Rajasthan High Court - Jaipur
M/S Jcc Infraprojects Pvt. Ltd vs Union Of India Through General Manager, ... on 21 September, 2022
Author: Pankaj Bhandari
Bench: Pankaj Bhandari
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Arbitration Application No. 48/2021
1. M/s JCC Infraprojects Pvt. Ltd., Aklank House, Opposite
Railway Mal Godown, 761/30, Tikam Ganj, Ajmer-
305001 Through Its Authorised Signatory Shri Ajay
Kumar Jain S/o Shri Rajendra Kumar Jain,
2. Ajay Kumar Jain, S/o Shri Rajendra Kumar Jain, Aged
About 61 Years, Authorised Signatory, M/s JCC
Infraprojects Pvt. Ltd, Aklank House, Opposite Railway
Mal Godown, 761/30, Tikam Ganj, Ajmer -305001
----Applicants
Versus
1. Union Of India Through The General Manager, North
Western Railway, Near Jawahar Circle, Malviya Nagar,
Jaipur-302017
2. The Chief Engineer (Construction)-III, North Western
Railway), Near Jawahar Circle, Malviya Nagar, Jaipur-
302017
3. The Dy. Chief Engineer (Construction) -II, North Western
Railway, Mal Road, Ajmer.
----Respondents
For Applicant(s) : Mr. Sushil Daga
Mr. Chitransh Mathur
Ms. Tarushi Maheshwari
For Respondent(s) : Mr. Anand Sharma
Mr. Namandeep Singh
HON'BLE MR. JUSTICE PANKAJ BHANDARI
Order
RESERVED ON :: 15/09/2022
PRONOUNCED ON :: 21/09/2022
1. The applicant has filed this arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") seeking appointment of an Arbitrator.
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2. It is pleaded in the arbitration application that the applicant
- Company was awarded the work of Construction of Minor Bridges including other ancillary works between Station Guriya (excluding) Marwar Junction (excluding) in connection with Guriya-Marwar Junction BG Patch Doubling Project by the respondents. It is also contended in the arbitration application that due to utter failure in performance of their reciprocal promises by the respondents, the timeline specified in the Contract/Agreement was extended many times. It is also pleaded that due to delay caused, the applicants had suffered huge losses. In addition, after imposition of GST, the applicants have also claimed neutralization of the GST and have written to the Railways, but the Railways have rejected the claim of the applicants, hence, the applicant was left with no alternative but to approach this Court by way of the present arbitration application. Counsel for the applicants has placed reliance on R.L. Kalathia & Co. Versus State of Gujarat:
(2011) 2 SCC 400, BPR Infrastructure Limited Versus Rites Ltd.:
MANU/TL/0961/2022, Bharat Coking Coal Ltd. Versus Annapurna Construction: (2003) 8 SCC 154, M/s. Pandit Construction Company Versus Delhi Development Authority & Anr.: OMP No.32/2006 decided by the Delhi High Court on 18.07.2007 and an order passed by this Court in M/s. PNC Infratech Ltd. & Anr. Versus Union of India & Ors.: S.B. Arbitration Application No.75/2020 on 31.03.2022.
3. In reply to the arbitration application, the respondent - Union of India has pleaded that the applicants have not given any notice under Section 21 of the Act of 1996 seeking referring of dispute to the Arbitrator. It is also pleaded in the reply that the claim as now been raised before the Court is more than 20% of (Downloaded on 25/12/2022 at 09:08:27 AM) (3 of 7) [ARBAP-48/2021] the value of the Contract, is not covered under the Agreement. It is further pleaded that the claim was under the 'exception clause' and is not arbitrable. It is contended that the applicants have given a No Claim Certificate and after submission of the same, the applicants are barred from raising any dispute and hence, the matter is not arbitrable. It is also contended by the counsel for the respondent - Union of India that after having signed the No Claim Certificate in March, 2019, the applicants were only claiming Rs.11,47,890/- against neutralization of impact of the GST, however, after more than one and a half years vide letter dated 14.10.2020, the applicants have claimed a sum of about Rs.8 Crore with 18% interest which along with the interest would come to around Rs.14,58,15,962.73/-.
4. A rejoinder to the reply has also been filed on behalf of the applicants. It is contended by the counsel for the applicants that while raising the final bill, the applicants have specifically mentioned that the claim does not include the amount for GST neutralization.
5. In response of which the counsel for the respondents has contended that the claim beyond 20% of the value of the Contract cannot be entertained and is not arbitrable and in spite of the objections raised by the counsel for the respondents, even in the rejoinder, the applicants have not pleaded that they would not claim more than 20% of the value of the Contract.
6. I have considered the contentions and have carefully gone through the pleadings and the documents annexed with the arbitration application and the reply filed by the respondents.
7. A note is appended to Clause 41(7)(i) of the Special Conditions of Contract, which reads as under: (Downloaded on 25/12/2022 at 09:08:27 AM)
(4 of 7) [ARBAP-48/2021] "41(7)(i) The provision of Clause 63 & 64 of General Condition of Contract will be applicable only for settlement of claims of disputes between the parties for values less than or equal to 20% of the value of the Contract and when the claims and disputes are of value more than 20% of the value of Contract, the provision of clause 36 & 64 and other clause of General Conditions of Contract will not be applicable and Arbitration will not be remedy for settlement of such disputes."
