Rajasthan High Court - Jodhpur
M/S. Mohatha Construction Company vs Union Of India And Ors on 20 May, 2019
Equivalent citations: AIRONLINE 2019 RAJ 328, 2019 WLC(RAJ)(UC) 2 139
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 9968/2016
M/s. Mohatha Construction Company
----Petitioner
Versus
The Union Of India And Ors
----Respondent
Connected With
S.B. Civil Writ Petition No. 9462/2016
M/s. Maheshwari Builders
----Petitioner
Versus
The Union Of India And Ors.
----Respondent
For Petitioner(s) : Mr. S.S. Ladrecha
For Respondent(s) : Mr. Deelip Kawadia
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Judgment Reserved on 14/05/2019 Pronounced on 20/05/2019
1. These writ petitions under Articles 226 and 227 of the Constitution of India have been preferred claiming, in sum and substance, the following reliefs:
"1. That the writ petition in hand may kindly be allowed and by an appropriate order or direction, impugned orders dated 14.06.2016 and 14.07.2016 (Annexure-7) may kindly be directed to be set aside;
2. That the Respondents may kindly be directed to be restrained from taking any further action in furtherance of the impugned orders.(Downloaded on 28/06/2019 at 05:07:44 AM)
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3. That the directions may kindly be issued to the Respondents to allow the petitioner for renewal of its enlistment if everything is found in order then Petitioner firm may be allowed to be renewed for enlistment and be approved therein;
4. Any other relief/reliefs which the Hon'ble Court deems fit in the interest of justice."
2. Since both the writ petitions involve the common controversy, therefore, they have been heard together and are being decided by this common order.
3. Brief facts of this case, as noticed by this Court, are that both the petitioners-Firms are sister concerns and are the enlisted contractors of the Military Engineering Services (MES). The petitioners-Firms are engaged in the business of making constructions and engineering for the MES for past many years and claimed to have earned a considerable reputation in the field of construction.
4. The MES of the Indian Army Branch issued a tender for Chennai, for which a bid was placed by the present petitioners- Firms. As per the pleaded case of the petitioners, looking into the continuous accomplishments of the petitioner-Firm, the term of the petitioner-Firm was renewed and re-classified, whereby the tender limit of the petitioner-Firm was enhanced to Rs.15 crores vide letter dated 27.09.2010.
5. The petitioners-Firms, while performing the contract assigned to them at Chennai, were communicated certain defects in their project by the Garrison Engineer vide communication dated 05.07.2012, which is Annexure-3 of writ petition No.9968/2016.
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6. The petitioners' renewal of enlistment as a contractor was being considered by the respondents from the period from 2015 to 2020. Meanwhile, the petitioners applied for renewal of the said enlistment as a contractor of the MES on 26.06.2015, but the same was declined by the respondents.
7. Learned counsel for the petitioners points out that non- renewal communicated to the petitioners through letter dated 31.12.2015 was intimated by the Chief Engineer, Chennai Zone, and the allegation against the petitioners was pertaining to their indifferent attitude towards rectification of defects pointed out by an earlier letter dated 10.04.2015. The renewal of the Firm for the next cyclic period of 01.01.2016 to 31.12.2020 was therefore, not approved by the Registering Authority.
8. Learned counsel for the petitioners has however pointed out that vide letter dated 07.07.2012, the petitioner was informed that all the defects pointed out in the previous letter have been rectified by the petitioner. The said letter is on record as Annexure-4 of the writ petition No.9462/2016.
9. Learned counsel for the petitioners has also shown to this Court the norms of renewal of the enlistment of the enlisted contractors for the cyclic period ending on 31.12.2020 and submitted that the petitioner fulfilled all the necessary conditions.
10. Learned counsel for the petitioners has further shown to this Court the letter dated 12.01.2016 to contend that the defects pointed out in the petitioners work were rectified and the entries made against the present petitioners were deleted in totality.
11. Learned counsel for the petitioners further submits that the non-approval by the respondents on 13.01.2016 shows that (Downloaded on 28/06/2019 at 05:07:44 AM) (4 of 12) [CW-9968/2016] the application of mind was not made regarding the letter dated 12.01.2016 by which the defects in the petitioners work were deleted in toto and the petitioners were exonerated from the remarks of defects.
12. Learned counsel for the petitioners also submitted that as per the condition No.12 of the Conditions for Renewal of Enlistment of Enlisted Contractors Cyclic Period ending 31.12.2020 dated 10.04.2015, the interested contractors were to forward their application for enlistment to the Chief Engineer of the new Command through the Chief Engineer of their parent command, who will give his recommendations in this regard, which will be accepted by the other Command CE without further scrutiny. The said condition No.12 reads as follows:
"12. Contractors of following classes who are enliststed and have lodged Standing Security Deposit and Bond to Secure Performance of Agreement in one Command (ie the contractor's parent Command) can get themselves enlisted by lodging fresh Standing Security Deposit and Bond to Secure Performance of Agreement in:-
Any Command or Command(s) - For class 'S' contractors Any TWO Command(s) - For class 'A' contractors Any ONE Command - For class 'B' to class 'D' contractors.
