M/S Asean Agencies vs The Union Of India And 4 Ors
2025 Latest Caselaw 4085 Gua

Gauhati High Court

M/S Asean Agencies vs The Union Of India And 4 Ors on 13 March, 2025

Author: Soumitra Saikia

Bench: Soumitra Saikia

                                                                   Page No.# 1/6

GAHC010135612024




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                       THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                           Case No. : Arb.P./25/2024

         M/S ASEAN AGENCIES
         REPRESENTED BY ITS PROPRIETOR- SRI TARIK TALOM AGED ABOUT 47
         YEARS, S/O- TAROK TALOM PRESENTLY RESIDING AT H/NO- HARMONY
         APARTMENT, VIP ROAD, P.O./ NOONMATI, P.S. SATGAON, GUWAHATI- 26,
         DISTRICT- KAMRUP (M), ASSAM



         VERSUS

         THE UNION OF INDIA AND 4 ORS
         REPRESENTED BY THE SECRETARY, RAILWAY BOARD, GOVT. OF INDIA,
         RAIL BHAWAN, RAFI MARG, NEW DELHI- 110001

         2:THE GENERAL MANAGER
          CONSTRUCTION
          MALIGAON
          NORTH EAST FRONTIER RAILWAY
          GUWAHATI
         ASSAM

         3:THE CHIEF ADMINISTRATIVE OFFICER
          CONSTRUCTION
          MALIGAON
          NORTH EAST FRONTIER RAILWAY
          GUWAHATI
         ASSAM

         4:THE CHIEF ENGINEER CONSTRUCTION/II
          MALIGAON
          NORTH EAST FRONTIER RAILWAY
          GUWAHATI
         ASSAM
                                                                       Page No.# 2/6

             5:THE DEPUTY CHIEF ENGINEER
              CONSTRUCTION
             AIZWAL
              MALIGAON
              NORTH EAST FRONTIER RAILWAY
              GUWAHATI
             ASSA

Advocate for the Petitioner   : MR A SAIKIA, R BARMAN

Advocate for the Respondent : DY.S.G.I., MR. K GOGOI




                                    BEFORE
                     HONOURABLE MR. JUSTICE SOUMITRA SAIKIA

                                         ORDER

13.03.2025 Heard Ms. N. Saikia, learned counsel for the petitioner. Also heard Mr. K. Gogoi, learned CGC for the respondents.

2. This is an application under Section 11 of the Arbitration and Conciliation Act, 1996.

3. The petitioner is a registered Class I(A) Contractor of (R&B) PWD, Government of Arunachal Pradesh and having registration of North East Frontier Railways and S.S. Class in Boarder Roads Organization, Government of India.

4. Pursuant to a bid invited by the respondents, the petitioner participated in a bid process by offering their bid. Thereafter, the petitioner was awarded with the contract. The description of the work is "Earthwork Cutting and Construction of minor bridges retaining wall, pucca approach road to alignment and other ancillary work between chainage Km 46/820 to Km 49/200 in between station Mualkhang and Sairang in connection with the construction of new BG Railway line from Bairabi to Sairang (Mizoram)". The petitioner has successfully Page No.# 3/6

completed the work allotted. The railway authority further extended new work to the petitioner firm namely Sub-Contract Agreement-I and II. After completion of Sub-Contracts, the Sub-Contract Agreement-III was proposed and the agreement was signed on 16.03.2021. After 13 days of Sub-Contract Agreement-III, the respondent authority has proceeded to rescind the contract agreement vide order dated. 29.03.2021. Although the revocation of termination order was issued on 16.06.2021, the Date of completion was issued much later which was on 11.08.2021 till 17.09.2021. As there was no quantity to be executed as the Sub-Contract III was executed on 16.03.2021. During this period the machineries were sitting idle along with the manpower causing huge loss to the petitioner. On the other hand, the respondent No-4 and 5 pressurized the petitioner to work without getting the price escalation for increase in fuel price which he is eligible under the contract agreement by and between the petitioner.

