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Showing contexts for: pma arbitration in Engineering Projects (India)Ltd vs M/S Hll Life Care Ltd on 18 February, 2014Matching Fragments
4. The 2nd respondent convened a meeting on 27.12.2016 with the representatives of respondents 1 and 2 and the petitioner, to sort out the issue and complete the work in a time bound manner. In the meeting so held, it was decided that petitioner shall complete and hand over the ground floor to the 1st respondent by 28.02.2017, as such, petitioner engaged more than 280 labourers per day, for finishing work alone and the work was progressing in a war-
footing basis. But, to the surprise of the petitioner, 1st respondent issued Ext.P8 termination letter, overlooking Ext.P9 issued by the 4th respondent. The 1st respondent has also communicated Ext.P8 to 3rd respondent to encash Exts.P2 and P2(a) bank guarantees. According to the petitioner, a perusal of Ext.P11 will establish the present stage of Ext.P1 work. Though Ext.P10 was submitted by the petitioner highlighting the illegality in issuing Ext.P8, the same is left unattended. Petitioner and the 1st respondent being Central Public Sector establishments, the procedure prescribed by law is recourse to Permanent Machinery of Arbitration (PMA). These are the background facts projected to secure the reliefs sought for in the writ petition.
"V. REFERENCE
(i) As far as possible parties should try to resolve as many points of dispute as they can, amicably by mutual consultation and only those points stating the amount involved be referred to the PMA that could not be settled mutually despite best efforts from both sides. To ensure prompt disposal of dispute(s) by the PMA, both the CPSEs and the Government Departments shall refer the existing dispute(s) to the PMA at the earliest and not later than two months of arising of dispute. If any arbitrator has already been appointed in any dispute that should immediately be cancelled. Both the parties will also ensure inclusion of an Arbitration Clause (if not already done so) in favour of PMA (as given in Annexure) in all the existing and future contracts/supply orders between the parties. PMA shall not entertain the disputes referred to it without proper Arbitration Clause.
14. On the contrary, learned counsel appearing for the 1st respondent contended that in Ext.P1 agreement, there is no reference to Dispute Resolution Mechanism provided under Ext.P9. Therefore, according to the learned counsel, there is no terms entered into by and between the parties to settle any disputes by resorting to the provisions contained under Ext.P9. Learned counsel has specifically invited my attention to the last sentence of sub-clause (i) of Clause V quoted above, which read thus: "Both the parties will also ensure inclusion of an Arbitration Clause (if not already done so) in favour of PMA (as given in Annexure) in all the existing and future contracts/supply orders between the parties. PMA shall not entertain the disputes referred to it without proper Arbitration Clause". Therefore, it is the contention of the learned counsel for the 1st respondent that, since there is no arbitration clause contained under Ext.P1, petitioner is not entitled to get resolution of the disputes by resorting to the mechanism provided under Ext.P9 Office Memorandum of the Government of India. According to the learned counsel, no manner of interference is warranted to Ext.P8 order of termination passed by the 1st respondent. Other factual aspects relating to the lethargy on the part of the petitioner was also put forth to justify the action initiated by providing the contract awarded to the petitioner.
15. Taking note of the contention put forth by the respective counsel across the Bar, the question to be considered is whether in the absence of a specific clause in Ext.P1 agreement, to resolve the disputes by resorting to the mechanism provided under Ext.P9, petitioner is entitled to get the benefit of the said provisions. As I have pointed out earlier, Ext.P1 agreement is dated 18.02.2014. Ext.P9 Office Memorandum is issued by the Government of India on 12.06.2013, which thus means, while Ext.P1 agreement was executed by and between the parties, Ext.P9 O.M. was in force and therefore, the 1st respondent was duty bound to incorporate the clause in Ext.P1 agreement since the intention of Ext.P9 was to expedite the settlement of disputes relating to commercial contracts between the Central Public Sector Enterprises per se. Looking at the intention behind Ext.P9, it is categoric and clear, even if there is no clause added to Ext.P1 agreement, Ext.P9 will come into play, which can be termed as an imperative Government Order issued for the purpose of resolving the disputes by and between the Central Public Sector Undertakings in an amicable manner. It is true, learned counsel for the 1st respondent has a contention that if the clause is not included in the arbitration agreement, the PMA is not bound to entertain the dispute. But, on a reading of Clause V of Ext.P9, what I could gather is that, it specifically deals with a situation where an agreement executed is in vogue at the time of issuance of Ext.P1, and thereby cautioning respective undertakings to incorporate such clauses. Merely because such a clause is contained in Clause V, that will not take away the liability created on the Central Public Sector Enterprises to have the clause in the contract. In my considered opinion, Ext.P9 Government Order is a general conditions of contract which are to be followed by all the Central Public Sector Enterprises while entering into contracts. Therefore, the mere omission on the part of the petitioner and the 1st respondent to incorporate the same specifically into the agreement will not take away the liability created under Ext.P9 by the Government of India. Moreover, all the officers of the Public Sector Enterprises are functioning under the instructions issued by the Government of India, and therefore, it cannot overlook any of the Government Orders issued and existing in the subject matter.