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2023 Supreme(Cal) 1630
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
T.S. SIVAGNANAM, CJ., HIRANMAY BHATTACHARYYA, J.
Harji Engineering Works Pvt. Ltd. - Appellant
Versus
Union of India & Anr. – Respondents
M.A.T. 1299 of 2023 With I.A. No. CAN 1 of 2023
Decided On : 17-08-2023
For the Appellant : Mr. Sirsanya Bandyopadhyay, Ms. Deboleena Ghosh.
For the Respondents: Mr. Saurik Nandy, Mr. Rohit Das, Ms. Kishwar Rahman, Mr. Indradip Das, Ms. Sristi Roy.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Tender termination - Intra-Court appeal against order permitting floating of a new tender at the risk and cost of the appellant after contract termination. The court determined that the new tender was consequential and the arbitration provision applies. A fresh cause for action is recognized. (Paras 1, 4, 5, 6)
(B) Jurisdiction - The court ruled on the appropriate forum for challenges, affirming that the arbitration clause applies to new tenders post-termination, thus a writ petition is inappropriate. (Paras 4, 5, 6)
Facts of the case:
The appellant's contract was terminated, prompting the tendering authority to float a new tender, which the appellant challenged citing jurisdiction and invoking the arbitration clause.
Findings of Court:
The court allows the appellant to file a fresh application under Section 9 of the Act, indicating recognition of new causes arising post-termination.
Issues: The key issues included the applicability of the arbitration clause to new tenders and jurisdictional questions about the appropriate forum for the appellant's challenge.
Ratio Decidendi: The court held that the termination of the contract inherently triggers the arbitration clause concerning the new tender and that the learned single Bench retains jurisdiction until the arbitration proceedings are completed.
Result: The appeal is disposed of.
| Table of Content |
|---|
| 1. challenge to termination and tender floating (Para 1) |
| 2. jurisdiction issues raised by respondents (Para 2 , 3) |
| 3. consequences of contract termination and arbitration applicability (Para 4 , 6) |
| 4. appellant's liberty to file fresh application under arbitration act (Para 5) |
| 5. conclusion and order of appeal (Para 7 , 8 , 9) |
JUDGMENT :
(T.S. Sivagnanam, C.J.)
1. This intra-Court appeal filed by the writ petitioner is directed against the order dated 6th July, 2023 in W.P.A. 12900 of 2023. In the said writ petition, the appellant had challenged the action of the 2nd respondent in floating a new tender with regard to the subject work through ‘Risk and Cost’ of the petitioner/appellant, who was initially awarded the tender, which stood terminated consequently. As against the order of termination, the appellant has rightly invoked the arbitration clause and notices have also been issued and the appellant has also moved an application under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity, “the Act”) before the learned single Bench of this Court. We are informed by the learned advocate appearing for the appellant that the arguments have been heard by the learned single Bench and orders have been reserved.
2. The learned advocate appearing for the 2nd respondent/tendering authority submits that in the said application filed under Section 9 of the Act, an order of status quo has been granted and the 2nd respondent has questioned the jurisdiction of the learned single Bench of this Court to entertain the application filed under Section 9 of the Act and the appropriate forum would be the Commercial Court at Rajarhat and not before this Court.
3. The learned advocate appearing for the 2nd respondent submitted that the new tender floated has been finalised and a third party has been awarded the work.
4. The proceedings, which were impugned in the writ petition are consequence upon the termination of the contract awarded to the appellant. We say so because upon termination of the contract, the 2nd respondent has floated a new tender subject to the ‘Risk and Cost’ of the appellant. Thus, the new tender having been floated is in effect a consequential action upon termination of the contract awarded to the appellant at the first instance. Therefore, the arbitration clause, which is available in the tender document will equally apply to the challenge to the fresh tender, which has been floated at the risk and cost of the appellant. Therefore, the appellant should invoke the provisions of the Act and a writ petition questioning the correctness of the same cannot be entertained.
5. In the light of the fact that already arguments have been heard and orders have been reserved in the application filed by the appellant under Section 9 of the Act, the appellant is at liberty to file a fresh application under Section 9 since according to the appellant floating of a new tender at the risk and cost of the appellant gives it a fresh cause of action. Liberty sought for is granted.
6. We make it clear that the observations/findings rendered by the learned writ Court in the impugned order dated 6th July, 2023 will not in any manner prejudice the appellant from canvassing all grounds, both factual and legal in the proceedings, which it proposes to initiate under Section 9 of the Act.
7. With the above observations, the appeal along with the connected application are disposed of.
8. No costs.
9. Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.
I agree,
(Hiranmay Bhattacharyya, J.)
