MADHYA PRADESH HIGH COURT
Rajendra Menon and Smt. Vimla Jain, JJ.
Mahalinga Shetty and Company (M/s.) v. Madhya Pradesh Electricity Board
Civil Revisions No.579, 580 and 581 of 2003 (Jabalpur);
Decided on 20.9.2013
Held : In view of the above, we are of the considered view that without raising a demand with the applicant-Company, the counter claim made directly in the pending reference under the Adhiniyam 1983 was not maintainable. 1973 JLJ 695, 1993 JLJ 423 and 1997 ATLR 1 relied on. AIR 1998 Ker. 99 and AIR 2011 SC 3814 distinguished.
(2) Madhyastham Adhikaran Adhiniyam, 1983 (M.P.) -- Ss.7A and 7B -- decision of final authority in terms of works contract regarding dispute must for raising counter-claim -- such counter-claim must be filed before Tribunal within period of limitation as per provisions. 2006(2) JLJ 186 relied on. [Para 20
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Menon, J. -- 1. As common questions of law and fact are involved in all these three revisions, which have been filed under section 19 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam 1983; and, as challenge is made to an order identical in nature passed on 3.2.2003, thethree revision petitions are being decided by this common order. For the sake of convenience, documents and material available in the record of Civil Revision No.579/2003 is being referred to in this order.
2. Applicant M/s. Mahalinga Shetty and Company claims to be a Company registered under the Companies Act with its office in New Delhi. The Company claims to be Engineers, Contractors and carry out various building, construction and engineering activities. Certain contract was granted to the applicant-Company by the Madhya Pradesh Electricity Board (hereinafter referred to as ‘MPEB’), in the matter of providing RCC Lining in bed and slide slopes of Power Channel and various other works in the matter of excavation of certain work pertaining to Tons Hydro Electric Project. For the present, the particulars of the contract and work are not relevant. Suffice it to say that the applicant-Company filed three reference cases under section 7 of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 (hereinafter referred to as ‘Adhiniyam of 1983’). The references were made to the M.P. State Arbitration Tribunal, a statutory Tribunal created under the Adhiniyam of 1983; and, in all the three reference cases certain claims were made, which were ‘disputes’ as contemplated under section 2(1)(d) of the Adhiniyam of 1983. All the petitions seeking the reference were made on 9.2.1987; and, the non-applicant Board appeared in all the cases and filed their written statement/reply on 4.11.1987. At that point of time, no counter claim was raised by the non-applicant/Board. However, for the first time a counter-claim was raised on 30.6.1989. When this counterclaim was filed, it is seen that certain interlocutory proceedings were taking place and on 8.3.1996, a preliminary objection was raised by the applicant-Company with regard to maintainability of the counter claim.
3. The preliminary objection raised by the applicant-Company was on three grounds. The first ground was that as the counter-claim is being filed directly in the reference proceedings without raising a demand with the applicant-Company, it cannot be termed as a ‘dispute’ within the meaning of section 2(1)(d) and in the absence of a demand being made, a arbitral dispute will not come into existence, therefore, the counter-claim was not maintainable. The second ground canvassed was that the counter claim is barred by time, as it is filed beyond the period of limitation. The third ground canvassed was that as required under section 7B of the Adhiniyam of 1983, the counter-claim raised without first referring it to the final authority as contemplated under the agreement, was not maintainable.
4. When these objections were filed, the matter was kept pending and finally on 18.9.2000 vide Document No.19, the non-applicant Board issued a notice of demand to the applicant-Company and made a claim with regard to the assertion made in the counter-claim and in paragraph 7 of this notice dated 18.9.2000 – Document No.19, the non-applicant Board made an averment to the effect that ‘as various judgments of the High Court and the Arbitration Tribunal contemplate that before lodging a counter-claim by the department, a notice of demand has to be made to the other party, the notice is being issued to cure the legal deficiency in raising the counter-claim’. When this notice was given, applicant-Company submitted its reply vide Document No.20 on 23.10.2000, and denied the claim made and pressed its objection with regard to the counter-claim. Finally, by the impugned order, when the objections raised by the applicant Company are rejected and the counter-claim is held to be maintainable, all these civil revisions have been filed. As far as
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