Gujarat High Court
Gpc Infrastructure Ltd vs Gandhinagar Municipal Corporation on 19 September, 2025
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C/ARBI.P/198/2024 CAV JUDGMENT DATED: 19/09/2025
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Reserved On : 04/07/2025
Pronounced On : 19/09/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 198 of 2024
With
R/PETN. UNDER ARBITRATION ACT NO. 244 of 2024
With
R/PETN. UNDER ARBITRATION ACT NO. 6 of 2025
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2025
In R/PETN. UNDER ARBITRATION ACT NO. 6 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 7 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 8 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 9 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 10 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 11 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 12 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 13 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 14 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 16 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 17 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 18 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 19 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 20 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 21 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 22 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 23 of 2025
With
R/PETN. UNDER ARBITRATION ACT NO. 60 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
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GPC INFRASTRUCTURE LTD.
Versus
GANDHINAGAR MUNICIPAL CORPORATION
==========================================================
Appearance:
1. R/ARBI.P/ 198 /2024 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR CHINMAY M GANDHI for the Respondent No.1
MS NIKITA C GANDHI for the Respondent No.1
2. R/ARBI.P/ 244 /2024 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR KV GADHIA for the Respondent No.1
3. R/ARBI.P/ 6 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR. G. H.VIRK,GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR. PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
C.A.No.1 /2025 Mr. ASPI M.KAPADIA, SR.ADVOCATE FOR THE
APPLICANT
MR. G.H.VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
Nos. 2 to 4
MR.SHASHVATA SHUKLA, ADVOCATE for Res.No.1
4. R/ARBI.P/ 7 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
5. R/ARBI.P/ 8 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR. PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
6. R/ARBI.P/ 9 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
7. R/ARBI.P/ 10 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
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RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
8. R/ARBI.P/ 11 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
9. R/ARBI.P/ 12 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR. PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
10. R/ARBI.P/ 13 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
11. R/ARBI.P/ 14 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
12. R/ARBI.P/ 16 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCAE for the Respondent
No.1, 2, 3
13. R/ARBI.P/ 17 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCAE for the Respondent
No.1, 2, 3
14. R/ARBI.P/ 18 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
15. R/ARBI.P/ 19 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
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RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
16. R/ARBI.P/ 20 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
17. R/ARBI.P/ 21 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
18. R/ARBI.P/ 22 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCAE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
19. R/ARBI.P/ 23 /2025 MR. UNMESH SHUKLA, SR. ADV. FOR MR.SHASHVATA
SHUKLA for the Petitioner No.1
MR.G. H. VIRK, GP WITH MR.SHYAMAL K.BHIMANI,
ADV.WITH MR.PRASHANTH S.UNDURTI, ADV. WITH
MR.SIMRANJIT H.VIRK, ADVOCATE WITH MS.RUCHI
RAMPURIA, ADVOCATE for the Respondent
No.1, 2, 3
20. R/ARBI.P/ 60 /2025 MR.MANISH BHATT, SR.ADVOCATE FOR MR. MUNJAAL
BHATT, ADVOCATE & MR.MAYUR KISHANCHANDANI,
ADVOCATE for the petitioner .
MR.K.V.GADHIA, GP for the Respondent
==========================================================
CORAM:HONOURABLE MR.JUSTICE D.N.RAY
CAV JUDGMENT
1. Heard learned Counsel appearing for the respective
parties.
2. A batch of petitions has been instituted under Section
11(6) of the Arbitration and Conciliation Act, 1996 (for short
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"the Arbitration Act, 1996").The common question which
arises for consideration in all these petitions pertains to the
applicability of the Gujarat Public Works Contracts Disputes
Arbitration Tribunal Act, 1992(for short "the Arbitration
Tribunal Act, 1992"),which contemplates reference of
disputes arising between parties to a works contract to the
Tribunal established thereunder, in terms of Section 8 of the
Arbitration Tribunal Act, 1992, despite the invokation of the
respective arbitation clauses u/s 21 of the Arbitration Act,
1996.
3. Since the issues raised across the petitions are
substantially identical, they were heard together. For the sake
of convenience, Arbitration Petition No. 60 of 2025 is treated
as the lead matter, and the decision rendered herein shall
govern the outcome of the connected petitions as well.
4. Brief foundational facts are as under:-
4.1 The Petitioner is a company engaged in construction
activities, whereas the respondent is an authority responsible
for providing essential infrastructure and allied facilities,
including entertainment amenities, within the territorial limits
of Rajkot, Gujarat.
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4.2 In January 2015, the respondent-authority issued a
public tender for the development of an Integrated Group
Housing Facility over the land situated at Bharat Nagar Slum
7B, Mavdi, Rajkot (TP No. 28; FP No. 49/1; Ward No. 13),
under a Public Private Partnership (PPP) model. Pursuant
thereto, Red Organisers Pvt. Ltd. (hereinafter referred to as
the "erstwhile Concessionaire") submitted its bid, which was
accepted, and a Letter of Acceptance was accordingly issued
on 06.04.2015.
4.3 As per the tender stipulations, the erstwhile
Concessionaire was obligated to construct 215 dwelling units
with a minimum carpet area of 28 sq. meters each, along with
12 commercial shops having a total carpet area of 15 sq.
meters. The total plot admeasured 30,505 sq. meters with a
permissible FSI of 3. The said land was bifurcated into two
parts:- Parcel A, designated for construction of the Slum
Rehabilitation Project, and Parcel B, marked as freehold land
for commercial utilization by the concessionaire.
4.4 The Petitioner's contention is that the permissible FSI of
3 is applicable to the entire plot area and not confined merely
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to Parcel A. In support of this assertion, reliance has been
placed upon clarifications issued by the Urban Development
and Urban Housing Department, in addition to the tender
conditions themselves.
4.5 Subsequently, the respondent and the erstwhile
Concessionaire executed a Concession Agreement dated
11.06.2015 for development of the housing facility on the
subject land. Despite the tender requirement of fewer
dwelling units, the concessionaire undertook additional
construction, ultimately delivering 314 dwelling units with an
approximate carpet area of 37.08 sq. meters each, along with
20 shops admeasuring a total of about 16.49 sq. meters.
4.6 Thereafter, in compliance with the terms of the tender, a
Deed of Conveyance was executed on 15.10.2018 between the
respondent and the erstwhile Concessionaire with respect to
Parcel B, the freehold land, admeasuring 25,846.61 sq. meters
out of the total 30,505 sq. meters. On the very same date, the
concessionaire sold the said freehold land to the present
Petitioner through a registered sale deed, for a consideration
of ₹65,00,00,000/-.
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4.7 Consequently, disputes emerged between the parties,
inter alia, pertaining to the applicability of permissible FSI of
3 (three) in respect of the freehold land i.e., Parcel B, cost
towards additional construction undertaken for Parcel A,, and
the levy of betterment charges. In view of these disputes, the
Petitioner, invoking Clause 11 of the Concession Agreement
dated 11.06.2015, issued a notice dated 26.11.2024 under
Section 21 of the Arbitration Act, 1996, seeking reference of
disputes to arbitration. Clause 11 provided for resolution of
disputes by a Sole Arbitrator, namely the Municipal
Commissioner of the respondent. The Petitioner, however,
objected to unilateral appointment of an arbitrator by the
respondent.
4.8 While no reply was initially filed by the respondent in the
present proceedings, a communication dated 12.02.2025 was
subsequently addressed, wherein the respondent disputed the
claims and further contended that, in light of Notification
dated 16.12.2024, municipalities and municipal corporations
fall within the ambit of "public undertakings." Hence,
according to the respondent, the disputes are required to be
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referred to the Gujarat Public Works Contracts Disputes
Arbitration Tribunal.
The Notification dated 16.12.2024 reads as under :-
"Notification
Legal Department,
Sachivalaya, Gandhinagar.
Dated the 16th December, 2024.
NO. GK/64/ARB/102024/UOR-01/D-1:- In exercise of the
powers conferred by sub-clause (iii) of clause (i) of sub-
section(1) of section 2 of the Gujarat Public Works Contracts
Disputes Arbitration Tribunal Act, 1992(Guj.4 of 1992)-
(hereinafter referred to as "the said Act")the Government of
Gujarat hereby specifies the 'Municipalities' defined under
Sub-section (14) of section 2 of the Gujarat Municipalities
Act, 1963 and Sub-section (34B) of section 2 Gujarat
Provincial Municipal Corporations Act, 1949; and the
'Panchayats' defined under Sub-section (14) of section 2 of
Gujarat Panchayat Act, 1993 to be the "public undertaking"
for the purpose of the said Act.
