S.K. Jain, a Partnership Firm vs M.P. Rural Road Development Authority and Another

Prayer has been made in the writ petition to say the recovery as Petitioner has invoked arbitration clause and matter is pending before the Chief Executive Officer under Clause 24 of the Agreement.

Petitioner has submitted that he has entered into a works contract on 4-9-2008 for the work of construction and upgradation of rural roads under PMGSY Package No. MP 4602 in the District Anuppur, M.P. Time was allowed of 12 months to complete the work. The work was delayed due to various latches and breaches of the contract committed by the Respondents. 75% of the work site was not provided by the Respondents. Petitioner was paid total sum of Rs. 1,93,57,988.00. He had applied for extension of time, but, the contract was rescinded on 4-9-2008. Petitioner has invoked Clause 24 of the agreement for settlement of the dispute through its letter dated 27-4-2010. The Respondents without awaiting the result of such dispute settlement system and without resorting the mechanism of arbitration as per contract Clause 25 have initiated recovery proceedings. Respondents have also retained all the due sums of the Petitioner and have initiated recovery proceedings in addition to other penal actions without resorting to the mechanism of arbitration as envisaged under the contract agreement. Hence, the petition has been preferred.

Shri Abhijeet Awasthy, learned Counsel appearing on behalf of the Petitioner has relied upon the Full Bench decision of this Court in B.B. Verma and Another and S.C. Batra and Another Vs. State of M.P. and Another, , in which this Court has laid down that there has to be decision of the Superintending Engineer or that of the Tribunal established under the Madhyastham Adhikaran Adhiniyam. In the instant case the matter is pending before the Chief Executive Officer, it is for the Petitioner to approach the said authority or take recourse to the appropriate proceedings in law under the Madhyastham Adhikaran Adhiniyam/Arbitralion and Conciliation Act, 1996 as the case may be.

It is rightly pointed by Shri Purushendra Kaurav, Dy. AG appearing on behalf of the Respondents that the Apex Court in Civil Appeal No. 3746 of 2005, VA Tech Escher Wyass Flovel Ltd. v. M.P.S.E. Board and Anr. decided on 14-1-2010 reported in 2010 Arb.W.L.J. 116 , has laid down that the Madhyastham Adhikaran Adhiniyam, 1983 does not apply where there is an arbitration clause. In case of arbitration clause the matter is governed by the Arbitration & Conciliation Act, 1996 after exhausting remedy under Clause 24 Petitioner has to approach under relevant Act for redressal of grievance. The recovery of amount cannot be said to be causing irreparable injury nor work can be kept pending in case termination of contract is found to be illegal equities can be settled later on.

Petitioner has the remedy as per law laid down by Apex Court. Writ Petition cannot be said to be the appropriate remedy, hence, we are not inclined to entertain it, same is dismissed with liberty to Petitioner to avail the appropriate remedy.