For this purpose, the interested contractors may forward their application for enlistment to the CE of the new Command through CE of their parent Command, who will give his recommendations in this regard which will be accepted by the other Command CE without further scrutiny."
13. Learned counsel for the petitioners further submitted that since the Chief Engineer of the Command in question was at Jaipur Zone, therefore, the petitioners' renewal had to go through (Downloaded on 28/06/2019 at 05:07:44 AM) (5 of 12) [CW-9968/2016] the CE Jaipur Zone, and thus, the jurisdiction of the Rajasthan High Court was there, particularly when the petitioners had a permanent address of Bikaner.
14. On the other hand, learned counsel for the respondents has vehemently submitted that since in the present case, all the necessary proceedings are being taken place at, Pune whereas the petitioner is claiming the jurisdiction in Rajasthan, which is not at all made out.
15. Learned counsel for the respondents further submitted that the letter dated 05.07.2012 (Annexure-3 of writ petition No.9968/2016) being relied upon by the petitioner itself shows that the same was being issued by the Garrison Engineer (P), Chennai and the petitioner himself has given an address, which was situated at Chennai.
16. Learned counsel for the respondents also submitted that the criteria for renewal was fixed and the following criteria was operated by the respondents to deny renewal to the petitioners. The said criteria in question reads as follows:
"Criteria for Renewal
7. All contractors who apply for renewal will be re- enlisted in same class/categories of enlistment except those falling under para 14 here-in-after and those falling under the following categories fior which the approval of this HQ will be obtained:-
(a) . . . . .....
(b) Contractors in whose completed works during the last 5 years, serious defects were noticed which are substantially attributed to the performance of Contractors, established through Court of Inquiry or Tech Boards and disciplinary action is pending."(Downloaded on 28/06/2019 at 05:07:44 AM)
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17. Learned counsel for the respondents further submitted that the petitioners had in fact committed number of mistakes and the denial order clearly said that the disciplinary action was contemplated for poor performance and fraudulent act of the present petitioners.
18. Learned counsel for the respondents also submitted that an indifferent attitude was also attributed to the petitioners.
19. Learned counsel for the respondents further submitted that in the arbitration proceedings launched by both the sides, the learned Arbitrator has observed the fraud having been committed by the petitioners.
20. Learned counsel for the respondents also shown Annexure R/1, which clearly shows that the jurisdiction lays with the Chennai Courts.
21. Learned counsel for the respondents has further shown to this Court the Military Engineering Services General Conditions of Contract, which stipulate that the jurisdiction shall be with the Chennai Courts, and the relevant condition No.72 thereof reads as under:
"72. Jurisdiction of Courts- Irrespective of the place of issue of tenders, the place of acceptance of tenders, the place of execution of contract or the place of payment under the contract, the contract shall be deemed to have been made at the place from where the acceptance of tenders has been issued and the work is executed/executable. The Courts of the place from where the acceptance of the tender has been issued or the place where the work is executed/under execution shall alone have (Downloaded on 28/06/2019 at 05:07:44 AM) (7 of 12) [CW-9968/2016] jurisdiction to decide any dispute arising out of or in respect of the contract."
22. Learned counsel for the respondents also submitted that the show-cause notice dated 16.04.2015 was also issued to the petitioner-Firm which it has failed to reply and respond, and thus the respondents have also initiated disciplinary action against the present petitioner for its removal from the approved list.
23. Learned counsel for the respondents further submitted that the learned Arbitrator in para 13.4 of its award dated 05.04.2017 has held that the petitioner-Firm committed an act of fraudulent and manipulation of records. Para 13.4 of the said Award reads as under:
"13.4 Claimant brought out that the contractor did not attend the rectifications thus GE vide letter dt.08 th Sep 2014 asked M/s. Paws Pest Aways Pvt. Ltd. to depute their authorized representative to visit the site and check efficacy of the treatment done by them and comments on the same. M/s. Paws Pest Aways Pvt. Ltd. intimated that they have not carried out the preconstruction ATT Work for the subject work and also stated that their firm name was forged and fraudulently used with manipulated records/vouchers by the contractors."
24. Learned counsel for the respondents relied upon the precedent law laid down by the Hon'ble Supreme Court in M/s. Swastik Gases P. Ltd. Vs. Indian Oil Corp. Ltd., reported in 2013(2) WLC SC Civil 406, relevant portion of which reads as under:-
"9. In the course of hearing before the designate Judge, two judgments of this Court, one A.B.C. Laminart [A.B. C. Laminart Pvt. Ltd. & Anr. v. A.P. (Downloaded on 28/06/2019 at 05:07:44 AM) (8 of 12) [CW-9968/2016] Agencies, Slem; 1989(2) SCC 163] and the other Rajasthan State Electricity Board [Rajasthan State Electricity Board v. Universal Petrol Chemicals Limited; 2009(3) SCC 107] were cited. The designated Judge applied A.B.C. Laminart (supra) and held that Rajasthan High Court did not have any territorial jurisdiction to entertain the application under Section 11 and dismissed the same while giving liberty to the appellant to file the arbitration application in the Calcutta High Court. It is from this order that the present appeal by special leave has arisen.