By order and in the name of the Governor of Gujarat.
(R.D.Maheta)
Deputy Secretary to Government"
Subsequently, another Notification dated 14.05.2025 has
been published, which reads as under :-
"Notification
Legal Department,
Sachivalaya, Gandhinagar.
Dated the 14th May, 2025.
NO.GK/10/ARB/102025/UOR-01/D-1:- In exercise of the
powers conferred by sub-clause (iii) of clause (i) of sub-
section (1) of section 2 of the Gujarat Public Works Contracts
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Disputes Arbitration Tribunal Act, 1992(Guj.4 of 1992), the
Government of Gujarat hereby amends the Government
Notification, Legal Department NO. GK/64/ARB/102024/UOR-
01/D-1, Dated the 16th December, 2024 with effect from 16th
December, 2024 as follows, namely;-
In the said Notification, after the words and figures "the
Gujarat Municipalities Act, 1963" the words, figures and
brackets 'the corporation' defined under sub-section (10),
shall be inserted.
By order and in the name of the Governor of Gujarat.
(A.K.Gohil)
Under Secretary to Government"
5. These petitions under Section 11 of the Arbitration Act,
1996 are now being considered in the above light.
6. SUBMISSIONS ON BEHALF OF PETITIONERS:-
6.1 Mr. Manish R. Bhatt, learned Senior advocate appearing
on behalf of the Petitioner, submitted that in view of the
amendment introduced by Section 12 of the Arbitration and
Conciliation (Amendment) Act, 2015, read in conjunction with
the recent judgment of the Hon'ble Supreme Court in Central
Organisation for Railway Electrification v. M/s. ECI SPIC
SMO MCML (JV) A Joint Venture Company reported in
2024 INSC 857,(CORE-II) the respondent cannot either act
as an arbitrator or assume the role of sole appointing
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authority of the arbitrator. It is further contended that,
admittedly, disputes in the present matter arose in the year
2019, i.e., prior to 16.12.2024.
6.2 With reference to the Notification dated 16.12.2024, by
which the respondent Municipal Corporation has been
brought within the ambit of a "public undertaking," learned
Senior advocate submitted that Section 8 of the Arbitration
Tribunal Act, 1992 envisages reference to the Tribunal only
where a dispute arises between the "parties" to a "works
contract" with a "public undertaking." It was argued that the
language of the Notification, particularly the usage of the
expression "the Government of Gujarat hereby specifies",
indicates that the inclusion of the respondent Corporation as a
"public undertaking" has prospective effect. Hence, as on any
date prior to 16.12.2024, the respondent was not covered
within the definition of a "public undertaking" under Section 2
(1) (i) (iii) of the Arbitration Tribunal Act, 1992. Consequently,
since invocation of arbitration by the Petitioner occurred prior
to 16.12.2024, such inclusion is inconsequential for the
present dispute. Hence, it is not necessary to even examine
the notification dated 14.05.2025 any further.
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6.3 It was further submitted that the Concession Agreement
dated 11.06.2015 specifically incorporates a private
arbitration clause, and the parties, at the time of entering into
the said agreement, were fully aware that arbitration would
be governed by the provisions of the Arbitration Act, 1996,
along with its statutory amendments. Learned counsel argued
that this contractual right of reference to private arbitration
cannot subsequently be defeated by issuance of a Notification,
which, according to the Petitioner, lacks legislative
competence to override the terms of a duly executed
agreement.
7. Mr. Unmesh Shukla, learned Senior Advocate appearing
for the Petitioner in Arbitration Petition No. 6 of 2025 has
submitted on the same lines that the Notification dated
16.12.2024, issued under the Arbitration Tribunal Act, 1992 is
inapplicable to the present dispute for three distinct reasons:
firstly, the Notification does not possess retrospective
effect;
secondly, any retrospective application would infringe
vested contractual rights of the Petitioner and result in
manifest prejudice; and
thirdly, the disputes in the present case arose prior to
issuance of the Notification.
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7.1 It was further submitted that while the legislature,
subject to constitutional limitations, may enact laws with
retrospective or prospective effect, a subordinate legislation
such as a Notification can only operate retrospectively where
an express power in this regard is conferred under the parent
statute. In this connection, reliance was placed upon the
decisions of the Hon'ble Supreme Court in State of
Rajasthan v. Basant Agrotech (India) Ltd., reported in
(2013) 15 SCC 1, and Mahabir Vegetable Oils (P) Ltd. v.
State of Haryana, reported in (2006) 3 SCC 620.
7.2 According to Mr. Shukla, the Arbitration Tribunal Act,
1992 contains no provision, either express or implied,
empowering the State Government to issue a Notification
specifying a class of local authorities as "public undertakings"
with retrospective effect. Therefore, the Notification dated
16.12.2024, even if valid, can only apply prospectively and
cannot affect the present dispute, which had arisen and was
invoked prior to the said date.
8. Mr. Aspi M. Kapadia, Learned advocate appearing in
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Civil Application No. 1 of 2025 in Arbitration Petition No. 6 of
2024, advanced submissions on behalf of the Intervener, M.V.
Omni Projects (India) Ltd. It was submitted that the
contentions raised by the Petitioner are equally applicable to
the case of the Intervener, inasmuch as, the Notification dated
16.12.2024 cannot govern disputes that arose prior to its
issuance. Learned counsel supported the arguments advanced
by Mr. Unmesh Shukla emphasizing that the Notification lacks
retrospective operation, cannot override vested contractual
rights, and has no bearing on disputes which were invoked
before the said date.
9. SUBMISSIONS ON BEHALF OF THE RESPONDENT
9.1 Learned Government Pleader, Mr. Gursharan H. Virk,
appearing for the respondent, submitted that on a plain
reading of the Preamble and the provisions of the Arbitration
Tribunal Act, 1992, it is evident that the legislative intent
underlying the enactment was to ensure that disputes arising
from "works contracts" are adjudicated by the Gujarat Public
Works Contracts Disputes Arbitration Tribunal established
under the said Act.
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9.2 It was further contended that the definition of "public
undertaking" under the Arbitration Tribunal Act, 1992 has,
since inception, included within its scope local authorities.
According to learned counsel, the Notification dated
16.12.2024 merely operates to specify the particular class of
local authorities that would fall within the definition of "public
undertaking," as contemplated by the statute. Therefore, the
Notification is neither beyond the scope of the Act nor dehors
the legislative framework. On the contrary, its issuance is
rooted in, and flows from, the statutory scheme of the
Arbitration Tribunal Act, 1992.
9.3 Reliance was further placed on the decision of this Court
in M/s. SPML Infra Limited v. Gujarat Water
Infrastructure [Arbitration Petition No. 168 of 2019],
wherein it was held that the Arbitration Tribunal Act, 1992,
being a special law, would prevail over the general provisions
of the Arbitration Act, 1996. Learned counsel emphasized that
the same principle must govern the present matter, as the
disputes in question arise out of a works contract within the
meaning of the Arbitration Tribunal Act, 1992. In the
abovementioned case, it was held that:-
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"15... With the repeal of the Arbitration Act, 1940 by
enactment of the Arbitration and Conciliation Act, 1996, the
effect of Section 21 of the Arbitration Tribunal Act, 1992 is
not diluted rather the provisions of the Arbitration Tribunal
Act, 1992, which is a specific law would prevail over the
general provisions of the Arbitration and Conciliation Act,
1996, which ceases to apply to any dispute arising from a
works contract and all arbitration proceedings in relation to
such dispute, shall have to be dealt with by the Arbitration
Tribunal constituted under Section 3 of the Arbitration
Tribunal Act, 1992."
10. DISCUSSION AND FINDINGS:-
10.1 The moot question that has fallen for consideration of
this Court in this bunch of petitions is whether, the
Notification No. GK/64/ARB/102024/UOR-01/D-1 dated
16.12.2024 and Notification No. GK/10/ARB/102025/UOR-1/D-
1 dated 14.05.2025 issued under the Arbitration Tribunal Act,
1992 would apply retrospectively to the disputes in which the
petitioners have sought the appointment of their respective
Arbitrators?
10.2 The second question which calls for pronouncement by
this Court is whether, if the answer to the first question
hereinabove is in the negative, then whether the invocation
under Section 21 of the Arbitration Act, 1996 would take the
disputes out of the purview of the Arbitration Tribunal Act,
1992?
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10.3 A perusal of the Arbitration Tribunal Act, 1992 shows
that the Act begins with the preamble which reads as under:-
"AN ACT
to provide for the constitution of a Tribunal to arbitrate in
disputes arising from works contracts to which the State
Government or a public undertaking is a party and to provide
for matters connected therewith."
