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2021 Supreme(Ori) 37

IN THE HIGH COURT OF ORISSA AT CUTTACK
K.R. Mohapatra, J.
Odisha State Road Transport Corporation – Petitioner
Versus
ARSS Bus Terminal Pvt. Ltd. - Opposite Party
W.P.(C) NO.2472 OF 2021
Decided On : 16-07-2021

Advocate Appeared:
For the Petitioner:Mr. Sanjit Mohanty, Senior Advocate along with Mr. Subrat Mishra, Advocate
For the Respondent:M/s. Naresh Thacker and Mr. Manish Panda, Advocates

Point of Law : Arbitration - Concession Agreement – Maintainability of writ - Power under Article 227 of Constitution in a rare and exceptional circumstance - When an alternative and efficacious remedy is available to Petitioner, writ petition should not be entertained which would impliedly circumvent efficacious statutory provision made in Arbitration Act itself.

Headnote:
Constitution of India, 1950 - Article 227 - Arbitration and Conciliation Act, 1996 - Section 16(2), 11 and 34 - Contract Act - Sections 2(g), 2(j), 10 and 23 - Orissa High Court Rules, 1948 - Rule 5 - Arbitration clause - Public private partnership mode - Concession Agreement - Dispute Resolution - Plea with regard to sustainability of arbitration clause after quashing of Concession Agreement - Government of Odisha in Department of Commerce and Transport published notice informing about issuance of Request for Proposal (RFP) and inviting tender from reputed Infrastructure Developers for development of Bus Terminal along with commercial facilities through public private partnership mode. In said tender process, ARSS Infrastructure Project Limited (ARSS Infra) was selected as preferred bidder. Accordingly Letter of Acceptance was issued by Secretary to Government of Odisha, Department of Commerce and Transport in favour of ARSS Infra. A Concession Agreement was executed between General Manager of Orissa State Road Transport Corporation (OSRTC) (Petitioner) and Opposite Party- ARSS Infra - Assailing validity of execution of such Concession Agreement, (PIL) was filed before this Court with a prayer to quash Concession.
Finding of the court : Arbitration Act deals with 'arbitration agreement ’. Section 7 describes that an agreement which enables the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined 'legal relationship whether contractual or not, is called an arbitration agreement - Section 34 of Contract Act provides that an unstamped instrument would not be admissible in evidence or acted upon, till requisite stamp duty is paid. This would amount only to a deficiency, which can be cured on payment of the requisite stamp duty - Petitioner has assailed the impugned order on grounds prescribed under Section 34(2) of the Arbitration Act. It further appears that plea of mala fide and bad faith was never raised either before the Tribunal or in the writ petition. It was only raised in the rejoinder affidavit filed by the Petitioner. Thus, such grounds having not raised before Arbitral Tribunal cannot be taken into consideration in a proceeding under Article 227 of Constitution - Entertaining an application under Article 227 of Constitution at this stage will also result in piecemeal trial of arbitration proceeding, which is deprecated by Hon’ble Supreme Court time and again. Further, all arguments raised by the Petitioner could have been raised in a petition under Section 34 of Arbitration Act after finality of arbitration proceeding.
Result : Writ petition dismissed

JUDGMENT :

1. This writ petition has been filed assailing the order dated 11.12.2020 (Annexure-7) passed by learned Arbitral Tribunal in Arbitration Proceeding No.68 of 2019, whereby it rejected an application filed under Section 16(2) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Arbitration Act’).

2. Short narration of facts relevant for proper adjudication of this case are that the Government of Odisha in the Department of Commerce and Transport published notice on 14.12.2009 informing about issuance of Request for Proposal (RFP) and inviting tender from reputed Infrastructure Developers for development of the Baramunda Bus Terminal, Bhubaneswar along with commercial facilities through public private partnership mode. In the said tender process, ARSS Infrastructure Project Limited (ARSS Infra) was selected as the preferred bidder. Accordingly, on 26.07.2010 Letter of Acceptance was issued by the Secretary to Government of Odisha, Department of Commerce and Transport in favour of the ARSS Infra. A Concession Agreement was executed between the General Manager of Orissa State Road Transport Corporation (OSRTC) (the Petitioner) and Opposite Party-ARSS Infra on 16.03.2011 (Annexure-1). Assailing the validity of the execution of such Concession Agreement, Writ Petition (PIL) No.30961 of 2011 (for short ‘PIL’) was filed before this Court with a prayer to quash the Concession Agreement dated 16.03.2011 along with other reliefs. The Petitioner, Opposite Party as well as ARSS Infra were arrayed as opposite parties to the said PIL.

3. This Court, vide order dated 20.12.2012 (Annexure-2), holding that the Concession Agreement being in contravention of Article 299 of the Constitution of India is not sustainable in law, allowed the said PIL with the following orders:

No order as to costs.”

3.1 The judgment and order dated 20.12.2012 remained unchallenged and attained its finality. Subsequently, invoking Clause-16 of the Concession Agreement (Annexure-1) the Opposite Party filed an application under Section 11 of the Arbitration Act in ARBP No.53 of 2016 before this Court for appointment of Arbitrators. Clause-16 of the Concession Agreement deals with dispute resolution, which reads as follows:-

xxx xxx xxx

16.3. ARBITRATION

(a) Arbitrators

In the event the dispute or difference or claim, as the case may be, is not resolved, as evidenced by the signing of the written terms of settlement by the Parties, within 30 (thirty) days of reference for amicable settlement and/or settlement with the assistance of Expert, as the case may be, the same shall be finally settled by binding arbitration under the Arbitration and Conciliation Act, 1996. The arbitration shall be by a panel of three arbitrators, one each to be appointed by the Grantor and the Concessionaire and the third to be appointed by the two arbitrators so appointed, who shall act as chairperson of the Arbitral tribunal.”

Although the plea with regard to sustainability of the arbitration clause after quashing of the Concession Agreement was raised by the Petitioner, this Court vide its order dated 15.11.2019 (Annexure-3), allowed the application under Section 11 of the Arbitration Act appointing arbitrators and leaving open for the parties to raise all issues before the arbitrators. The order under Annexure-3 passed by this Court was assailed by the petitioner before the Hon’ble Supreme Court in SLP(C

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2021 Supreme(Ori) 37

IN THE HIGH COURT OF ORISSA AT CUTTACKK.R. Mohapatra, J.Odisha State Road Transport Corporation – PetitionerVersusARSS Bus Terminal Pvt. Ltd. - Opposite PartyW.P.(C) NO.2472 OF 2021Decided On : 16-07-2021

Cases Referred (16)

IN THE HIGH COURT OF ORISSA AT CUTTACK
K.R. Mohapatra, J.
Odisha State Road Transport Corporation – Petitioner
Versus
ARSS Bus Terminal Pvt. Ltd. - Opposite Party
W.P.(C) NO.2472 OF 2021
Decided On : 16-07-2021