 2019 against the contract signed by him with a clear "No Further Claim" certificate on 04th January, 2019 and the payment of the same has been paid vide DV No. 10 dated 05th December 2020 without any protest. Therefore, the accord and satisfaction has been fulfilled as per section 6 of the Indian Contract Act.
As per Condition 65 of IAFW-2249-General Conditions of Contracts forming part of the contract, no further claims shall be made by the contractor after submission of the Final Bill and these shall be deemed to have been waived and extinguished."
5. Mr. Anil Kumar, the learned ASGI, with reference to the aforementioned stand of the respondents in supplementary affidavit dated 5th October 2023, submits that the present Arbitration Application is liable to be dismissed. On the other hand, Mr. Shresth Gautam, the learned counsel for the petitioner-Firm has drawn attention of this Court to the proceeding of the Board of Officers whereunder the stand by the partner of the petitioner-Firm is recorded, that the works completed in recent past have not been entered in the measurement book. This Court gathers that the proceedings by the Board of Officers vide annexure-5 to the present Arbitration Application records that:
"D. Sri Jag Mohan Singh has failed to assign reason for signing MB under protest and not signing proceedings of BOO inspite of requesting him to justify the same."
3 Arbitration Application No. 7 of 2023
6. In view of the aforementioned objections by the petitioner- Firm, this cannot be said that there was no dispute as regards the final measurement and payment thereof. The stand taken by the respondents in paragraph no. 4 of the supplementary affidavit dated 5th October 2023 that the petitioner-Firm shall be deemed to have waived off all objections shall still be an issue which can be debated before the learned Arbitrator.
7. By now this is quite a settled proposition in law that the Court while dealing with an application under section 11(6) of the AC Act for appointment of an Arbitrator shall not go into the merits of the dispute between the parties. The jurisdiction under section 11(6) of the AC Act is confined to examine (i) whether there is a written arbitration agreement
(ii) whether the dispute is arbitrable under the contract (iii) whether the application is barred by limitation or (iv) the claim itself is time-barred.
8. Having found so, this Arbitration Application succeeds and Mr. Chanchal Jain, a practicing lawyer of this Court, is appointed as the Arbitrator
9. The fee payable to the learned Arbitrator shall be as per Fourth Schedule of the AC Act.
10. Before entering upon the reference, the learned Arbitrator shall make disclosure if any in terms of sub-section 5 of section 12 of the AC Act.
11. It is expected that the learned Arbitrator shall make the Award in the matter within six months or as early as possible.
(Shree Chandrashekhar, A.C.J.) Tanuj