10. We have heard Mr. Uday Gupta, learned counsel for the appellant and Mr. Sidharth Luthra, learned Additional Solicitor General for the company. Learned Additional Solicitor General and learned counsel for the appellant have cited many decisions of this Court in support of their respective arguments. Before we refer to these decisions, it is apposite that we refer to the two clauses of the agreement which deal with arbitration and jurisdiction. Clause 17 of the agreement is an arbitration clause which reads as under:
17.0. Arbitration If any dispute or difference(s) of any kind whatsoever shall arise between the parties hereto in connection with or arising out of this Agreement, the parties hereto shall in good faith negotiate with a view to arriving at an amicable resolution and settlement. In the event no settlement is reached within a period of 30 days from the date of arising of the dispute(s)/difference(s), such dispute(s)/difference(s) shall be referred to 2 (two) Arbitrators, appointed one each by the (Downloaded on 28/06/2019 at 05:07:44 AM) (9 of 12) [CW-9968/2016] parties and the Arbitrators, so appointed shall be entitled to appoint a third Arbitrator who shall act as a presiding Arbitrator and the proceedings thereof shall be in accordance with the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof in force. The existence of any dispute(s)/difference(s) or initiation/continuation of arbitration proceedings shall not permit the parties to postpone or delay the performance of or to abstain from performing their obligations pursuant to this Agreement.
31. In the instant case, the appellant does not dispute that part of cause of action has arisen in Kolkata. What appellant says is that part of cause of action has also arisen in Jaipur and, therefore, Chief Justice of the Rajasthan High Court or the designate Judge has jurisdiction to consider the application made by the appellant for the appointment of an arbitrator under Section 11. Having regard to Section 11(12)(b)and Section 2(e) of the 1996 Act read with Section 20(c) of the Code, there remains no doubt that the Chief Justice or the designate Judge of the Rajasthan High Court has jurisdiction in the matter. The question is, whether parties by virtue of clause 18 of the agreement have agreed to exclude the jurisdiction of the courts at Jaipur or, in other words, whether in view of clause 18 of the agreement, the jurisdiction of Chief Justice of the Rajasthan High Court has been excluded. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like 'alone', 'only', 'exclusive' (Downloaded on 28/06/2019 at 05:07:44 AM) (10 of 12) [CW-9968/2016] or 'exclusive jurisdiction' have not been used but this, in our view, is not decisive and does not make any material difference. The intention of the parties - by having clause 18 in the agreement - is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner.
33. In view of the above, we answer the question in the affirmative and hold that the impugned order does not suffer from any error of law."
25. After hearing learned counsel for the parties as well as perusing the complete record of the case alongwith the precedent law cited at the Bar, this Court finds that the preliminary objection of the respondents is sustainable as the Military Engineering Services General Conditions of Contract in its Condition No.72, as quoted hereinbove, clearly stipulate that irrespective of the place (Downloaded on 28/06/2019 at 05:07:44 AM) (11 of 12) [CW-9968/2016] of issue of tenders, the place of acceptance of tenders, the place of execution of the contract or the place of payment under the contract, the contract shall be deemed to have been made at the place from where the acceptance of tenders has been issued and the work is executed/executable.
26. This Court also finds that the work in question, which is operating against the petitioners, comes within the total domain of the Garrison Engineer (P), which is the Headquarters of Chief Engineer, Chennai Zone and the works being done by the petitioners were executed at Chennai only.
27. This Court further finds that the petitioners themselves have provided the address of Chennai, during performance of work according to the tender conditions.
28. This Court also finds that the respondents have a fair right to raise the objection of jurisdiction so much so that the Arbitration proceedings between the parties have also taken place at Chennai.
29. This Court also sees that the Arbitration proceedings initiated by the present petitioner were also held in the Office of Headquarter Chief Engineer, Chennai Zone bearing CA No. CECZ/MH/32 of 2007-08.
30. Thus, it is an undisputed fact that the arbitration proceedings initiated by the present petitioners against the respondents and the arbitration proceedings initiated by the respondents against the present petitioners both were at their instance at the Chennai Office of Headquarter Chief Engineer, Chennai Zone, and thus, the jurisdiction is writ large on the face of the record read with the aforequoted Condition No.72 of the Military Engineering Services General Conditions of Contract. (Downloaded on 28/06/2019 at 05:07:44 AM)
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31. In light of the aforesaid observations, this Court finds that the jurisdiction of the case would lie only in Chennai and not in Rajasthan. Further, the total work operations of the petitioners and the total relationship for renewal of the petitioners' enlistment as enlisted contractors was initiated and taken up at Chennai, and the work experience which has resulted into non-renewal/non- approval of the petitioners enlistment as enlisted contractors has also taken place in Chennai.
32. Thus, without going into the merits of the case, the present petitions are dismissed on the ground of jurisdiction. The stay applications also stand dismissed accordingly.
(DR. PUSHPENDRA SINGH BHATI),J Skant/-
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