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IN THE HIGH COURT OF MADHYA PRADESH
(FULL BENCH)
Hemant Gupta, C.J. Vijay Kumar Shukla and Subodh Abhyankar, JJ.
Shri Gouri Ganesh Shri Balaji Constructions "C" Class Contractor v. Executive Engineer, PWD
Arbitration Case No. 40 of 2016 (Jabalpur); Decided on 3.5.2018
(2) Arbitrator -- is appointed by parties to do justice in the sense of arriving at a "fair decision" -- not in the sense of "judicial justice" -- arbitrator is not bound by strict law of evidence. (1987)4 SCC 497, (2006)13 SCC 322 and (1992) 1 SCC 508 followed. [Paras 29 & 33
(3) Madhyastham Adhikaran Adhiniyam, 1983 (M. P.) -- S. 7A -- Specific Relief Act, 1963 -- S. 34 -- Civil P. C., 1908 - O. 2 R. 2 -- aggrieved person is required to include whole of the claim which parties are entitled to make in respect of works contract till filing of reference petition -- where party omits to refer or intentionally relinquishes any claim or any portion of his claim -- shall not afterwards be entitled to refer in respect of such claim or portion of claim so omitted or relinquished.
Held : The sub-section (2) of section 7A of the State Act is analogous to the provisions of Order 2 rule 2 of Code of Civil Procedure, 1908. Sub-section (3) of section 7A of the State Act permits the raising of dispute which may arise after filing of reference petition. If the consequential relief is omitted though available then such claim cannot be raised afterwards not only before the Arbitral Tribunal but before any other forum as all claims have to be raised before one forum.
Thus, in terms of section 7A of the State Act, the consequential relief such as right to complete the remaining work or to challenge the revenue recovery certificate or to challenge the order of black listing, if passed, are required to be included in a reference under section 7A of the State Act. In fact, when claim is raised disputing the termination of contract and as a consequence to complete remaining works, the claim is in fact seeking specific performance of the contract.
(4) Madhyastham Adhikaran Adhiniyam, 1983 (M. P.) -- S.7A -- seeking simpliciter termination of agreement without seeking consequential relief -- not maintainable -- if a particular consequential relief can be claimed, aggrieved person must claim that relief in reference otherwise reference would not be maintainable -- consequential relief, if not claimed in the reference, cannot be claimed subsequently.
Held : In terms of clause (2) of section 7A of the State Act, if the aggrieved person omits to claim a relief though available on the date of seeking reference; he is debarred from claiming such relief in a subsequent action. It only means that consequential relief, if not claimed in the reference, cannot be claimed subsequently. Therefore, keeping in view the rule that all claims must be included in one petition, as may be arising on the date of reference, has to include the consequential reliefs otherwise the reference would be not maintainable. (2012) 8 SCC 148, (2014) 14 SCC 502 and (2017) 3 SCC 702 followed. 1967 JLJ 350 and 1970 JLJ 290 (FB) relied on. 2017 (3) JLJ 66, C. R. No. 198 of 1990 decided on 30.6.1995, 2003 (1) MPHT 205 and M. A. No. 1030 of 1999 decided on 16.2.2010 referred to.
[Paras 47, 53 & 55
(5) Madhyastham Adhikaran Adhiniyam, 1983 (M. P.) -- S. 2 (1) (d) - "ascertained amount" -- includes amount of consequential relief. (1992) 1 SCC 731 and C. A. No. 4017 of 2018 decided on 18.4.2018 discussed. 2017 (3) JLJ 66 referred to. 2003 (1) MPHT 205 and M. A. No. 1030 of 1999 decided on 16.2.2010 disapproved. C. R. No. 198 of 1990 decided on 30.6.1995 distinguished. [Paras 48 & 55
(6) Madhyastham Adhikaran Adhiniyam, 1983 (M. P.) -- Ss. 7 and 7A -- astuteness in draft of reference so as not to claim any money though ascertainable -- cannot oust jurisdiction of statutory Arbitral Tribunal -- without consequential relief, declaration is meaningless -- party claiming only declaration and not consequential relief -- jurisdiction of Tribunal cannot be avoided only for this reason. (1973)2 SCC 524, 2013 (1) JLJ 20, C. A. No. 974 of 2012 decided on 8.3.2018 (SC), C. A. No. 2615 of 2018, A. A. No. 21 of 2007 decided on 1.5.2008, 2007 (4) MPHT 444 and 2017 (3) JLJ 66 referred to. [Paras 48 & 51
(7) Declaration -- every declaration has necessary consequence. [Para 51
(8) Madhyastham Adhikaran Adhiniyam, 1983 (M. P.) -- S. 7 -- mere declaration of termination of contract -- is not substantial relief -- in guise of mere declaration, aggrieved person cannot be permitted to omit consequential relief which he may be entitled to claim in reference.
