[Cites 5, Cited by 0]
Calcutta High Court
M/S Anupam Enterprises vs The Principal Chief Materials Manager on 29 January, 2026
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 7
ORDER SHEET
AP-COM/1014/2025
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION
ORIGINAL SIDE
M/S ANUPAM ENTERPRISES
VS
THE PRINCIPAL CHIEF MATERIALS MANAGER
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 29th January, 2026.
Appearance:
Ms. Hasnuhana Chakraborty, Adv.
. . .for the petitioner.
Mr. Mukesh Kumar Gupta, Adv.
Mr. Shaunak Ghosh, Adv.
. . .for the respondent.
The Court:
1. This is an application for appointment of an Arbitrator for adjudication
of the disputes which arose out of the purchase order no.
29/2017/2550/37344 dated March 27, 2017, issued by SMM-IV,
Chittaranjan Locomotive Works, to the petitioner. The petitioner being
aggrieved by various disputes and differences which arose in the course
of supply of articles, initially approached the West Bengal State Micro
Small Enterprises Facilitation Council. It was found by the Council that
the supply unit had received full payment against the supply made.
The reference was dismissed with liberty to the petitioner to approach
the appropriate forum with regard to the other allegations of deduction
of various amounts from the bills which were allegedly payable to the
petitioner in respect of other purchase orders, by enforcing the alleged
claims against the petitioner arising from the purchase order of March
27, 2017.
2. Ms. Chakraborty, learned advocate for the petitioner relies on the Indian
Railways Standard (IRS) Conditions of Contract and paragraphs 2901,
2902 and 2003 thereof. She submits that in the event of any dispute or
difference between the parties as to the construction or operation of the
contract, or the respective rights and liabilities of the parties on any
matter in question, the contractor can demand in writing that the
dispute be referred to arbitration.
3. The demand for arbitration shall specify the matters which are in
question or the subject of the dispute or difference as also the amount
of the claim, item wise. The Clause provides that the parties may waive
the applicability of Sub-section 12(5) of the Arbitration and Conciliation
Act. It is contended that when the disputes arose and the respondent
deducted various claims from the petitioner's bills, by a letter dated
September 10, 2025, the petitioner approached the Principal Chief
Materials Manager thereby invoking the arbitration clause and
specifying its demands. The petitioner was issued a notice on 12 th
January, 2026, by the DyCMM(D)/CLW/CRJ, asking the petitioner to
approach the appropriate authority by demanding arbitration.
4. Mr. Shaunak Ghosh, learned advocate for the respondent, submits that
the application is premature. The petitioner ought to have approached
the General Manager for the purpose of determination of the dispute
and only if the dispute was not resolved within 120 days from such
approach being made to the General Manager, could the petitioner
demand arbitration.
5. Paragraph 2900 of the said conditions deals with dispute resolution.
Paragraph 2901 deals with conciliation of disputes. It provides that all
disputes and differences arising out of or in connection with the
contract shall be referred by the party raising the dispute to the
concerned Chief Materials Manager (CMM) or the Divisional Railway
Manager or the Executive Director by issuing a notice of dispute.
6. Thus, Mr. Ghosh's submission that the petitioner was required to
approach the General Manager is not correct. Paragraph 2920 deals
with the matters or disputes to be finally determined by the railways.
The petitioner approached the conciliator by issuing a notice. It
appears from paragraph 2903 which deals with the demand for
arbitration that in the event of any dispute or difference between the
parties as to the construction or operation of the contract or the
respective rights and liabilities of the parties arising out of the contract,
the demand shall be made in writing for reference of the dispute to
arbitration. Such demand can be made in respect of all disputes except
those which fall under the excepted matters. It is not the case of the
railways that the dispute raised by the petitioner is covered by the
definition of excepted matters under the conditions.
7. Moreover, the expression "or" in the 4th line of the said paragraph is
disjunctive and not conjunctive. The party raising the dispute may
demand for arbitration if there are subsisting disputes or demand
arbitration at a later stage, if the General Manager or any other
authority at the conciliation stage does not take a decision within 120
days as referred to in paragraph 2902. The petitioner complied with the
provisions of paragraph 2901. No decision was taken by the conciliator.
The records do not reveal that any conciliation proceeding had at all
been initiated. Thus, the petitioner was within its right to demand
arbitration, under paragraph 2903 of the said conditions. There is an
another angle to the said issue. The petitioner had approached the
West Bengal State Micro Small Enterprises Facilitation Council some
time in 2022. The matter was pending before the Council. The
respondent participated. Had the respondent been interested in holding
a conciliation proceeding in terms of paragraph 2901, they could have
done so.
8. Moreover, the letter dated January 12, 2026, issued by
DyCMM(D)/CLW/CRJ clearly indicates that the respondent being
conscious of the provisions of paragraph 2903 asked the petitioner to
approach the appropriate authority by demanding arbitration. A notice
invoking arbitration was already been issued on September 10, 2025.
Thus, further demand of arbitration pursuant to the letter dated 12 th
January, 2026 will be an empty formality. The respondent did not agree
to refer the dispute. In view of the present legal position the Railway
Authorities cannot also unilaterally constitute a Tribunal. Under such
circumstances and in view of the stand taken by the Railways this
Court is of the view that, relegating the matter for further consideration
will be an empty formality. Reference is made to the decision of
Demerara Distilleries Private Limited and Anr. vs. Demerara
Distillers Limited : (2015) 13 SCC 610 and Visa International
Limited vs. Continental Resources (USA) Limited : (2009) 2 SCC 5.
9. All objections with regard to arbitrability, admissibility, limitation tec,
are kept open.
10. Under such circumstances, this Court allows the application by
appointing Mr. Shashwat Nayak, Advocate, [Mob. No. 8910251490] as
the learned Arbitrator, to adjudicate the disputes between the parties.
This appointment is subject to compliance of Section 12 of the
Arbitration and Conciliation Act, 1996.
11. The learned Arbitrator shall fix his remuneration as per the Schedule
of the Act.
12. AP-COM 1014 of 2025 is accordingly disposed of.
(SHAMPA SARKAR, J.)
SP/
