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2008(1) JLJ 50
(FULL BENCH)
K. Patnaik, C.J., S.S. Jha and A.M. Sapre, JJ.
Shri Shankarnarayana Construction Company v.
State of M.P. and others
Miscellaneous Civil Case No.1749 of 2004 and Writ Petition No.4049 of 2004 (Jabalpur) on reference by Division Bench; decided on 11.10.2007.
(2) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- Ss.7, 3 and 2(d) --Arbitration and Conciliation Act, 1996 -- Ss.2(4), 2(5),11(6) and Part I -- work contract of more than Rs. 50, 000/- -- Part I of 1996 Act also applicable along with 1983 Adhiniyam -- Adhiniyam shall prevail by virtue of provision of S.2(4) of 1996 Act.
The Division Bench, in its order dated 19.12.2003, took note of the provisions of Article 254 of the Constitution as well as the decision of this Court in M/s. Spedra Engineering Corporation, Engineers and Contractors v. State of M.P. [1988 JLJ 601=AIR 1988 MP 111], in which it was held that the 1983 Adhiniyam being a later Special Act would prevail over the Arbitration Act, 1940, as provided in Article 254(2) of the Constitution. The Division Bench, however, was of the prima facie view that the 1996 Act being a later Act made by Parliament would prevail over the 1983 Adhiniyam made by the State Legislature to the extent of repugnancy as provided in Article 254 of the Constitution. Accordingly, the Division Bench held that the judgment delivered in the case of Bhanu Kumar Jain and Associates [WP No.3l38 of 1997], required reconsideration by a larger Bench vis-à-vis a matter where there is an arbitration agreement between the parties. [Para 3
Held: The 1983 Adhiniyam provides for statutory arbitration is correct in law because it provides for arbitration of disputes by the Arbitration Tribunal even without an arbitration agreement. Accordingly, the provisions of Part I of the 1996 Act will also apply to arbitration under the 1983 Adhiniyam as if the arbitration was pursuant to an arbitration agreement and as if the provisions of the 1983 Adhiniyam were an arbitration agreement, but if there is any conflict between the provisions of Part I of the 1996 Act and the provisions of the 1983 Adhiniyam, then the provisions of the 1983 Adhiniyam will prevail as provided in sub-section (4) of section 2 of the 1996 Act.
We now come to sub-section (5) of section 2 of the 1996 Act. The opening words of sub-section (5) of section 2 of the 1996 Act say that Part I shall apply to all arbitrations and to all proceedings relating thereto subject to the provisions of sub-section (4). As we have seen, sub-section (4) of section 2 of the 1996 Act states that in case of inconsistency between the provisions of Part I of the 1996 Act and the provisions of other enactments providing for statutory arbitration, the provisions of the other enactments providing for statutory arbitration shall prevail over the provisions of Part I of the 1996 Act. (1999)2 SCC 479,1955 SCR 799, AIR 1989 SC 150 and AIR 1999 Born. 226 distinguished. (1996)5 SCC 411 and (2001)7 SCC 473 followed. WP No.3138/1997 and 1988 JLJ 601 approved. [Paras 16 & 17
(3) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- Ss.3 and 7( 1) -- jurisdiction of Arbitration Tribunal is to decide all questions relating to work contract -- reference of dispute can be made even in absence of arbitration agreement. WP No.3138 of 1997 and 1988 JLJ 601 relied on. [Para 14
(4) Arbitration and Conciliation Act, 1996 -- S.2(2), 2(3), 2(4) and 2(5), Part I -- scope and application of the Act -- provisions of other enactments -- when prevail over this Act.
Sub-section (2) of section 2 states that Part I of the 1996 Act applies to any arbitration which takes place in India, Sub-section (3) of section 2 makes it dear that Part I of the 1996 Act does not apply to any law under which disputes are not submitted to arbitration.
