M S Isc Projects Bna Infra Jv Thr ... vs Union Of India And Others
2021 Latest Caselaw 4356 Bom

                                     1              1033-wp 2128-2021+.odt



               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          BENCH AT AURANGABAD

                          WRIT PETITION NO. 2128 OF 2021

 M/s ISC Projects-BNA-Infra (JV),
 Joint Venture through its Director -
 Special Power of Attorney
 Ashwin Suresh Agrawal                                           .. Petitioner

          Versus

 The Union of India and others                                   .. Respondents

 Mr. R. S. Deshmukh, Senior Advocate i/by Mr. Nirmal Rajendra
 Dayama and Devang Deshmukh, Advocate for the Petitioner.
 Mr. A. G. Talhar, A.S.G. for Respondent No. 1.
 Mr. S. B. Deshpande, Advocate for Respondent Nos. 2 and 3.

                                      WITH
                          WRIT PETITION NO. 2294 OF 2021

 M/s B N Agrawal,
 through its partner -Special
 Power of Attorney
 Ashwin Suresh Agrawal                                           .. Petitioner

          Versus

 The Union of India and others                                   .. Respondents

 Mr. R. S. Deshmukh, Senior Advocate i/by Mr. Nirmal Rajendra
 Dayama and Devang Deshmukh, Advocate for the Petitioner.
 Mr. A. G. Talhar, A.S.G. for Respondent No. 1.
 Mr. S. B. Deshpande, Advocate for Respondent Nos. 2 and 3.

                               CORAM :    S. V. GANGAPURWALA &
                                          SHRIKANT D. KULKARNI, JJ.

DATED : 10th March, 2021.

                                                                              1 of 6





                                     2               1033-wp 2128-2021+.odt

 PER COURT:-

 .        The petitioners are assailing the recovery notices issued to them

 by the respondent No. 3.

2. Pursuant to the tender notice the petitioners filled in the tender.

The petitioners were awarded the work for construction of 165 Nos

Minor bridges and Earthwork in embankment and cutting between

Chalisgaon - Jalgaon (93 Kms.) in Writ Petition No. 2128 of 2021. The

work of construction of one important and 21 Major bridges in

Manmad - Jalgaon section in connection with Manmad - Jalgaon 3 rd

line (160 Kms.) in Writ Petition No. 2294 of 2021 was awarded. The

said work was awarded in March 2019. During the continuance of the

work the impugned recovery notices are issued.

3. Mr. Deshpande, learned counsel for respondent Nos. 2 and 3

raises a preliminary objection that the parties under the terms of the

contract have agreed to refer the dispute to the arbitration.

4. Mr. Deshmukh, learned senior counsel for the petitioners

strenuously contends that excepted matters as provided in the clause of

arbitration cannot be referred to arbitration. The learned senior counsel

refers to clauses 57.2 and 57.3 (15) of the terms of the tender.

According to the learned senior counsel, the present dispute would be

2 of 6

3 1033-wp 2128-2021+.odt

within the realm of excepted matters as provided under clause of

tender and cannot be referred to arbitration.

5. The learned senior counsel further contends that availability of a

remedy before the arbitrator or before any other Court would not affect

the powers of this Court under Article 226 of the Constitution of India

and even in matters involving contractual disputes, this Court can

entertain the writ petition. The learned senior counsel relies on the

judgment of the Apex Court in case of Union of India & Ors. Vs. Tantia

Construction Pvt. Ltd. Reported in 2011 (5) SCC 697.

6. The learned senior counsel further lays emphasis that the

impugned recovery notices are issued in violation of principles of

natural justice. Prior to issuance of the recovery notices no show cause

notices were issued, nor say of the petitioners was called. The

petitioners could have explained the payments made to it and that the

payments are not illegal or excess payments. Referring to the affidavit

in reply filed by the respondents, the learned senior counsel submits

that the respondents are also not fully convinced of the alleged over

payments or excess payments. They do not have any record to verify

the same, still the recovery notices are issued against the petitioners.

The same suffers from non application of mind.

                                                                              3 of 6





                                   4               1033-wp 2128-2021+.odt

7. The learned senior counsel further submits that the officer who

has issued the recovery notices, on the same day has also issued

another communication to the effect that the matter of wrongful

payment / over payment / bogus payment done previously is under

investigation by the vigilance department. The said letter is of even

date. The impugned recovery notice is issued before completion of

investigation. The same would not satisfy the test of the reasonableness

and also no conclusive finding could have been arrived at about excess

payment made to the petitioners. In the light of that, the learned senior

counsel emphasizes to entertain the writ petitions under Article 226 of

the Constitution of India.

8. The learned senior counsel further submits that the recovery

claimed is of Rs. 04 Crore and odd amount in each matter and the

security deposit of the petitioners is more than Rs. 08 Crore in each

matter. The amount claimed by the respondents even if found to be

genuine could be recovered from the security deposit of the petitioners.

9. Though the learned senior counsel for the petitioners and the

learned counsel for the respondents canvassed their submissions on

merits, it would appear that clause of arbitration exists between the

parties. The respondents have not determined the contract as per the

terms of settlement of disputes. Excepted matters are detailed under

4 of 6

5 1033-wp 2128-2021+.odt

clause 57.3. The clause relied by the learned senior counsel for the

petitioners would not inure to the benefit of the petitioners in as much

as clause 57.3. (15) would apply only if the contract is determined

owing to the default of contractor. In the present matters the contract

between the parties still subsist. The contract is not determined. None

of the other matters as detailed under clause 57.3 can be invoked to

bring it within the purview of the excepted matters.

10. As contended by the learned counsel for the respondents, the

present matter is arbitrable and can be dealt with by the arbitrator to

be appointed in terms of the agreement between the parties.

11. In the case of Union of India & Ors. (supra) the matter before the

Apex Court was for payment of the work already completed by the

company. In the said matter it does not appear that there was dispute

with regard to the work done and the rate agreed upon. In the present

matters the dispute between the parties revolve around the alleged

excess payment or otherwise. The same would certainly require the

evidence and detailed investigation of disputed facts.

12. As the dispute between the parties is arbitrable and the matter

can be dealt with by the arbitrator as per the terms and conditions

agreed between the parties, we are not inclined to invoke our writ

5 of 6

6 1033-wp 2128-2021+.odt

jurisdiction under Article 226 of the Constitution of India.

13. The parties may take up the process for arbitration and for

further reliefs as the petitioners may claim under the provisions of the

Arbitration and Conciliation Act. In that event, all contentions of the

parties are kept open.

14. Writ petitions, as such, are disposed of with aforesaid

observations. No costs.

 ( SHRIKANT D. KULKARNI )                       ( S. V. GANGAPURWALA )
         JUDGE                                            JUDGE




 P.S.B.




                                                                            6 of 6