Madhya Pradesh High Court
Madhya Pradesh Madhya Kshetra Vidyut ... vs M/S Schaltech Automation Pvt. Ltd. on 11 January, 2017
HIGH COURT OF MADHYA PRADESH JABALPUR
C.R. No.366/2016
Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Ltd.
Vs.
M/s. Schaltech Automation Pvt. Ltd.
-----------------------------------------------------------------------------
Present : Hon'ble Smt. Justice Anjuli Palo
-----------------------------------------------------------------------------
Shri Ankit Saxena, learned counsel for the applicant.
Shri Rajesh Pancholi, Advocate with Shri Amraresh Mishra, counsel
for the respondent.
-------------------------------------------------------------------------------------------
ORDER
(Delivered on 11thday of January, 2017) This civil revision has been filed under Section 115 of the CPC against the order dated 2.9.2016 passed by the Commercial and Arbitration Court in MJC (Arbitration) No.196/2016, whereby the applicant's appeal has been dismissed.
2. Brief facts of the case are that, the applicant is an electricity distribution licensee for a part of State of M.P. The respondent awarded a contract for execution of "Reduction of AT & C losses in selected towns of MPMKVVCL and common in during asset mapping work MPMKVVCL/ADB/II/D/09 Lot-II Rajgarh, Sehore, Vidisha for the Contract Price in the aggregate of Rs.27,71,37,816.81/- vide letter of Award No.CMD/MK/ADB/Cell/1431 dated 14.12.2011. A Contract Agreement was executed between the parties. The respondent had not executed work as prescribed in the contract as Appendix-IV. After serving termination notice to 2 C.R. . No.366/2016 the respondent, work order was terminated on 23.11.2013 and forfeit the Bank Guarantee furnished by the respondent. Thus the dispute arose between the applicant and the respondent, the respondent approached the Hon'ble High Court by preferring a petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.
3. Smt. Renu Sharma was appointed as Sole Arbitrator by this Court. The respondent submitted claim (Annexure-P/1) before the Sole Arbitrator while the applicant raised an objection under Section 16(3) of the Arbitration and Conciliation Act, 1996 relating to the Sole Arbitrator by filing an application (Annexure-P/2), which was rejected vide order dated 20.6.2016 (Annexure-P/3). The applicant challenged the order of Sole Arbitrator before the District Court. The learned Additional District Judge dismissed the appeal holding that, when there is arbitration claim, the Provisions of M.P. Madhyasthan Adhikaran Adhiniyam, 1983 are not applicable. Copy of impugned order is filed Annexure-P/4.
4. Hence, the applicant has challenged the orders passed by the Sole Arbitrator to the Appellate Court. It is contended that the orders are patently illegal, erroneous and is contrary to law. Therefore, liable to be set aside.
5. Heard and perused the record.
6. Learned Sole Arbitrator and Appellate Court while passing the order considered that the contract awarded to the respondent is not covered under the definition of "Work Contract" under Section 2(1)(i) of the M.P. Arbitration Tribunal Act, 1983, which was defined as follows:-
"Work contract" means an agreement in writing for the execution of any work relating to the construction, repair or maintenance of any building or superstructure, 3 C.R. . No.366/2016 dam, canal, reservoir, tank, lake, road, well, bridge, culvert, factory workshop, powerhouse, transformer or such other works of the State Government or Public Undertaking as the State Government may, be notification, specify in this behalf at any of its stages, entered into by the State Government or by an official of the State Government or Public Undertaking or its official for and on behalf of such Public Undertaking and includes and agreement for the supply of goods or material and all other matters relating to the execution of any of the said works." The Notification dated 22.11.1996 specifies that the agreements in writing for execution of work relating to Construction, repair of maintenance or electric lines, water supply..... shall also be work contract.
Learned Sole Arbitrator also found that the Key word in Section 2(i) is 'execution of any work relating to Construction of..' From the Contract provisions it is clear that the Contract was to deliver, install, complete and commission certain facilities. In the present Agreement between the parties, nowhere it is stated that the contract is related to execution of any construction work or building or it is a contract for the execution of work relating to construction, repair or maintenance of electric lines. This work has direct connection to construction is not made out from the contract documents. Had there been an agreement that the said work, would come in preview of the work contract the matter would have been different. Work Order dated 6.2.2012 is for survey, re-engineering, analysis, supply, transportation storage, erection, testing, commissioning and quality assurance of all item including all other associated work on turnkey basis to bring down the AT & C losses.."
