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2002 Supreme(Guj) 871

Gujarat High Court
Judgename :J.N.PATEL
VINODBHAI MOHANBHAI VEKARIA - Appellant
Versus
STATE - Respondent
S.C.A. 9285 of 2002
Decided On : 12/19/2002

Advocates Appeared: P.J.Kanabar

Headnote:

Constitution of India - Article 227 - Indian Arbitration Act - Sections 34, 21 - Learned AGP waives service of notice of rule on behalf of the State Government - With the consent of the parties the matter is taken up for final hearing today - Civil suit is filed prior to the enactment of Public Works Contracts Disputes Arbitration Tribunal Act - Whether the Civil Courts jurisdiction is ousted or is required to be transferred to the Tribunal or whether the Civil Court has the jurisdiction to try such suits - Petitioner filed Special Civil Suit for the recovery of on the ground of recovery of the amount towards security deposit, non-payment of the work already undertaken, loss of profit of the works contract entered into by the petitioner with the respondent State said Civil Suit Application was filed by the State Government to stay the proceedings of the Civil Suit on the ground that there is a clause of arbitration and the matter can be referred to the arbitrator - Learned Civil Judge passed the order below the said application - Whereby the application was dismissed and the request of the State Government to stay the proceedings of the Civil Suit in view of Section of the Indian Arbitration Act was dismissed - Statement is made at the bar that the said order is not challenged before any higher forum and is operating as on today - Held, learned AGP and even the reference made by the learned trial Judge in the impugned order upon the decision of this Court in the case of Agricultural University are ill-founded in as much as in the said case Application under the Arbitration Act was moved before the Court for appointment of the Arbitrator and at that stage the matter was considered as to whether the proceedings are required to be transferred to the Tribunal constituted under the Act or not. Similarly, in the decision University facts were that after the appointment of the Arbitrator, the award was passed on and after the award the proceedings were pending before the Civil Court under Section of the Arbitration Act and at that stage the question arose for transferring the proceedings to the Tribunal constituted under the Act whereas in the present case no proceedings are initiated under the Arbitration Act before the Civil Court - It may be in a case the proceedings before the Civil Court may be initiated under the Arbitration Act prior to the appointment of the Arbitrator also but such is not even the case because as observed above the request to invoke the Arbitration clause is expressly not accepted by the Court - Proceedings of the Special Civil Suit are pending in the Civil Court under the Arbitration Act and therefore Section of the Act will have no application - As a consequence thereof the Civil Court will continue to assume the jurisdiction for entertaining and trying the proceedings of Special Civil Suit - Appears that the learned Judge has manifestly committed error in exercising the jurisdiction therefore the order deserves to be quashed by exercising power under Article 227 of the Constitution of India - Order dated passed by the learned Civil Judge Application below is quashed and set aside. Special Civil Suit shall stand restored to the Court of Civil Judge - Petition is allowed.

JAYANT PATEL, J.

( 1 ) RULE. Mr. Gori, learned AGP waives service of notice of rule on behalf of the State Government. With the consent of the parties, the matter is taken up for final hearing today.

( 2 ) THE short question involved in this petition is that if civil suit is filed prior to the enactment of Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (hereinafter referred to as "act"), whether the Civil Courts jurisdiction is ousted or is required to be transferred to the Tribunal or whether the Civil Court has the jurisdiction to try such suits.

( 3 ) THE short facts of the case are that the petitioner filed Special Civil Suit No. 151/1986 in the Court of Civil Judge (S. D.), Gondal for the recovery of Rs. 5,72,575. 82 on the ground of recovery of the amount towards security deposit, non-payment of the work already undertaken, loss of profit etc. , of the works contract entered into by the petitioner with the respondent State Government. In the said Civil Suit, Application Ex. 24 was filed by the State Government on 28-10-1988 to stay the proceedings of the Civil Suit on the ground that there is a clause of arbitration and the matter can be referred to the arbitrator. The learned Civil Judge on 30-11-1989 passed the order below the said application Ex. 24, whereby the application was dismissed and the request of the State Government to stay the proceedings of the Civil Suit in view of Section 34 of the Indian Arbitration Act was dismissed. A statement is made at the bar that the said order is not challenged before any higher forum and is operating as on today.

( 4 ) THEREAFTER, on 29-7-2002, on behalf of the State Government, application Ex. 174 was filed to transfer the proceedings of the suit to the Tribunal constituted under the Act. The learned Judge passed the order on 31-7-2002, below Application Ex. 174, whereby he found that the matter is required to be transferred to the Tribunal constituted under the Act and, therefore, he ordered accordingly. It is that order of the learned Judge, which is under challenge in this petition.

( 5 ) MR. KANABAR, learned Counsel appearing for the petitioner has relied upon the judgement of this Court in the case of "gujarat Water Supply and Sewerage Board thro. Executive Engineer v. Heirs and L. R. of Pravinbhai Patel" (Coram: HH Mehta, J.), reported in 2002 (2) G. H. J. , 70 and unreported decision of this Court in the case of "state of Gujarat v. Valji Puna and Co. " (Coram: NN Mathur, J.) passed in Civil Revision Application No. 1286 of 1996 to contend that Section 21 would not be applicable in a matter where the dispute is not pending under the Arbitration Act in a Court and he has submitted that the learned Judge has committed error in exercising the jurisdiction while transferring the matter to the Tribunal constituted under the Act.

( 6 ) ON behalf of the State Government, Mr. Gori, learned AGP, while supporting the order passed by the learned Judge, has relied upon the decisions of this Court in the case of "sardar Patel University v. Patel and Co. ", reported in 1999 (2) GLH, 1264 and in the case of "sorathia Velji Ratna and Co. v. Gujarat Agricultural University and Anr. ", reported in 2000 (4) GLR, 3666 to contend that even if the dispute is in respect to the contract prior to the Act came into force, the matter is required to be transferred to the Tribunal constituted under the Act and the learned Judge has rightly passed the order.

( 7 ) HAVING considered the above and the scheme of the Act and Section 21 of the Act is relevant for the purpose of this petition, which reads as under:"21. THE provisions of the Arbitration Act, shall in so far as they are inconsistent with the provisions of this Act, cease to apply to any dispute arising from a works contract and all arbitration proceedings in relation to such dispute before an arbitrator, umpire, court or authority shall stand transferred to the Tribunal. "on true construction of Section 21 of the Act









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