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2004 Supreme(Jhk) 856

Jharkhand High Court
P.K.Balasubramanyan, J.
Sharda Construction - Appellant
Versus
State Of Jharkhand - Respondent
A.A. 3 Of 2004, A.A. 5 Of 2004
Decided On : 20 August, 2004

Headnote:Arbitration and Conciliation Act, 1996 – Section 11(6) – Clause 23 of Arbitration clause deleted by Govt. Notification – existence of arbitration Clause is sine qua non for exercising jurisdiction by chief justice in appointing on arbitration Govt. is not bound to communicate each and every notification to every individual – application dismissed (paras 4 & 5)

JUDGMENT

P.K. Balasubramanyan, C.J.

1. These are applications by a contractor under Section 11(6) of the Arbitration and Conciliation Act, 1996. According to the petitioner-firm, it had been allotted three contracts relating to the widening of National High Way No. 23 at three different stretches. They were identified as Job Nos. 515. 516 and 538. Claiming that the contractor had failed to perform his part of the contract in terms of the three independent agreements, the respondents made an adjustment from the amounts payable to it in one of the works and also refused to release the securities offered by the contractor. Claiming that it had completed the work covered by Job Nos. 515 and 516 and that those contracts must be closed, the petitioner approached this Court with a writ petition. The petitioner also questioned the attempted adjustment made by the respondents of the amounts allegedly due to the petitioner towards Job Nos. 515 and 516. towards Job No. 538. The respondents having disputed the claims of the petitioner and having contended that they were entitled to make the adjustments and that the contractor had breached the agreement, the learned Single Judge took the view that the disputes springing out of the contracts were of such a nature that they could not be satisfactorily resolved in a proceeding under Article 226 of the Constitution of India, Thus, interference was declined. The petitioner filed an appeal before this Court as Letters Patent Appeal No. 119 of 2003. That appeal was dismissed. In that appeal, an alternative plea was sought to be raised that in view of the existence of an arbitration clause in the agreement, being Clause 23 in all the agreements, this Court could appoint an Arbitrator for resolution of the disputes in terms of that clause. Apart from contending that such a course was not permissible in a proceeding originating under Article 226 of the Constitution of India, the respondents also contended that the arbitration clause stood deleted by a Government order duly published and the mere fact that the concerned clause in the agreement entered into was not struck out specifically at the time of entering into the agreement, would not enable the contractor to seek an arbitration. The Division Bench agreed with the learned Single Judge that the contractual disputes had to be left to be decided elsewhere. It also took the view that. the appeal was not an occasion for considering whether an Arbitrator was liable to be appointed in exercise of the power of the Chief Justice or his nominee under Section 11(6) of the Arbitration and Conciliation Act, 1996. The appeal was thus dismissed. It was thereafter that the petitioner filed A.A. No. 3 of 2004 and WP No. 694 of 2004, which was got converted into A.A. No. 5 of 2004 under Section 11(6) of the Act seeking the appointment of an Arbitrator.

2. According to learned counsel for the petitioner, since Clause 23 of the contract between the parties contained an arbitration clause and disputes have arisen between the parties, the Chief Justice was bound to appoint an Arbitrator and refer the dispute for adjudication by that Arbitrator. The decision of the Supreme Court in Konkan Railway Corporation Ltd. v. Rani Construction Pvt. Ltd., 2002 (2) SCC 388, was relied on to emphasize that no adjudication by the Chief Justice, or his nominee, was contemplated in such an application and even the question whether there did exist an arbitration clause had to be left to the Arbitrator to arbitrate upon. In the counter affidavit filed on behalf of the respondents, it has been submitted that the arbitration clause stood deleted by virtue of a Government order dated 18.11.1992 which was duly published in the Gazette dated 18.11.1992. The notification provided that with effect from the date of the notification. Clause 23 of all the contracts in Form F-2 will stand deleted. The Contracts involved here are also Form F-2 contracts and the fact that old forms were used and Clau





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