Nowhere is it mentioned that the order is for construction, repair or maintenance of power house, transformers, electric line work or the work or the goods were to be supplied for some construction, repair and maintenance 4 C.R. . No.366/2016 of power station, transformer or construction, repair or maintenance of electric lines. In absence of the same and with the clarity of language incorporated in the agreement, it does not come under the definition of a work contract as defined u/s 2(1)(i) M.P. Arbitration Tribunal Act of 1983. Hence, the present Contract is not covered under the definition of 2(i) of 1983 Act and therefore it is not a dispute which is within the sole jurisdiction of the Tribunal constituted under 1983 Act.
7. In the present agreement between the parties, nowhere it is stated that the contract is related to execution of any construction, repair or maintenance of electric lines therefore, Sole Arbitrator found that the matter is within the Sole Arbitration Tribunal constituted under M.P. Arbitration Tribunal Act, 1983.
8. In this case Hon'ble High Court while deciding the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 has considered the Arbitration agreement took place between the parties and opined that arbitration proceeding have to be conducted in accordance with Provisions of Arbitration and Conciliation Act 1996, which was not challenged by the applicant nor objected before this Court on the ground that the matter falls within the purview of M.P. Madhyastham Adhiniyam, 1983.
9. It is very important that order passed by the Chief Justice of the High Court or by the designated Judge of that Court is a judicial order and an appeal will lie against that order only under Article 136 of the Constitution to the Supreme Court nor any action taken to get the said findings set aside and therefore, findings given by this Court is binding on the parties.
10. Learned counsel for the respondent has contended that the applicant's appeal was not maintainable under Section 34 of the Arbitration 5 C.R. . No.366/2016 and Conciliation Rule and Section 16 sub-clause 2 of the Arbitration and Conciliation Act. The Sole Arbitrator has jurisdiction in relating to the contract whether the applicant is a party to the agreement and whether Arbitral dispute subsits.
11. In case of S.B.P. & Company Vs. Patel Engineering Ltd. and another (2005) 8 SCC 618, Seven Judges Bench of the Supreme Court has held that once the Chief Justice or his designate appoints an Arbitrator in an application under Section 11 of the Act, after satisfying himself that the conditions for exercise of power to appoint an arbitrator are present, the arbitral tribunal could not go behind such decision and rule on its own jurisdiction or on the existence of an arbitration clause.
12. The aforesaid judgment was followed by the Hon'ble Supreme Court in M/s. APS Kushwaha Vs. Gwalior Municipal Corporation Civil Appeal No. 1888-1889/2011 and in the matter of Jabalpur Corridor (I) Private Limited Vs. MPRD Corporation [2014 (2) MPLJ 276].
In the light of above principle laid down by the Hon'ble Superior Court, learned Sole Arbitrator has held that:-
"Section 37 of the Act makes certain orders of the arbitral tribunal appealable. Under Section 34, the aggrieved party has an avenue for ventilating his grievances against the award including any in-between orders that might have been passed by the arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act."
13. In the latest judgment of "State of M.P. Vs. Seth Mohanlal Hiralal (2016) (4) M.P.L.J.)," passed by this Court has held that when the petitioner did not challenge the order of civil Court whereby an Arbitrator was 6 C.R. . No.366/2016 appointed for arbitration. Applicant appeared before the Arbitrator and submitted to his representation. Order passed by the Court remains enforceable unless necessary proceedings are filed to get it quashed. In absence of any challenge made to the order of the Civil Court, the order for appointment of arbitrator cannot be treated as void or nulity in eyes of law. It shall be upheld till the ends of proceeding.
14. As Special Act namely M.P. Madhyasthan Adhikaran Adhiniyam, 1983 will not prevail, the work awarded in favour of the respondent by the applicant is not covered under the definition of "Work Contract" under the M.P. Madhyasthan Adhikaran Adhiniyam, 1983. Hence, the learned Sole Arbitrator has jurisdiction to decide the dispute as per the Arbitration Clause in the contract.
15. On the above grounds, the present civil revision is dismissed, as devoid of merits.
(Smt. Anjuli Palo) JUDGE pn