11. Ostensibly, the Act was to "Arbitrate" the disputes
arising between contractors of "works contracts" concerning
the State Government or a "public undertaking" as defined in
Section 2(1)(i) of the Arbitration Tribunal Act, 1992. Although,
even if the word used is "Arbitrate", the proceedings under
the Arbitration Tribunal Act, 1992 are nothing akin to
"Arbitration" within the meaning of the Arbitration Act, 1996
or its predecessor, the Arbitration Act, 1940. This would be
clear from the perusal of Sections 11, 12, 14 and 21 of the
Arbitration Tribunal Act, 1992. Under Section 11, the Tribunal
has power to review its own award. Under Section 12, the
High Court has powers of revision akin to Section 115 of the
Code of Civil Procedure, 1908 over the awards of the
Tribunal. Under Section 14, all the proceedings before the
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Tribunal are deemed to be judicial proceedings within the
meaning of Sections 193, 219 and 228 of the Indian Penal
Code, 1860 and under Section 21, the provisions of the
Arbitration Act shall in so far as they are inconsistent with the
provisions of the Arbitration Tribunal Act, 1992, cease to
apply to any dispute arising from a works contract and all
arbitration proceedings in relation to such dispute pending
before any arbitrator, umpire, Court or other authorities shall
stand transferred to the Tribunal. Further, there is no power
to challenge the awards under Section 34 of the Arbitration
Act, 1996. From the above, it is clear that the Tribunal is
certainly not a permanent arbitral institution within the
meaning Section 2 (1) (a) of the Arbitration Act, 1996.
12. It will also be seen that the Arbitration Tribunal Act,
1992 was enacted in 1992 before the entire regime of
Arbitration came to be changed under the Arbitration Act,
1996. It has been specifically pleaded by the petitioner that
the Arbitration Tribunal Act, 1992 is one of the most misused
piece of State legislation, inasmuch as, after coming into force
of the Arbitration Act, 1996, the Arbitration Tribunal Act is
redundant as it is an archaic piece of legislation which has no
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place in civilised society and the sole purpose of the Act in the
present day is to embroil the Government contractors in
payment disputes which virtually ensures that the State/Public
undertaking does not end up releasing any payment to the
contractors due to massive pendency in the Tribunal which is
grossly understaffed and virtually infrastructure less and
where disputes are pending for more than 20 or even 25
years. Unfortunate as it may be, this Court is not competent to
hear the challenge to the Arbitration Tribunal Act, 1992, even
if it were made. Therefore, the abovestated situation has only
to be kept in mind while according an interpretation to the
retrospective operation of the Notification dated 16.12.2024
and 14.05.2025 it at all. The petitioners before this Court have
entered into works contract agreements with the Ahmedabad
Municipal Corporation (AMC) at various stages. Such
contracts have arbitration clauses which have been agreed to
between the parties. The petitioners in these petitions are
exercising their rights to arbitrate their disputes to which the
respondent-Corporation, by taking out the Notifications in
question has sought to plead that since the Corporation is now
covered within the meaning of "public undertaking" of the
Arbitration Tribunal Act, 1992, these arbitration petitions
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must fail and the petitioners must be relegated to the
Tribunal.
13. It is the specific contention of Mr.Virk that, the moment
the Corporation stands covered within the meaning of "public
undertaking", Section 21 of Arbitration Tribunal Act, 1992 will
kick in and the Act of 1996 will cease to apply from that
moment onwards and "all arbitration proceedings in relation
to such disputes before an arbitrator, umpire, court or
authority shall stand transfer to the Tribunal". It is without
doubt that the contracts entered into with the petitioners are
works contract within the meaning of Section 2(1)(k). Thus,
the proceedings under Section 11 of the Act being
proceedings under the Arbitration Act, 1996 and pending
before the Court, being this Court, shall automatically stand
transferred to the Tribunal. Thus, it is not a matter of
retrospective operation of the Notifications but rather by
virtue of application of Section 21 of Arbitration Tribunal Act,
1992, these proceedings must cease immediately after the
Notifications have come into force.
14. In the decision of this Court dated 06.10.2023 in
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Arbitration Petition No. 168 of 2019 and the allied matters, on
the question, whether in view of the Arbitration clause, an
Arbitrator could be appointed in disputes that had arisen
between the contractors and Gujarat Water Infrastructure
Ltd., a Company incorporated under the Companies Act, 1956
with the Government of Gujarat being 100% shareholder in
the Company and hence, falling within the meaning of "public
undertaking", this Court had gone on to hold as under :-
"17. Following the above stated ratio, coming back to the
instant case, we may note at the cost of reiteration that the
Arbitration Tribunal Act, 1992 has been enacted on
23.03.1992, at the time when the Arbitration Act, 1940 was in
existence, for a specific purpose to provide for the
constitution of a Tribunal to arbitrate any dispute arising
from works contract to which the State Government or a
public undertaking is a party. Section 8(1) provided that
irrespective of whether such works contract contains an
arbitration clause or not, any dispute arises between the
parties to the works contract shall be referred to the Tribunal
for arbitration, within one year from the date when the
dispute has arisen. The Tribunal is empowered to make an
interim award under Sub-section (5) of Section 8 of the
Arbitration Tribunal Act, 1992, and the award made by the
Tribunal including an interim awconfers powers of the Civil
Court upon the Tribunal in respect of the matters provided
therein, for the purposes of exercise of its jurisdiction under
the Act. Section 11(1) confers power of review of the award
or interim award made by the Tribunal. Section 12, as noted
herein before, provides for exercise of revisional powers by
the High Court. Section 13 bars the jurisdiction of the Civil
Court. The constitution of Tribunal as provided in Section
3(2) is to be decided by the Government, which shall consists
of the Chairman and such number of other members as may
be appointed by him. The Chairman of the Tribunal has to be
qualified for appointment as a Judge of High Court and the
other members of Tribunal shall possess the qualification
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prescribed in clause (b) of Sub-section (3) of Section 3, which
may be of District Judge; Secretary of the Government of
Gujarat; or the Chief Engineer of the Government of Gujarat.
Section 21 as noted hereinabove states that the provisions of
the Arbitration Act, 1940 insofar as they are inconsistent with
the provisions of the Arbitration Tribunal Act, 1992, cease to
apply to any dispute arising from a works contract and all
arbitration proceedings in relation to such dispute, pending
before an arbitrator, umpire, court or authority shall have to
be transferred to the Tribunal. The Arbitration Tribunal Act,
1992 being a special statute dealing with the disputes arising
from a works contract entered into with the State
Government or a public undertaking, in view of the overriding
effect given by Section 21 of the Arbitration Tribunal Act,
1992 would prevail over the general law governing the
Arbitration and Conciliation under the then Arbitration Act,
1940,repealed and substituted by the Arbitration Act,1996.
The specific nature of disputes arising between specific
categories of persons is to be resolved by a specific process
through a specific forum as observed by the Apex Court in
Gujarat State Civil Supplies Corporation Limited (supra).
Being a specific law, the provisions of the Arbitration
Tribunal Act, 1992,would have precedence over or prevail
over the Arbitration Act, 1996.
18. Taking clue from the above decision, we maynote that the
Arbitration Act, 1996 does not specifyany specific dispute or
specific class or category ofpersons to which the Act shall
apply, as has been specified in the Arbitration Tribunal Act,
1992.Overriding effect given by the Legislature to
theArbitration Act, 1940, which was in existence at thetime of
enactment of the Arbitration Tribunal Act,1992 by virtue of
Section 21 of the said Act, shallcontinue, to prevail over the
subsequent enactment ofreplacement of the then Arbitration
Act, 1940, whichis the Arbitration Act, 1996. As noted above,
theArbitration Act, 1996 was enacted to consolidate
andamend the law relating to the arbitration and conciliation
and the Arbitration Act, 1940 stoodrepealed and substituted
by the Arbitration Act, 1996. The result is that though being a
subsequentenactment in point of time, the effect of Section
21of the Arbitration Tribunal Act, 1992 over the
thenArbitration Act, 1940 would continue over the Arbitration
Act, 1996.
19. Insofar as the arguments of the learned counsel for the
petitioner based on Clause 20.3.1 of the Agreement that the
parties agreed to the dispute resolution mechanism under the
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Arbitration Act, 1996 and the Arbitration Agreement entered
into between the parties under the Arbitration Act, 1996
would prevail over the statutory provisions of the Arbitration
Tribunal Act, 1992, suffice it to note that Sub-section (1) of
Section 8 provides choice or confers right upon a party to the
dispute, irrespective of the agreement to the contrary,
despite of existence of an arbitration clause in the Arbitration
Agreement between the parties, to approach the Tribunal
constituted under the Arbitration Tribunal Act, 1992 for
arbitration. The substantive right created under Sub-section
(1) of Section 8 of a party to approach the Tribunal for
arbitration cannot be precluded because of the arbitration
clause existing in the agreement arrived between the parties.
