M/S Gr (Jv) vs Union Of India
2025 Latest Caselaw 111 Gua

Gauhati High Court

M/S Gr (Jv) vs Union Of India on 2 May, 2025

Author: Soumitra Saikia

Bench: Soumitra Saikia

                                                               Page No.# 1/5

GAHC010200142024




                                                        undefined

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

                          Case No. : Arb.P./44/2024


         M/S GR (JV)
         A JOINT VENTURE FIRM BETWEEN GPT INFRAPROJECTS LIMITED AND
         RAHEE INFRATECH LIMITED
         HAVING ITS REGISTERED OFFICE AT KEMWELL MANOR
         5TH FLOOR
         10/D/2
         HO CHI MINH SARANI
         KOLKATA- 700071
         REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE
         NAMELY
         SRI BASU DEV DAS
         AGED ABOUT 52 YEARS
         SON OF LATE NARARAJ DAS
         RESIDENT OF BYE LANE NO. 1
         WEST JALUKBARI
         LANKESWAR
         KHANAMUKH
         KAMRUP METRO
         ASSAM 781014.


          VERSUS

         UNION OF INDIA
         THROUGH GENERAL MANAGER
         CONSTRUCTION
         NORTH EAST FRONTIER RAILWAYS
         MALIGAON
         GUWAHATI
         DISTRICT- KAMRUP(M)
         ASSAM
         PIN- 781011.
                                                                           Page No.# 2/5

           ------------
           Advocate for : MR. SAILENDRA DEKA
           Advocate for : DY.S.G.I. appearing for UNION OF INDIA



                                  BEFORE
                   HONOURABLE MR. JUSTICE SOUMITRA SAIKIA

                                         ORDER

02.05.2025

Heard Mr. J. Das, learned counsel and Mr. P. Banerjee, learned counsel appearing for the petitioner. Also heard Mr. H. Gupta, learned CGC appearing for the respondent.

2. This petition has been filed by the petitioner under Section 11 of the Arbitration and Conciliation Act, 1996, praying for the appointment of an Arbitrator. The petitioner participated in the tender process invited by the respondent and pursuant thereto, the respondent issued a Letter of Acceptance on 14.07.2015 in respect of the bid submitted by the petitioner for the execution of construction of New Broad Gauge Railway Line from Jiribam to Imphal, at an approximate cost of Rs. 101,78,38,451.64/-. Following the issuance of the Letter of Acceptance, a formal agreement was executed between the petitioner and the respondent on 05.10.2015.

3. A dispute arose between the parties with regard to the tax liability concerning the writ petitioner. It is submitted by the learned counsel for the petitioner that, due to an incorrect understanding of the provisions of the GST law, a demand was raised for an amount of Rs. 1,80,50,810.76/- towards recovery of the alleged excess GST neutralization. The said amount was sought to be recovered from the petitioner's bills/security deposits lying with the respondents.

Page No.# 3/5

4. Despite the petitioner's response to the purported recovery sought to be made towards the alleged excess GST neutralization paid, the respondent authorities rejected the petitioner's claims. It is submitted that, under the provisions of the contract, there exists a clause providing for reference of any disputes and differences arising between the parties to arbitration.

5. It is submitted that the denial of the amounts claimed by the petitioner due to differences arising between the parties constitutes a dispute relating to the contract agreement executed between the petitioner and the respondents. Accordingly, a notice was served upon the respondents requesting the appointment of an arbitrator in terms of the arbitration clause contained in the said agreement.

6. Pursuant to the receipt of the notice, the respondent demanded that the petitioner furnish a waiver, enabling the appointment of an arbitrator from the curated panel maintained by the respondent authorities. However, the petitioner did not accede to this demand and consequently, no arbitrator came to be appointed. Being aggrieved by the inaction of the respondents the petitioner has filed the present application praying for appropriate directions and for the appointment of an arbitrator in accordance with law.

7. The respondent has contested the matter by filing their objection, wherein they raised an objection based on the Judgment of Central Organisation for Railway Electrification vs. M/s ECI-SPIC-SMO-MCML(JV), reported in (2019) 16 SCR 1234. In that case, the Hon'ble Supreme Court held that the existence of a waiver clause does not affect the substantive rights of the parties in appointment of an arbitrator from a panel maintained by the employer namely the respondent herein. However, the said judgment was subsequently referred to a larger bench, which rendered its decision in Central Organisation for Railway Electrification vs. M/s ECI-

Page No.# 4/5

SPIC-SMO-MCML(JV), reported in (2024) INSC 857. The larger bench held that the waiver clause does indeed affect the rights of the parties, and that if a party does not accept the curated panel proposed by the other party, it must be given the liberty to appoint its own arbitrator. This Judgment has since been followed and relied upon in several subsequent decisions.

8. Under such circumstances, in view of the clear principles laid down by the Hon'ble Apex Court in the aforementioned Judgment, the respondent has accepted the legal position and submits that they would abide by any order passed by this Court regarding the appointment of an arbitrator. However, the respondent has raised an additional objection, contending that the notice invoking arbitration was issued by a power of attorney holder. As such, they argue that no valid notice under Section 21 of the Arbitration and Conciliation Act, 1996, can be deemed to have been issued by the petitioner or received by the respondent for the purpose of invoking the provisions under Section 11 of the Act.

9. This aspect of the matter has also been dealt with in the Judgment of a Co- ordinate Bench of this Court rendered in Stl. Infracon Pvt. Ltd. Vs. Union of India & Anr. reported in 2017 (4) GLT 1028 (Arbitration Petition No. 29/2014) decided on 07.09.2017. The said Judgment, which has been followed in subsequent decisions of this Court, held that a notice issued by a power of attorney holder constitutes sufficient compliance with the requirements of Section 21 of the Arbitration and Conciliation Act, 1996.

10. The petitioner has proposed the name of Mr. M.K. Bhattacharjee, former District Judge, to be appointed as the Sole Arbitrator to adjudicate the disputes arising between the parties in the present matter. In view of the settled legal position of law laid down by the Hon'ble Supreme Court, as well as the Judgment Page No.# 5/5

of this Court in appeal, which affirms that a notice issued by a power of attorney holder amounts to sufficient compliance under Section 21 of the Arbitration and Conciliation Act, 1996, this application is allowed. Accordingly, Mr. M.K. Bhattacharjee, former District Judge, is appointed as the Sole Arbitrator to arbitrate and decide the disputes between the parties. However, this appointment shall be subject to the prospective arbitrator furnishing a written declaration in terms of Section 12(1) of the Act, affirming his independence and impartiality before this Court.

11. Let the parties appear before the learned Arbitrator after a period of three (3) weeks. The matter be listed again on 04.06.2025, by which date the written declaration from the prospective Arbitrator, as required under Section 12(1) of the Arbitration and Conciliation Act, 1996, shall be filed before this Court. Upon receipt of the written declaration, the appointment of the Arbitrator shall be confirmed.

12. List accordingly.

JUDGE

Comparing Assistant