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1998 Supreme(Bom) 498
IN THE HIGH COURT OF BOMBAY
M.B. Shah, C.J.
M/s. Premlaxmi Co...... Petitioner.
Versus
Trafalgar House Construction India Ltd..... Respondent.
Arbitration Petition No. 193 of 1998, decided on 4-9-1998.
Advocates appeared :
J.P. Devadhar, for the petitioner.
N.H. Seervai with S.V. Doijode and P.A. Kabadi i/by M/s. Shah Desai Doijode Phatarphekar, for the respondent.
Headnote:Section 2(a)-Appointment of Respondent Applicant for excavation work as per terms mutually agreed-Condition applicable Except specifically excluded-Non inclusion of Arbitration clause-Arbitration Agreement provides in Section 2(a) to mean an agreement referred to in Section 7-Reference constitutes an agreement if it is in writing.-All conditions of contract as per Tata Electric companys Tender Document were made applicable on back to back basis. The terms which were excluded are also specifically mentioned therein. It should be noted that in the letter dated 24th September 1997 (Exhibit F to the Petition) the Respondent has specifically stated that the TECL Agreement separate and distinct agreement and some of the clauses under the TECL Agreement were agreed to be incorporated into the agreement. After admitting this fact, it is stated that it was always the understanding between the parties that the terms incorporated into the Agreement were merely the technical clauses, excluding in particular the arbitration clause in the said Agreement. In view of Court this statement is without any basis because whatever was required to be excluded is specifically excluded in the Respondents letter by stating that all conditions of Contract as per Tata Electric Companys Tender Document except conditions Nos. 1 to 12 mentioned therein will be applicable. Result of the exclusion of the specific conditions would mean that the other conditions of the TECL Agreement are agreed upon by the parties.
2.It is the contention of the applicant that M/s. Tata Electric Co. (TEC) is the owner of Mulshi Dam situated at Pune. M/s. Tata Electric Co. entered into a contract with the respondent as per work order dated 1st August 1995 for strengthening the said Mulshi Dam by rock excavation and filling earth as per its specification. The respondent in turn appointed the applicant as Sub-Contractor for doing the excavation work for spillways and allied work as per the terms and conditions mutually agreed by and between the applicant and the respondent. It is also the contention of the Applicant that appointment of the applicant as Sub-Contractor was duly approved by the Tata Electric Co. The terms of the agreement between the applicant and the respondent are mentioned in the letter dated 19th September, 1995 (Exhibit 'A' to the petition) written by the respondent, which inter alia, provide as under:-
"Specific Terms and Conditions:
All conditions of contract as per Tata Electric Company's Tender document (as per attached Annexure 'A' ) except the following, will be applicable to you on back to back basis."
Annexure 'A' to the said letter is the Tata Consulting Engineers Title General Conditions of Contract. Clauses 22.1, 23.1 and 23.2 of the said General Conditions of Contract read as under:-
"22.1 The decision, opinion, certificate or valuation by the ENGINEER/OWNER with respect to all or any of the matters under scope of Contract and Clauses 3.0, 4.0, 8.0, 11.0, 12.0, 13.0, 20.0, 29.2, 30.0, 32.5, 38.0 and 40.0 hereof (which matters are herein referred to as expected matters ) shall be final and conclusive and binding on the CONTRACTOR and shall be without Appeal. Any other decision, opinion, direction, certificate or valuation of the ENGINEER/OWNER or any refusal of the ENGINEER/OWNER to give any of the same shall be subject to the right Arbitration as per clause 23.0."
"23.1 In case any dispute or difference shall arise between the OWNER or the Engineer on his behalf and the CONTRACTOR touching or concerning this contract or the construction, meaning, operation or effect thereof or of any clause herein contained or as to the rights, duties or liabilities of the parties hereto respectively or of the ENGINEER under or by virtue of these presents or otherwise or touching the subject matter of these presents or arising out of or in relation thereto (except as to matters left to the sole discretion of the ENGINEER) the same shall be referred to the arbitration of a single arbitrator in case the parties can agree upon one, otherwise, to two arbitrators, one to be appointed by each part and an umpire to be appointed by the two arbitrators before entering upon the references and in either case in accordance with the subject to the provisions of the Indian Arbitration Act, 1940, or any statutory modification or to enactment thereof for the time being in force.
(Emphasis supplied)
"23-2 Work under the contract shall, if reasonably possible continue during the arbitration proceedings and no payments due or payable by the OWNER shall be withheld on account of such proceedings."
3.It is contended by the applicant that as per the agreement dated 19th September 1995, the applicant has carried out nearly 98% of the work (including allied work) and certain disputes and differences have arisen between the applicant and the respondent which could not be settled on amicable basis. For this purpose, various meetings were held between the parties. However, high-handedly, the respondent, by its Advocate's letter dated 19th April 1997, terminated the Contract dated 19th September, 1995 without
