MS DALIP SINGH ADHIKARI vs STATE OF UTTARAKHAND AND OTHERS

Sharad Kumar Sharma, J

This is a Special Appeal, which has been preferred by the writ petitioner, challenging the judgment and order dated 19.3.2018, as passed by learned

Single Judge, in WPMS No.700/2018, Dalip Singh Adhikari vs. State of Uttarakhand & others. As a consequence thereto, the learned Single Judge,

has proceeded to dispose of the writ petition with a direction that, since the petitioner is a contractor and for the reason, that the basis of challenging

the impugned orders dated 16.01.2018 and 27.02.2018, being a dispute with regards to the matter which is a matter between the contracting parties

already pending consideration before the Arbitral Tribunal, had disposed of the writ petition, directing the appellant/petitioner if so advised to file an

appropriate application for an interim 2 protection by invoking Section 17 of the Arbitration and Conciliation Act, 1996. It is this order which has been

put to challenge by the appellant/petitioner in the present special appeal.Â

In short the contention of the learned counsel for the appellant/petitioner is that based on the tender notice which was published and vide recourse

to the etendering process which was initiated for the construction of two lane Tanakpur Jauljibi motor road from 13.600 to 55.00 along with India

Nepal Border. Petitioner was held to be lowest bidder, the work was assigned to him. According to the appellant/petitioner, as per the terms of the

contract, the work was to be completed within a period of 18 months from the date of issuance of letter of intent. After being declared as a successful

bidder, the Superintending Engineers, Civil Circle, PWD, Champawat executed a work contract being Contract Bond No.15/SE dated 03.01.2017 and

by virtue of the said order, the appellant/petitioner was suppose to commence the work by 03.01.2017 and it was to be complete by 02.7.2018.Â

It is the case of the appellant that based on the complaint which was submitted before the Hon’ble Chief Minister of the ruling party. On the

said complaint, the Hon’ble Chief Minister of the Ruling Party vide his noting dated 29.4.2017, a letter was written to the Secretary, PWD to

enquire into the matter, however, the grievance of the appellant/petitioner is that the said reference of enquiry was made specifically to a particular

officer of his choice would vitiate proceedings, i.e. by Chief Engineer, PMGSY, Almora. The appellant submission was that under the work order

executed in his favour on 03.04.2017, by the time the controversy arose, he had already completed 25 percent of the work under the contact, which

was taken into consideration by the Chief Engineer, PMGSY, Almora. His submission was further that while the said officer was conducting an

enquiry, he had committed an error by not considering the work experience of the appellant /petitioner of the previous financial year which was issued

in his favour from the concerned Executive Engineer and hence his contention is that his experience satisfied the finance component essential for the

purposes of considering the experience for the execution of the work.

It is the case of the appellant/petitioner that the Additional Chief Secretary, PWD is said to have passed an order on 22.8.2017, wherein he has

contended that after the rejection of two unresponsive bids, only one firm had remained in bidding contest which makes the bidding process as to be a

process falling under the single bid system. The grievance of the appellant/petitioner in the writ petition was against the order dated 22.8.2017 as

passed by the Additional Chief Secretary, PWD, wherein, it is reflected that exclusively basing his finding on the          ex-parte

enquiry report dated 15.6.2017, and which according to the appellant/petitioner was exclusively in derogation to principles of natural justice, as no

opportunity of hearing was provided to the appellant/petitioner by the order had proceeded to direct the respondent no.3, i.e. the Chief Engineer

(Pithoragarh Region, PWD) to rescind the work contract being Contract Bond No.15/SE dated 03.01.2017. It is based on this communication dated

22.8.2017 to be read with enquiry report dated 15.6.2017. It is contended that the Chief Engineer, respondent no.3 by an order dated 23.8.2017 and

cancelled the contract executed by the Superintending Engineer with the appellant/petitioner.

The said order was communicated to the appellant/petitioner by the order of the Superintending Engineer, Civil Circle, PWD, Champawat dated

25.8.2017. Consequently, the contract of the appellant/petitioner has been cancelled. The appellant/petitioner admittedly aggrieved against the orders

dated 22.8.2017, the communication of Engineer in Chief dated 23.8.2017, the enquiry report dated 15.6.2017 and the communication of the

Superintending Engineer dated 25.8.2017, had preferred a writ petition being WPMS.2143 of 2017, M/s Dalip Singh Adhikari vs. State of Uttarakhand

& others.

The said writ petition was disposed of by the judgment dated 20.9.2017 by the learned Single Judge, observing thereof that since under the terms of

the contract, it provides an agreed forum for redressal of the grievance arising from contract, as provided under its Clause 23 of the General

Conditions of the Contract. The dispute rederessal should be as per the terms of the contract, i.e. by initially raising before the adjudicator and if at all

necessary then before the arbitrator. The forum available as per Clause 23.1 it was by an initiation of a dispute before the Adjudicator an Officer, who

was to be appointed by the employer and as per Clause 24.1, if the contractor is aggrieved by any decision taken by the engineer an officer as defined

under Clause 1.1 (a-a), reference was to be made for adjudication and being 5 dissatisfied by the decision of the adjudicator, who is suppose to give a

decision within 28 days of the receipt of the notification of dispute. The matter is required to be referred to the arbitration under Clause 24.3 r/w

Clause

24.4.