8. It is evident that the tender amount is Rs.21,69,63,087.73/-, thus the claim amount could not have been more than Rs.4,33,92,600/-, however, the claimants have raised the claim which is more than Rs.14 Crore. The contention of the counsel for the applicants that they had submitted the No Claim Certificate under coercion and duress cannot be accepted for the very reason that the No Claim Certificate was filed way back on 11.03.2019 and thereafter, in the various letters written by the applicants, they never raised any finger on the No Claim Certificate having been obtained by force rather, in all the letters written thereafter for a period of one and a half years, the only claim raised by the applicants was pertaining to neutralization of the GST. It is only after objection was raised with regard to signing of the No Claim Certificate in the reply filed by the respondents that for the first time in the rejoinder, it has been mentioned that it was under
duress or coercion. The stand taken now after more than 3 years cannot be said to be a bonafide-one.
9. It is only on 14.10.2020 i.e. for the first time after a lapse of more than one year and seven months that the claimants have raised a claim of around Rs.14 Crore. The submission of No Claim Certificate, therefore, cannot be said to be given under duress and coercion and is, therefore, falling under the 'exception clause'. (Downloaded on 25/12/2022 at 09:08:27 AM)
(5 of 7) [ARBAP-48/2021] Clause 43(2) of the General Conditions of Contract reads as under:-
"43(2) Signing of "No Claim" Certificate: The Contractor shall not be entitled to make any claim whatsoever against the Railway under or by virtue of or arising out of this contract, nor shall the Railway entertain or consider any such claim, if made by the Contractor, after he shall be have signed a "No Claim"
Certificate in favour of the Railway in such form as shall be required by the Railway after the works are finally measured up. The Contractor shall be debarred from disputing the correctness of the items covered by "No Claim" Certificate or demanding a clearance to arbitration in respect thereof."
10. Clauses 63 & 64 of the General Conditions of Contract also reads as under:-
"63. Matters Finally determined by the Railway: -
All disputes and differences of any kind whatsoever arising out or in connection with the contract, whether during the progress of the work or after its completion and whether before or after the determination of the contract, shall be referred by the contractor to the Railway and the Railway shall within 120 days after receipt of the contractor in writing, provided that matters for which provision has been made in Clauses 8, 18, 22(5), 39, 43(2), 45(a), 55, 55-A(5), 57, 57(A), 61(1), 61(2) and 62(1) (xiii) (B) (e) of General Conditions of Contract or in any clause of the special conditions of the contract shall be deemed as "excepted matters" and decision of the Railway authority, thereon shall be final and binding on the contractor, provided further that "excepted matters" shall stand specifically excluded from the purview of the arbitration clause and shall not be referred to arbitration."
"64.(1)(i) Demand For Arbitration : In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the (Downloaded on 25/12/2022 at 09:08:27 AM) (6 of 7) [ARBAP-48/2021] respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the "excepted matters" referred to in Clause 63 of these Conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration.
64.(1) (ii) The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item-wise. Only such dispute(s)or difference(s) in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference.
64.(1) (ii) - (a) The Arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway.
(b) The claimant shall submit his claim stating the facts supporting the claims alongwith all the relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the Arbitral Tribunal.
(c) The Railway shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from Tribunal thereafter, unless otherwise extension has been granted by Tribunal.
(d) The place of arbitration would be within the geographical limits of the Division of the Railway where the cause of action arose or the Headquarters of the (Downloaded on 25/12/2022 at 09:08:27 AM) (7 of 7) [ARBAP-48/2021] concerned Railway or any other place with the written consent of both the parties.
64.(1) (iii) No new claim shall be added during proceedings by either party. However, a party may amend or supplement the original claim or defence thereof during the course of arbitration proceedings subject to acceptance by Tribunal having due regard to the delay in making it.
64.(1) (iv) If the contractor(s) does/do not prefer his/their specific and final claims in writing, within a period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment, he/they will be deemed to have waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract in respect of these claims.
11. It is evident from the pleadings that the applicants have never raised any demand for arbitration under Clause 64(1)(i) of the General Conditions of the Contract and have not specified the matters, which are in question or subject of the dispute or difference as also the amount of claim item-wise. This court is of the considered view that the case falls under the "excepted matters" as the applicants had filed the No Claim Certificate and have raised the dispute at a very belated stage i.e. after more than one and a half years. They have never objected that the No Claim Certificate was filed under duress and have raised a dispute with regard to a sum, which is around Rs.14 Crore, which is also more than 20% of the tender amount and is thus not arbitral, hence, I am not inclined to entertain the arbitration application and the same is, accordingly, dismissed.
(PANKAJ BHANDARI),J SUNIL SOLANKI /PS (Downloaded on 25/12/2022 at 09:08:27 AM) Powered by TCPDF (www.tcpdf.org)