Madhya Pradesh High Court
Madhya Pradesh Road Development ... vs Ministry Of Road Transport Highways ... on 2 May, 2024
Author: Sheel Nagu
Bench: Sheel Nagu, Amar Nath Kesharwani
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE SHEEL NAGU
&
HON'BLE SHRI JUSTICE AMAR NATH KESHARWANI
ON THE 2nd OF MAY, 2024
W.P. No.4903 of 2024
BETWEEN:-
1. MADHYA PRADESH ROAD DEVELOPMENT
CORPORATION LTD.
2. MINISTRY OF ROAD TRANSPORT &
HIGHWAYS THROUGH ITS SECRETARY
AND ALSO MPRDC,
THROUGH ITS DIVISIONAL MANAGER,
MPRDC, REWA, DISTRICT- REWA (M.P.)
....PETITIONERS
(BY SHRI PRASHANT SINGH - SENIOR ADVOCATE WITH SHRI
ANVESH SHRIVASTAVA - ADVOCATE)
AND
M/S CONCAST PATH BAMEETHA SATNA
ROAD PROJECT PRIVATE LTD., 21 HEMAN
BASU ASRANI, GROUND FLOOR,
CALCUTTA.
.....RESPONDENT
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(BY SHRI NAMAN NAGRATH - SENIOR ADVOCATE WITH SHRI
PRAKASH UPADHYAYA - ADVOCATE)
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This petition coming on for admission this day, Hon'ble Shri
Justice SHEEL NAGU passed the following:
ORDER
This petition filed under Article 226 of the Constitution of India assails order dated 22.11.2023 (Annexure P/9) by which three-member Arbitral Tribunal constituted under Clause 44.3 of Concessionaire Agreement (for brevity "CA") r/w Rule 5(2) of International Centre for Alternative Dispute Resolution Arbitration Rules, 1996 (for brevity "ICADR Rules") dismissed an application preferred by petitioners u/S 16(2) of Arbitration and Conciliation Act, 1996 (for brevity "Act of 1996") questioning the jurisdiction of three-member Arbitral Tribunal to decide the dispute in question.
2. Learned counsel for rival parties Shri Prashant Singh, Senior Advocate with Shri Anvesh Shrivastava, Advocate for petitioners and Shri Naman Nagrath, Senior Advocate with Shri Prakash Upadhyaya, Advocate for respondent, are heard extensively.
3. Learned counsel for petitioners relying upon Madhya Pradesh Rural Road Development Authority and another vs. L.G. Chaudhary Engineers and Contractors, (2018) 10 SCC 826 (Para 14), Supreme Court Employees Welfare Association vs. Union of India and another
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(1989) 4 SCC 187 (Para 23) and Viva Highways Limited vs. Madhya Pradesh Road Development Corporation Limited [2017 (2) MPLJ 681], primarily contends that considering the dispute in question essentially relating to Works Contract, the three-member Arbitral Tribunal by wrongly interpreting the true meaning and purport of Clause 44.3 of CA has passed the impugned order. It is further contended that despite having no jurisdiction to entertain a dispute squarely falling within the definition of Works Contract and thus lying within the exclusive jurisdiction of Madhya Pradesh Arbitration Tribunal constituted under Madhyastham Adhikaran Adhiniyam, 1983 (for brevity "Adhiniyam of 1983"), the impugned order has been passed.
4. On the other hand, Shri Naman Nagrath, learned Senior Advocate with Shri Prakash Upadhyaya, Advocate for respondent- contractors by relying upon the decision of Indore Development Authority vs. Arbitral Tribunal [(2016) SCC OnLine MP 10787], Ellora Paper Mills Limited vs. State of M.P. and others [2017 (2) MPLJ 77], Shivhare Road Lines, Gwalior vs. Container Corporation of India Limited, Noida and another [2017 (3) MPLJ 600] & Suncity Dhoot Colonizers Private Limited vs. Ram Chandra Patidar [2024 SCC OnLine MP 1203] and supporting the impugned order, submits that the impugned order contains enough reasons and findings after due consideration of all rival contentions to save it from being sacrificed at the alter of judicial review under Article 226 of the Constitution where the scope of interference is
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extremely limited specially in the face of unavailed statutory remedy u/S 16(6) of the Act of 1996.
5. In view of the preliminary objection as regards maintainability of this writ petition raised by learned senior counsel for respondent, this Court proceeds first to dwell upon the same.
5.1 Section 16 of the Act of 1996 confers statutory power on the Arbitral Tribunal constituted under the Act of 1996 to decide on the question of their own jurisdiction, provided such objection is raised not later than submission of statement of defence with the caveat that a party raising the objection shall not be precluded from doing so merely because such party has participated in appointment of Arbitrator, with further caveat that Arbitral Tribunal shall have power to condone the delay in raising such plea.
5.2 On a plea of lack of jurisdiction being raised, the same shall be decided by Arbitral Tribunal and if the same is not upheld then a decision rejecting the said plea shall be passed and arbitral proceedings shall go on till passing of arbitral award which shall inter alia contain finding regarding rejection of plea of lack of jurisdiction.
