Amit-Mass (J.V.) vs North Western Railway

Alok Sharma, J.—This petition has been filed challenging the letter/order dt. 30.10.2012 whereby the petitioner-Company was directed by the Dy. Chief Engineer Construction, N.W. Railway, Udaipur that action be taken to restart the construction work and time bond programme for adequate progress of work in the contract awarded to the petitioner-Company be submitted. It was required that compliance with the directions aforesaid be made within 48 hours in terms of clause 62 of General Conditions of Contract and in the event of non-compliance with the directions on the expiry of period of 48 hours, the contract awarded to the petitioner-Company would stand rescinded and the work under the contract be carried out independently without the participation of the petitioner-Company. The petitioner-Company was informed that following the rescinding of the contract, the full security deposit made by the petitioner-Company with the N.W. Railway would be forfeited and the performance guarantee would also be encashed. On the matter coming up before this Court on 09.11.2012, while issuing notices, it was directed that till 21.11.2012, the respondents not invoke the bank guarantee. The said interim order dt. 09.11.2012 has continued till date.

On notice being served on the respondent-N.W. Railway, reply to the petition has been filed. It has been stated that the writ petition ought to be dismissed at the threshold in view of the fact that in the contract agreement dt. 21.10.2011 between the petitioner-Company and the respondent-N.W. Railway to which this petition relates, a provision had been made under clause 64 (GCC) as referred to at clause 85 in the agreement for arbitration of all disputes and differences between the parties in respect of the contract. It is submitted that in terms of Section 5 of the Arbitration and Conciliation Act, 1996 (hereinafter ''the Act of 1996''), interference of the Court in disputes covered under the arbitration agreement under a valid contract is to be eschewed except otherwise statutorily provided. This would entail this Court desisting from exercising its writ jurisdiction in such makers. It is submitted that aside of the writ petition not being maintainable, this Court should also take note of the fact that the petitioner-Company has itself moved an application under Sec. 9 of the Act of 1996 read with Order 39 Rule 1 & 2 CPC before the District Judge, Jaipur City inter alia praying for the same relief as prayed before this Court, i.e. that the performance guarantee submitted by the petitioner-Company not be encashed. It has been submitted that the petitioner-Company having availed its statutory remedy, parallel proceeding for the same relief by way of this writ petition ought not to be allowed and the writ petition should be dismissed also on this count.

Having heard the counsel for the petitioner-Company and the respondent-N.W. Railway, I am of the considered view that the submissions made by the counsel for the respondents with regard to the arbitration clause in the agreement dt. 21.10.2011 between the petitioner-Company and the respondent and with regard to the petitioner-Company already having availed the statutory remedy under Sec. 9 of the Act of 1996 where the very same relief as prayed before this Court has been claimed, entail no occasion to entertain the writ petition.

The writ petition stands dismissed accordingly.

Consequently, the interim order dt. 09.11.2012 would also stand vacated. It is made clear that the period commencing 09.11.2012 till the passing of this order today shall be excluded from computing the time frame for invoking the Bank Guarantee by the respondent-N.W. Railway. The N.W. Railway shall now be free to invoke the Bank Guarantee/Performance Guarantee.

Dr. P.C. Jain, at this stage, has submitted that the mechanism for the invocation of the arbitration clause in the contract agreement dt. 21.10.2011 between the parties is very tedious. He submits that now when the Court is taking a view that the dispute between the parties can be referred to arbitration under clause 64 of the General Conditions equivalent to clause 85 of the Contract dt. 21.10.2011, this Court in the interest of justice should also direct that on an application/notice for appointment of an arbitrator in arbitrable matters under the contract, the competent authority should appoint an arbitrator for the resolution of the dispute between the parties within a period of fifteen days of the receipt of the application/notice for the appointment of an Arbitrator.

Mr. Shailesh Prakash Sharma cannot conceivably have any objection to the innocuous prayer made by the counsel for the petitioner-Company. He however submits that the dispute raised would be submitted for arbitration only if it is an arbitrable dispute under the contract. It is submitted that in the event the dispute/s raised is not arbitrable the petitioner-Company would have to lay a suit if so advised. On submissions made, it is directed that in the event an application/notice for appointment of an arbitrator under clause 64 of the General Conditions of the contract-clause 85 of the agreement dt. 21.10.2011 is received from the petitioner-Company within seven days, the competent authority under the contract agreement dt. 21.10.2011 shall consider the same and pass a speaking and reasoned order thereon within fifteen days thereafter.