5. The petitioner has already completed 90% of the work but surprisingly on 14.12.2021 the respondent No.4 has again issued 48 hours' notice and thereafter issued the impugned termination of work order dated 16.12.2021 along with encasement of Bank guarantee and security deposit dated 15.12.2021 although the validity of work was till 31.12.2021. Being aggrieved the petitioner has filed a writ petition being W.P. (C) No- 7215/2021 praying for setting aside and quashing the impugned order dated 15.12.2021 and 16.12.2021, this Court after hearing both the parties had disposed of the writ petition directing the respondent Railway authority to consider the representation filed by the petitioner as per Clause 61.(1) and Clause 64.(1) of GCC relating to Demand for Arbitration and other clause of the GCC 2013 within a period of 60(sixty) days. But after submission of the detail representation, the Page No.# 4/6

Dy. Chief Engineer (Con/Aizawl), N.F. Railways on 26.04.2024 without following relevant clause of GCC Act 2013 had issued a letter to the petitioner giving item wise reply of the representation dated 10.03.2022. The petitioner again approached this Court by filling another writ petition being WP(C) No. 3444/2022 wherein this Court had directed the petitioner to approach the authority for appointment of an arbitrator as provided in the arbitration and Conciliation Act 1996. Accordingly the petitioner has approached the authority but due to some technical reason and pecuniary jurisdiction of claim, the authority could not appoint the arbitrator. As such finding no other alternative the petitioner has filed this arbitration petition for appointment of an arbitrator.

6. The respondents filed their affidavit contesting the case of the petitioner stating that the claim of the petitioner is not arbitrable in view of Clause 64.7 of the agreement. The learned counsel for the respondents has pointed out that there is a specific clause which prohibits reference to arbitration in the event the claim of the contractor is more than 20% of the contract value.

7. The learned counsel for the petitioner on the other hand disputes the contentions raised. She has submitted that this Court had earlier considered this issue and has appropriately decided the matter in W.P(C) No. 1076/2024 (Union of India Vs. M/S GSR Ventures Pvt. Ltd)

8. The learned counsel for the parties have been heard. Pleadings on record have been carefully perused. The agreement executed by and between the petitioner and the respondent has also been perused.

9. By order dated 31.08.2024 passed in W.P.(C) No. 1076/2024, this Court had earlier held that the question of jurisdiction of the arbitral Tribunal can be decided by the Tribunal itself. Referring to the Judgments rendered by the Apex Page No.# 5/6

Court, this Court held that the question to be examined by the referral Court is the existence of an arbitration agreement by and between the parties. Where there is no dispute as to the existence of an arbitration agreement, all other questions should be dealt with and decided by the Arbitrator/ the Arbitral Tribunal. This view of this Court is in accordance with the judgments rendered by the Apex Court. This position has been further clarified by the Apex Court in another Judgment in SBI General Insurance Vs. Krish Spinning, reported in (2024) SCC Online SC 1754.

10. The other question raised by the respondents are that the railways have maintained a curated panel and even assuming the matter is referred for arbitration, the Arbitrators are to be appointed as per procedure prescribed under the agreement and an arbitrator(s) are to be appointed from the curated panel maintained. This aspect of the matter has already been decided as the law is settled in this respect in view of the Judgment rendered by the Apex Court in Central Organization for Railway Electrification Vs. ECI SPIC SMO MCML (JV), reported in 2024 SCCOnline SC 3129, and other subsequent judgment like SBI General Insurance (Supra).

11. In that view of the matter, this Court is of the considered opinion that the arbitration petition should be allowed. The petitioner has been able to make out the case for issuance of orders for appointment of an Arbitrator on the failure of the respondents to appoint an Arbitrator when called upon do so by the Notice issued by the petitioner earlier.

12. Accordingly, under the powers of this Court under Section 11 of the Arbitration and Conciliation Act read with the Notification No. 29 of the Gauhati High Court, this Court appoints Hon'ble Mr. Justice P.K. Mushahary, Former Judge of the Gauhati High Court is hereby appointed as an Arbitrator to Page No.# 6/6

arbitrate and decide on the disputes arising by and between the parties. The Arbitrator will also render appropriate finding on its jurisdiction in the event such a question is raised by the Railways. The appointment of the prospective Arbitrator is however, subject to the written declaration to be furnished by the learned prospective Arbitrator in terms of Section 12(1) of the Arbitration and Conciliation Act, 1996.

13. Copy of this order be placed by the Registry as well as by the parties before Hon'ble Mr. Justice P.K. Mushahary, Former Judge, Gauhati High Court and thereafter this appointment shall be confirmed upon receipt of a written declaration from the prospective arbitration shall be placed before the Court.

Let the matter be listed again on 24.03.2025.

JUDGE

Comparing Assistant