5.3 Any party aggrieved by rejecting the aforesaid plea of lack of jurisdiction is estopped from raising a challenge to the same at any stage prior to passing of final award by Arbitral Tribunal, whereafter aggrieved party can take recourse to Section 34 of the Act of 1996 by
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filing an application for setting aside arbitral award on the ground enumerated in the said Section.
5.4 The object behind absence of any statutory remedy against rejection of plea of want of jurisdiction is to ensure an expeditious passing of arbitral award with least interference of Courts in arbitral process [please see SBP & Co. vs. Patel Engineering Ltd. and another [(2005) 8 SCC 618 (Para 45)], Deep Industries Ltd. vs. Oil and Natural Gas Corporation Ltd. And another [ (2020) 15 SCC 706 Para 22] & (Bhaven Construction vs. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd. and another [(2022) 1 SCC SCC 75 (Para 19, 21, 26 & 27)].
5.5 The ground raised by petitioner that the dispute essentially relates to Works Contract thereby ousting the jurisdiction of Arbitral Tribunal does not impress this Court. Bare perusal of the well reasoned and considered impugned order reveals that the said plea has been duly considered by Arbitral Tribunal and has been rejected by recording cogent reasons which may be erroneous but that by itself cannot impel this Court to invoke the power of judicial review to interfere with the impugned order [please see (2005) 8 SCC 618 (Para 46) (SBP & Co. vs. Patel Engineering Ltd. and another)].
5.6 The Arbitral Tribunal has taken pains while passing the impugned order to interpret and cull out the true meaning and purport of Clause 44.3.2 of CA and render a prima facie finding that the said clause of CA
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does not make available remedies under the Adhiniyam of 1983 for the parties to the agreement.
5.7 The aforesaid findings rendered in the impugned order may not be palatable to petitioners and the possibilities of another view having been taken also cannot be ruled out but that by itself cannot be a ground for successfully assailing the impugned order on the anvil of power of juridical review.
5.8 It is settled law that when an alternative statutory remedy is available, the same ordinarily needs to be availed unless exceptions for invoking the power of judicial review under Article 226 of the Constitution are available. The exceptions are as follows:
(a) The impugned order is violative of any statutory or constitutional provision;
(b) The impugned order is passed in breach of principles of natural justice;
(c) The impugned order inherently lacks jurisdiction;
(d) The impugned order is an outcome of malice in law and fact (please see Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others [(1998) 8 SCC 1 Para 15], Harbanslal Sahania vs. Indian Oil Corporation Ltd.
[(2003) 2 SCC 107 Para 7], Jaipur Vidyut Vitran Nigam Ltd. and others vs. MB Power Ltd. and others [(2024) SCC
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OnLine SC 26 Para 139], & Radha Krishna vs. State of Himanchal Pradesh [(2021) 6 SCC 771 Para 24] .
5.9 In the instant case, primary objection of petitioners is that the three-member Arbitral Tribunal lacks jurisdiction to decide an issue which relates to Works Contract. The Act of 1996 confers power on the Arbitral Tribunal to decide the question of its jurisdiction. The Arbitral Tribunal herein has rejected such a question raised by petitioners by exercising its powers u/S 16 of Act of 1996. If this Court under Article 226 of the Constitution interferes with the impugned order despite petitioners having not availed statutory alternative remedy u/S 16(6) of the Act of 1996, then this Court would be opening floodgates for inviting litigations where parties on being aggrieved by a decision u/S 16(2) of the Act of 1996 shall stall further proceedings before the Arbitral Tribunal thereby defeating one of the solemn objects of promulgation of Act of 1996 which is manifested by mandatory provisions contained in following Sections of Act of 1996:
"5. Extent of judicial intervention.--Nothwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.
29A. Time limit for arbitral award--(1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section
23. Provided that the award in the matter of international commervial arbitration may be made as expeditiously as possible and endeavour may be made to dispose off the matter within a
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period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.
(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub-
section (1) for making award for a further period not exceeding six months.
(4) If the award is not made within the period specified in sub- section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator (s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:
Provided that while extending the period under this sub- section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such delay:
Provided further that where an application under sub- section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:
Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced. (5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material (7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal. (8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section. (9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be
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made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party."
6. From the above discussion, it is obvious that the impugned order has considered all the contentions of the rival parties on the question of lack of jurisdiction raised u/S 16 of the Act of 1996 and has passed a reasoned order which does not suffer from any illegality on the anvil of Article 226 of the Constitution. More so learned counsel for petitioners has not been able to point out any breach of constitutional or statutory provision, malafides, lack of inherent jurisdiction or violation of any principles of natural justice.
7. In view of above, this Court upholding the preliminary objection of maintainability raised by respondent declines to go into the prolixity of discussing the relevancy or otherwise of the citations relied upon by the rival parties.
8. Accordingly, petition stands dismissed at the threshold.
(SHEEL NAGU) (AMAR NATH KESHARWANI)
JUDGE JUDGE
YS
Digitally signed by YOGESH KUMAR
SHRIVASTAVA
Date: 2024.05.03 18:17:48 +05'30'