Sub-section (1) of Section 8 would prevail over the Clause
20.3.1 of the Arbitration Agreement pressed into service
before us to assail the applicability of the Arbitration Tribunal
Act, 1992.
20. For the above discussion, the arguments made by the
learned counsel for the petitioner that in view of Clause
20.3.1 of the Arbitration Agreement, arrived between the
parties, the provisions of the Arbitration Tribunal Act, 1992
would not be attracted, is found to be misconceived.
21. The submission on the two issues referred by this Court
to the Larger Bench in the order dated 28.04.2023 is of no
benefit to the petitioner, inasmuch as, both questions
referred by the learned Judge in the aforesaid order to the
Larger Bench are not arising in the facts and circumstances
of the instant case. The fact remains that there is no dispute
about the respondent being the Company defined in Section 3
of the Companies Act, 1956, 100% share capital of which is
held by the State Government, and as such, being a Public
Undertaking, within the meaning of Sub-clause (i) of Clause
(i) of Sub- section (1) of Section 2. Being a 'public
undertaking' within the meaning of Section 2(i)(i) of the
Arbitration Tribunal Act, 1992 and a party to the contract
which is the 'Works Contract' within the meaning of Section
2(1)(k) of the Arbitration Tribunal Act, 1992, the dispute
arising out of the agreement-in-question has to be referred to
the Tribunal constituted under Section 3 of the Arbitration
Tribunal Act, 1992, in view of the provisions of Section 8(1) of
the Arbitration Tribunal Act, 1992. It is not open for the
petitioner to agitate the Question No.1 referred to the Larger
Bench in the order dated 28.04.2023, as in my considered
opinion, such an issue does not arise in the instant case.
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22. As regards the judgment in M/s.SMS Infrastructure
Limited (supra), relied by the learned counsel for the
petitioner, the same is not applicable in the facts of the
instant case, inasmuch as, the issue raised therein was that
the respondent Corporation could not be said to be a 'public
undertaking' within the meaning of Section 2(1)(i) of the
Arbitration Tribunal Act, 1992 as it is not so specified by
notification published in the official gazette, as required by
Sub-clause (iii) of Clause (I) of Section 2(1) of the Arbitration
Tribunal Act, 1992. It was also contended therein that the
contract entered into between the parties also could not be
termed as 'Works Contract' as defined in Section 2(1) (k) of
the Arbitration Tribunal Act, 1992. For the fact that the
respondent, namely Gujarat Water Infrastructure Limited
falls within the meaning of 'public undertaking' under Sub-
clause (i) of Section 2(1)(i) of the Arbitration Tribunal Act,
1992, being a Company defined under Section 3 of the
Companies Act, 1956, the ratio of this Court in M/s.SMS
Infrastructure Limited (supra) will not be attracted.
Further that the contract in question has been notified as
'Works Contract' by the Notification dated 23.09.2003, as
noted hereinabove, the view taken in M/s.SMS
Infrastructure Limited (supra) about the contract therein
not being a 'Works Contract' as defined in Section 2(1)(k) of
the Arbitration Tribunal Act, 1992, will not be applicable.
23. In view of the above discussion, none of the arguments of
the learned counsel for the petitioner merit consideration and
are, accordingly turned down. The Arbitration petitions are
liable to be dismissed, accordingly and as such are hereby
dismissed.
24. However, it is kept open for the petitioner to approach
the Arbitration Tribunal in accordance with the provisions of
Section 8 of the Arbitration Tribunal Act, 1992. As much time
has been lapsed due to the pendency of the present petitions,
it is provided that, in case, the petitioners herein approach
the Tribunal within the period of two months along with the
copy of this order, their applications shall be entertained and
decided on merits, without raising any objection as to the
period of limitation prescribed in Sub-section (1) of Section 8
of the Arbitration Tribunal Act, 1992. Subject to the above
discussions and directions, all the arbitration petitions herein
stand dismissed."
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15. It was vehemently submitted by the learned Counsel for
the petitioners, placing reliance upon the decision of the
Hon'ble Apex Court in Om Construction Company Vs.
Ahmedabad Municipal Corporation and Another reported
in (2009) 2 SCC 486 that the entire controversy is fully
covered by paragraph No.'19' and '20' of the aforesaid
decision and that the decision of this Court in Gujarat Water
Infrastructure Ltd., (Supra) has not considered the date of
application of a Notification by which the respondent therein
became a "public undertaking". In Om Construction (Supra),
the controversy that arose for the determination of the
Hon'ble Supreme Court can be traced from the following
paragraphs:-
"6. It appears that under General Conditions of Contract of
the Engineering Department of the Ahmedabad Municipal
Corporation, under its General Specifications it is provided
that certain conditions are required to be followed which
includes the condition that Form B-I would be applicable to
the contract and clause 30 of Form B-I is relevant for this
case. The relevant portions of clause 30 of Form B-I reads as
follows :-
"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 disputes arise
during the progress of the work or after the completion
or abandonment thereof, shall be referred to the
Arbitration Tribunal, Gujarat State;
(2) * * * *
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(3) The provision of Arbitration Act, shall in so far
as they are inconsistent with the provision of this
Act, cease to apply to any dispute arising from a
works contract and all arbitration proceedings in
relation to such dispute before an Arbitrator, Court
or authority shall stand transferred to the
Tribunal."
7. The appellant filed a petition before the Gujarat High Court
on 9th July, 2007, being Arbitration Petition No. 35 of 2007,
under Section 11 of the Arbitration and Conciliation Act,
1996, hereinafter referred to as "the 1996 Act", inter alia,
praying for the appointment of an Arbitrator to resolve the
disputes between the parties. The High Court by its order
dated 20th November, 2007, rejected the said petition. While
doing so, the High Court took note of Section 2(1)(k) of the
Gujarat Public Works Contracts Disputes Arbitration Tribunal
Act, 1992, hereinafter referred to as the "Gujarat Tribunal
Act", which defines "works contract" to mean a contract made
by the State Government or Public Undertaking which is
notified in the Official Gazette by the State Government.
8. The High Court also noticed Section 2(1)(i)(iii) of the
aforesaid Act, which defines "public undertaking" to, inter
alia, mean such class of local authorities as the State
Government specifies by Notification in the Official Gazette.
It was further noticed that in the absence of such
Notification, the Ahmedabad Municipal Corporation was not a
"Public Undertaking" and the contract entered into by it with
the appellant could not, therefore, be termed as a "Works
Contract" as defined in Section 2(1)(k) of the aforesaid Act.
The High Court, therefore, held that the Arbitration Tribunal,
Gujarat State, would have no jurisdiction to entertain the
disputes between the parties emanating from the Work Order
in question.
9. The High Court then went on to consider the
applicability of the Arbitration and Conciliation Act, 1996, to
the facts of the case. The High Court took note of the fact
that the Agreement between the parties, and more
particularly the Arbitration Agreement, did not lay down any
procedure for appointing an Arbitrator or Arbitrators.
Accordingly, in the absence of such procedure, the
Designated Court could not invoke its jurisdiction under Sub-
section (6) of Section 11 of the 1996 Act, which contemplates
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a situation, where the appointment procedure as agreed to by
the parties under Sub- section (2) of Section 11 is not
followed. The High Court, therefore, while rejecting the
applicability of the Gujarat Tribunal Act, also closed the doors
for relief under the provisions of the 1996 Act.
10. The said order of the High Court, which has been
challenged in this appeal, therefore, gives rise to the question
as to whether in the absence of any procedure in the
Arbitration clause for the appointment of an Arbitrator, can
the Chief Justice of the High Court or the Designated Court
appoint an Arbitrator under Section 11(6) of the 1996 Act in
terms of the Agreement between the parties to have their
disputes settled by arbitration."
15.1 Thereafter, the Hon'ble Supreme Court has gone on to
hold as under :-
"19. We have carefully considered the submissions made on
behalf of the respective parties and it appears that we are
called upon to decide two questions in order to decide this
appeal. The first and possibly basic question is whether in the
absence of a Notification in the Official Gazette, the
Municipal Corporation can at all be considered as a Public
Authority for the purpose of Section 2(1)(k) of the Gujarat
Tribunal Act, 1992. The other question is whether the
absence of a procedure for appointment of an Arbitrator in
the Arbitration Agreement itself, would constitute a bar for
the appointment of an Arbitrator under Section 11(6) or any
other provision of the 1996 Act, when not only the parties to
these proceedings, but the High Court as well, had arrived at
a conclusion that the provisions of the Gujarat Tribunal Act,
1992, would not be applicable in the instant case.
