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2024 Supreme(MP) 376
IN THE HIGH COURT OF MADHYA PRADESH
Vivek Rusia and Rajendra Kumar Vani, JJ.
Neeraj Motors and Travels (M/s.) v. The Gwalior Smart City Development Corporation Limited & Another
Arbitration Appeal No. 5 of 2024 (Gwalior): against the order dated 17.10.2023 passed by the Commercial Court, Gwalior; Decided on 15.5.2024
Arvind Dudawat with Arun Dudawat for appellant; Deepak Khot and Shivam Kumar Kurchaniya for respondents.
Headnote:
(1) Arbitration and Conciliation Act, 1996 -- S. 9 -- M. P. Madhyastham Adhikaran Adhiniyam, 1983 -- S. 7 -- reference to Tribunal -- clear from Notice Inviting Tender that any dispute not resolved amicably as provided in Request for Proposal shall be finally settled by authorizing Divisional Commissioner of respective Division of Project City as arbitrator -- held -- objection that appellant has remedy to approach M. P. Madhyastham Adhikaran at Bhopal under provisions of the Act is not tenable. [Para 5]
(2) Arbitration and Conciliation Act, 1996 -- S. 9 -- M. P. Madhyastham Adhikaran Adhiniyam, 1983 -- S. 7 -- reference to Tribunal -- clause in agreement to refer dispute to tribunal constituted under M. P. Madhyastham Adhikaran Adhiniyam -- appears to be a typographical error -- admittedly this is not a works contract -- in main Request for Proposal, there is a clause of arbitration in which Divisional Commissioner is appointed as arbitrator by parties -- under M. P. Madhyastham Adhikaran Adhiniyam, disputes pertaining to works contract are liable to be entertained by Madhyastham Adhikaran -- Commercial Court has wrongly placed reliance on this clause while dismissing application u/s. 9 of Act -- impugned order set aside as it is passed by applying a clause in agreement which is contrary to law as well as terms and condition of Notice Inviting Tender. [Paras 8 & 9]
¼1½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 & /kkjk 9 & e-ç- ek/;LFke~ vfèkdj.k vf/kfu;e] 1983 & /kkjk 7 & vf/kdj.k dks funsZ'k & fufonk vkea=.k lwpuk ls Li"V fd ,slk dksbZ Hkh fookn ftldk çLrko ds fy, vuqjks/k esa micafèkr fd, x, vuqlkj lkSgkæiw.kZ lek/kku ugha gqvk gks] ifj;kstuk 'kgj ds lacaf/kr laHkkx ds laHkkxh; vk;qä dks e/;LFk çkf/k—r djds vafrer% lqy>k;k tk,xk & vfHkfu/kkZfjr & ;g vkifÙk ekU; ugha fd vihykFkhZ ds ikl ek/;LFke~ vkSj lqyg vf/kfu;e ds mica/kksa ds v/khu Hkksiky fLFkr e-ç- ek/;LFke~ vf/kdj.k tkus dk mipkj gSA ¼iSjk 5½
¼2½ ek/;LFke~ vkSj lqyg vf/kfu;e] 1996 & /kkjk 9 & e-ç- ek/;LFke~ vf/kdj.k vf/kfu;e] 1983 & /kkjk 7 & vf/kdj.k dks funsZ'k & djkj esa e-ç- ekè;LFke~ vf/kdj.k vf/kfu;e ds v/khu xfBr vf/kdj.k dks fookn funsf'kr djus dk [kaM & Vadu =qfV çrhr gksrk gS & Loh—rr% ;g ladeZ lafonk ugha & eq[; çLrko ds fy, vuqjks/k esa e/;LFkrk dk [kaM gS ftlesa i{kdkjksa }kjk laHkkxh; vk;qä dks e/;LFk fu;qä fd;k x;k gS & e-ç- ek/;LFke~ vf/kdj.k vf/kfu;e ds v/khu] ek/;LFke~ vf/kdj.k }kjk ladeZ lafonk ls lacaf/kr fookn xzkg~; gSa & okf.kfT;d U;k;ky; us ek/;LFke~ vkSj lqyg vf/kfu;e dh /kkjk 9 ds v/khu vkosnu [kkfjt djrs le; bl [kaM dk voyac xyr fy;k gS & vkf{kIr vkns'k vikLr fd;k x;k D;ksafd og djkj dk ,slk [kaM ykxw dj ikfjr fd;k x;k gS tks fof/k ds lkFk gh fufonk vkea=.k lwpuk ds fuca/ku ,oa 'krksZ ds Hkh çfrdwy gSA ¼iSjk 8 ,oa 9½
ORDER
1. The appellant has filed the present appeal under section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter shall be referred to as the Act) being aggrieved by the order dt.17.10.2023 passed by the Commercial Court, Gwalior, whereby the application filed by the appellant under section 9 of the Arbitration Act has been dismissed.
