Gauhati High Court
Arb.P./37/2021 on 8 August, 2022
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GAHC010210522021
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : Arb.P./37/2021
M/S NONDOCHAND NAIDING ,
A FIRM REP. BY SRI NANDOCHAND NAIDING,
SON OF LATE HARILAL NAIDING,
RESIDENT OF DEHENGI BAZAR, P.O. AND P.S. DEHENGI BAZAR,
DIST.- DIMA HASAO, ASSAM,
REP. BY ITS CONSTITUTED ATTORNEY SRI REEJEET NUNISA,
AGED ABOUT 35 YEARS,
SON OF SRI BIMOL CHANDRA NUNISA,
R/O- VILL.- DIHUR PHONGLO,
P.O. AND P.S. MAIBANG, DIST.- DIMA HASAO,
ASSAM, PIN- 788831.
......Petitioner.
-VERSUS -
1. THE ADDITIONAL CHIEF ENGINEER AND ANR
PWD (R AND B) HILLS, HAFLONG, ASSAM, PIN- 788819.
2: THE EXECUTIVE ENGINEER
PWD HAFLONG BUILDING DIVISION
HAFLONG, ASSAM, PIN- 788819.
3. THE NORTH CACHAR HILLS AUTONOMOUS COUNCIL,
REP. BY ITS PRINCIPLA SECRETARY, HAFLONG.
......Respondents.
For the Petitioner: Mr. B. Pathak, Advocate.
Mr. R. Thadani, Advocate.
Mr. V. Kumar, Advocate.
For the Respondents : Mr. R.M. Das,
Standing Counsel, NCHAC.
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BEFORE
HON'BLE MR. JUSTICE N. KOTISWAR SINGH
Date of Hearing & Judgment : 08.08.2022
JUDGMENT AND ORDER (ORAL)
Heard Mr. B. Pathak, learned counsel for the petitioner. Also heard Mr. R.M. Das,
learned Standing Counsel, North Cachar Hills Autonomous Council (NCHAC) appearing for the
respondents.
2. The present petition has been filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 for appointment of an Arbitrator on the ground that after the dispute
has arisen between the petitioner and the NCHAC authorities, in terms of the Arbitration
Clause 20.1 of the Special Conditions of Contract (SCC), the matter is to be referred to the
Arbitrator in accordance with the Arbitration and Conciliation Act, 1996.
3. Mr. R.M. Das, learned Standing Counsel, NCHAC, however, submits that the dispute
arose out of termination of the contract by the Executive Engineer and there is a specific
provision under Clause 24.1 of the General Conditions of Contract (G.C.C.) of the Agreement
to the effect that if the contractor is of the view that the decision taken by the Engineer was
wrong, the said decision could be referred to the Dispute Review Board, and as such, there is
an Alternative Dispute Resolution Mechanism already in place under the said Agreement and
as such, before the said Arbitration Clause is evoked, the petitioner ought to have evoked the
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Dispute Resolution Clause as provided under Clause 24.1 of the General Conditions of
Contract and as such, the present petition is not maintainable.
4. In support of his submission that if there is an existence of an Alternative Resolution
Mechanism or forum available, as provided in the Agreement, the same must be first resorted
to, Mr. Das, learned Standing Counsel, NCHAC has relied upon the decision of this Court
rendered in Bharat Hydro Power Corporation Ltd. and Anr. Vs. A.S.E.B. and Anr .,
reported in 1999 (2) GLT 86 wherein it was held that if there is an alternative forum for
settlement of dispute, the same should be first resorted too.
5. Mr. Das, learned Standing Counsel, NCHAC has also referred to the decision rendered
by the Hon'ble Supreme Court in M.K. Shah Engineers and Constructions Vs. the State
of M.P., (1999) 2 SCC 594 to the same effect.
6. It has been, accordingly, submitted by learned Standing Counsel, NCHAC that the
petitioner should first invoke the said Dispute Resolution Mechanism as provided under Clause
24.1 of the General Conditions of Contract before invoking the Arbitration Clause.
7. Mr. B. Pathak, learned counsel for the petitioner, on the other hand, submits that the
said Clause 24.1 of the General Conditions of Contract is applicable when the decision is
taken by the Executive Engineer. He further submits that though in the present case, the
termination of the contract was by an order issued by the Executive Engineer, the Executive
Engineer had no such authority to terminate the contract inasmuch as only the "Employer"
can terminate the contract as provided under Clause 59.1 of the General Conditions of the
Contract, and who is the "Employer" has been also defined under the aforesaid Agreement as
the "Additional Chief Engineer, PWD (R&B) Hills, Assam, Haflong.
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8. Under the circumstances, learned the Executive Engineer did not have any jurisdiction
or authority to terminate the contract. Only the Additional Chief Engineer, being the employer,
could terminate the contract as provided under Clause 59.1 of the General Conditions of
Contract.
9. Under the circumstances, this itself is also an issue which is required to be considered
by the Arbitrator.
10. Having heard the learned counsel for the parties, this Court would now concur with the
submission advanced by the learned counsel for the petitioner for the following reasons.
11. Though there is a Dispute Resolution Mechanism provided under Clause 24.1 of the
General Conditions of Contract, the said Clause will be applicable only when the decision
taken by the Executive Engineer which is considered to be wrong by the contractor.
12. In the present case, the contract was terminated by the Executive Engineer, and
normally, it would have been required to be referred for the Dispute Resolution under Clause
24.1 of General Conditions of Contract. However, it is also seen that the Executive Engineer
did not have any authority to terminate the contract. For this purpose, only the "Employer"
had the right to do so and the "Employer" has been defined under the Agreement as
Additional Chief Engineer, PWD (R&B) Hills, Assam, Haflong.
13. This Court is of the view that even if the contract was terminated by the Executive
Engineer, but since he did not have any authority, and it could have been terminated only by
the Additional Chief Engineer, PWD (R& B) Hills, Assam, Haflong, the dispute could not be
resolved by resorting to Clause 24.1.
Since the competency of the Executive Engineer to terminate the contract has been also
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challenged and there is a specific Clause in the Arbitration Agreement that the "Employer" is
the "Additional Chief Engineer, PWD (R &B) Hills, Assam, Haflong", who could terminate the
contract as provided under the General Conditions of Contract, this Court is of the prima facie
view that the said Clause 24.1 as urged upon by the learned Standing Counsel, NCHAC
appearing for the respondent will not be applicable.
14. Accordingly, this Court would hold that the present dispute can be resolved through
Clause 20.1 of the Special Conditions of Contract.
15. Though this Court had made the observation about the lack of competency of the
Executive Engineer to terminate the contract, in view of the definition of "Employer" as
"Additional Chief Engineer, PWD (R& B) Hills, Assam, Haflong, this issue is also open to be
decided by the Arbitrator.
16. Accordingly, for the reasons discussed above, the matter is referred to the Arbitrator.
17. Accordingly, as also agreed by the parties, this Court appoints Mr. P.C. Phukan, a
retired Judge of this Court as the sole Arbitrator, subject to the declarations to be made under
Section 12 of the Arbitration and Conciliation Act, 1996 (as amended) subject to his consent
and absence of any disabling condition.
18. Parties will accordingly, appear before the learned Arbitrator and thereafter, the
learned Arbitrator will proceed with the matter in accordance with law.
19. The Registry is directed to furnish a copy of this order to Mr. P.C. Phukan, Retired
Judge of this Court, the learned Arbitrator for doing the needful.
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20. With the above observations and directions, the present petition stands disposed of.
JUDGE
Comparing Assistant