20. In this regard, we are inclined to accept the
submissions of Mr. Gambhir notwithstanding the fact that the
Ahmedabad Municipal Corporation had not been notified to
be a "Public Undertaking" as defined in Section 2(1)(iii) of the
Gujarat Tribunal Act, 1992. There is no dispute that the
Ahmedabad Municipal Corporation is a local authority and it
could assume the garb of a "Public Undertaking" only
pursuant to a Notification published in that regard in the
Official Gazette. On the other hand, even if Form B-I loses its
relevance as far as the present contract is concerned, since
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the parties have agreed to resolution of their disputes by
arbitration, the provisions of Sub-section (5) of the 1996 Act
can be pressed into service to enable the parties to invoke the
powers of the Chief Justice to appoint an Arbitrator. The
stand taken by Mr. Divan is highly technical and is not in aid
of resolution of the disputes between the parties by an
Arbitral Tribunal."
16. From a perusal of the above, I find that a question that
was specifically framed was as under :-
"Whether in the absence of a Notification in the Official
Gazette, the Municipal Corporation can at all be
considered as a public authority (sic public undertaking)
"works contract" and therefore, the contract entered
into by it cannot be termed as defined in Section 2(1)(k)
of the Arbitration Tribunal Act, 1992?".
The aforesaid question came to be answered specifically
in Om Construction (Supra) in the following terms:-
"20. We are inclined to accept the submissions of Mr.
Gambhir notwithstanding the fact that Ahmedabad Municipal
Corporation had not been notified to be a "public
undertaking" as defined in Section 2(1)(i)(iii) of the Gujarat
Tribunal Act, 1992. There is no dispute that Ahmedabad
Municipal Corporation is a local authority and it could
assume the garb of a "public undertaking" only pursuant to a
Notification published in that regard in the official gazette".
17. In other words, the ratio of the decision in Om
Construction (Supra) is to the effect that only after the
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Notification is published in the official gazette, the AMC could
be considered to be a "public undertaking". In the present
case, the Notification having been issued on 16.12.2024, the
respondent-AMC could not be said to be a "public
undertaking" before 16.12.2024. Another way of looking at
the situation would be that in Om Construction (Supra),
which was decided on 13.01.2009, the Hon'ble Supreme Court
has held the very same respondent-AMC not to be a "public
undertaking" on the said date because there was no
Notification declaring AMC to be a "public undertaking". The
position as on 13.01.2009 has continued till 16.12.2024, if not
till 14.05.2025 on which date, the AMC eventually came to be
declared as a "public undertaking" within the meaning of
Section 2(1)(i)(iii) of the Arbitration Tribunal Act, 1992.
Therefore, on and from 16.12.2024 or 14.05.2025, the
respondent-AMC became a "public undertaking".
18. In such view of the matter, the Notification dated
16.12.2024 and 14.05.2025 must be held to be prospective
and cannot be said to be having retrospective operation. In
view of the above position, I do not deem it necessary to refer
to the myriad decisions cited and referred to by the
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petitioners regarding prospective/retrospective operation of
statutes and the power of the State to issue retrospective
notifications.
19. Section 2(4) of the Arbitration Act, 1996 reads as under:-
"(4) This Part except sub-section (1) of section 40, sections 41
and 43 shall apply to every arbitration under any other
enactment for the time being in force, as if the arbitration
were pursuant to an arbitration agreement and as if that
other enactment were an arbitration agreement, except in so
far as the provisions of this Part are inconsistent with that
other enactment or with any rules made thereunder"
20. Section 8 of the Arbitration Tribunal Act, 1992 mandates
that where any dispute arises between the parties to the
works contract, any party may refer such dispute to the
Tribunal. Thus, clearly Section 8 of the Arbitration Tribunal
Act, 1992 is inconsistent with the provisions of Section 11 of
the Arbitration Act and therefore, the provisions of the
Arbitration Tribunal Act must prevail in view of Section 2(4) of
the Arbitration Act.
21. The Hon'ble Supreme Court in the case of Gujarat
State Civil Supplies Corporation Limited v. Mahakali
Foods Private Limited (Unit 2) And Another, reported in
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(2023) 9 SCC 401, has held as under:-
"32. Now, the first and foremost issue involved in these
appeals is whether the provisions contained in Chapter V of
the MSMED Act, 2006 with regard to the Delayed Payments
to Micro and Small Enterprises would have the precedence
over the provisions contained in the Arbitration Act, 1996,
more particularly when the parties by execution of an
independent agreement as contemplated in Section 7 of the
Arbitration Act had agreed to submit to arbitration the
disputes arising between them? In other words, whether the
provisions contained in Chapter V of the MSMED Act, 2006
would have an effect overriding the provisions contained in
the Arbitration Act, 1996?
43. The court also cannot lose sight of the specific non
obstante clauses contained in sub-section (1) and sub-section
(4) of Section 18 which have an effect overriding any other
law for the time being in force. When the MSMED Act, 2006
was being enacted in 2006, the Legislative was aware of its
previously enacted Arbitration Act of 1996, and therefore, it
is presumed that the legislature had consciously made
applicable the provisions of the Arbitration Act, 1996 to the
disputes under the MSMED Act, 2006 at a stage when the
Conciliation process initiated under sub-section (2) of Section
18 of the MSMED Act, 2006 fails and when the Facilitation
Council itself takes up the disputes for arbitration or refers it
to any institution or centre for such arbitration. It is also
significant to note that a deeming legal fiction is created in
the Section 18(3) by using the expression as if for the
purpose of treating such arbitration as if it was in pursuance
of an arbitration agreement referred to in sub-section (1) of
Section 7 of the Arbitration Act, 1996. As held in K.
Prabhakaran v. P. Jayarajan, (2025) 1 SCC 754, a legal fiction
presupposes the existence of the State of facts which may not
exist and then works out the consequences which flow from
that state of facts. Thus, considering the overall purpose,
objects and scheme of the MSMED Act, 2006 and the
unambiguous expressions used therein, this court has no
hesitation in holding that the provisions of Chapter-V of the
MSMED Act, 2006 have an effect overriding the provisions of
the Arbitration Act, 1996."
22. In the recent decision of the Hon'ble Apex Court in case
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of Umri Pooph Pratapur (UPP) Tollways Pvt. Ltd. Vs.
M.P. Road Development Corporation and Another
reported in 2025 SCC OnLine SC 1569, the Hon'ble Apex
Court was concerned with a somewhat similar conflict
between the Arbitration Act and Madhya Pradesh Arbitration
Tribunal Act, 1983 which is some what similar to the
Arbitration Tribunal Act, 1992. In Umri (Supra), it was held
as under:-
"11.8. Similarly, in Madhya Pradesh Rural Road
Development Authority v. Backbone Enterprises Limited
(supra), this Court once again reinforced the exclusive
jurisdiction of the Madhya Pradesh Arbitration Tribunal in
matters arising from works contracts covered by the 1983
Act.
11.9. Given that the present Concession Agreement
pertains to the construction of a State Highway situated
entirely within the State of Madhya Pradesh and was
awarded by Respondent No. 1, a State-controlled entity, the
agreement clearly qualifies as a "works contract" under
section 2(1)(i) of the 1983 Act. Consequently, the dispute
arising therefrom falls within the exclusive jurisdiction of the
Madhya Pradesh Arbitration Tribunal.
11.10. In view of the above statutory framework and
judicial pronouncements, the Arbitration and Conciliation
Act, 1996 stands excluded by operation of law in such
matters. The private arbitration proceedings initiated by the
appellant are therefore, non est in law, and the proper forum
for adjudication is the Madhya Pradesh Arbitration Tribunal
established under the 1983 Act.
12.2. It is trite law that parties cannot contract out of a
statutory obligation enacted in furtherance of public interest.
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In Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., this
Court held that arbitration is not permissible where the
legislature has reserved adjudication of disputes to a special
forum. The relevant observation is as follows:
"35. The Arbitral Tribunals are private fora chosen
voluntarily by the parties to the dispute, to adjudicate
their disputes in place of courts and tribunals which are
public fora constituted under the laws of the country.
