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2018 Supreme(Jhk) 2769
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Mr. Aparesh Kumar Singh, J.
Vijeta Projects And Infrastructure Ltd. - Appellant
Versus
State Of Jharkhand & Ors. - Respondent
Arbitration Application No. 38 of 2017
Decided On : 06-12-2018
Rohitashya Roy, Advocate, for the Appellant; Vikash Kr. Sinha, AC to AG, for the Respondent
The main legal point established in the judgment is that the existence of an arbitration clause in an agreement cannot be disputed on the grounds of alleged abolition by gazette notification, and the merits of the dispute are not to be analyzed at the stage of appointing an arbitrator.
Headnote:
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)(c) - 15F2 of 2006-07 - Clause 23 - Clause 27 - Clause 30
Fact of the Case:
The petitioner sought appointment of an Arbitrator under section 11(6)(c) of the Arbitration and Conciliation Act, 1996, due to disputes arising from the execution of an agreement for construction work. The petitioner faced issues with land acquisition, disturbances by local villagers, delays in approval of drawings, and disruptions at the work site. The petitioner made requests for security arrangements and raised a dispute invoking Clause 23 of the Agreement. The respondents contested the claim, citing clauses 27 and 30 of the agreement, and alleged that the petitioner slowed down the work and submitted frivolous claims.
Finding of the Court:
The court found that the existence of the arbitration clause in the agreement was not disputed by the respondents and that the disputes between the parties were arbitrable. The court rejected the respondents' plea denying the existence of the arbitration clause and appointed an independent arbitrator to adjudicate the dispute.
Issues: The issues revolved around the existence and applicability of the arbitration clause, the validity of the petitioner's claims, and the disputed events leading to the request for arbitration.
Ratio Decidendi: The court held that the arbitration agreement, once incorporated, cannot be disputed on the grounds of alleged abolition by gazette notification. The court also emphasized that the merits of the dispute were not to be analyzed at the stage of appointing an arbitrator.
Final Decision: The court appointed an independent arbitrator to adjudicate the dispute between the parties, emphasizing the satisfaction of the ingredients to seek appointment of an arbitrator.
JUDGMENT
Aparesh Kumar Singh, J. - Heard learned counsel for the parties.
2. Petitioner sought appointment of an Arbitrator under section 11(6)(c) of Arbitration and Conciliation Act, 1996. Upon hearing the counsel for the parties, this Court by order dated 20.07.2018 allowed the Respondents to file counter affidavit in the matter, which reads as under:
Learned counsel for the petitioner submits that the Agreement No. 15F2 of 2006-07 was executed on 23.03.2007 between the petitioner and the Executive Engineer, Water Ways Division, Barhi, Hazaribagh for construction of Residual work of Keso Reservoir Scheme at Jainagar Block in Koderma District on Turn Key basis after the petitioner turned out to be the successful bidder in NIT No. 01/2006-07 issued by the Water Resource Department. Petitioner faced issue of land acquisition which kept its entire infrastructure idle causing severe financial loss to him. In between, there were disturbances by the local villagers. Petitioner requested for proper security arrangement through letter dated 14.05.2007. Petitioner renewed his request through letter dated 14.07.2007 (Annexure-4) and again through letter dated 07.09.2007 (Annexure-5) for resolution of the dispute raised by the land losers and to provide protection at the site. There were abnormal delay in approval of the drawing and designs by the Respondent Department which was also brought to their notice through letter dated 08.02.2008 (Annexure-6). The Secretary, Water Resource Department also made a request to the Secretary, Home Department through letter dated 26.02.2008 to depute at least one platoon at the worksite to maintain law and order for smooth execution of the work. Disruption by the local person however continued. Petitioner communicated this disruption to the department through its letters dated 26.03.2008, 10.04.2008 and 08.05.2008. A report of the Superintending Engineer contained in letter no. 727 dated 05.05.2008 (Annexure-9) affirmed the issue raised by the petitioner relating to non-acquisition of the land and prevailing unrest in the locality. All this entailed severe loss to the petitioner.
2. Petitioner made an application for extension of time vide Annexure-10. Meanwhile, full infrastructure was deployed at the site with the hope that the working condition would improve for execution of the work. The matter remained silent for quite some time. Thereafter, petitioner raised a dispute invoking Clause 23 of the Agreement through letter dated 10.09.2016 addressed to the Engineer Incharge (Superintending Engineer, Water Ways Circle, Hazaribagh) dated 10.09.2016 (Annexure-12). He also served notice upon the Chief Engineer of the Department at Hazaribagh on 24.04.2017 (Annexure-13). In between, meetings were held by the Engineer-in-Chief of the Department on 20.12.2014 (Annexure-14) and subsequently under the Chairmanship of the Principal Secretary of the Department on 05.02.2016 (Annexure-15). However, instead of facilitating the work through removal of encumbrances, petitioner was served with show-cause notice dated 19.05.2017 asking him to reply as to why he be not debarred from participating in future tenders of the Department on the grounds of non-completion of the work. Petitioner has furnished his reply on 16.06.2017 (Annexure-17). Department has proceeded to debar the petitioner from participating in future tenders by order 23.08.2017 (Annexure-18).
3. Arbitration Clause 23 under the Agreement entitles the petitioner to raise dispute for adjudication through Arbitration. However, Respondents have not replied to the request for arbitration to the notice dated 24.04.2017 (Annexure-13). Therefore, petitioner has been compelled to approach this court for appointment of an independent Arbitrator in terms of section 11 (6) of Arbitration and Conciliation Act, 1996.
4. Learned counsel for the Respondent prays for and is allowed four weeks'' time to file counter affidavit.
5. List it accordingly.
3. In the counter af