2. Facts of the case in short are as under :--
(i) The respondents issued a Request For Proposal (RFP) bearing RFP No.GSCDCL/61/E-Tendering/2018-19 for selection of Bus Operators for Bus Transport System in Gwalior on a cluster basis through Procurement, Operation and Maintain Basis for a period of 7 years in 2 clusters.
(ii) The appellant participated in the said e-tendering process for all 2 clusters. Two separate letters of acceptance were issued by the appellant on 27.9.2018. The appellant submitted performance guarantees each of Rs.16,80,000/- and thereafter offered a total of 32 buses in both clusters. Thereafter, agreements were also duly executed and the appellant started plying the buses on the basis of a permit granted by the Regional Transport Authority Gwalior .
(iii) The appellant in addition to the submission of two performance guarantees also submitted a VGF guarantee for Buses of Rs.2,90,47,200/-. According to the appellant, in purchases of buses an amount of Rs.7,32,18,000/- was invested.
(iv) The respondents vide order dt.20.9.2023, terminated the agreement dt.29.9.2018 and initiated the proceeding for encashment of bank guarantee. The appellant approached the Commercial Court by way of an application under section 9 of the Act to get a temporary injunction. The respondents appeared and filed a reply by submitting that as per the terms and conditions of the agreement, the present application is not maintainable under the Act as the appellant has the remedy to approach the Madhya Pradesh Madhyastham Adhikaran at Bhopal.
(v) Meanwhile the appellant challenged the aforesaid termination of contract by way of Writ Petition No.27457/2023 before this High Court. Vide order dt.5.12.2023, Writ Petition was dismissed with advice to the appellant to approach the
(4) Divisional Commissioner who is a named Arbitrator under Clause 6.9.2 of the NIT.
(vi) Vide order dt.17.10.2023, the learned Commercial Court has dismissed the application under the provisions of Order 7 Rule 11 of CPC as not maintainable. Hence present an appeal before this Court.
3. We have heard learned counsel for the parties.
4. Clause 6.9.2 of the NIT deals with the Arbitration and RFP, which is reproduced below :--
6.9.2 Arbitration
1. Arbitrators
Any Dispute which is not resolved amicably as provided in RFP shall be finally settled by authorizing Divisional Commissioner of the respective Division of the Project City as Arbitrator. Both the parties agree to have Divisional Commissioner of the respective Division of Gwalior as Arbitrator in case the dispute is not resolved amicably.
2. Enforcement of Award Any decision or award resulting from arbitration shall be final and binding upon the Parties. The Parties hereto hereby waive, to the extent permitted by law, any rights to appeal or to review of such award by any Court or Tribunal. The Parties hereto agree that the arbitral award may be enforced against the Parties to the arbitration proceedings or their assets wherever they may be found and that a judgment upon the arbitral award may been entertained in any Court having jurisdiction thereof.
3. Performance during Arbitration Pending the submission of and/or decision on a Dispute, difference or claim or until the arbitral award is published; the Parties shall continue to perform all of their obligations under this Agreement without prejudice to a final adjustment in accordance with such award.
5. It is clear from sub Clause 1 of Clause 6.9.2 that any dispute which is not resolved amicably as provided in RFP shall be finally settled by authorizing the Divisional Commissioner of the respective Div