Every civil or commercial dispute, either contractual or
non-contractual, which can be decided by a court, is in
principle capable of being adjudicated and resolved by
arbitration unless the jurisdiction of the Arbitral
Tribunals is excluded either expressly or by necessary
implication. Adjudication of certain categories of
proceedings are reserved by the legislature exclusively
for public fora as a matter of public policy. Certain
other categories of cases, though not expressly
reserved for adjudication by public fora (courts and
tribunals), may by necessary implication stand excluded
from the purview of private fora. Consequently, where
the cause/dispute is inarbitrable, the court where a suit
is pending, will refuse to refer the parties to
arbitration, under Section 8 of the Act, even if the
parties might have agreed upon arbitration as the
forum for settlement of such disputes."
13. The appellant's submission that both parties intended
to arbitrate under the 1996 Act carries no legal weight. The
object and scheme of the 1983 Act is to channel all disputes
arising from works contracts involving the State and its
instrumentalities into a specialized statutory forum to ensure
uniformity, efficiency, and public accountability. This intent is
also reflected in Clause 44.4 of the Concession Agreement,
which acknowledges that in the event of constitution of a
competent statutory forum, such forum would override the
contractual arbitration clause. Although it was argued that
the Madhya Pradesh Arbitration Tribunal was not expressly
contemplated under Clause 44.4, the existence of the
Tribunal under the prevailing law and its exclusive
jurisdiction cannot be contractually overridden or ignored."
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23. The petitioners have heavily relied upon the judgment in
R. M. Dasa Vs. The Gujarat Water Supply and Sewerage
Board and Others reported in AIR 2009 Gujarat 130, in
the context of a Notification under section 2(1)(k) of the
Arbitration Tribunal Act, 1992 to argue that since there is no
notification under Section 2(1)(k) of the Arbitration Tribunal
Act, 1992, these disputes would still fall outside the purview
of the Arbitration Tribunal Act, 1992. R. M. Dasa (Supra)
goes on to hold as under :-
"8.1 Prior to Notification dated 23.09.2003 work of all types
of pipe liens was not within the definition of Section 2(1)(k) of
the Arbitration Tribunal Act, 1992. As per Section 2(1)(k) of
the Arbitration Tribunal Act, 1992, "Work contract" means a
contract made by the State Government or the public
undertaking with any other person for the execution of any
works Paragraph No. 8.1 to 8.4 relating to construction,
repairs or maintenance of any building or superstructure,
dam, weir, canal, reservoir, tank, lake, road, well, bridge,
culvert, factory or workshop or of such other work of the
State Government or, as the case may be, of the public
undertaking, as the State Government may, by notification in
the Official Gazette specify and includes- (i) a contract made
for the supply of goods relating to the execution of any of
such works (ii) a contract made by the Central Stores
Purchase Organization of the State Government for purchase
or sale of goods.
Thus, under Section 2(1)(k) of the Arbitration Tribunal Act,
1992 vide Notification in the Official Gazette the State
Government may specify work also. Thus in exercise of
powers conferred by clause (k) of sub-section (1) of Section 2
of the Arbitration Tribunal Act, 1992, vide Notification dated
23.09.2003 the State Government has specified work of all
types of pipe lines of the State Government for the purpose of
the Arbitration Tribunal Act, 1992. As per section 8 of the
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Arbitration Tribunal Act, 1992, where any dispute arises
between the parties with respect to such works contract,
either party shall, irrespective of whether such works
contract contains an arbitration clause or not, refer, within
one year from the date when the dispute has arisen, such
dispute in writing to the Tribunal for arbitration. Thus on and
from 23.09.2003 even with respect to work of all types of pipe
lines, any dispute arises between the parties to the works
contract, either party shall, irrespective of whether such
works contract contains an arbitration clause or not, refer,
within one year from the date when the dispute has arisen,
such dispute in writing to the Tribunal for arbitration.
8.2 As per section 13 of the Arbitration Tribunal Act, 1992,
save as otherwise provided by section 12, no Civil Court shall
have jurisdiction to deal with or decide any question which
the Tribunal is empowered to deal with and decide by or
under the said Act and no injunction shall be granted by any
Civil Court in respect of any action taken or to be taken in
pursuance of any power by or under Arbitration Tribunal Act,
1992. Therefore, considering section 13 of the Arbitration
Tribunal Act, 1992 on and after 23.09.2003, for any dispute
arising between the parties to the work contract of pipe lines
of the State Government or Public Undertaking, no Civil
Court would have any jurisdiction and only the Tribunal
constituted under the Arbitration Tribunal Act, 1992 shall
have jurisdiction. It is to be noted that eve as per section 21
of the Arbitration Tribunal Act, 1992, the provisions of the
Arbitration Act, 1940 shall in so far as they are inconsistent
with the provisions of the Act, cease to apply to any dispute
arising from a 'works contract' and all arbitration
proceedings in relation to such dispute before an arbitrator,
umpire, court or authority shall stand transferred to the
Tribunal. Therefore, in a case where even arbitration
proceedings relating to such dispute is pending before
arbitrator, umpire, court or authority, it shall transfer to the
tribunal constituted under the Act. Mr.Parmar, learned
Advocate for the petitioner has sought to contend that in the
present case Arbitration proceedings cannot be said to have
been initiated and therefore, section 21 would not be
applicable. It is submitted that only in a case where
Arbitration proceedings were pending they were required to
be transferred. Such contention cannot be accepted. When
even in a case where arbitration proceedings were already
pending before the arbitrator, they shall transfer to the
tribunal, there is no question of subsequently now appointing
arbitrator under the provisions of Arbitration and Conciliation
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Act, 1996.
8.3 Therefore, considering the aforesaid provisions of
Arbitration Tribunal Act, 1992, the contention on behalf of
the petitioner that relevant date for consideration would be
date on which works order was executed i.e. 12.04.1999 and
not the date on which dispute has arisen cannot be accepted.
Therefore, the contention on behalf of the petitioner that
Notification dated 23.09.2003 would not be applicable
retrospectively also cannot be accepted. There is no question
of making Notification dated 23.09.2003 applicable
retrospectively. By law considering section 2(1)(k), section 8,
section 13, section 21, on and from the date on which
particular contract / works contract is brought within
definition of Section 2(1)(k), for the dispute arising between
the parties to such works contract, only the tribunal
constituted under Gujarat Public Works Contracts Disputes
Arbitration Tribunal Act, 1992 would have jurisdiction.
8.4 As stated above, relevant date would be date on which
dispute has arisen and not the date on which work contract
was executed. On fair reading of section 8 relevant date for
approaching Tribunal would be date on which dispute has
arisen. In para - 10 of the petition, the petitioner himself has
submitted that cause of action has arisen on 29.03.2005 and
onwards and finally on 20.02.2007. Therefore, when the
dispute has arisen with respect to work order on 29.03.2005
and onwards, even considering Notification dated
23.09.2003, 'work contract' is provided in Section 2(1)(k) of
the Act and as and when any dispute arise between the
parties to such works contract, either party shall refer the
dispute in writing to the Arbitration Tribunal. Therefore, the
contention on behalf of the petitioner that Notification dated
23.09.2003 bringing works of pipe lines within the definition
of 'work contract' under section 2(1) (k) of the Arbitration
Tribunal Act, 1992 shall not effect works contract executed
prior to dated 23.09.2003 and/or for which work order/
contract is executed prior to 23.09.2003, the provisions of
Arbitration Tribunal Act, 1992 would not be applicable,
cannot be accepted and has no substance.
Now so far as the decisions relied upon by the learned
Advocate for the petitioner are concerned, they are not of any
assistance to the petitioner in view of statutory provisions
and findings and observations by this Court."
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24. Thus, this Court had categorically observed that there
would be no retrospective operation of the Notification under
Section 2(1)(k) of the Arbitration Tribunal Act, 1992. Further,
by considering Section 2(1)(k), 8, 13, 21 of the Arbitration
Tribunal Act, 1992, this Court went on to hold that for the
purpose of Section 8 i.e. to give jurisdiction to the Tribunal,
the relevant date would be the date on which the dispute has
arisen and not the date on which the works contract was
executed. In the present case the relevant date in all the
petitions would be the date of invocation of arbitration under
the Arbitration Act, 1996, which is admittedly prior to the
Notification under Section 2(1)(i)(iii) of the Arbitration
Tribunal Act, 1992, which is dated 16.12.2024, on which date
the respondent became eligible to have disputes arising out of
its works contracts to be tried by the Tribunal. This is apart
from the fact that there is no Notification under Section 2(1)
(k) of the Arbitration Tribunal Act, 1992 which expressly
brings the disputes in question within the meaning of the
"works contract".
