Chattisgarh High Court
Intercontinental Consultants ... vs State Of Chhattisgarh on 13 August, 2021
1
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
ARBR No. 16 of 2020
Intercontinental Consultants And Technocrats Private Limited
Through Its Authorised Signatory Pranav Sharma, Aged About 44
Years, Head Corporate Relations, R/o H No. A-1/73, Safdarjung,
Enclave, New Delhi 110001
---- Applicant
Versus
State Of Chhattisgarh Through Secretary, Public Works Department,
Represented By Project Director, ADB Project, CGPWD, Mahanadi
Bhawan, Mantralaya, Naya Raipur, Chhattisgarh
---- Respondents
For Applicant : Mr. Apurv Goyal, Advocate
For Respondent : Mr. Jitendra Pali, Dy. Advocate General
Hon'ble Shri Justice P. Sam Koshy
Order on Board
13/08/2021
1. Present is an application under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred as "the Act of 1996")
seeking for appointment of an Arbitrator for settlement of the dispute
between applicant and respondent.
2. The brief facts, relevant for disposal of the present application, are
that the applicant is a Company registered under the Companies Act,
1956 and is engaged in providing consultancy services. That on
04.03.2015 applicant entered into a contract with respondent for
providing consultancy services for construction & supervision and
consultancy of civil works at Bilaspur, Chhattisgarh. It was agreed
that respondent will reimburse service tax which would be paid by
applicant. The financial proposal amounted to Rs.15,17,82,630/-.
The applicant has provided services and paid service tax to the tune
of Rs.3,16,53,754/- and submitted invoices with the respondent for
making payment of the same by way of reimbursement. Despite
various reminders and correspondence, the respondent has not made
any payment to applicant. Hence, this dispute.
3. Thereafter applicant proposed for amicable settlement, which was not
accepted and communicated, therefore, applicant has become
entitled to invoke Clause-49 of special conditions of contract, for
adjudication of the dispute by an independent arbitrator. Applicant
also issued a notice to respondent on 31.05.2018 which was replied
by respondent stating that the State Tribunal constituted under the
State Madhyastam Adhikaran Adhiniyam, 1983 is the recourse
available.
4. It is also pertinent to mention here that the applicant had approached
the Chhattisgarh Arbitration Tribunal at Raipur and filed a claim on
01.10.2018 and deposited court fees of Rs. 5,53,871/-. However,
vide order dated 21.01.2020 (Annexure A/8), the Arbitration Tribunal
upon knowledge of the order passed in ARBR No. 23 of 2018 decided
by this High Court and also the order dated 11.09.2019 passed by the
Hon'ble Apex Court in Special Leave to Appeal No. 21120/2019
granted liberty to the applicant to redress its grievances before
appropriate forum. Thereafter, the applicant served notices dated
31.01.2020 and 13.03.2020 upon respondent for appointment of
arbitrator but the non-adjudication of the same led to the filing of
present application.
5. It is submitted by learned counsel for applicant that the matter to be
referred to the State Arbitration Tribunal has to be strictly a work
contract. A consultancy contract between applicant and respondent
is not a works contract. On the contrary, it is a consultancy services
contract, therefore, the applicant is left with no other option but to
approach this Court praying for appointment of arbitrator. Reliance
has been placed on the judgment of Bombay High Court in Mrs.
Henriqueta Maria Julieta Vs. State of Goa and others in 2008 Law
Suit (Bom) 3264.
6. Learned counsel for respondent submits that "works contract" defined
in Section 2(i) of CG Madhyastham Adhikaran Adhiniyam, 1983 (for
short 'Adhiniyam, 1983") includes the contract, that is in existence
between applicant and respondent and any dispute regarding to such
contract will have to be referred to the Arbitration Tribunal, therefore,
present dispute is referable to State Arbitration Tribunal. Reliance is
placed on the judgment of M.P. High Court passed in Landmark
Engineering Vs. The State of M.P. and others, Arbitration Case
No.12/2014 decided on 21.04.2015, in which, it was held that it is trite
law that statutory provision would prevail over provisions of
agreement. Therefore, contention of the petitioner that since
agreement contains an arbitration clause under the provisions of the
Act of 1996, cannot be accepted.