Based on the view expressed by learned Single Judge, in its judgment dated 20.9.2017, case is that the appellant/petitioner is said to have

approached to the Adjudicator for redressal of the grievance. He moved an application before the Superintending Engineer for appointment of an

Adjudicator who in turn, appointed Engineer in Chief, Mr. B.D. Joshi (Retired to act as an Adjudicator). It is the submission of learned counsel for the

appellant/petitioner that the Adjudicator vide its order dated 13.12.2017, had decided the issue in his favour, and according to the appellant/petitioner,

the Adjudicator vide its decision dated 13.12.2017 has held that action of the employer of terminating the contract on 25.8.2017 to be illegal, which is

quoted herein under:Â

“It is clear that the Employer has not noticed the Contractor committing of the fundamental breach under (a) to (h) of Clause 56.2 and in particular

Clause 56.2 (h) and the Fraudulent Practice as defined under sub clause 57.1 (a) (ii) at the time Contracting and even thereafter. Further even after to

the Contract was entered into, the Employer has reconfirmed that the Contractor was fulfilling the P.Q. Requirement as required prior to award of the

work.â€​

The decision of the Adjudicator     dated 13.12.2017 reads as follows:

“It is just and appropriate to hold that the termination made is non-est unjustified and not sustainable.Â

Insofar as prayed of claimant at S1. No.9 (b,c,d, e & f) and prayer of respondent at s1. No.16 (1, 2 & 3) are concerned all these issues are

consequential to the decision of claimant’s prayer at s1. No.9 (a). On accounts of the facts and circumstances provisions under the contract it is

my considering opinion that the termination dated 22.8.2017 by the ACS and consequential office order of the employer dated 25.8.2017 are unjustified

and dehors the contract provision.

Therefore, I find that is appropriate to direct the Employer to reconsider the matter in its entirely and also to permit the Contractor to complete the

work as per Contract in the public interest and to prevent undue litigation and avoidable financial loss.â€​Â

However, he disagreed that the two findings which has been recorded by the Adjudicator pertaining to as to whether the termination of the contract

is justified legally? He submits that once the Adjudicator has held that the termination of the contract was bad because the appellant/petitioner have

not committed any default or breach of any conditions contemplated under Clause (a) to (h) of Clause 56.2 as entered at the time of contracting or

even thereafter.Â

Learned counsel for the appellant/petitioner relied on the finding of the decision rendered by the Adjudicator that the termination order dated

22.8.2017 and the consequential order was bad.

It is an admitted case of the appellant that though there was an order passed by the Adjudicator on 13.12.2017 in his favour, yet he had preferred

an 7 arbitration application under Section 9 of the Arbitration and Conciliation Act, which was registered as Arbitration Case No.71 of 2017, Dalip

Singh Adhikari vs. State of Uttarakhand & others, before learned District Judge, Dehradun, thereby, making a prayer that the respondents may be

restrained from awarding the contract in favour of any other person and for maintaining status quo. It is further apparent from the records that the

learned Incharge District Judge, while considering the application under Section 9 of the Arbitration and Conciliation Act, has passed an order on

27.9.2017, by virtue of which restraining the respondents from proceeding with execution of the contract in favour of any other person and directed to

maintain status quo over the site in question.Â

The present controversy which has reached to this stage rather has its genesis from the second show cause dated 11.9.2017, which is said to have

been issued by the Chief Engineer, Dehradun, which as per the appellant shows that, it was based upon the same set accusations as leveled against

the appellant pending consideration before consideration before arbitrator. The record reveals that the second show cause dated 11.9.2017, was

replied by the appellant by filing a reply to it on 05.12.2017 & 21.9.2017. He simultaneously submits and pleaded in the writ petition that he has prayed

for an opportunity of hearing to be granted by the Chief Engineer, PWD, while he considers the reply dated 05.12.2017 and 21.9.2017 to the set of the

allegations as leveled in the show cause dated 11.9.2017. The appellant on the basis of the decision of the Adjudicator dated 13.12.2017 is said to have

approached the Chief Secretary, Government of Uttarakhand, by submitting a letter dated 18.12.2017 for revival of the contract, as the cancellation

has been held to be illegal by Adjudicator.Â

It is the Superintending Engineer, PWD Champawat being dissatisfied by the decision of the Adjudicator dated 13.12.2017, forming the basis for

claim of the appellant for revival of the contract has written a letter dated 08.01.2018, whereby requested him to appoint his nominee for arbitration in

terms of Clause 24.3 r/w Clause 24.4 of the General Conditions of the Contract. Hence as a matter of fact, the respondents did not agree with the

decision taken by the Adjudicator forming the basis of the claim for the appellant. The issue pertaining to as to whether the appellant was at all eligible

to be considered for participating in the contracting process, since according to the respondents their case was that the contract was based on false

and fabricated experience certificates. The same as to whether it be taken into consideration for contract or could not have been taken into

consideration, because it was yet to be decided by the arbitrary. Hence as a matter of fact on merits, the respondents denied the propriety of the

enquiry report as well as award/decision of the Adjudicator dated 13.12.2017.Â

The respondents to writ are said to have invoked Rule 15(1) of the Classification and Enlistment of Contractors in Public Works Department Rules

and has rejected the same by the impugned order in the writ petition dated 16.01.2018. This Court vide its judgment dated 31.01.2018 passed in