25. To my mind, even the respondent-AMC clearly
understood that the Notification dated 16.12.2024 was not to
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include the respondent and therefore, a further Notification
dated 14.05.2025 came to be published in the official gazette
amending the notification dated 16.12.2024 in the following
terms :-
"In the said Notification, after the words and figures "the
Gujarat Municipalities Act, 1963" the words, figures and
brackets 'the corporation' defined under sub-section (10),
shall be inserted."
26. The plain and literal interpretation of the Notification
No. GK/64/ARB/102024/UOR-01/D-1 dated 16.12.2024 does
not bring "Municipal Corporations" as a class of local
authorities within the purview of "public undertaking" for the
purposes of section 2(1)(i)(iii) of the Arbitration Tribunal Act,
1992. The Notification only specifies "Municipalities" as
defined under Sub-section (14) of section 2 of the Gujarat
Municipalities Act, 1963 and Sub-section (34B) of section 2 of
the Gujarat Provincial Municipal Corporations Act, 1949 and
"Panchayats" defined under Sub-section (14) of section 2 of
the Gujarat Panchayat Act, 1993 to be "public undertaking"
for the purposes of the 1992 Act.
27. Thus, the Notification's plain and literal interpretation
explicitly excludes Municipal Corporations from its purview.
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While the Notification specifically encompasses
"Municipalities" as defined under the Gujarat Municipalities
Act, 1963 and the Gujarat Provincial Municipal Corporations
Act, 1949, it conspicuously omits any reference to Municipal
Corporations as a class of local authorities within the meaning
of "public undertaking" under section 2(1) (i) (iii) of the
Arbitration Tribunal Act, 1992.
28. For ease of reference the relevant provisions of the
Gujarat Municipalities Act, 1963, Gujarat Provincial Municipal
Corporations Act, 1949 and "Panchayats" defined under Sub-
section (14) of section 2 of the Gujarat Panchayat Act, 1993
referred to in the Notification are reproduced hereunder:
Gujarat Municipalities Act, 1963
"2. In this Act, unless the context otherwise requires,-
[...]
(14) "Municipalty" means Nagar Panchayat constituted
under Section 5(1) or as the case may be "Municipal
Council" constituted under Section 5(2)."
Gujarat Provincial Municipal Corporations
Act, 1949
"2. In this Act, unless there be something repugnant in
the subject or contest,
[...]
(34B) "Municipal Area" means the territorial area of a
Corporation as referred to in clause (d) of article 243P
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of the Constitution of India"
Gujarat Panchayats Act, 1993
"2. In this Act, unless the context otherwise requires,
[...]
(14) "Panchayat" means a village panchayat, taluka
panchayat or district panchayat."
29. Section 2(1)(i)(iii) of the Arbitration Tribubal Act, 1992
requires a class of local authorities to be specified by a
notification in the Official Gazette for them to come within the
purview of a "public undertaking". Section 2(1)(i)(iii) reads as
under.
"2. (1) In this Act, unless the context otherwise
require,
[...]
(i) "public undertaking means-
[...]
(ii) such class of local authorities as the State
Government may by notification in the Official
Gazette specify."
(emphasis supplied)
30. This Court in the matter of Gujarat Housing Board
Vs. Arvind C. Patel reported in 2002 (1) GLR 153: 2001
(1) GLH 646 while interpreting the expression "local
authority" has held that the expression "local authority" in
clause (ii) as well as in clause (iii) of Section 2(1) of the Act
has the same meaning as the expression "local authority" in
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Section 2(26) of the Bombay General Clauses Act and Section
3(31) of the General Clauses Act. Section 3(26) of the Bombay
General Clauses Act, 1894 reads as under:
"Local Authority" shall mean a Municipal
Corporation, Municipality, Local Board, Body of
Port Trustees or Commissioners, or other authority
legally entitled to, or entrusted by the Government
with the control or management of a municipal or
local fund."
31. From a combined reading of the Notification and the
sections reproduced hereinabove it is clear that the only class
of local authorities specified in the Notification are
"Municipalities" and "Panchayats". The Notification does not
expressly or impliedly cover "Municipal Corporations" as a
class of local authorities notified to be a "public undertaking"
under the 1992 Act. Thus, Ahmedabad Municipal Corporation
is not covered by the Notification dated 16.12.2024 and is
therefore not a public undertaking. Hence even after
16.12.2024, AMC did not fall within the purview of the 1992
Act as to attract its other provisions including but not limited
to Section 21 thereof. However, this position changed with the
notification dated 14.05.2025, from which point of time, the
"Corporation" came to be added.
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32. In view of the above, I am of the clear opinion that prior
to 14.05.2025, the respondent-AMC was not covered within
the meaning of "public undertaking" under the Arbitration
Tribunal Act, 1992. However, nothing turns on that. The only
implication of the above is that by legal fiction, it is as if the
Arbitration Tribunal Act, 1992 in resect of the present
disputes came to be enacted on 14.05.2025.
33. Coming back to Section 21 of the Arbitration Tribunal
Act, 1992, this Court still has to consider the submissions of
Mr. Virk that by virtue of Section 21 of the Arbitration
Tribunal Act, 1992, it matters not whether the Notifications in
question are prospective or retrospective because no matter
when the dispute arises, as long as the dispute is covered by
the Arbitration Tribunal Act, 1992, by operation of Section 21
of the Arbitration Tribunal Act, 1992, such dispute and "all
arbitration proceedings in relation to such disputes before an
arbitrator, umpire, court or authority shall stand transferred
to the Tribunal". As the present petitions are Arbitration
proceedings pending before a Court with respect to disputes
which have arisen under the Arbitration Tribunal Act, 1992,
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the provisions of the Arbitration Act shall cease to apply to
such dispute.
34. In these circumstances, by the brutal mandate of Section
21, since the disputes are live, the same shall "stand
transferred to the tribunal". Therefore, even though, at the
time of invocation or even the time of filing these petitions,
the petitioners' right to arbitrate the disputes under the
Arbitration Act had crystalized, the same, upon the operation
of the Arbitration Tribunal Act, 1992 on and from 14.05.2025,
in respect of AMC, will extinguish. Section 21 firmly shuts the
barn door on the crystalized rights of the petitioners under
the Arbitration Act. However, it is nobody's case that in
respect of these disputes there is any notification under
Section 2(1)(k) notifying these disputes to be "works
contract". Given the definition of Section 2(1)(k), the State
Government by Notification has the power to specify such
other works of the State Government to be including within
the meaning of works contract, apart from those which are
specifically stated in Section 2(1)(k). In a recent decision of
this Court in Bankers Cardiogy Pvt. Ltd. & Another Vs.
Commissioner of Commercial Tax & Another, reported in
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2025 SCC OnLine Guj 3255, it was observed as under:-
"126. "Works Contract" is defined as per Explanation (ii) to
section 2(23) of the VAT Act explaining the expression "works
contract" and it is to be appreciated and understood in light
of the constitutional meaning.
127. Clause (ii) of the Explanation to section 2(23) stipulates
that for the purpose of sub-clause (b) of the expression
"works contract' means a contract for execution of works and
includes such "works contract" as the State Government may,
by notification in the Official Gazette, specify and therefore,
as observed by the Hon'ble Apex Court in paragraph no.87 of
the decision in case of Larsen and Toubro Ltd. (supra) that
the distinction between contract for sale of goods and
contract for work of services has almost diminished in the
matters of composite contract involving both contract of work
/ labour and a contract for sale, for the purposes of Article
366(29A)(b) of the Constitution of India. Therefore "Works
contract" includes any agreement for "fitting out" of any
movable property. It is not confined to any genre of contract.
Therefore, fitting out or implanting of items into the
physiology or the body of a human patient for alleviation of
pain or for improvement of the life of the patient in the
course of medical/surgical procedure is required to be
construed as "works contract", more particularly, when the
petitioners have not been able to demonstrate how the
definition of "works contract" is not attracted to the facts of
the present case.
128. An attempt has been made on part of the petitioners to
distinguish the contentions raised on behalf of the
respondents by canvassing that passing of property by
principle of accretion is fundamental to "works contract" and
human body is not a "property" and therefore, principle of
accretion cannot apply to the treatment of patients because
substantive civil law is divided into the law of property, the
law of obligations and the law of status and there is a clear
distinction between the legal treatment of "property" and of
"persons". Reference was made to Salmond on
Jurisprudence to submit that "persons" in chapter 10 are
treated separately from "property" and the law does not treat
persons as "property". It was also submitted that the
"property" includes legal rights of a person, but such usage is
obsolete in law as law has always treated persons and
property separately which is also borne out from the
provisions of the IPC by treating offences relating to persons
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and those related to property separately and even under the
law of torts, torts relating to the person are treated
separately from torts relating to property and therefore, to
treat a live human body as a property is shockingly
retrograde and harks back upon the pre-colonial era when
humans were treated as objects and were kept in captivity as
slaves and therefore, medical treatment to the human being
cannot be equated with treatment to a property and therefore
the use of medicines, implants, stents, consumables, etc. for
such treatment cannot be subjected to sales tax under clause
(b) of Article 366(29A) of the Constitution, and the treatment
of the human body cannot be equated to "works contract".