Sub-section (4) of section 2 of the 1996 Act is relevant as it has been held by the Division Bench of this Court in M/s. Bhanu Kumar Jain & Associates [WP No.3138 of 1997], that this subsection saves the 1983 Adhiniyam even after the 1996 Act came into force. Sub-section (4) of section 2 provides that the provisions of Part I of the 1996 Act except sub-section (1) of section 40 and sections 41 and 43 shall apply to every "arbitration under any other enactment for the time being in force" as if the arbitration were pursuant to an arbitration agreement and "as if that other enactment were an arbitration agreement". The phrases "arbitration under any other enactment for the time being in force" and "as if that other enactment were an arbitration agreement" in sub-section (4) of section 2 of the 1996 Act clearly show that this sub-section relates to statutory arbitration under any other enactment for the time being in force and not to arbitration pursuant to arbitration agreement. This sub-section, however, states that the provisions of Part I of the 1996 Act shall apply to the statutory arbitrations under other enactments for the time being in force with the rider that if there is inconsistency between the provisions of Part I of the 1996 Act and the provisions of the other enactments or rules made there under providing for statutory arbitration, the provisions of the other enactments or rules providing for statutory arbitration will prevail over the provisions of Part I of the 1996 Act. [Paras 12 & 13
(5) Arbitration and Conciliation Act, 1996 -- statement of objects appended to Bill and long title of the Act -- indicate main purpose of the Bill but cannot control express provisions of the Act. 2003 RN 135 (SC) and AIR 1961 SC 418 followed. [Para 11
¼1½ Hkkjr dk lafo/kku && vuq-254 && ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 2¼4½] 2¼5½ rFkk Hkkx 1 && /kkjk 2¼4½ rFkk 2¼5½ ds mica/kksa }kjk ek/;LFke~ ds {ks= esa fo|eku jkT; fof/k;k¡ vfHkO;Dr :i ls O;ko`Ùk dh xbZ gSa] Hkys&gh og 1996 ds vf/kfu;e ds Hkkx 1 ls vlaxr Fkha && dsanzh; vkSj jkT; fof/k;ksa esa vlaxfr dk iz‘u mn~Hkwr ugha gksrkA , vkb vkj 1983 e-iz- 150 voyafcrA ¼iSjk 24
[kaM U;k;ihB us vius vkns‘k fnukad 19-12-2003 esa lafo/kku ds vuqPNsn 254 ds mica/kksa ij vkSj es- LisMªk bathu;fjax dkiksZjs‘ku] bathfu;lZ ,aM daVªSDVlZ fo e-iz- jkT; [1998 ts ,y ts 601¾, vkb vkj 1988 e-iz- 111] esa bl U;k;ky; ds fu.kZ; ij ftlesa ;g vfHkfu/kkZfjr fd;k x;k gS fd lafo/kku ds vuqPNsn 254¼2½ esa ;Fkk micaf/kr] 1983 dk vf/kfu;e] i‘pkr~orhZ fo‘ks"k vf/kfu;e gksus ds dkj.k] ek/;LFke~ vf/kfu;e 1940 ij vfHkHkkoh gksxk rFkkfi] [kaM U;k;ihB dh izFken`"V~;k jk; Fkh fd 1996 dk vf/kfu;e] laln }kjk fojfpr i‘pkr~orhZ vf/kfu;e gksus ds dkj.k jkT; fo/kku&eaMy }kjk fojfpr 1983 ds vf/kfu;e ij lafo/kku ds vuqPNsn 254 esa ;Fkk micaf/kr] vlaxfr dh lhek rd vfHkHkkoh gksxkA rnuqlkj] [kaM U;k;ihB us vfHkfu/kkZfjr fd;k fd Hkkuqdqekj tSu ,aM ,lksfl,V~l [fjV ;kfpdk Ø- 3138 lu~ 1997] esa fn, x, fu.kZ; ij ml ekeys ds laca/k esa ftles i{kdkjksa ds e/; ek/;LFke~ djkj gS] c`gÙkj U;k;ihB }kjk fopkj fd;k tkuk vk{ksfir gSA ¼iSjk 3
vfHkfu/kkZfjr % 1983 ds vf/kfu;e esa dkuwuh ek/;LFke~ micaf/kr gS] ;g fof/kr% lgh gS D;ksafd blesa ek/;LFke~ djkj fcuk Hkh ek/;LFke~ vf/kdj.k }kjk fooknksa dk ek/;LFke~ micaf/kr gSA rnuqlkj] 1996 ds vf/kfu;e ds Hkkx 1 ds mica/k Hkh 1983 ds vf/kfu;e ds v/khu ek/;LFke~ djkj ds vuqlj.k esa Fkk vkSj ekuks 1983 ds vf/kfu;e ds mica/k dksbZ ek/;LFke~ djkj Fkk] fdarq ;fn 1996 ds vf/kfu;e ds Hkkx 1 ds mica/kksa vkSj 1983 ds vf/kfu;eksa ds mica/kksa ds e/; dksbZ fojks/k gS] rc 1996 ds vf/kfu;e dks /kkjk 2 dh mi/kkjk ¼4½ esa ;Fkk micaf/kr] 1983 ds vf/kfu;e ds mica/k vfHkHkkoh gksaxsA
