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2016 Supreme(Jhk) 1483
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Aparesh Kumar Singh, J.
Supreme Infrastructure India Limited – Petitioner
Versus
The Union of India through its Secretary, Ministry of Road, Transport and Highways – Respondent
W.P. (C) Nos. 2272 & 2852 of 2016
Decided On : 04-08-2016
For the Petitioner: Mr. Sumeet Gadodia.
For the Respondents: Mr. Rajiv Sinha, Mr. Niraj Kumar, M/s. Ajit Kumar and Aparajita Bharadwaj.
Enforcement of arbitration clause in contracts and referral of disputes to arbitration in accordance with the Arbitration and Conciliation Act, 1996.
Headnote:
Termination of Contract - Arbitration Clause - Agreements provide for arbitration clause at Clause no. 25.3 under the General Conditions of Contract. The matter arising from termination of both the Agreements in question are referred for arbitration before the Hon'ble Mr. Justice Loknath Prasad, former Judge of Patna High Court. Parties shall appear before the Learned Arbitrator on 20.08.2016. It is expected that the arbitration proceedings would be concluded in an expeditious manner, preferably within a period of six months, keeping in line with the provisions contained in the Arbitration and Conciliation (Amendment) Act, 2015.
Fact of the Case:
The writ petition challenges the termination of two contracts for road construction and the forfeiture of security deposits by the Road Construction Department, Jharkhand. The contracts were terminated and security deposits forfeited by the Chief Engineer (Communication), Road Construction Department, Jharkhand.
Finding of the Court:
The court referred the matter for arbitration before the Hon'ble Mr. Justice Loknath Prasad, former Judge of Patna High Court, in accordance with the arbitration clause provided in the agreements.
Issues: Termination of contracts, forfeiture of security deposits, availability of alternative dispute resolution mechanism, and reservation of rights by the respondents.
Ratio Decidendi: The court decided to refer the matter for arbitration in line with the arbitration clause provided in the agreements, allowing the parties to raise their claims and counter claims before the Learned Arbitrator.
Final Decision: The writ petitions stand disposed of, and pending I.As are accordingly closed.
Aparesh Kumar Singh, J.
1. This writ petition been preferred to challenge the termination of the contract (Agreement No. 01-NCB/2012-13 dated 20.07.2012) for the work of widening to intermediate lane and improvement of Sisai-Basia Road from Km 0.0 to 37.775 issued by the Chief Engineer (Communication), Road Construction Department, Jharkhand (Annexure-16). Pursuant thereto, security deposit also stood forfeited to the Government. The impugned letter also refers to the communication of Superintending Engineer (LWE), MoRTH & H, New Delhi vide letter no. NH-12014/411/2010/JH/LWE dated 18.04.2016 and Secretary, Road Construction Department, Jharkhand, Ranchi Letter No. 2586(S) dated 25.04.2016. Annexure-15 is communication of the Superintending Engineer (LWE), Ministry of Road Transport and Highways, Government of India requesting the Principal Secretary, Road Construction Department, Government of India to take necessary action in the matter of proposal for termination of the Contract Agreement of the petitioner in relation to the same work. This also been challenged by the petitioner as admittedly, the work in question is sponsored by the Ministry of Road Transport and Highways, Government of India.
2. However, it is pertinent to notice here that the Agreement itself been executed between the petitioner and the Respondent No. 6 - Executive Engineer, Road Division, Gumla, Road Construction Department, Gumla. It is further pertinent to notice here that on 03.05.2016 when the matter was taken up for the first time, while granting time to the Respondent State and Union of India, it was observed that pendency of the writ application would not preclude the parties from going to an alternative resolution of the dispute. It was also observed that any forfeiture made pursuant to the impugned order, would be subject to the outcome of the writ petition.
3. Incidentally, during pendency of the writ application, the Respondent Department issued a e-tender bearing Reference No. RCD/Gumla (LWE)/448 dated 20.05.2016 for award of “Remaining Work of Strengthening and Widening of Sisai-Basia Road from K.M. 0.00 to 37.775 (under LWE Scheme) and also (Widening to Intermediate Lane and Improvement of Sisai-Basia Road from K.M. 0.000 to 37.775 K.M.)”. This was assailed by the petitioner in I.A. No. 3442/2016. By order dated 03.06.2016 passed by a Coordinate Bench of this Court, further process of e-tender Reference was stayed. During course of the proceedings thereafter, parties were directed to explore the possibilities for referring the matter for arbitration and suggest choice of the names of the Learned Arbitrator. The Respondent- Union of India was asked to furnish its response as well.
WP (C) No. 2852/2016
4. This writ petition been preferred to challenge the termination of the contract (Agreement No. 07-SBD/2012-13 dated 18.07.2012) for the work of widening to intermediate land and improvement of Chakulia-Matihani Road from Km 0.0 to 27.60 issued by the Chief Engineer (Communication), Road Construction Department, Jharkhand (Annexure-15). Pursuant thereto, security deposit also stood forfeited to the Government. The impugned letter also refers to the communication of the Secretary, Road Construction Department, Jharkhand, Ranchi vide Letter No. 3036(S) dated 13.05.2016 and MoRTH & H, New Delhi vide letter no. 2154(S) dated 30.03.2016. Annexure-16 letter dated 1071 dated 21.05.2016 issued by the Respondent No. 3 - Executive Engineer, Road Construction Department, Road Division, Jamshedpur pursuant to the termination of the contract dated 20.05.2016, also been challenged, where under petitioner been directed to be present for final measurement of the works undertaken.
5. It is to be taken note of that when the matter was taken up on 28.05.2016 before a Coordinate Bench of this Court, while granting time to the Respondents to file counter affidavit, an order of status quo, as on that date, was directed to be maintained. It is also pertinent to me
