P.D.Agarwal Infrastructure Ltd vs State Of Mp & Others

Heard.

This arbitration case has been filed u/S.11 of the Arbitration and Conciliation Act, 1996 for appointing an independent Arbitrator for resolving the

dispute between the parties.

The case of the applicant is that in pursuance to the NIT dated 5/6/1998 the bid of the applicant was accepted and the work order was issued and

sanction letter dated 27/10/1998 was also issued and thereafter the agreement was entered into for the commencement of the work. Further case of

the applicant is that the attempt was made to complete the assigned work, but in the mean while certain dispute arose and since Clause 4.3.29.2 of the

standard tender documents provides for settling dispute under the provisions of Madhyastham Adhikaran Adhiniam, therefore, the applicant had

approached the Madhyastham tribunal. The said Clause 4.3.29.2 reads as under:-

“4.3.29.2. Except where otherwise specified in the contract, for the claim valued at Rs.50,000/- or more the decision of the Superintending

Engineer of the Circle for the time being in respect of all questions and disputes relating to the meaning of the specifications designs drawings and

instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question claim right matter

or thing whatsoever, in any way arising out of relating to the contract designs drawings specification estimates instructions, orders or those conditions

or otherwise concerning the work of execution or failure to execute the same whether arising during the progress work or after the completion or

abandonment there of shall be final provided that the Superintending Engineer shall before giving his decision in writing in the matter gives in

opportunity of being heard to the parties to the contract.

If any party to the contract is dissatisfied with the final decision of the Superintending Engineer in respect of any matter, he may within 28 days after

receiving notice of such decision may refer such dispute to the Arbitration Tribunal constituted under the Madhya Pradesh Madhyastham Adhikaran

Adhiniyam 1983 (No.28 of 1983).â€​

The Madhyastham Tribunal under the provisions of M.P. Madhyastham Adhikaran Adhiniyam, 1983 (for short “Act of 1983â€) had initially

entertained the reference and thereafter an objection was taken in view of the judgment of the supreme court in CA No.3746/2005 in the case of Va

Tech Escher Wyass Flovel Ltd Vs. MPSE Board & Another (2011) 13 SCC 261 and the tribunal vide order dated 5/4/2010 had held that the tribunal

had jurisdiction to proceed with the matter. This order of the tribunal was subject matter of challenge before this court in WP No.9308/2010 and the

division bench of this court vide order dated 29/11/2010 had allowed the writ petition in view of the order passed on the same day in another WP

No.7104/2010 which was allowed and the order of the tribunal was set aside on the basis of the order dated 23/2/2010 passed in CR No.353/2004 in

the case of Maheshchandra Garg Vs. State of MP and others. In that CR No.353/2004 on 23/2/2010 this court placing reliance upon the judgment of

the supreme court in the case of Va Tech Escher Wyass Flovel Ltd (supra) had taken the view that the provisions of Act of 1983 were impliedely

overruled on enactment of the Arbitration and Conciliation Act, 1996. Accordingly, following the order of this court, the tribunal on 28/1/2011 had held

that it had no jurisdiction to proceed with the reference and granted liberty to the petitioner to seek remedy under the provisions of Arbitration and

Conciliation Act, 1996. Hence, this AC was filed.

It is not in dispute that subsequently the supreme court in the matter of Madhya Pradesh Rural Road Development Authority and another Vs.

L.G.Chaudhary Engineers and Contractors (2012) 3 SCC 495 has held that the judgment in the case of Va Tech Escher Wyass Flovel Ltd (supra)

was per incuriam in so far as it held that the Act of 1983 stood impliedly overruled by the Central Act. On account of difference of opinion in respect

of applicability of the Act of 1983 in the cases of termination of the contract, the issue was referred to the larger bench and the larger bench of the

Hon. Supreme Court by order dated 8th March, 2018 in CA No.974/2012 has settled the said controversy by upholding the view which was taken

by Hon.Ganguly, J in the earlier judgment by holding that for such a dispute the remedy is under the Act of 1983. While holding so, the supreme

court has ruled as under:-

“We find from the definition under Section 2(d) of the Arbitration and Conciliation Act, 1996 that even after a contract is terminated, the

subjectmatter of dispute is covered by the said definition. The said provision has not been even referred to in the judgment rendered by Hon'ble Gyan

Sudha Mishra, J.

In view of above, we are of the opinion that the view expressed by Hon'ble Ganguly J is the correct interpretation and not the contra view of Hon'ble

Gyan Sudha Mishra J. Reference stands answered accordingly.

Taking up appeal on merits, we find that the High Court proceeded on the basis of the judgment of this Court in Va Tech Escher Wyass Flovel Ltd.

(supra) which has been held to be per incuriam. The M.P. Act cannot be held to be impliedly repealed.

We are, thus, is agreement with the proposed opinion of Hon'ble Ganguly J. in para 42 of the reported judgment which reads as follows:

“42. Therefore, appeal is allowed and the judgment of the High Court which is based on the reasoning of Va Tech Escher Wyass Flovel Ltd. V.

M.P. SEB, Misc. Appeal No.380 of 2003, order dated 5-3-2003 (MP) is set aside. This Court holds the decision in Va Tech Escher Wyass Flovel

Ltd. v. M.P. SEB, (2011) 13 SCC 261 has been rendered in per incuriam. In that view of the matter the arbitration proceeding may proceed under

M.P. Act of 1983 and not under the A.C. Act 1996.â€​

In view of the aforesaid order of the supreme court, proper remedy available to the applicant to continue the arbitration proceedings before the

Madhyastham tribunal. Hence, no case is made out for appointment of the Arbitrator u/S.11 of the Arbitration and Conciliation Act, 1996. Hence the

applicant may approach the division bench seeking review of the order dated 29/11/2010 passed in WP No.9308/2010 and the tribunal for revival of

the proceedings.

The arbitration case is accordingly disposed of with the aforesaid liberty.