vc ge 1996 ds vf/kfu;e dh /kkjk 2 dh mi/kkjk ¼5½ ij fopkj djsaxsA 1996 ds vf/kfu;e dh /kkjk 2 dh mi/kkjk ¼5½ ds izkjafHkd ‘‘kCnksa esa dgk x;k gS fd mi/kkjk ¼4½ ds mica/kksa ds v/;/khu] Hkkx 1 leLr ek/;LFkeksa vkSj muls lacaf/kr dk;Zokfg;ksa dks ykxw gksxkA tSlk geus voyksdu fd;k gS] 1996 ds vf/kfu;e dh /kkjk 2 dh mi/kkjk ¼4½ esa dgk x;k gS fd 1996 ds vf/kfu;e ds Hkkx 1 ds mica/kksa vkSj dkuwuh ek/;LFke~ micaf/kr djus okyh vU; vf/kfu;fefr;ksa ds mica/kksa esa vlaxfr dh fLFkfr esa] dkuwuh ek/;LFke~ micaf/kr djus okyh vU; vf/kfu;fefr;ksa ds mica/k 1996 ds vf/kfu;e ds Hkkx 1 ds mica/kksa ij vfHkHkkoh gksaxsA ¼1992½2 ,l lh lh 479] 1995 ,l lh vkj 799] , vkb vkj 1989 ,l lh 150 rFkk , vkb vkj 1999 cacbZ 226 izHksfnrA ¼1996½5 ,l lh lh 419 rFkk ¼2001½7 ,l lh lh 473 vuqlfjrA fjV ;kfpdk Ø-3138@1997 rFkk 1988 ts ,y ts 601 vuqeksfnrA ¼iSjk 16 ,oa 17
¼3½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 3 rFkk 7¼1½ && ek/;LFke~ vf/kdj.k dh vf/kdkfjrk] dk;Z lafonk ls lacaf/kr leLr iz‘u fofuf‘pr djus dh gS && ek/;LFke~ djkj ds vHkko esa Hkh fookn dk funsZ‘k fd;k tk ldrk gSA fjV ;kfpdk Ø- 3138 lu~ 1997 rFkk 1988 ts ,y ts 601 voyafcrA ¼iSjk 14
¼4½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && /kkjk 2¼2½] 2¼3½] 2¼4½ rFkk 2¼5½] Hkkx 1 && vf/kfu;e dh O;kfIr vkSj mldk ykxw gksuk && vU; vf/kfu;fefr;ksa ds mica/k && bl vf/kfu;e ij dc vfHkHkkoh gksrs gSaA
/kkjk 2 dh mi/kkjk ¼2½ esa crk;k x;k gS fd 1996 ds vf/kfu;e dk Hkkx 1 fdlh Hkh ek/;LFke~ ij ykxw gksrk gS tks Hkkjr esa gksrk gSA /kkjk 2 dh mi/kkjk ¼3½ esa ;g Li"V fd;k x;k gS fd 1996 ds vf/kfu;e dk Hkkx 1 fdlh fof/k ij ykxw ugha gksxk ftlds v/khu fookn ek/;LFke~ dks lkSais ugha tkrsA
1996 ds vf/kfu;e dh /kkjk 2 dh mi/kkjk ¼4½ lqlaxr gS D;ksafd es- Hkkuq dqekj tSu ,aM ,lksfl,V~l [fjV ;kfpdk Ø-3138 lu~ 1997] esa bl U;k;ky; dh [kaM U;k;ihB us vfHkfu/kkZfjr fd;k gS fd 1983 dk vf/kfu;e] 1996 dk vf/kfu;e izo`Ùk gksus ds i‘pkr~ Hkh bl mi/kkjk }kjk O;ko`Ùk gSA /kkjk 2 dh mi/kkjk ¼4½ esa micaf/kr gS fd 1996 ds vf/kfu;e ds Hkkx 1 ds mica/k /kkjk 40 dh mi/kkjk ¼1½ rFkk /kkjk 41 vkSj 43 dks NksM+ dj ^^rRle; izo`Ùk fdlh vU; vf/kfu;fefr ds v/khu ek/;LFke** ij ykxw gksaxs ekuks fd og ek/;LFke~ fdlh ek/;LFke~ djkj ds vuqlj.k esa Fkk rFkk ^^ekuks fd vU; vf/kfu;fefr dksbZ ek/;LFke~ djkj gks**A 1996 ds vf/kfu;e dh /kkjk 2 dh mi/kkjk ¼4½ okD;ka‘k ^^rRle; izo`Ùk fdlh Hkh vU; vf/kfu;fefr ds v/khu ek/;LFke~** vkSj ^^ekuks vU; vf/kfu;fefr dksbZ ek/;LFke~ djkj** ls Li"Vr% nf‘kZr gS fd ;g mi/kkjk rRle; izo`Ùk fdlh vU; vf/kfu;fefr ds v/khu dkuwuh ek/;LFke~ ls lacaf/kr gS] ek/;LFke~ djkj ds vuqlj.k ls ughaA rFkkfi] bl mi/kkjk esa crk;k x;k gS fd 1996 ds vf/kfu;e ds Hkkx 1 ds mica/k rRle; izo`Ùk vU; vf/kfu;fefr;ksa ds v/khu dkuwuh ek/;LFkeksa ij bl mifjdk ds lkFk ykxw gksaxs fd ;fn 1996 ds vf/kfu;e ds Hkkx 1 ds mica/k vkSj dkuwuh ek/;LFke~ micaf/kr djus okyh vU; vf/kfu;fefr;ksa vFkok rn~/khu fojfpr fu;eksa ds e/; vlaxfr gS] dkuwuh ek/;LFke~ micaf/kr djus okyh vf/kfu;fefr;ksa ;k fu;eksa ds mica/k 1996 ds vf/kfu;e ds Hkkx 1 ds mica/kksa ij vfHkHkkoh gksaxsA ¼iSjk 12 ,oa 13
¼5½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 && fo/ks;d ds lkFk layXu mn~ns‘;ksa dk dFku rFkk vf/kfu;e dk nh?kZ ‘kh‘kZd && fo/ks;d dk eq[; iz;kstu minf‘kZr djrs gSa fdarq vf/kfu;e ds vfHkO;Dr mica/kksa dks fu;af=r ugha dj ldrsA 2003 jk fu 135 ¼mPpre U;k-½ rFkk , vkb vkj 1961 ,l lh 418 vuqlfjrA ¼iSjk 11
