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2019 Supreme(Gau) 1180

IN THE HIGH COURT OF GAUHATI
PRASANTA KUMAR DEKA, J.
Subhash Projects and Marketing Ltd. - Appellant;
Versus
Assam Urban Water Supply and Sewerage Board - Respondent
Arb. A. Nos. 18, 21 and 22 of 2014
Decided on : 25-01-2019

Advocates:
Advocate Appeared:
Mr. B. Deb and Ms. P. Bhattacharya for the appellant.
Ms. M. Bordoloi for the respondent.

Headnote:

Assam Urban Water Supply & Sewerage Board Act, 1985 – Arbitration – Contract Agreement – Appellant entered into a contract agreement with the Gauhati Municipal Corporation for supply, fitting, fixing and commissioning of Raw Water Pumpset with all allied accessories including supply and laying of Pumping Machines and Barge – Work value was Rs. 6,09,55,200 and the scheme is known as Zoo Road Water Supply Scheme. – The said project was handed over to Assam Urban Water Supply & Sewerage Board, a Statutory Body under the Assam Urban Water Supply & Sewerage Board Act, 1985. – Contract period was 30 months w.e.f. 21.11.1985. – There was delay of eight years in completion of the work and in the process the respondent-Board paid Rs. 12,81,49,564. – Alleging breaches committed by the respondent-Board in fulfilling its contractual obligation, the appellant sought for referring 14 Nos. of claim for arbitration. – Held, Court is not inclined to interfere with the impugned common judgment passed by the court below inasmuch as the arbitral Tribunal is not vested with the jurisdiction to act as the dispute resolution forum between the parties to the respective agreements referred hereinabove. – Award passed by the Tribunal is patently illegal and as a result all three appeals are dismissed – Appeal Dismissed

JUDGMENT :

1. All these appeals are disposed of by this common judgment. Heard Mr. B. Deb, learned senior counsel assisted by Ms. P. Bhattacharyya, learned counsel for the appellant and Ms. M. Bordoloi, learned counsel for the respondent.

Arb. Appl. No. 18/2014

2. The appellant entered into a contract agreement with the Gauhati Municipal Corporation (agreement No. GWS/169/85/32 dated 21.11.1985) for supply, fitting, fixing and commissioning of Raw Water Pumpset with all allied accessories including supply and laying of Pumping Machines and Barge. The work value was Rs. 6,09,55,200 and the scheme is known as Zoo Road Water Supply Scheme. The said project was handed over to Assam Urban Water Supply & Sewerage Board, a Statutory Body under the Assam Urban Water Supply & Sewerage Board Act, 1985. The contract period was 30 months w.e.f. 21.11.1985. There was delay of eight years in completion of the work and in the process the respondent-Board paid Rs. 12,81,49,564. Alleging breaches committed by the respondent-Board in fulfilling its contractual obligation, the appellant sought for referring 14 Nos. of claim for arbitration.

Arb. Appl. No. 21/2014

3. The respondent-Board invited tender for design and execution of Jorhat Water Supply Scheme which included surveying of the soil, testing, etc., on turnkey basis. The work order was issued on 18.9.1989 to the appellant and formal agreement was signed by both the parties. The contract period was for 24 months w.e.f. 18.9.1989. The work value was of Rs. 5,43,81,418. The completion of work was delayed by about 7 years and in the process the respondent-Board paid an amount of Rs. 12,61,24,864 to the appellant. Alleging breaches committed by the respondent-Board the appellant sought for referring 14 Nos. of claim for arbitration.

Arb. Appl. No. 22/2014

4. On 18.9.1989 the respondent-Board also entered into an agreement with the appellant for similar nature of work under Goalpara Town Water Supply Scheme at Goalpara on turnkey basis. The contract was valued at Rs. 1,49,33,289 but as alleged by the appellant, due to failure on the part of the respondent-Board with respect to its contractual obligation, the appellant could not complete the work within the stipulated time. As against the completion period of 18 months from 18.9.1989, there was delay of five years and in the process the respondent-Board paid a sum of Rs. 2,87,85,960. Similar claims were raised by the appellant-company for referring the same to arbitration.

5. The disputes between the parties were referred to the arbitral tribunal and the first sitting of the arbitration was held on 2.1.1997.

6. The relevant dates and the developments thereon with respect to the arbitral proceeding are relevant considering the dispute raised in all these appeals which are common, i.e., whether the reference made to the arbitral tribunal and the jurisdiction assumed by it is lawful there being no written arbitration agreement as required under section 7 of the Arbitration and Conciliation Act, 1996 (‘the Act, 1996’) inasmuch as, in the respective agreements there were no arbitration clause.

(a) 28.10.1996: As apparent from the letter dated 29.10.1996 issued by the appellant-company to the Managing Director of the respondent-Board, a meeting was held on 28.10.1996 wherein purportedly the parties to these appeals, inter alia, agreed with the disputes in regard to the issue of non-payment of unadmitted outstanding amount and in the said meeting it was decided to refer the claims for arbitration. However, no minutes of meeting dated 28.10.1996 are produced nor called for by the appellant. By way of the said letter dated 29.10.1996 one Mr. S.K. Jain, advocate was nominated as the Arbitrator of the said Tribunal with a request to the Managing Director of respondent-Board to nominate its Arbitrator.

(b) 12.12.1996: Mr. K.C. Borthakur, the Managing Director of respondent-Board vide letter No. UWS-832/96/8 dated 12.12.1996 wrote to Mr. K.D. Lahkar to act as the Arbi

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