[Para 51
(9) Madhyastham Adhikaran Adhiniyam, 1983 (M. P.) -- S.7 -- challenge to revenue recovery certificate under guise of challenge to only termination of agreement -- not tenable because consequential relief is that of challenge to recovery certificate. [Para 51
(10) Arbitration -- there cannot be multiple forums for a party to seek resolution of disputes such as to seek declaration of termination of contract from Arbitral Tribunal under Arbitration and Conciliation Act, 1996 and consequential relief from other forums. [Para 52
¼1½ ek/;LFke~ && i{kdkjksa ds fof/kd vf/kdkjksa vkSj ck/;rkvksa dks vkc)dkjh izHkko ds LkkFk U;kf;Dr% vo/kkfjr djus dh izfØ;k gS && ;g nks lafonkdkjh i{kksa }kjk e/;LFk ds :i esa p;fur O;fä;ksa }kjk muds e/; fooknksa dk lek/kku gS && jkT; vf/kfu;e ds v/khu ek/;LFke~ dh n'kk esa] dkuwu esa xfBr vf/kdj.k }kjkA gSYlcjh Ñr ykW vkWQ baxySaM] prqFkZ laLdj.k ¼1973½] ftYn 2] i`"B 255 fufnZ"VA ¼iSjk 29 ,oa 33
¼2½ e/;LFk && i{kdkjksa }kjk && ßmfpr fofu'p;Þ ij igqapus ds vFkZ esa U;k; djus ds fy, fu;qDr fd;k tkrk gS && ßU;kf;d U;k;Þ ds vFkZ esa ugha && e/;LFk lk{; dh vfrfu;efu"B fof/k ls vkc) ugha gksrkA ¼1987½4 ,l lh lh 497] ¼2006½13 ,l lh lh 322 rFkk ¼1992½1 ,l lh lh 508 vuqlfjrA ¼iSjk 29 ,oa 33
¼3½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 7&d && fofufnZ"V vuqrks"k vf/kfu;e] 1963 && /kkjk 34 && flfoy izfØ;k lafgrk] 1908
&& vk-2 fu-2 && O;fFkr O;fDr }kjk og laiw.kZ nkok lfEefyr fd;k tkuk visf{kr gS tks funsZ'k ;kfpdk izLrqr djus rd ladeZ lafonk ds laca/k esa i{kdkj nkok djus ds gdnkj gksa & tgk¡ i{kdkj dksbZ nkok vFkok vius nkos dk dksbZ va'k fufnZ"V ugha djrk ;k lk'k; R;kx nsrk gS && bl izdkj NksM+s x, ;k R;kxs x, ,sls nkos ;k nkos ds va'k ds laca/k esa okn esa funsZ'k djus dk gdnkj ugha gksxkA
vfHkfu/kkZfjr % jkT; vf/kfu;e dh /kkjk 7&d dh mi/kkjk ¼2½ flfoy izfØ;k lafgrk] 1908 ds vkns'k 2 fu;e 2 ds mica/kksa ds ln`'k gSA jkT; vf/kfu;e dh èkkjk 7&d dh mi/kkjk ¼3½ esa ,slk fookn mBkus dh vuqKk gS tks funsZ'k ;kfpdk dh izLrqfr ds i'pkr~ mn~Hkwr gqvk gksA ;fn miyC/k gksus ds ckotwn ifj.kkfed vuqrks"k NksM+ fn;k x;k gS rc okn esa og nkok dsoy ek/;LFke~ vf/kdj.k ds le{k gh ugha] vfirq vU; fdlh Hkh Qksje ds le{k mBk;k ugha tk ldrk D;ksafd leLr nkos ,d gh Qksje ds le{k mBk, tkuk gksrs gSaA
vr%] jkT; vf/kfu;e dh /kkjk 7&d ds vuqlkj] 'ks"k dk;Z iw.kZ djus ds vFkok jktLo olwyh izek.k i= vk{ksfir djus ds vFkok dkyh lwph esa Mkyus dk vkns'k] ;fn ikfjr fd;k x;k gks] vk{ksfir djus ds vf/kdkj tSls ifj.kkfed vuqrks"k jkT; vf/kfu;e dh /kkjk 7&d ds v/khu funsZ'k esa lfEefyr fd, tkuk visf{kr gSaA oLrqr% tc lafonk dh lekfIr fookfnr djrs gq,] mlds ifj.kkeLo:i 'ks"k dk;Z iw.kZ djus dk nkok fd;k tkrk gS] rc okLro esa nkos esa lafonk ds fofufnZ"V ikyu dh bZIlk dh xbZ gksrh gSA
¼4½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 7&d && ikfj.kkfed vuqrks"k dh bZIlk ds fcuk dsoy djkj dh lekfIr dh bZIlk && pyus ;ksX; ugha && ;fn fdlh fof'k"V vuqrks"k dk nkok fd;k tk ldrk gS rc O;fFkr O;fä dks funsZ'k esa ml vuqrks"k dk nkok vo'; djuk gksuk vU;Fkk funsZ'k pyus ;ksX; ugha gksxk && ikfj.kkfed vuqrks"k dk nkok] ;fn funsZ'k esa ugha fd;k gks rks ckn esa ugha fd;k tk ldrkA
