The M.P. Madhyastham Adhikaran Adhiniyam, 1983 applies exclusively to works contracts with Municipal Corporations, as they are public undertakings substantially controlled by the State Government, overriding the Arbitration and Conciliation Act, 1996.

ORDER :

Since both these petitions are on common legal issues and involve similar facts, therefore they are being decided by this common order. For the sake of convenience the facts are being taken from AC No.111/2019.

2. The present petition has been filed under Section 11(6) of Arbitration and Conciliation Act, 1996 (for short ‘Act of 1996’), wrongly captioned in the application as under Section 11(5), for appointment of arbitrator on account of disputes rising between the parties in relation to agreement for construction of RCC overhead tanks and other ancillary works for water supply distribution network project floated by Bhopal Municipal Corporation.

3. The sole question that arises for consideration in the present case is that whether an arbitrator under Act of 1996 can be appointed in the present case or not, or whether the arbitration will be conducted as per the statutory provisions contained in MP Madhyastham Adhikaran Adhiniyam, 1983 (for short ‘Adhiniyam 1983’) which provides for a separate procedure for arbitration and M.P. Arbitration Tribunal has been constituted by the State Government under the said Adhiniyam 1983 and the parties have to approach the said statutory Tribunal, or the petitioner can maintain the present application under section 11(6) of Act 1996 for getting an arbitrator appointed under Act of 1996.

4. The legal question is that whether the Act of 1996 would prevail over Adhiniyam, 1983, has been subject matter of determination by the Hon’ble Supreme Court from time to time and initially in the case of VA Tech Escher Wyass Flovel Ltd. v. M.P. SEB, (2011) 13 SCC 261 the issue was decided in favour of Act of 1996. However, later on the in case of M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors, (2012) 3 SCC 495 it was decided by the Hon’ble Supreme Court that all disputes in relation to works contract have to be statutorily referred to the Tribunal set up under 1983 Act. However, there was partly dissenting opinion between the Hon’ble Judges constituting the Bench that whether disputes pertaining to termination, cancellation or repudiation of works contract would still be maintainable before the Tribunal under the Adhiniyam, 1983 and the matter was referred to Larger Bench of the Hon’ble Apex Court.

5. Thereafter the Larger Bench in the case of M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers and Contractors, (2018) 10 SCC 826 has emphatically overruled the judgment in the case of V.A. Tech (Supra) and it has been conclusively held that in view of Section 2 (d) of the Adhiniyam, 1983, the State Act will cover a dispute even after termination of the works contract. It was held that the State Act cannot be said to be impliedly repealed by the Act of 1996. The Larger Bench in L.G. Choudhary Engineers (supra) held as under:-

“4. When the matter was considered by a Bench of this Court on 24-1-2012 (order in M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers and Contractors [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers and Contractors, (2012) 3 SCC 495 : (2012) 2 SCC (Civ) 210] ), this Court held that the judgment in VA Tech Escher Wyass Flovel Ltd. [ VA Tech Escher Wyass Flovel Ltd. v. M.P. SEB , (2011) 13 SCC 261 : (2012) 3 SCC (Civ) 468] was per incuriam insofar as it held that the M.P. Act stands impliedly repealed by the Central Act. While Hon'ble Ganguly, J., held that the State Act will cover a dispute even after termination of the “works contract”, Hon'ble Gyan Sudha Mishra, J. took a different view as follows : (M.P. Rural Road Development case [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers and Contractors, (2012) 3 SCC 495 : (2012) 2 SCC (Civ) 210] , SCC p. 511, para 51)

“51. It is no doubt true that if the matter were before an arbitrator appointed under the Arbitration and Conciliation Act, 1996 for adjudication of any dispute including the question regarding the justification and legality as t