Patnaik, C.J. -- 1. The petitioner entered into a works contract with the respondents for construction of a central spillway of Rajeev Sagar Tank Project in Guna District of Madhya Pradesh on 19.2.1999. Clause 4.3.29.2 of the conditions of Contract provides that any claim valued at Rs.50,000/ or more will be considered by the Superintending Engineer (for short "the S.E.") of the Circle and any party dissatisfied with the final decision of the S.E. may refer the dispute to the Tribunal constituted under the Madhya Pradesh Madhastham Adhikaran Adhiniyam, 1983 (for short "the 1983 Adhiniyam"). The petitioner made a claim of Rs.21.81 crores against the State of Madhya Pradesh in its letter dated 7.2.2002. The S.E. rejected the claim and this was communicated to the petitioner by the Executive Engineer by letter dated 6.6.2002. Instead of referring the dispute to the Tribunal constituted under the 1983 Adhiniyam, the petitioner filed the M.C.C. under section 11(6) of the Arbitration and Conciliation Act, 1996 (for short "the 1996 Act") contending that the 1983 Adhiniyam being repugnant to the provisions of the Act of 1996 is void by operation of Article 254 of the Constitution and making a prayer to the Chief Justice of the High Court under section 11 (6) of the Act of 1996 to appoint an Arbitral Tribunal comprising of three members to decide the disputes between the petitioner and the respondents arising under the works contract. The petitioner also filed the writ petition under Article 226 of the Constitution making a prayer to the Court to declare that the provisions of the 1983 Adhiniyam were impliedly repealed by the 1996 Act and to declare the provisions of the 1983 Adhiniyam to the extent irreconcilable with the provisions of the 1996 Act as void and unenforceable and to further declare that the parties to the works contract are governed by the provisions of the 1996 Act.
2. The respondents filed an Interlocutory Application (IA No.609 of 2003) in the MCC contending that the High Court had no jurisdiction to entertain a dispute arising under the works contract because under the provisions of the 1983 Adhiniyam, the dispute has to be referred to the Arbitration Tribunal constituted there under and hence the application under section 11 (6) of the 1996 Act was not maintainable before the High Court. The MCC was heard by a Division Bench of the High Court at Gwalior. The counsel for the petitioner contended before the Division Bench that the 1996 Act made by Parliament will prevail over the 1983 Adhiniyam made by the State Legislature by virtue of the provisions of Article 254 of the Constitution. The respondents, on the other hand, relied upon the unreported judgment in M/s. Bhanu Kumar Jain and Associates v. State of M.P and two others [WP No.3138 of 1997], delivered on 21.11.1997 at Jabalpur in which a Division Bench of this Court has held that the 1983 Adhiniyam was saved by the provisions of sub-section (4) of section 2 of the 1996 Act and, therefore, the 1983 Adhiniyam survives even after the coming into force of the 1996 Act.
3. The Division Bench, in its order dated 19.12.2003, took note of the provisions of Article 254 of the Constitution as well as the decision of this Court in M/s. Spedra Engineering Corporation, Engineers and Contractors v. State of M.P. [1988 JLJ 601=AIR 1988 M.P.111], in which it was held that the 1983 Adhiniyam being a later Special Act would prevail over the Arbitration Act, 1940, as provided in Article 254(2) of the Constitution. The Division Bench however was of the prima facie view that the 1996 Act being a later Act made by Parliament would prevail over the 1983 Adhiniyam made by the State Legislature to the extent of repugnancy as provided in Article 254 of the Constitution. Accordingly, the Division Bench held that the judgment delivered in the case of Bhanu Kumar Jain and Associates (supra), required reconsideration by a larger Bench vis-à-vis a matter where there is an arbitration agr
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