Shri Mangalam Buildcon Now Known ... vs Executive Engineer, Panchayat ...
2022 Latest Caselaw 1226 Guj

      C/IAAP/119/2020                                              ORDER DATED: 04/02/2022




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

            R/PETN. UNDER ARBITRATION ACT NO. 119 of 2020
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   SHRI MANGALAM BUILDCON NOW KNOWN AS SHRI MANGALAM
                   BUILDCON (I) PVT. LTD.
                          Versus
 EXECUTIVE ENGINEER, PANCHAYAT ROAD AND BUILDING DIVISION
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Appearance:
MR NL RAMNANI(2400) for the Petitioner(s) No. 1
MR HS MUNSHAW(495) for the Respondent(s) No. 1
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 CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
       ARAVIND KUMAR

                                     Date : 04/02/2022
                                      ORAL ORDER

1. Heard. Petitioner is a registered

Partnership Firm having registration of AA Class

Contractor and it is duly registered with the R & B

Department, Surat, in Special Category-I and is

engaged in construction of bridges and has earned

reputation in the field of construction since last

many years. After having successfully and

satisfactorily completed various works, participated

in the tender bid invited by the respondent on

11.11.2016 for the construction of major bridge

across river Anas on Tanda Bhavani Mandir to Anas

river M.P. Border Road at Taluka and District Dahod.

The estimated cost of the tender was

C/IAAP/119/2020 ORDER DATED: 04/02/2022

Rs.15,88,57,799.11 as against which the petitioner

quoted Rs.13,03,38,173.80 and petitioner's bid being

lowest, contract was awarded and works order came to

be issued on 11.11.2016 and after completing all the

formalities including furnishing of security deposit

in the form of fixed deposit receipt, the work was

commenced and completed within the original time

limit fixed, resulting in Completion Certificate

being issued to the said effect by the competent

authority. As against total running bills submitted,

an amount of Rs.24,02,873/- was due and payable by

respondent which came to be demanded by the

petitioner and same has not been paid. Hence,

petitioner got issued a legal notice on 05.11.2020

calling upon the respondents to appoint an Arbitrator

for resolving the dispute arising under the subject

contract as mentioned in Clause 30 of the Agreement.

No reply was received. Hence, present petitioner has

been filed.

2. Respondent on being notified has filed the

reply denying the averments made in the petition

except to the extent expressly admitted thereunder.

C/IAAP/119/2020 ORDER DATED: 04/02/2022

3. Having heard Shri Narendra Ramnani, learned

counsel appearing for petitioner and Shri

H.S.Munshaw, learned advocate appearing for the

respondent, this Court is of the view that only

question that would arise is :

Whether petitioner is entitled to seek

for appointment of a sole Arbitrator ?

4. Having heard learned advocates appearing

for the parties and on perusal of the subject

contract, it would emerge therefrom that under clause

30, parties are at ad-idem on the issue of resolving

the disputes arising out of contract by alternative

dispute redressal mechanism namely arbitration.

Clause 30 reads thus :

"Clause 30 (1): Disputes to be referred to Tribunal:

The disputes relating to this contract, so far as they relate to any of the following matters, whether such dispute arise during the progress of the work or after the completion of abandonment thereof, shall be referred to the Arbitration Tribunal, Gujarat State."

5. It is the primary contention of Mr.Munshaw,

learned advocate appearing for the respondent that

C/IAAP/119/2020 ORDER DATED: 04/02/2022

under the contract dispute has been agreed to be

resolved through Arbitration Tribunal, Gujarat State

and as such parties may be relegated to the said

redressal mechanism. However, learned counsel

appearing for petitioner would vehemently oppose the

same. He would rely upon the judgment of the

coordinate Bench rendered in I.A.A.P. No.64 of 2015

disposed of on 22.01.2016 whereunder this Court

having considered similar contention was of the view

that Amreli District Panchayat is not a notified

authority in terms of clause (k) of sub-section (1)

of Section 2 of the Gujarat Public Works Contracts

Disputes Arbitration Tribunal Act, 1992, which

defines the term 'works contract'. In the teeth of

the said provision, it cannot be gainsaid by the

respondent in the instant case that arbitration

contract would mean a contract made by the State

Government or the public undertaking with any other

person for execution of any of its work relating to

construction, repair etc. and as such the arbitration

tribunal referred to in Clause 30 supra would be the

authority to adjudicate the dispute.

C/IAAP/119/2020 ORDER DATED: 04/02/2022

6. The contract in question admittedly is

entrusted to petitioner by the District Panchayat of

Dahod and not by the State Government. When there is

no privity of contract between petitioner and the

government and the contract is between petitioner and

Dahod Panchayat, this Court is of the considered view

that contention raised by Mr.Munshaw cannot be

accepted. Hence, rejecting said contention, I proceed

to pass the following :

ORDER

(i) Petition is allowed.

(ii) Shri Virendra Balwantrai Barot, retired District Judge, is hereby appointed as the sole Arbitrator to resolve the disputes between the parties in accordance with the Arbitration Centre (Domestic and International), High Court of Gujarat Rules, 2021. Both Parties would be governed by said Rules.

(iii) Registry to communicate this order to the sole Arbitrator forthwith by Speed Post.

(ARAVIND KUMAR, CJ) GAURAV J THAKER