vfHkfu/kkZfjr % jkT; vf/kfu;e dh /kkjk 7&d ds [kaM ¼2½ ds vuqlkj] ;fn O;fFkr O;fDr funsZ'k dh bZIlk ds fnukad dks miyC/k gksus ds ckotwn fdlh vuqrks"k dk nkok ugha djrk rks og i'pkr~orhZ vuq;kstu esa ,sls vuqrks"k dk nkok djus ls fooftZr gSA bldk vFkZ dsoy ;g gS fd ;fn ikfj.kkfed vuqrks"k dk nkok funsZ'k esa ugha fd;k x;k gS rks ckn esa mldk nkok ugha fd;k tk ldrkA vr%] ;g fu;e n`f"Vxr j[krs gq, fd funsZ'k ds fnukad dks mn~Hkwr gksus okys leLr nkos ,d gh ;kfpdk esa lfEefyr fd, tkuk pkfg,] funsZ'k esa ikfj.kkfed vuqrks"k lfEefyr fd, tkuk pkfg, vU;Fkk funsZ'k pyus ;ksX; ugha gksxkA ¼2012½8 ,l lh lh 148] ¼2014½14 ,l lh lh 502 rFkk ¼2017½3 ,l lh lh 702 vuqlfjrA 1967 ts ,y ts 350 rFkk 1970 ts ,y ts 290 ¼iw.kZ U;k;ihB½ voyafcrA 2017¼3½ ts ,y ts 66] flfoy iqujh{k.k Ø- 198 lu~ 1990 fu.khZr fnukad 30-6-1995] 2003¼1½ ,e ih ,p Vh 205 rFkk izdh.kZ vihy Ø- 1030 lu~ 1999 fu.khZr fnukad 16-2-2010 fufnZ"VA
¼5½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 2¼1½¼?k½ && ßvfHkfuf'pr jdeÞ && ikfj.kkfed vuqrks"k dh jde lfEefyr gSA ¼1992½1 ,l lh lh 731 rFkk flfoy vihy Ø-4017 lu~ 2018 fu.khZr fnukad 18-4-2018 foosfprA 2017¼3½ ts ,y ts 66 fufnZ"VA 2003¼1½ ,e ih ,p Vh 205 rFkk izdh.kZ vihy Ø- 1030 lu~ 1999 fu.khZr fnukad 16-2-2010 vuqeksfnrA flfoy iqujh{k.k Ø-198 lu~ 1990 fu.khZr fnukad 30-6-1995 izHksfnrA ¼iSjk 48 ,oa 55
¼6½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 7 rFkk 7d && funsZ'k ds izk:i esa prqjkbZ rkfd fdlh /ku dk nkok ugha fd;k tk,] Hkys gh og vfHkfu'p; gks && dkuwuh ek/;LFke~ vf/kdj.k dh vf/kdkfjrk Nhu ugha ldrh & ikfj.kkfed vuqrks"k ds fcuk] ?kks"k.kk vFkZghu gS && i{kdkj }kjk dsoy ?kks"k.kk dk nkok vkSj ifj.kkfed vuqrks"k dk ugha && vf/kdj.k dh vf/kdkfjrk dsoy bl dkj.k ifjoftZr ugha dh tk ldrhA ¼1973½2 ,l lh lh 524] 2013¼1½ ts ,y ts 20] flfoy vihy Ø- 974 lu~ 2012 fu.khZr fnukad 8-3-2018 ¼mPpre U;k-½] flfoy vihy Ø- 2615 lu~ 2018] ek/;LFke~ vihy Ø- 21 lu~ 2007 fu.khZr fnukad 1-5-2008] 2007¼4½ ,e ih ,p Vh 444 rFkk 2017¼3½ ts ,y ts 66 fufnZ"VA ¼iSjk 48 ,oa 51
¼7½ ?kks"k.kk & izR;sd ?kks"k.kk dk vko';d ifj.kke gksrk gSA ¼iSjk 51
¼8½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 7 && lafonk dh lekfIr dh ?kks"k.kk ek= && lkjoku~ vuqrks"k ugha gS && ?kks"k.kk ek= ds Hks"k esa] O;fFkr O;fä dks og ikfj.kkfed vuqrks"k NksM+us ugha fn;k tk ldrk ftldk og funsZ'k esa nkok djus dk gdnkj gks ldrk gksA ¼iSjk 51
¼9½ ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 ¼e-iz-½ && /kkjk 7 && djkj dh lekfIr ek= ij vk{ksi ds Hks"k esa jktLo olwyh izek.k i= ij vk{ksi && ekU; ugha D;ksafd ikfj.kkfed vuqrks"k olwyh izek.ki= ij vk{ksi dk gSA ¼iSjk 51
¼10½ ek/;LFke~ && fooknksa ds lek/kku dh bZIlk djus gsrq fdlh i{kdkj ds fy, vusd Qksje ugha gks ldrs] tSls lafonk dh lekfIr dh ?kks"k.kk dh bZIlk ekè;LFke~ vkSj lqyg vf/kfu;e] 1996 ds v/khu vkSj ikfj.kkfed vuqrks"k dh bZIlk vU; Qksje lsA ¼iSjk 52
Gupta, C.J. -- 1. A learned Single Judge while considering the present petition under section 11(6) of the Arbitration and Conciliation Act, 1996 (for short “the Central Act”) found divergent views between the two Single Bench orders of this Court i.e. order dated 8.2.2016 passed by Indore Bench of this Court in A.C. No. 9/2013 (Rajesh Agrawal v. Executive Engineer, Public Works Department) and order dated 21.4.2015 passed by a learned Single Bench of Principal Seat of this Court in A.C. No.12/2014 (M/s Landlord Infrastructure v. Engineer in Chief, PWD and others). Therefore, the following questions were referred for the opinion of the Larger Bench :
