GAUHATI HIGH COURT (AIZAWL BENCH)
Nelson Sailo, J.
M/s. GSR Venture Private Limited - Appellant
Versus
State Of Mizoram - Respondent
Arbitration Petition No. 5 of 2019
Decided On : 12-03-2020
Arbitration - Appointment of Sole Arbitrator - Arbitration & Conciliation Act, 1996, Section 11 - Summary of Acts and Sections: Act of 1996, Section 11 - The court discussed the provisions of Clause 24 and 25 of the General Conditions of Contract (GCC) under the Standard Bidding Document for PMGSY, and the implications of the Dispute Redressal System. The court also considered the Amendment Act of 2019, which omitted Sub-Section 6-A of Section 11 of the Act of 1996, and its impact on the appointment of an Arbitrator. The court referred to relevant case laws to support its decision.
Fact of the Case:
The petitioner sought the appointment of a sole Arbitrator under Section 11 of the Arbitration & Conciliation Act, 1996, due to disputes arising from a construction and maintenance agreement. The respondents contested the appointment, citing the Dispute Redressal System under the General Conditions of Contract (GCC) and a specific bar for arbitration under Clause 25.1 of the GCC.
Finding of the Court:
The court found that the Dispute Redressal System had failed to address the petitioner's grievances within the stipulated time frame, and the specific bar for arbitration did not preclude the appointment of an Arbitrator. The court appointed an Arbitrator to resolve the disputes between the parties.
Issues: The issues revolved around the failure of the Dispute Redressal System, the specific bar for arbitration under the GCC, and the applicability of the Amendment Act of 2019 in the appointment of an Arbitrator.
Ratio Decidendi: The court held that the failure of the Dispute Redressal System and the specific bar for arbitration did not preclude the appointment of an Arbitrator. The court also considered the implications of the Amendment Act of 2019 in expediting the appointment process.
Final Decision: The court appointed Hon'ble Mr. Justice B.P Katakey, former Judge of the Gauhati High Court, as the Arbitrator to resolve the disputes between the parties within a reasonable period.
JUDGMENT
Nelson Sailo, J. - Heard Mr. B. Pathak, learned counsel appearing for the petitioner. Also heard Mrs. Linda L. Fambawl, learned Govt. Advocate appearing for the respondents.
2. By filing this application under Section 11 of the Arbitration & Conciliation Act, 1996, herein after referred to as the "Act of 1996", the petitioner seeks the appointment of a sole Arbitrator to adjudicate the dispute in connection with Agreement No. 1/MiRRDA/2014-2015 dated 25.09.2014, which was for construction and maintenance of Rawkbuk - Lungtian Road, 0.00 kmp - 14.00 kmp.
3. The petitioner claims to be a Private Limited Company registered under the Companies Act, 1956. The Government of Mizoram in the Public Works Department floated a tender under the Pradhan Mantri Gram Sadak Yojana (PMGSY) for construction of the aforesaid stretch of road and the petitioner participated in the tender process. Being the most eligible bidder, the petitioner was awarded the work and a Letter of Acceptance was issued on 10.09.2014, whereafter, an agreement was signed on 25.09.2014 between the petitioner and the Mizoram PWD.
4. According to the petitioner, during the execution of the work, the petitioner faced many hindrances, which were beyond its control resulting in delay of the completion of the work. A show Cause Notice was issued to the petitioner on 20.06.2018, by the respondents and the same was replied to by the petitioner on 18.09.2018, explaining the reasons for the delay and the difficulty faced in the execution of the contract work. The petitioner also stated that they have started taking up the balance work and they intend to complete the same within the month of March, 2018. According to the petitioner, despite non-payment of their legitimate dues, they completed the work. Therefore, the monetary dues in their favor is yet to be considered and paid by the respondents. The further contention is that the General Conditions of Contract (GCC) between the petitioner and the respondents is a standard format adopted across the country for execution of work under the PMGSY. Clause 24 of the GCC provides for Dispute Redressal System. Therefore, in terms of Clause 24.1 of the GCC, the petitioner submitted their dispute and claims for settlement before the Superintending Engineer, PWD, Lunglei Circle on 17.03.2019 but the same was not replied to. As such, the petitioner approached this Court by filing Arbitration Petition No. 2/2019, seeking for the appointment of an Arbitrator. Against the Arbitration Petition, the respondents filed their affidavit-in-opposition on 26.08.2019 contending inter-alia that the "Competent Authority" as mentioned in the Standard Bidding Document is not the Superintending Engineer but the Chief Executive Officer. In view of such stand, the petitioner withdrew the Arbitration Petition on 03.10.2019 with liberty to approach the Court afresh, if so warranted.
5. The petitioner then approached the Competent Authority i.e., the Chief Executive Officer with their grievance by submitting a detailed representation on 09.09.2019. The petitioner also submitted a similar representation before the Chief Engineer (Roads), PWD on the same day. Both the representations were received by the 2 (two) authorities on 09.09.2019 itself. As per the GCC, the competent authority is required to redress the grievance within 45 days. Despite the period having lapsed on 23.10.2019, the respondents have not given any consideration to the dispute and claims raised by the petitioner. Thus, being aggrieved, the petitioner is again before this Court through the present petition.
6. Mr. B. Pathak, the learned counsel submits that as per the Dispute Redressal System, the competent authority on receiving the representation or the complaint is required to convey its decision to the Contractor concerned within 45 days. However since no such disposal or reply was forthcoming from the competent authority, the petitioner has filed the instant Arbitration Petition. H
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