Chattisgarh High Court
M/S S. Narinder Singh And Company, ... vs South Eastern Coalfields Ltd on 2 September, 2022
Author: Arup Kumar Goswami
Bench: Arup Kumar Goswami
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NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
Arbitration Request No. 2 of 2022
M/s. S. Narinder Singh & Company, Engineers & Government
Contractors through its Proprietor Manjit Singh, aged about 70
years, S/o Late S. Narinder Singh, Address : A-85, Power City,
Jamnipali, Korba, Chhattisgarh, 495450, Email -
[email protected]
---- Applicant
Versus
1. South Eastern Coalfields Ltd. Through its Chairman and
Managing Director, Headquarter, Seepat Road, Bilaspur,
Chhattisgarh, 495006
2. Area General Manager, South Eastern Coalfields Limited,
Kusmunda Area, District Korba, Chhattisgarh
3. Engineer-in-Charge, Sough Eastern Coalfields Limited,
Kusmunda Area, District Korba, Chhattisgarh
---- Respondents
(Cause Title taken from Case Information System) For Applicant : Mr. Bidya Nand Mishra, Advocate. For Respondents : Ms. Astha Shukla, Advocate.
Date of Hearing : 29.07.2022 Date of Order : 02.09.2022
_________________________________________________________ Hon'ble Shri Arup Kumar Goswami, Chief Justice CAV Order Heard Mr. Bidya Nand Mishra, learned counsel for the applicant. Also heard Ms. Astha Shukla, learned counsel, appearing for the respondents.
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2. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, for short, 'A&C Act' for appointment of an Arbitrator.
3. The respondents had floated an e-tender notice dated 07.02.2017 for "Renovation of garden area, parking place and front side of Kusmunda House at Kusmunda Area" vide NIT No. SECL/GM / KSM/CIVIL/e-Tender/16-17/162. The applicant, being the successful tenderer, was awarded the work valued at Rs.47,34,888.07. An agreement was also entered into in between the parties on 11.10.2017.
4. It is pleaded that the respondents will have to bear escalation cost for the work as it is laid down in the terms and condition of the tender that any additional cost or price escalation incurred by the applicant due to variable taxation or otherwise would be suitably reimbursed and compensated and that the applicant suffered financial loss due to price escalation amounting to Rs.12,18,117.00. Accordingly, the applicant had sent a legal notice dated 24.08.2021 claiming an amount of Rs.12,18,117.00 alongwith interest, etc., totaling Rs.23,42,927/-. It was indicated in the said notice that if the aforesaid amount along with interest @ 18% per annum till the date of actual payment within a period of 30 days is not paid and that if the amount is disputed, the dispute be referred for resolution by way of arbitration within 30 days of receipt of the notice. It was also indicated that if no steps were taken in that regard, the applicant would be constrained to initiate appropriate proceedings for appointment of Arbitrator. As no action was taken, the instant application is filed before this Court. 3
5. The applicant had relied on Clause 16 of the General Terms and Conditions of the Contract, which is on the subject of settlement of disputes.
6. The respondents had filed a return stating that the instant application for appointment of Arbitrator under Clause 16A is not maintainable, as the applicant has not exhausted the remedy of dispute resolution and settlement under Clause 16 of the conditions of the contract. No document has been placed on record showing that any dispute was raised earlier in point of time in terms of Clause 16. It is also pleaded that while accepting payment of third and final bill, the applicant had certified that he has no claim outstanding against the Department for the work in question and that claim preferred through that bill was in full and final settlement.
7. In the rejoinder-affidavit, it is stated that the claim is not made against the running and final bill, but is made on account of price escalation, which aspect has not been dealt with in the reply-affidavit by the respondents.
8. Mr. Mishra submits that the applicant has raised dispute with regard to the grievances and as no steps were taken by the respondent in terms of Clause 16 of the General Terms and Conditions of the Contract, the applicant had no option but to approach this Court for appointment of an Arbitrator.
9. Ms. Shukla submits that the applicant had not raised any dispute as raised in the letter dated 24.08.2021 in terms of Clause 16 of the General Terms and Conditions of the Contract and a belated 4 claim is made on 24.08.2021 after final payments were made on 04.09.2018. She further submits that if at all a dispute can be raised by the applicant, same has to be before a Court of law and not by way of arbitration as there is no provision for arbitration in the General Terms and Conditions of the Contract. Accordingly, she submits that this application is liable to be dismissed.
10. I have considered the submission of the learned counsel for the parties and perused the materials on record.
11. Clause 16 of the General Terms and Conditions of the Contract, as annexed by the applicant as Annexure-A/5, reads as follows :
"16. 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 GM or 5 GM/HoD(C). 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 resolved 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 in the Court of law."
12. There is no Clause 16A in the General Terms and Conditions of the Contract as stated in the return of the respondents.
13. A perusal of the Clause 16 of the General Terms and Conditions of the Contract would go to show that if there is a dispute, effort shall be made to resolve the disputes at the company level and for that purpose the contractor should make request in writing to the Engineer-in-charge for settlement of such disputes/claims within 30 days of arising of the cause of dispute/claim failing which it is indicated that no disputes/claims of the contractor shall be entertained by the company.
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14. No material has been placed on record by the applicant with regard to raising of any dispute as envisaged under Clause 16 of the General Terms and Conditions of the Contract. That apart, perusal of Clause 16 does not indicate that there was any agreement for resolution of the dispute by way of arbitration in the event of in-house mechanism of dispute redressal failing to resolve the dispute. It is stipulated that disputes relating to commercial contracts with Central Public Sector Enterprises/Govt. Departments (except Railways, Income Tax, Customs & Excise Duties) / State Public Sector Enterprises can be referred by either party for Arbitration to the PMA (Permanent Machinery of Arbitration) in the Department of Public Enterprises. It is also laid down that in the case of parties other than Govt. Agencies, the redressal of the dispute may be sought in the Court of law.
15. The applicant is not a government agency. Thus, there being no agreement in between the parties for resolution of dispute through arbitration, I find no merit in the petition.
16. Accordingly, the application is dismissed.
Sd/-
(Arup Kumar Goswami) CHIEF JUSTICE Chandra