(1) Whether the dispute relating to termination of a contract without claiming any consequential relief is maintainable before the Arbitral Tribunal under the M.P. Madhyastham Adhikaran Adhiniyam, 1983?
(2) Whether, under the guise of challenge to an action of termination of contract, the remedy under the MP Act can be said to be not available, when the real challenge is to the Revenue Recovery Certificate issued by the State for recovery of the loss/damages?
(3) Any other question that may arise for adjudication or decision in the dispute involved in the present petition and which the Larger Bench thinks appropriate to decide?
2. In view of the above, when the matter was placed before this Bench, another argument was raised by the learned counsel for the petitioner on 15.3.2018 that in case the remedy under Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (for short “the State Act”) is not available, then the aggrieved person would have a remedy under the Arbitration and Conciliation Act, 1996 (for short “the Central Act”) if there is an arbitration clause in a works contract. Whereas, learned counsel for the respondent-State argued that in view of the judgment of the Supreme Court reported as 2012(2) JLJ 329=(2012)3 SCC 495 (Madhya Pradesh Rural Road Development Authority and another v. L.G. Chaudhary Engineers and Contractors (for short referred to as “L.G. Chaudhary-I”) and also the order of the Supreme Court dated 8.3.2018 rendered in Civil Appeal No.974/2012 (Madhya Pradesh Rural Road Development Authority and another v. M/s L.G. Chaudhary Engineers and Contractors) (for short referred to as “L.G. Chaudhary-II”) and Civil Appeal No. 2615/2018 (State of Madhya Pradesh and others v. Gammon India Ltd.), the State law will prevail in terms of section 2(4) of the Central Act. Thus, if the dispute in relation to works contract is not arbitrable under the State Act, the parties need to seek their remedy from the civil Court and not under the Central Act.
3. In view of the arguments raised, this Court framed another question for the opinion, which would now be Question No. (2A). The same is reproduced as under :
“(2A) If the dispute is not arbitrable by the Arbitral Tribunal under the State Act, the remedy of the aggrieved person is before the civil Court or under the Arbitration and Conciliation Act, 1996?”
4. The above said question arises out of the fact that the petitioner herein sought appointment of an Arbitrator in terms of section 11 of the Central Act arising out of a dispute pursuant to the work order given to the petitioner for the construction of road from Bhogiteda to Bhadus Rondha Jod road on 9.7.2012. The contract value was Rs.1,08,21,000/- and the rate of tender being 2.80% below the SOR (Schedule of Rates).
5. The grievance of the petitioner is that a show cause notice was served on it to terminate the contract agreement but even before delivery of the notice, the contract was terminated on 29.1.2014. The petitioner has raised a dispute before the Superintending Engineer, who has affirmed the order of termination of contract. The petitioner filed an appeal before the Chief Engineer, who has dismissed the appeal on 14.6.2016. Thereafter, the petitioner is said to have served a notice on 24.6.2016 for appointment of an Arbitrator under the Central Ac
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