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1998 Supreme(Bom) 597

IN THE HIGH COURT OF BOMBAY
M.B. Shah, C.J. Y.S. Jahagirdar, J.
Ved Prakash Gupta ..... Appellant.
Versus
Municipal Corporation of Greater Bombay,
through the Municipal Commissioner others ..... Respondents.
Appeal No. 881 of 1998 in Arbitration Suit No. 3285 of 1995 and Appeal No. 882 of 1998 in Arbitration Suit No. 3286 of 1995, decided on 7-10-1998.
Advocates appeared :
N.G. Thakkar with S.U. Kamdar i/by V.L. Panjuani, for appellant.
Mrs. N.V. Sanglikar with R.D. Dhanuka, for respondents.

Headnote:Section 2(a)-Arbitration agreement-Clause only empowering higher officer to examine contentions raised by contractor and to give administrative decision-Clause providing that decision will not be arbitrable-Said clause not an arbitration agreement the parties.-Clause 96 of the contract between the parties provided "If any dispute, difference or claim is raised by the contractor relating to any matter arising under the contract, the Engineer may refer such matter to the superior not below the rank of Chief Engineer and other than Municipal Commissioner or Additional Municipal Commissioner, who, on examining the dispute, difference or claim shall give decision in writing. Such decision will be final and binding upon all parties. This decision will not be arbitrable at all." On the question whether the said clause was an arbitration agreement.

       Held, that Clause 96 only empowered .higher officer to examine the contentions raised by the contractor and give an administrative decision. The higher officer was not required to decide the mater after recording evidence and considering submissions of the parties but he was required to make enquiries, apply his mind and render decision with regard to the contentions raised by the contractor. There were no express words in the said clause stating that matter was required to be referred to arbitrator, arbitral tribunal or arbitration. Consequently there was no arbitration agreement between the parties.

       

JUDGMENT - M.B. SHAH, C.J.:---Both these Appeals can conveniently be disposed of by a common judgment.

2.These appeals are filed against the judgment and order dated 23rd April 1998 passed by the learned Single Judge in Arbitration Suits Nos. 3285 of 1995 and 3286 of 1995. It was contended before the learned Single Judge that the appellant's (original plaintiff) tender for the work of concreting of R.C. Marg, Chembur, Bombay, was accepted by the B.M.C. in the year 1992. As large amount was locked up by respondent No. 1-Corporation, the appellant (original plaintiff), by his letter dated 16-5-1994, addressed to respondent No. 3, requested for referring the dispute to arbitration. As the said request was not acceded to, the aforesaid Arbitration suits were filed by the appellant (original plaintiff) with a prayer for referring the matter to arbitration. The learned Single Judge, after considering clauses upon which the reliance was placed by the learned Counsel for the appellant, arrived at the conclusion that there was no arbitration agreement between the parties.

3.In our view, the decision of the learned Single Judge, cannot, in any way, be said to be illegal or erroneous. We would like to note that prior to 1995, under the general terms and conditions of the contract, Clause 97 provided for referring the dispute to arbitration. Clause 97, inter alia, was as under :--

"97. All disputes or differences whatsoever which shall at any time arise between the parties hereto touching or concerning the works or the execution or maintenance thereof or this contract or the construction, execution, or maintenance thereof or this contract or the construction meaning operation or effect thereof or, to the rights or liabilities of the parties or arising out of or in relation thereto whether during or after completion of the contract or whether before or after determination, foreclosure or breach of the contract (other than those in respect of which, the decision of any person is by the contract expressed to be final and binding) shall after written notice by either party to the contract to the other of them specify the nature of such dispute or difference and call for the point or points at issue to be referred to the arbitration.

Arbitration shall be effected-

(i) ........................................................

(ii) ..........................................................

(iii) ..........................................................

(iv) .........................................................."

4.After deleting Arbitration Clause 97, Clause 96 is substituted, which reads as under :--

"96. If any dispute, difference or claim is raised by the contractor relating to any matter arising under the contract, the Engineer may refer such matter to the superior not below the rank of Chief Engineer and other than Municipal Commissioner or Additional Municipal Commissioner who, on examining the dispute, difference or claim, shall give decision in writing. Such decision will be final and binding upon all parties. This decision will not be arbitrable at all."

Clause 96 of the contract between the parties clearly provides that decision rendered by the Municipal Commissioner or Additional Municipal Commissioner will not be arbitrable at all.

5.The learned Counsel appearing for the appellant contended that Clause 96 specifically provides that if any dispute is raised by the contractor relating to any matter arising under the contract, the Engineer is required to refer such matter to the superior not below the rank of Chief Engineer or Additional Municipal Commissioner. He, therefore, submitted that Clause 96 provides for referring the dispute to arbitration and the arbitrator would be superior officer not below the rank of Chief Engineer. In our view, this contention cannot be accepted because as per Clause 96, that if any dispute arises, the Engineer may refer such dispute to the superior who, on examining the dispute, is required to give















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