The court reaffirmed that contractual dispute resolution mechanisms should be utilized, disallowing jurisdiction under Article 227 unless there is a demonstrated case of perversity.

JUDGMENT

Prathiba M. Singh, J. (ORAL)--The present petition has been filed by the Petitioner challenging the impugned letter dated 24th June 2019, issued by Respondent No. 1- NHPC Ltd. (hereinafter "NHPC"), directing the appointment of Shri. H.L. Bajaj as the Adjudicator in respect of claims raised by NHPC for a sum of Rs.4.55 crores qua the Reconstruction of the permanent bridge over the River Jhelum at Bandi, Jammu and Kashmir.

2. The case of the Petitioner is that the appointed Adjudicator had earlier rejected the claim for compensation of the NHPC, and a second round of adjudication by the same Adjudicator is not permissible, under the terms of the contract entered into on 6th February 2006.

3. Mr. Anish Chawla, ld. counsel for the Petitioner submits that the Adjudicator is charging a huge fee and the Petitioner is being saddled with the expenses of the same. In terms of the contract, he submits that the Adjudicator ought to have decided the issue within 28 days, as provided in Clause 56.1.2 of the General Conditions of Contract, which he has failed to do and hence he became functus officio.

4. On the other hand, Mr. Sharma, ld. counsel for Respondent No.1, has challenged the territorial jurisdiction of this court on the ground that the entire project was to be executed in Srinagar, Jammu & Kashmir, and even the venue of the arbitration is Srinagar, Jammu & Kashmir. Accordingly, he submits that this Court ought not to entertain the present writ petition.

5. The Court has perused the contract, especially clause 56 of the contract, which lays down the complete mechanism for settlement of disputes, including for the appointment of Adjudicator, and thereafter for arbitration proceedings.

6. This court is of the view that as a proper mechanism of settlement of disputes is provided as per scheme of the contract, the exercise of jurisdiction of this Court, under Article 227 of the Constitution of India is not appropriate.

7. If the Petitioner is aggrieved by any decision/action taken by the Adjudicator, or with the appointment of the Adjudicator, a challenge to the same ought to be raised before the appropriate forum as per the contractual scheme, if the Petitioner deems it appropriate. If the Adjudicator has given an order, which is liable to be challenged, the Petitioner would have to resort to settlement/adjudication of disputes as per the procedure prescribed under clause 56 of the contract, and cannot invoke the jurisdiction of this Court, under Art. 227 of the Constitution of India, unless there is a case of perversity that is made out. The said clause reads:

"CLAUSE-56: SETTLEMENT OF DISPUTES:

56. 1 Adjudicator

56.1.1 If any dispute of any kind whatsoever shall arise between the Corporation and the Contractor in connection with or arising out of the Contract, including without prejudice to the generality of the foregoing any question regarding its existence, validity or termination, or the execution of the Facilities - whether during the progress of the facilities or after their completion and whether before or after the termination abandonment or breach of the Contract - the parties shall seek to resolve any such dispute of difference by mutual consultation. If the parties fail to resolve such a dispute or difference by mutual consultation. If the parties fail to resolve such a dispute or difference by mutual consultation then the dispute shall be referred writing by either party to the Adjudicator, with a copy to the other party.

56.1.2. The Adjudicator