7. It is also submitted before this Court that work under the contract was
of consultancy only and not for any work as defined under Section 2(i)
of Adhiniyam, 1983, therefore, it is prayed that petition be allowed.
8. I have heard both the parties and documents submitted in this
respect.
9. The arbitration clause under special conditions of contract, which
governs the contract between the parties, reads as under:-
"Any dispute or difference arising out of this
Contract or in connection therein which cannot be
amicably settled between the parties shall be
finally settled under the Rules of Indian Arbitration
and Conciliation Act, 1996."
10. The time based contract agreement, mentions very clearly that
the respondent i.e. Public Works Department, shall be referred to as
'client' and applicant, who is also a party, will be referred to as
'consultant'. In Clause-A it is very clearly mentioned that client has
requested the consultant to provide consultation services as defined
in this contract (hereinafter called as services).
11. Section 2(i) of C.G. Madhyastham Adhikaran Adhiniyam, 1983
is asunder :-
"works-contract" means an agreement in writing
for the execution of any work relating to
construction, repair or maintenance of any building
or superstructure, dam, weir, canal, reservoir,
tank, lake, road, well, bridge, culvert, factory,
work-shop, powerhouse, transformers or such
other works of the State Government or Public
Undertaking as the State Government may, by
notification, specify in this behalf at any of its
stages, entered into by the State Government or
by an official of the State Government or Public
Undertaking or its official for and on behalf of such
Public Undertaking and includes an agreement for
the supply of goods or material and all other
matters relating to the execution of any of the said
works."
12. Section 3 of the Chhattisgarh Madhyastham Adhikaran
Adhiniyam, 1983 is as under:-
" Constitution of Tribunal. - The State Government
shall by notification constitute an Arbitration
Tribunal for resolving all such disputes or
differences pertaining to works contract or arising
out of or connected with execution, discharge or
satisfaction of any such works contract."
13. Now the question that arises for consideration is whether
providing services of consultation can be regarded as a contract in
connection with execution or discharge satisfaction of any work
contract. The question can be answered very simply because there is
no such averment made on the part of the respondent that
respondent has any grievance with respect to execution, discharge or
satisfaction of contract which applicant had to provide was
consultation services. Dispute between applicant and respondent is
very clear that there had been an agreement between both the
parties that the entire service tax that would be paid by applicant, will
be reimbursed by the respondent, therefore, it appears to be a case
of breach of agreement between applicant and respondent. There is
no specific denial by the respondent regarding this agreement.
14. After due consideration on over all facts and circumstances of
case and documents present on record, I am of this view that nature
of the contract between applicant and respondent is not a contract as
defined under Section 2(i) of Adhiniyam, 1983 and as such, it is not a
work contract, rather it is a service contract. Hence, on the basis of
this finding, it is held that this dispute shall not be governed by the
provisions of Adhiniyam, 1983. Hence, the application brought before
this Court has merits and, further, this Court has jurisdiction and
power to invoke section 11(6) of Arbitration and Conciliation Act,
1996.
15. Therefore, on the basis of above discussions, this court
reaches to the conclusion, that it is fit case for exercise of power
under Section 11(6) of the Act, 1996. Therefore, by exercising power
under Section 11(6) of the Act, 1996 and under the authority given by
Hon'ble the Chief Justice, I hereby appoint Hon'ble Shri Justice L.C.
Bhadoo, former Judge of this High Court as Arbitrator to arbitrate
dispute between the parties. Registry is directed to communicate this
order to Hon'ble Shri L.C. Bhadoo who shall enter into reference after
complying with the provisions contained in Section 12(2) of the Act,
1996. Learned arbitrator is requested to dispose off the matter within
the time prescribed in the Act, 1996, as amended.
16. The remuneration of the Arbitrator shall be mutually settled by
the parties.
17. The ARBR is disposed off with the aforesaid directions.
Sd/-
(P. Sam Koshy)
Judge
Khatai
