Classic Network Private Limited vs State Of Gujarat & Anr

Hemant M. Prachchhak, J

RULE. Learned Assistant Government Pleader waives service of notice of rule on behalf of respondent - authorities.

With the consent of learned counsel appearing for the respective parties, the matter is taken up for hearing and disposal.

Present petition is filed by the petitioner under Articles 226 and 227 of the Constitution of India and under the provisions of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 [hereinafter be referred to as "the Act"] seeking the following reliefs:-

"a. Your Lordships be pleased to admit present petition.

b. Your Lordships may be pleased to issue appropriate writ of mandamus or any other appropriate writ, order or direction by quashing and setting aside common judgment and order dated 21.07.2022 passed by Hon'ble Gujarat Public Works Contract Disputes Arbitration Tribunal in Civil Application No. 3 of 2020 in Arbitration Reference No.2 of 2020.

c. Your Lordships may be pleased to by way of interim relief stay common judgment and order dated 21.07.2022 passed by Hon'ble Gujarat Public Works Contract Disputes Arbitration Tribunal in Civil Application No. 3 of 2020 in Arbitration Reference No.2 of 2020 and restrain respondents from effecting recovery of Rs.88,66,371/- from petitioner's other contracts dues and deposits.

d. Such other and further reliefs as may be deemed fit in view of facts and circumstances of the case be granted."

Brief facts of the present case are, in nutshell, as under:-

4.1 That the Petitioner is a Company incorporated under the Companies Act, 1956 and it is registered Government Approved Contractor having Registration as Class "AA" Contractor and the petitioner is carrying the business at the address shown in the cause title. The petitioner was awarded the contract for Strengthening to Km. 72/4 to 85/8 National Highway 8A from Bagodra to Limbdi by agreement No.B-2/9/2007-08 and the estimated cost of the work was Rs.9,04,72,806.60 and the petitioner's tender cost was Rs.7,50,49,031.50 i.e. 17.05% below the estimated cost.

4.2 That the tender of the petitioner was accepted and the respondent - authorities issued Tender Acceptance Letter No.Tender / 1937 of 2007-08 on 07.07.2007. Thereafter, the work order was issued on 31.07.2007 with stipulated period of 9 months and, thus, the work was required to be completed on or before 30.04.2008 and accordingly the work was completed on 24.08.2008 in all respects as per tender conditions.

4.3 That the petitioner addressed a letter dated 11.08.2008 to the Deputy Executive Engineer to release the FDR of Rs.22,61,820/- as well as Bank Guarantee of Rs.45,23,640/- and the Final Bill was paid on 04.09.2008. The Deputy Executive Engineer on 05.09.2008 made a proposal in the prescribed form for refund of FDR and Bank Guarantee. Since the work was completed, respondent No.2 released the FDR of Rs.22,62,000/-.

4.4 That the Deputy Executive Engineer by letters dated 23.02.2010, 13.04.2010, 07.06.2010, 06.07.2010, 25.08.2010,

07.09.2010 and 13.09.2010 directed the petitioner to carry out the repairs to the patch work occurred during monsoon. The repairing work was carried out, however, due to continuous rain, again the patches were developed to which repairing work was done and completed and reported to the Deputy Executive Engineer by letter dated 25.09.2010.

4.5 That respondent No.2 by letter dated 11.01.2014 served the notice for depositing Rs.88,66,371/- towards repairing within 7 days, failing which amount will be recovered either from the deposits of other contracts or from bills of present contract or from other deposits lying with the other Divisions. The respondent No.2 once again by letter dated 24.03.2015 directed the petitioner to deposit immediately Rs.88,66,371/-, failing which proceedings as per standardized code will be initiated.

4.6 That Gujarat Public Works Contracts Disputes Arbitration Tribunal [hereinafter be referred to as "the Tribunal"] did not have provision for granting the interim relief, thus there was no other alternate efficacious remedy available except the filing of the petition, accordingly Special Civil Application No.6811 of 2015 was filed, which was withdrawn with liberty to file fresh petition.

4.7 That the petitioner had filed Special Civil Application No.18309 of 2015 before this Court which came to be allowed vide order dated 18.02.2016. Being aggrieved, the respondents filed LPA(Civil) No.36096 of 2016 before the Hon'ble Supreme Court of India which was allowed by order dated 08.01.2020 on jurisdiction and the petitioner was permitted to file proceedings before the Tribunal, accordingly Arbitration No.2 of 2020 with Civil Application No.3 of 2020 is filed before the Tribunal. The Tribunal by common order dated 21.07.2022 dismissed Civil Application No.3 of 2020.

Being aggrieved by the said order of the Tribunal, the petitioner has preferred this petition.

Heard Mr.K. G. Sukhwani, learned counsel for the petitioner and Mr.Angesh Panchal, learned Assistant Government Pleader for the respondent - authorities at length.

Mr.Sukhwani, learned counsel for the petitioner has submitted the same facts which are narrated in the memo of petition and also submitted that the Tribunal has committed an error in deciding three applications by common judgment and even no any such application was filed for consolidating all three applications. He has submitted that the Tribunal has committed an error of facts and law in not considering the directions issued by the Hon'ble Supreme Court for deciding the dispute on merits and even committed an error in not considering the provisions of Section 28(1) of the Arbitration and Conciliation Act which provides for deciding / adjudicating the dispute in accordance with the substantive law for the time being in force. In support of his submissions, Mr.Sukhwani, learned counsel has relied upon the various decisions of the Hon'ble Supreme Court and has submitted that the petition deserves to be allowed and the impugned order deserves to be quashed and set aside.

Per contra, Mr.Panchal, learned Assistant Government Pleader, upon instruction from the concerned department, has submitted that though the matter is decided by the Arbitration Tribunal, let appropriate direction be issued to Arbitration Tribunal to decide the matter as expeditiously as possible.

This Court has considered the averments made in the petition and the submissions made on behalf of both the parties and perused the impugned order passed by the Tribunal.

For the foregoing reasons, the petition is allowed in part. The Arbitration Tribunal is hereby directed to decide the matter in accordance with law as expeditiously as possible preferably within a period of six months from the date of the receipt of the writ of this order after giving an opportunity of hearing to the petitioner. Till then, no coercive steps shall be taken against the petitioner. Direct service is permitted. Rule is made absolute to the aforesaid extent.a