Chitra Construction Company vs District Panchayat & on 22 January, 2016

[Cites 4, Cited by 3]

Gujarat High Court

Chitra Construction Company vs District Panchayat & on 22 January, 2016

Bench: Akil Kureshi

                  O/IAAP/65/2015                                             ORDER




                  IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                   PETN. UNDER ARBITRATION ACT NO. 65 of 2015

         ==========================================================
                    CHITRA CONSTRUCTION COMPANY....Petitioner(s)
                                     Versus
                      DISTRICT PANCHAYAT & 1....Respondent(s)
         ==========================================================
         Appearance:
         MR.CHIRAG K SUKHWANI, ADVOCATE for the Petitioner(s) No. 1
         MR PREMAL R JOSHI, ADVOCATE for the Respondent(s) No. 1 - 2
         ==========================================================

                 CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI

                                    Date : 22/01/2016


                                      ORAL ORDER

1. The petitioner is a construction company and seeks appointment of an arbitrator to resolve the disputes between the petitioner and respondent Amreli District Panchayat. The petitioner was awarded contract in relation to the irrigation project. Thus there is no dispute that the work order contained an arbitration clause. However, such arbitration clause was worded as under :

"30(1) The disputes relating to this contract so far as they relate to any of the following matters, whether such disputes arise during the progress of the work or after the completion or abandonment thereof, shall be referred to the Arbitration Tribunal, Gujarat State."

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2. This request for appointment of arbitrator is opposed by the Panchayat on two grounds. Firstly, that the work order was issued by Panchayat at the instance of the Government and that therefore, in terms of the said arbitration clause, the disputes must be referred to Arbitration Tribunal constituted under the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992. Second ground of opposition is that if it is held that such dispute would not be maintainable before the Tribunal, it must be treated that there is no arbitration clause and therefore, also request to appoint arbitrator cannot be made.

3. Both the grounds of opposition cannot be accepted. Firstly, respondent Amreli District Panchayat is admittedly not a notified authority in terms of clause(k) of subsection(1) of section 2 of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 , which defines the term work contract as under :

"(k) Works contract means a contract made by the State Government or the public undertaking with any other person for the execution of any of its works relating to construction, repairs or maintenance of any building or superstructure, dam, weir, canal, reservoir, tank, lake, road, well, bridge, culvert, factory or workshop or of such other work of the State Government or, as the case may be, of the public undertaking, as the State Government may, Page 2 of 4 HC-NIC Page 2 of 4 Created On Thu Jan 28 00:37:39 IST 2016 O/IAAP/65/2015 ORDER by notification in the official Gazete specify and includes

(i) a contract made for the supply of goods relating to the execution of any of such works,

(ii) a contract made by the Central Stores Purchase Organisation of the State Government for purchase or sale of goods.

(iii) Words and expressions used and not defined in this Act but defined in the Arbitration Act, shall have the meanings assigned to them in the Arbitration Act."

4. In terms of such provision, thus the arbitration contract means a contract made by the State Government or the public undertaking with any other person for execution of any of its works relating to construction repair etc. as the State Government may by notification in official gazette specify.

5. The contract in the nature of work order is admittedly issued by respondent District Panchayat and not by the State Government. There is thus no privity of contract between the petitioner and the Government. Coming to the question of existence of arbitration agreement, issue is squarely covered by the judgement of the Supreme Court in case of Om Construction Company v. Ahmedabad Municipal Corporation and another reported in (2009) 2 Supreme Court Cases 486, which is followed consistently Page 3 of 4 HC-NIC Page 3 of 4 Created On Thu Jan 28 00:37:39 IST 2016 O/IAAP/65/2015 ORDER by this Court, particularly in case of Rajkamal Builders Infrastructure Limited v. Ahmedabad Urban Development Authority (Petn. Under Arbitration Act No.91/2011 order dated 20.1.2012).

6. Under the circumstances, parties shall present declaration of Shri H.H. Mehta, retired Judge of this Court by next date of hearing. SO 29.1.2016.

(AKIL KURESHI, J.) raghu Page 4 of 4 HC-NIC Page 4 of 4 Created On Thu Jan 28 00:37:39 IST 2016

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