Jharkhand High Court
Avinash Transport vs Bharat Coking Coal Limited (Bccl) on 28 June, 2024
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Application No. 7 of 2024
Avinash Transport, a Partnership firm registers with registrar of firm West
Bengal, having its registered office at Bye pass Road, PO-Kalipahari and
PS-South Thana Asansol, District-Burdwan (West Bengal), PIN 7133339
and having its branch office at Sanjay Gandhi Chowk, Bye Pass Road,
Maithon, PO and PS-Merah, Dhanbad-828202 through its one of the
partners namely Arvind Singh, age about 73 years, s/o late Banke Bihari
Singh, r/o residing at Maithon, PO-Merha, PS-Maithon, District-Dhanbad-
828207 ... Petitioner
Versus
1. Bharat Coking Coal Limited (BCCL), through its Chairman cum
Managing Director, having its office at Koyla Nagar, PO and PS-Koyla
Nagar, District-Dhanbad, Jhakrhand-826005
2. The General Manager, Contract Management Cell, having its office Koyla
Nagar, PO and PS-Koyla Nagar, District-Dhanbad, Jharkhand-826005
3. The General Manager, Bharat Coking Coal Limited (BCCL), having its
office at Dhamagoria Colliery VC area, PO-Ramnagar, PS-Kulti, District-
Paschim Bardwan, West Bengal
4. The Project Officer, Bharat Coking Coal Limited (BCCL), having its
office at Dhamagoria Colliery VC area, PO-Ramnagar, PS-Kulti, District-
Paschim Bardwan, West Bengal ... Respondents
-----
CORAM: HON'BLE THE ACTING CHIEF JUSTICE For the Petitioner : Ms. Amrita Sinha, Advocate For the Respondents : Mr. Anoop Kumar Mehta, Advocate Mr. Manish Kumar, Advocate Mr. Pratyush, Advocate Mrs. Pratibha Mahto, Advocate
--------
Order No. 5/Dated: 28th June 2024 This Arbitration Application has been filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (in short, AC Act) by Avinash Transport, a partnership firm, through one of its partners, namely, Arvind Singh for appointment of an arbitrator.
2. Pursuant to e-notice inviting Tender dated 16th June 2018 and corrigendum dated 22nd June 2018 for the work of "hiring of HEMM for removal of OB, extraction and transportation of coal from Salanpur C and Salanpur D seam of East Ramnagar Patch of Damogoria Colliery of CV Area", the petitioner-Firm having been declared L1 was given a Letter of Acceptance for executing the subject work the estimated cost of which was Rs.1,66,23,78,867/-; the subject work was to be completed within 913 days. The petitioner-Firm states that it deployed resources on site and made huge investments in order to commence the work under the NIT but on account of protest by the local villagers the work was to be stopped. It faced local hindrances and the running bills were not paid by the Bharat Coking Coal Limited (in short, BCCL). According to the petitioner-Firm, the BCCL asked it to give consent for provisional extension of time and vide letter dated 31st July 2021 the BCCL on its own granted provisional extension of time for further 760 days for completion of the work but the petitioner-Firm rejected the proposal as it was a futile exercise. The petitioner-Firm has made several allegations against the BCCL and, according to it, when no solution was coming forth it requested for referring the dispute in proper authority for a decision. Thereafter, it filed a pre-institution mediation being Reference No. 03 of 2023 before the Secretary-cum-Coordinator, District Legal Services Authority, Mediation Center at Dhanbad but efforts made at mediation failed and the reference was disposed of on 29th February 2023 as non-starter.
3. By a notice dated 21st July 2023, the petitioner-Firm invoked the arbitration clause for appointment of an arbitrator as per clause 13A of the NIT. This notice was followed by a legal notice on 3rd October 2023 in response to which the BCCL sent a letter dated 28th November 2023 making a host of allegations against the petitioner-Firm. Constrained, the petitioner-Firm approached this Court on 16th February 2024 by filing the present Arbitration Application.
