2025 Supreme(Online)(Pat) 5818
PATNA HIGH COURT
K. Vinod Chandran, C. J.
State of Bihar v. Kashish Developers Limited Patna
C. Rev. No. 181 of 2023
1. The State is in review from the judgments in the request cases, which appointed an arbitrator to decide the disputes arising out of two contracts entered into between the Construction Division of the State, with the 1st Respondent; who was the petitioner in the request cases.
2. Two civil reviews are considered together, since the issues raised are identical though the agreements executed are separate; Agreement No. 04 - SBD / 2017-18 in Request Case No. 12 of 2023 and Agreement No. 05 - SBD / 2015-16 in Request Case No. 13 of 2023. The nature of the work awarded to the 1st Respondent is also identical being the work of construction of Vidhayak Awasan (MLA Parisar) at Patna, Bihar. The review petitions are also on the same ground of the petitioner having not approached the review petitioner / the Respondent - State, as per the procedure stipulated in the arbitration clause, found in the agreement.
3. The learned Advocate General appeared for the State and pointed out that the request cases were allowed on the first posting date; without even giving the State a chance to file a counter - affidavit. Clause - 25 of the General Conditions of Contract, which deals with settlement of disputes and arbitration is pointed out. It is the specific contention that any dispute arising out of the contract or in execution of the work should be taken up with the Superintending Engineer within 07 days, from whose decision there is an appeal provided to the Chief Engineer who also should give a decision within 30 days of receipt of appeal, after affording an opportunity to the contractor to be heard. It is also provided that if the contractor is dissatisfied with the decision of the Chief Engineer, then a notice shall be given to the Chief Engineer for appointment of an arbitrator, which appointment shall be made by the Engineer - in - Chief or the administrative head of the Public Works Division. The 1st Respondent had completely failed to take up the issue with the Superintending Engineer or the Chief Engineer and in such circumstances, there can be no appointment of an arbitrator under S.11(6) of the Arbitration and Conciliation Act, 1996 (for brevity 'Act of 1996'), is the contention.
4. A similar provision was considered in Request Case No. 105 of 2019, titled as Nirman Engicons Private Limited v. The State of Bihar and Others, and analogous cases, by decision dated 25.11.2020, in which the request was declined noticing the provision available under Clause - 25. Reliance is also placed on the judgment of the Hon'ble Supreme Court in Municipal Corporation of Greater Mumbai v. Pratibha Industries Limited, 2019 (3) SCC 203 : (AIR 2019 SC 650), to contend that a review is possible to an order appointing an arbitrator under the Act of 1996.
5. Shri Lalit Kishore, learned Senior Counsel appearing for the respondent would point out that the very same contention was raised before the Hon'ble Sole Arbitrator, who is a former Judge of the Hon'ble Supreme Court, which was disposed of by Annexure - B dated 02.05.2023; which is not stated in the review application. It is also asserted that five request cases, between the same parties, were allowed on the same day and in all the five cases, an arbitrator was appointed with consent and hence, there is no case for review. It is also pointed out that the arbitration had proceeded considerably before the sole arbitrator and substantial amounts have been expended for the arbitration proceeding. There is absolutely no ground for review of the judgment passed appointing a sole arbitrator. Reliance is placed on Ashok Tubwell and Engineering Corporation v. Union of India 2015 (5) SCC 702 : (AIR 2015 SC (Supp) 308) and Demerara Distilleries (P) Ltd. v. Demerara Distillers Ltd. 2015 (13) SCC 610 : (AIR 2015 SC (Supp) 1779).
6. On the question of whether review is permissible, Municipal Corporation of Greater Mumbai (supra) is apposite. That was a case in which the General Conditions of Contract specified that