Calcutta High Court

Tantia Construction Limited vs Union Of India on 16 September, 2021

                IN THE HIGH COURT AT CALCUTTA
                  ORIGINAL CIVIL JURISDICTION
                          (Original Side)

                                                      Pronounced on: 16/09/2021

                                                                AP 353 of 2020
                                                   (Through Video Conferencing)


TANTIA CONSTRUCTION LIMITED
                                                                  ... .Appellant(s)

                               Through : Mr. Ishaan Saha and Mr. Raghunath
                                        Ghose, Advocates (VC)

                                        v/s

UNION OF INDIA
                                                                 ....Respondent(s)

                               Through : Ms. Aparna Banerjee, Advocate


Coram : HON'BLE MR. JUSTICE RAJESH BINDAL,
                    CHIEF JUSTICE (ACTING)
                                 ORDER

1. The present application has been filed under Section 11 of the

Arbitration and Conciliation Act (for short, 'the Act') for appointment of an

arbitrator for resolution of dispute between the parties. Arbitration clause in

the agreement dated February 22, 2010, is not in dispute.

2. The learned Counsel for the applicants submitted that as during

the currency of execution the project, there was dispute regarding price

escalation the applicant prayed for appointment of an arbitrator by filing AP

92 of 2016 before this Court, which was disposed of on September 16, 2016

directing the appointing authority under to ensure constitution of Arbitral

Tribunal. The Tribunal considered the claim. The contract was concluded on

March 22, 2016. Final bill was prepared and submitted on December 16,

2016. As certain claims were rejected, fresh application was filed by the 2 AP 353 of 2020

applicant for appointment of arbitrator on August 21, 2017. At this stage, the

Court is only to examine as to whether there exists an arbitration clause in

agreement. Merits of the case cannot be gone into. All other objections are

open before the arbitrator. In support of his argument reliance was placed on

judgment of Hon'ble the Supreme Court in Mayavati Trading Private

Limited vs. Pradyuat Deb Burman, (2019) 8 SCC 714.

3. On the other hand, the learned Counsel for the respondent

submitted that at the interim stage the applicant, raising certain disputes,

sought appointment of an arbitrator. In terms of the direction issued by this

Court in AP 92 of 2016 dated September 16, 2016 Arbitral Tribunal was

appointed. The applicant submitted his claim petition on February 23, 2017,

which was adjudicated upon by the Tribunal while passing award on

December 11, 2020. The claim for which the Arbitral Tribunal is sought to

be appointed by the applicant were part of the claim petition filed by him

and have already been adjudicated upon by the Arbitral Tribunal. In fact by

filing a subsequent demand notice on August 21, 2017 the applicant wishes

to raise the same issues which he had been raised in the earlier arbitration

proceedings and have already been dealt with and partly rejected. Once the

claims made by the applicant have already been adjudicated upon by the

arbitrator no question arises for appointment of fresh arbitrator.

4. Heard the learned Counsel for the parties and perused the

relevant referred records. The fact that there is an arbitration clause in the

concluded contract between the parties is not in dispute. It has come on

record that during the currency of the execution of the project the applicant

issued a notice to the respondents on July 02, 2015 calling the respondents to

constitute the Arbitral Tribunal. The matter came to this Court. Vide order 3 AP 353 of 2020

dated September 16, 2016 passed by this Court in AP 92 of 2016, this Court

directed the appointing authority under the agreement to appoint an Arbitral

Tribunal and conclude the reference as expeditiously as possible. It further

came on record that the project stood executed on March 22, 2016 and the

final bill was also submitted by the applicant on December 16, 2016. As

according to the applicant on submission of final bill certain dispute

remained, a request was made to the appointing authority vide letter dated

August 21, 2017 for appointment of an Arbitral Tribunal. The summary of

claims made therein is extracted below:

Summary of Claims

S. No. Account Claim Amount

1 Inclusion of scope of preparation of 6,75,39,597/-

general arrangement drawings and design.

         2        Refund of Penalty                      59,00,000/-
         3        Excess amount of WB Sales              1,40,50,111/-
                  Tax/VAT deducted from payable
                  amount Claimant incl. Amount of
                  50th Bill
         4        Cost of additional resources (barge    3,04,21,912/-
                  mounted crane with barge for central
                  span erection w.e.f. 14.07.2015)
         5        Cost of Arbitrations
         6        Interest on the outstanding amount     To be calculated
                  from the date the payment should
                  have been made till the date of
                  payment

5. As it is evident from the communication dated January 01,

2016, from the applicant to the respondent seeking appointment of an

Arbitral Tribunal in the first round, claim of Rs. 3,29,41,477/- was made on

account of escalation bill.

4 AP 353 of 2020

6. A perusal of the claim petition filed by the applicant alongwith

letter dated February 23, 2017, before the Arbitral Tribunal, as has been

annexed by the respondent with the reply affidavit, shows that the applicant

had claimed resolution of dispute with reference to the following items:

"Summary of Claims:

         S. No. Account                               Claim Amount
         1      Erroneous computation of Price        3,28,83,942/-
                Variation amount unfreezing of        (incl.        assessed
                RBI Indices                           differential   amount
                                                      corresponding to final
                                                      bill)
         2        Inclusion     of     scope     of   6,75,39,597/-
                  preparation      of       general
                  arrangement drawings and
                  design
         3        Refund of Penalty                   59,00,000/-
         4        Excess amount of WB Sales           1,40,50,111/-
                  Tax/VAT       deducted      from
                  payable amount of Claimant
                  incl. amount of 50th Bill
         5        Cost of additional resources        3,04,21,912/-
                  (barge mounted crane with
                  barge for Central span erection
                  w.e.f 14-Jul-15)
                  Grand     total    of     Claim/    15,07,95,562/-
                  Outstanding amount

7. The Arbitral Tribunal gave its award on December 11, 2020 to

the claims made by the applicants. The award in the paragraph 11 of part B

thereof records that on October 10, 2017 it was noticed that further

proceedings could commence only after completion of pleadings. In the final

award the Arbitral Tribunal dealt with claims made by the applicant under

the following heads:

Claim Erroneous Computation of Rs. 3,28,83,942.00 No. 1 Price Variation amount. (including assessed Unfreezing of RBI Indices. differential amount corresponding to final bill) Claim Inclusion of scope of Rs. 6,75,39,597.00 5 AP 353 of 2020

No. 2 preparation of general arrangement of drawings and design.

Claim Refund of Penalty Rs. 59,00,000.00

Claim Excess amount of West Bengal Rs. 1,50,40,111.00 No. 4 Sales Tax/VAT deducted from payable amount of Claimant including amount of 50th Bill Claim Cost of additional Rs. 3,04,21,912.00 No. 5 resources/barge mounted crane with barge for Central span erection w.e.f 15.07.15 Part-D Award on the Counter Claims Not quantified preferred by the Respondent Railway.

8. A perusal of the claim petition filed by the applicant with

reference to the subject matter of dispute in the present application and the

award of the Arbitral Tribunal as has already been passed clearly shows that

the issues, which are sought to be raised now for appointment of an Arbitral

Tribunal, in fact have already been adjudicated upon the claim petition filed

by the applicant. As to whether under such circumstances, the Court should

direct appointment of an arbitrator has been gone into by Hon'ble the

Supreme Court in Bharat Sanchar Nigam Ltd. and Anr. v. M/s Nortel

Networks India Pvt. Ltd., Civil Appeal Nos. 843-844 of 2021 decided on

March 10, 2021, wherein it has been opined that at the referral stage, the

Court can interfere when it is found that the claim is time barred or there is

no subsisting dispute. The case in hand falls in the second category. Once a