4. In the counter-affidavit, the BCCL made counter allegations against the petitioner-Firm. It has pleaded that the work could not be executed because requisite number of men and machinery was not mobilized on the work site and the petitioner-Firm did not provide pumps for de-watering of accumulated rain water within the working area. The BCCL has taken a stand that out of the total claimed amount of Rs. 4,22,55,444/- the petitioner-Firm has 2 Arbitration Application No.7 of 2024 been paid Rs. 1,42,31,215/-. Objecting to the present Arbitration Application, the BCCL referred to clause 13 of the NIT to put forth its stand that the petitioner-Firm did not follow in-house mechanism provided thereunder.
5. In paragraph no. 18 of the counter-affidavit, the respondent-BCCL has taken the following stand:
"18. That in reply to statements made in Para 18 of the Application it is stated that the contract period ended on 31.07.2021 whereas petitioner made a request thereafter on 04.08.2021. In the letter attached the contractor has not followed due procedure i.e in house mechanism, according to NIT clause 13 of the general term and condition of the contract document. Quote
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/claims of the contractor shall be entertained by the company. Effort shall be made to resolve the dispute in two stages In first stage dispute shall be referred to Area CGM, GM. If difference still persist 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 committee. 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. 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 AMENDMENT ACT OF 2015)."
6. To begin with, this is an admitted fact that there is an arbitration clause in writing under clause 13 of the NIT. Secondly, there are disputes, allegations and counter-allegations by both parties as to execution and non-completion of the subject work. The objection as to non-adherence to in-house mechanism under clause 13 also cannot sustain in view of series of letters written by the petitioner-Firm. As per clause 13, the petitioner-Firm made representation to the Project Manager/Engineer Incharge raising its grievances including the letters dated 31st July 2021, 4th August 2021 and 3rd September 2021 which were not addressed by the Engineer Incharge. However, an objection has been taken by the BCCL in its counter-affidavit that the letter dated 4th August 2021 did not follow in-house mechanism. Quite naturally, in 3 Arbitration Application No.7 of 2024 absence of any decision on the dispute/claim by the Engineer Incharge, the second stage of dispute resolution whereunder a Committee shall be constituted by the Owner could not have been invoked by the petitioner-Firm. Therefore, this Court finds that the present Arbitration Application has been filed after exhausting in-house mechanism. Even so, in view of the judgment in "N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd." (2023) 7 SCC 1, this Court is of the opinion that the present Arbitration Application is maintainable.
7. In "Visa International Limited v. Continental Resources (USA) Limited" (2009) 2 SCC 55 the Hon'ble Supreme Court observed as under:
"38. It was contended that the pre-condition for amicable settlement of the dispute between the parties has not been exhausted and therefore the application seeking appointment of arbitrator is premature. From the correspondence exchanged between the parties at pp. 54-77 of the paper book, it is clear that there was no scope for amicable settlement, for both the parties have taken rigid stand making allegations against each other. In this regard a reference may be made to the letter dated 15-9-2006 from the respondent herein in which it is inter alia stated "... since February 2005 after the execution of the agreements, various meetings/discussions have taken place between both the parties for furtherance of the objective and purpose with which the agreement and the MoU were signed between the parties. Several correspondences have been made by CRL to VISA to help and support its endeavour for achieving the goal for which the abovementioned agreements were executed". In the same letter it is alleged that in spite of repeated requests the petitioner has not provided any funding schedules for their portion of equity along with supporting documents to help in convincing OMC of financial capabilities of the parties and ultimately to obtain financial closure of the project. The exchange of letters between the parties undoubtedly discloses that attempts were made for an amicable settlement but without any result leaving no option but to invoke the arbitration clause."
8. Accordingly, this Court requests Hon'ble Justice Virender Singh, Former Chief Justice of the Jharkhand High Court to act as an Arbitrator. The learned Arbitrator may enter reference within 30 days of the communication of this order. The fee of the learned Arbitrator shall be as per Fourth Schedule to the AC Act. This is also indicated that seat of the arbitration shall be at Ranchi and the learned Arbitrator shall be at liberty to change the venue for arbitration with the consent of the parties, who shall provide all necessary logistics if so desired by him.
9. Arbitration Application No.7 of 2024 is allowed.
(Shree Chandrashekhar, A.C.J.) Amit 4 Arbitration Application No.7 of 2024