Reliance placed on section 19 of the Transplantation of
Human Organs and Tissues Act, 1994 which prohibits the
commercial dealing in human organs an offence punishable
was also cited to canvas that there is a legislative drift to not
to tax and the right to deal is the substratum of any property/
proprietary right and when such right has been taken away
by another legislation, it cannot be said that human
body/organs is "property". These submissions and contentions
raised on behalf of the petitioners are very attractive but the
same are not tenable in view of the decision of Hon'ble Apex
Court in relation to the "works contract" as it is not in dispute
that petitioner hospitals render composite health services
which include the use and supply of prosthetics,
consumables, implant, stents, medicines, etc. while treating
the human body and therefore it would fall within the ambit
of Article 366(29A)(b) of the Constitution read with section
2(23) of the VAT Act. The argument of the petitioners that
accepting the submission that composite health services
offered by the Hospitals would fall within the meaning of
words "contract" within the ambit of Article 366 (29A)(b) of
the Constitution would be retrograde step in jurisprudence is,
on the contrary, a retrograde interpretation of the dynamic
constitutional ingredients under Article 366 (29A)(b) of the
Constitution which takes the entire jurisprudence back to
pre-Gannon Dunkerly days, apart from stretching the context
of "persons" and "property" to a point of absurdity.
Therefore, definition of "sale" in section 2(23) of the VAT Act
and the definition of the "works contract" as per explanation
(ii) makes it clear that it is of wide import as the rendering of
services together with supply of prosthetics, implants, stents,
consumables, medicines etc. used for treatment of indoor
patient cannot be given a restricted meaning by excluding the
same from "works contract" on the basis that "works
contract" as a concept was originally confined to contracts
relating to immoveable properties alone. However, after the
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46th Amendment to the Constitution, the definition of "works
contract" was widened and it is broad based taking within its
fold every possible and conceivable contracts involving
transfer of property while providing services. Therefore, the
definition of "works contract" can include hospital/ health/
Medical services including composite contracts where the
provision of services also includes supply of goods along with
medical service and the definition takes within its fold such
services also and therefore, the respondent State was
justified in proposing a demand to tax from the petitioner
hospitals on supply of consumables, medicines, stents,
implants, etc. for treatment of indoor patients and the
reasons given in the decisions of five Hon'ble High Courts
would have been acceptable in the era prior to the 46th
Amendment to the Constitution as per the decision of Hon'ble
Apex Court in case of Gannon Dunerkerly (supra) which has
required the Parliament to introduce 46th Amendment to the
Constitution so as to bring all genre of contents of services
including the supply of goods within the purview of "works
contract" as held by Hon'ble Apex Court in case of Larsen
and Toubro Ltd. (supra)."
35. It is thus clear that the definition of "works contract" is
inclusive and expansive in nature and despite no specific
Notifications, the disputes in question would be covered
within the meaning of Section 2(1)(k) of the Arbitration
Tribunal Act, 1992 particularly because the phrase "all other
such works of the State Government or, as the case may be, of
the public undertaking," would include within its reach every
conceivable concessionaire and/or agreement which form the
subject matter of these petitions.
36. Therefore, the subject matter of the agreement in
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respect of which the petitioners have preferred these petitions
would be clearly covered within the meaning of "works
contract" under section 2(1)(k) of the Arbitration Tribunal Act,
1992.
37. It is thus clear that on and from the moment that the Act
becomes applicable to the disputes forming the subject matter
of these petitions, that is, from 14.05.2025, the said disputes
cease to be arbitrable. Therefore, these petitions must
necessarily fail.
38. It has further been submitted by learned Counsel for the
petitioners that the reference to the Tribunal under Section
21 must be now held to be bad in view of the decision of the
Hon'ble Supreme Court in CORE-II (Supra). The submission
is that due to the inability of the public undertaking to select
an Arbitrator unilaterally, the compulsory reference to the
Tribunal would be hit by the CORE-II. As I have already held
that the Tribunal is not an Arbitral Tribunal, therefore, the
decision of CORE-II does not apply to the facts of the present
case.
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39. The Arbitration Tribunal Act, 1992 is founded on the
policy of the State Government that special disputes such as
those pertaining to works contract shall be adjudicated by a
Tribunal which could be manned by specialists who would
adjudicate such disputes. More than three decades after the
Arbitration Tribunal Act, 1992, it appears to me that the
recent ruling of the five Judge Bench of the Hon'ble Supreme
Court of India in CORE-II (Supra) has once again reinforced
the thought process behind public undertakings that adhoc
arbitration is not for them. While I have held in the foregoing
paragraphs that the adjudicatory process envisaged in the
Arbitration Tribunal Act, 1992 is not an arbitration process at
all and that the Tribunal is not a "permanent arbitral
institution" within the meaning of 2(1)(a) of the Arbitration
Act, 1996, it seems the State and the instrumentalities of the
State like "public undertakings", in the absence of
institutionalized arbitration, have moved away from adhoc
arbitration, back into the Tribunal regime.
40. In my limited experience of being part of a Division
Bench having roster over Appeals from Commercial Courts'
decisions under Section 34 of the Arbitration Act, 1996, I have
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come across vast delays both in delivering the award as well
as decades spent in the Section 34 Court. Institutional
Arbitration, within its defined procedures and its propensity to
adhere to timelines could have been a more effective choice
for public undertakings, particularly in high-stake arbitration
involving three Arbitrators. The administrative wings of the
Institutional Arbitration effectively sets down the calendar
and selects suitable Arbitrators and further provides facilities
to the Arbitral Tribunal which have the effect of nudging the
Arbitral Tribunal to strict adherence to its calendar so that
emergency provisions such as those under Section 29(A) of
the Arbitration Act, 1996 do not end up being routine
proceedings before the Courts. These obvious advantages of
Institutional Arbitration over adhoc arbitration are well
acknowledged globally, whether in the context of
International arbitration or domestic. The High Court as an
instituition has set up the Arbitration Centre and is
continuously working to have a state of the art Institutional
Arbitration facility.
41. During the course of hearing, the petitioners had
repeatedly stressed on the sheer farcical nature of the
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proceedings before the Tribunal and the mind numbing
pendency and ineptitude of the Tribunal as an Institution to
even possibly adjudicate these disputes if referred.
42. Mr. Virk, wearing a different hat, in his capacity as
Government Pleader of the State had ensured this Court that
he will personally look into these issues and ensure sufficient
competent personnel and administrative requirements which
would enable the Tribunal to deal with large volumes of
technical adjudication of the disputes pertaining to works
contracts so that the State Government is not branded as an
unfair employer which simply does not want to pay its
contractors. This Court will hold Mr. Virk to his word.
43. When the Act was introduced in Gujarat just as in many
other States, they were introduced in a regime governed by
the 1940 Act, which soon after gave way to the 1996 Act
under which arbitration including commercial arbitration has
grown exponentially. Further, the setting up of commercial
Courts to deal with the petitions under Section 8, 9, 34 etc.,
have grown in speed and efficacy to proportions which were
not contemplated under the 1940 regime. In the background
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of the working of the 1996 Act, the very purpose of enacting
the Arbitration Tribunal Act, 1992, in hindsight, seems to be
retrograde, if not redundant. The redressal to the deafening
anguish of the petitioners unfortunately does not lie with this
Court but perhaps with a different Court if not the Legislature
or even Parliament.
44. In the end, these petitions are dismissed with no order
as to costs. The petitioners are at liberty to approach the
Tribunal with a reference under Section 8 of the Arbitration
Tribunal Act, 1992 within a period of eight (8) weeks from the
uploading of this judgment and order. If such a reference is
filed within the period as aforesaid, then the time spent by the
petitioners from the date of invocation of respective disputes
till the uploading of a copy of this judgment and order shall be
excluded for the purposes of calculating the period of
limitation within the meaning of Section 16 of the Arbitration
Tribunal Act, 1992. Consequently, the connected Civil
Applications stand disposed of.
(D.N.RAY,J)
BINA SHAH