WPMS No.275 of 2018 has held in its para nos. 25 and 26 as under:

 “25. Be that as it may, the Rules which were published on 08.10.1980 dealing with the Classification and Enlistment of the contractors in

P.W.D. under which the impugned action has been taken. In its Rule-15 under which the action has been taken dealt with the circumstances under

which the competent authority could enlist the contractor or delist the contractor from the Register of enlisted contractors. The competent authority

has been defined under Appendix-G, though apparently there are bundle of facts which has been pleaded by the petitioner in the writ petition, which

are only having a persuasive blend and not relevant for the case, but this Court slightly incapacitated to interfere at this stage on account of the fact

that under the rules particularly Rule-16 which is quoted hereunder, the petitioner has got a remedy of preferring an appeal/review whichever is

available to him before the competent authority which has been defined as to be next higher authority under the rules and further because taking into

consideration the fact that Arbitration Proceedings and proceedings under Section 9 are pending and one yet to be decided finally, any finding would

not be possibly given by this Court after appreciation of facts as would have bearing on pending proceedings:Â

Rule-16 An applicant or enlisted contractor who feels aggrieved by any order passed under these rules, any file an appeal to the next higher authority

within a period of one month or receipt of intimation of such order and the order passed by such authority after holding such enquiry as it may consider

necessary, shall be final. Such appeals shall ordinarily be disposed of within a period of two months.Â

Provided that no appeal shall lie against an order passed by the engineer-on-chief/chief engineer. However, the person aggrieved by the said order

may apply to the Engineer in Chief/Chief Engineer may pass any order considered suitable.Â

On account of fact that the petitioner has a statutory remedy, which is by way of filing of an appeal or review, this writ petition is dismissed as the

petitioner has got a forum available for redressal of his grievance against impugned order passed under Rule15, in the given circumstance unit

jurisdiction is not available to the petitioner. It is left open for the petitioner to approach the Authority against the impugned order dated 16.01.2018,

and in an event if the petitioner approaches the authority by way of filing an appeal/review alongwith the interim application within two weeks from

today, the same would be considered by the competent authority and pass an appropriate order on the interim stay application within a period of two

weeks from the date of filing of appeal/review, exclusively in accordance with law.â€​

When the writ petition came up for consideration before the learned Single Judge, the learned Single Judge by the impugned judgment dated

19.3.2018, disposed of the writ petition to approach the Arbitral Tribunal where the proceedings are pending for consideration. It is not a bone of

contention or in dispute inter-se between the parties that in terms of the contract, the parties have voluntarily agreed that for redressal of any

grievances arising out of the contract, they would adopt the recourse for settlement of the dispute as per settled procedure contemplated under Clause

23 and Clause 24. Admittedly, the decision of the Adjudicator has not yet attained finality because a reference proceeding at the behest of the

respondents before the arbitrary has already pending consideration. Any proceedings which have been drawn against the appellant allegedly to be

under the Registration Rules called as “Classification and Enlistment Contractors in the Public Works Department Rules.â€​Â

As a matter of fact, on scrutiny of impugned appellate order dated 27.02.2018, the Chief Engineer/ Head of Department while taking recourse to

the provisions of Rule 15(1) and exercising his powers provided there under held that it would be appropriate to remove the name of the contractor

petitioner/appellant from the list of the registered contractors and thereby by the order impugned dated 27.02.2018 declined to grant an interim order,

dismiss the appeal and the application for the grant of interim protection.Â

It would be in fitness of things that against the impugned order dated 16.01.2018 delisting the petitioner/appellant exercising powers vested under

Rule 15 of the Rules from the register of registered contractors. The petitioner has preferred an appeal which has been dismissed and since there is a

corresponding proceedings of arbitration which is already pending for consideration, the learned Single Judge by the impugned judgment dated

19.3.2018 has rightly taken a view that the petitioner has got a remedy available under Section 17 of the Arbitration and Conciliation Act, because the

interest of the appellant could be best sub-served by Section 17 of the Arbitration Act, which provides the power of arbitrary Tribunal to grant interim

protection. Rather than multiplying the proceedings, the controversy based on same facts between same parties ought to be decided before single

agreed forum.

Since the controversy arises out of a contractual obligations covered by Clause 23 & Clause 24 of the General Conditions of the Contract, the

proceedings for redressal of the grievance inter-se between the parties ought not to be multiplied. In that view of the matter, we find that the

impugned order do not suffer from any apparent error or mistake in the eyes of law. Hence the appeal lacks his merits and is accordingly,

dismissed.Â

No orders as to costs. Â