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2020 Supreme(Pat) 717

IN THE HIGH COURT OF JUDICATURE AT PATNA
S. KUMAR, J.
Civil Revision Nos. 36-37, 151-154 of 2019
(13.1.2020)
Shree Gopal Construction and
Developers Pvt. Ltd. (in 36, 37)
DNA Infrastructure Pvt. Ltd.
(in 151, 152, 153, 154) – Petitioners
vs.
State of Bihar & Ors. – Respondents
(in all)

Advocates Appeared:
For the Petitioners: M/s Ashish Giri, Rajat Kr. Tiwary, Deepika Sharma, Sumit Kumar Jha (in both).
For the Respondents: Mr. Pushkar Narain Shahi, Patanjali Rishi, (in both).

Headnote:

Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008 – Sections 9 and 14 – Civil Procedure Code, 1908 – Section 2(2) – Reference case – Dismissal on ground of jurisdiction – Arbitral Tribunal constituted under Bihar Public Works Contract Disputes Arbitration Tribunal Act, is a Court within meaning of court as stipulated under Clause-24 of SBD Agreement and as such Tribunal has jurisdiction to enter into reference – State of Bihar has created a separate forum for purpose of determination of disputes arising out of work contract – Under Central Act 1996 in absence of arbitration agreement, arbitration is not possible, however, State Act provides for compulsory arbitration even in absence of arbitration agreement – In present case as there is no arbitration clause, dispute has to be referred to and adjudicated by Arbitral Tribunal constituted under State Act – Jurisdiction of Civil Court is expressly barred under Section 14 of Act to entertain any dispute which comes within purview of Clause-2(e) and 2(k) – Arbitral Tribunal is statutory tribunal whose function is judicial – Proceedings before Arbitral Tribunal are judicial proceedings and Award passed is final and binding between parties – Award is a decree within meaning of Section 2(2) of CPC of principal Civil Court of original jurisdiction – There is no provision for setting aside Award under Section 34 of Arbitration and Conciliation Act, 1996 – Award is final and can be executed as a decree of Civil Court and gives finality to lis between parties subject to power of revision of High Court – State Act is a Special Act enacted for the purpose to resolve dispute between State and other which envisages compulsory arbitration and has an overriding effect over any agreement entered between parties – Judgment and Award passed by Tribunal is not sustainable and accordingly, set aside and matter remitted back to Tribunal which shall enter into reference and decide case on merit. (Paras 7, 9, 10, 15, 16, 17, 18, 19 and 20)

S. Kumar, J. – Heard both the parties.

2. These Civil revision petitions have been filed under Section 13 of the Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008 (hereinafter referred to as the Act) for setting aside the awards passed by the Bihar Public Works Contracts Disputes Arbitration Tribunal, Patna, (hereinafter referred to as the Tribunal) by which the Tribunal has dismissed the Reference Case No. 51 of 2014, Reference Case No. 50 of 2014, Reference Case No. 221 of 2016, Reference Case No. 94 of 2016, Reference Case No. 220 of 2016 and Reference Case No. 222 of 2016, on the ground that the Tribunal has no jurisdiction to decide the same.

3. Briefly stated the facts of the case is that agreement was entered between petitioners and Government of Bihar in relation to execution of project for constructing roads under PMGSY. Mechanism for Dispute Redressal System is stipulated in the agreement itself that if there is any dispute between the parties same shall be resolved in terms of Clause-24 and 25 of the SBD Agreement. As dispute arose between the parties in relation to said contract petitioners filed reference cases before the learned Tribunal under Section 9 of the Bihar Public Works Contract Disputes Arbitration Act, 2008, which was dismissed and the operative part of the order reads as follows: –

“Para 30- In view of our above discussion we find that the Bihar Public Works Contracts Disputes Arbitration Tribunal Act, 2008 is not applicable so this Tribunal has no jurisdiction to decide these reference cases. The parties may approach appropriate forum as agreed by them. Accordingly all these reference cases are hereby disposed off. The interim order if any either for stay or injunction are hereby vacated.”

4. Clause 24 and 25 of the SBD Agreement deals with dispute redressal system which reads as follows: –

“24. Dispute Redressal System. – If any dispute or difference of any kind what-so-ever shall arises in connection with or arising out of this Contract or the execution of Works or maintenance of the works there under, whether before its commencement or during the progress of work or after the termination, abandonment or breach of the Contract, it shall be referred to Empowered Standing Committee which will consist of:

I. One official member, Chairman of the Standing Empowered Committee, not below the rank of Additional Secretary to the State Government;

II. One official member not below the rank of Chief Engineer, and

III. One non-official member who will be technical expert of Chief Engineer’s level selected by the Contractor from a panel of three persons given to him by the Employer.

Such decision in respect of every matter, so referred shall, subject to review as hereinafter provided, be final and binding upon the contractor. In case, the works is already in progress, the contractor shall proceed with the execution of the works, including maintenance thereof, pending receipts of the decision of the competent authority as aforesaid with all the diligence.

24.2. The Contractor and the Employer will be entitled to present their case in writing duly supported by documents. If so requested, the Standing Empowered Committee may allow one opportunity to the Contractor and the employer for oral arguments for a specified period. The empowered Committee shall give its decision within a period of 90 (ninety days) from the date of appeal, failing which the contractor can approach the appropriate court for the resolution of the dispute.

24.3 The decision of the Standing Empowered Committee will be binding on the Employer for payment of claims up to 5% (five percent) of the Initial Contract Price. The Contractor can accept and receive payment after signing as “in full and final settlement of all claims”. If he does not accept the decision, he is not barred from approaching the courts, Similarly, if the Employer does not accept the decision of the Standing Empowered Committee above the limit of 5 % (five persons) of

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