P.O. New Delhi vs Central Coalfields Limited Through Its ...
2024 Latest Caselaw 5160 Jhar

Jharkhand High Court

P.O. New Delhi vs Central Coalfields Limited Through Its ... on 10 May, 2024

 IN THE HIGH COURT OF JHARKHAND AT RANCHI
            Arbitration Application No. 3 of 2024

Sainik Mining and Allied Services Limited, a Company registered under the
Companies Act, 1956/2013, having its registered office at Punjabi Bagh,
P.O. New Delhi, P.S. New Delhi, District New Delhi - 110035, through its
Authorized Signatory namely Mr. Narayan Singh Rathore aged about 40
years, son of Shambhu Singh Rathore resident of 61, Shyam Colony, Near
Rana Hospital, Vaishali Nagar, Ajmer, P.O. Regional College, P.S. Christian
Ganj, District Ajmer.                                       .... Petitioner
                                  Versus
1. Central Coalfields Limited through its Chairman cum Managing Director,
having its office at Darbhanga House, P.O. - GPO, P.S.-Kotwali, District-
Ranchi, Jharkhand. Pin Code-834001.
2. General Manager (CMC), Central Coalfield Limited, having its office at
Darbhanga House, Kutchery Road, P.O.- GPO, P.S.-Kotwali, Ranchi,
Jharkhand- 834001.
3. General Manager, having its office at Office of the General Manager,
Piparwar Area, P.O. Bachra, P.S.- Piparwar District Chatra, Jharkhand-
829201.
4. Project Officer, having its office at Office of the Project Officer, Ashok
Opencast Project, Piparwar Area, P.O. Bachra, P.S. Piparwar, District Chatra,
Jharkhand - 829201.                                       ... Respondents
                          ---------------

CORAM: HON'BLE THE ACTING CHIEF JUSTICE

For the Appellant : Mr. Sumeet Gadodia, Advocate : Ms. Shilpi Gadodia, Advocate : Mr. Prakhar Harit, Advocate : Ms. Shruti Shekhar, Advocate : Mr. K. Hari, Advocate : Mr. Nillohit Choubey, Advocate For the Respondents : Dr. Ashok Kumar Singh, Advocate : Mr. Rajveer Singh, Advocate

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Order No. 07 / 10th May 2024

This arbitration application is filed by Sainik Mining and Allied Services Limited who seeks appointment of the sole Arbitrator by the Court in exercise of the powers under section 11(6) of Arbitration and Conciliation Act, 1996 (in short, AC Act).

2. Dr. Ashok Kumar Singh, the learned counsel for the Central Coalfields Limited has raised an objection that the present arbitration

application is premature. The learned counsel refers to paragraph no. 6 of the counter-affidavit to submit that the second stage of dispute resolution is in progress and it shall be lawful for the contractor to ask for dispute resolution through arbitration only if the dispute and differences persist.

3. In the counter affidavit filed on behalf of the CCL, the Deputy Manager who was authorized to file a counter affidavit has stated as under:

"6. That presently the second stage dispute resolution is in progress and it is still going on. If it doesn't succeed and the differences persist then only the redressal of the dispute through arbitration can be asked for."

4. The applicant- Sainik Mining and Allied Services Limited has pleaded that pursuant to tender notice dated 13th April 2018 the following work contract was awarded:

"(A) Hiring of HEMM for removal of OB, including blast hole drilling, blasting, excavation of various rocks/soft earth cutting of OB strata (consisting of top soil, alluvium soil, blast rock, etc. including inter-seam parting up to robi of lower dakra coal seam); loading, transporting, dumping in different dump yards, dozing, grading: leveling at dump site, including face and other specified places, preparation a maintenance of haul road and face pumping. water spraying as per the instruction or the Engineer In Charge of Ashok OCP of Piparwar Area and;

(B) Hiring of surface miner, payloaders, tipping trucks and other allied equipment for extraction and mechanical transfer of coal into contractor's tipping trucks and transportation of the same from surface miner face to raw coal stockyard, CHP-CPP, Rajdhar, RCM/Bachra and KD(O) siding including face pumping, preparation and maintenance of transport road within mine area as per instruction of Engineer In charge of Ashok OCP and spraying of water for dust suppression on face and coal transportation route upto raw coal stock yard, CHP-CPP, Rajdhar, RCM/Bachra & KD(O) sidings for a period of 03 years at Ashok Project of Piparwar Area".

5. According to the applicant-Company, the agreement signed on 20th September 2018 between the parties contained a provision for "Settlement of Dispute". The applicant-Company pleads that on account of hindrances on the site, delays in providing project-site, failure to reimburse the differential amount of higher revised CMPF, dearness allowance to the workers etc. the CCL was requested to resolve the issues vide letter dated 24th October 2018. This was followed by the letter dated 30th April 2019 claiming reimbursement of the enhanced HPC wages. Looking at the indifferent attitude of the CCL, the applicant-Company invoked the dispute resolution clause through letter dated 25th November 2021. Then, the applicant-Company again issued a legal notice on 9th August 2023 seeking

resolution of dispute through arbitration as per Clause 13A of the Conditions of Contract. At this stage, the CCL invited the applicant-Company for conciliation meetings which were conducted on 23rd August 2023 as per Clause 13. This is the case set up by the applicant-Company that conciliation meeting dated 23rd August 2023 brought the parties at dead-end and, therefore, a notice under section 21 of the AC Act was issued on 25th September 2023. This is further pleaded by the applicant-Company that the CCL did not adhere to the settlement of dispute mechanism and instead called second meeting for conciliation at the Director's level which also failed.

6. Mr. Sumeet Gadodia, the learned counsel for the applicant- Company submits that only to delay the appointment of a sole arbitrator under clause 13A of the Conditions of Contract respondent-CCL continued to issue notices without any meaningful purpose.

7. The settlement of dispute under Clause 13 provides that the Contractor should make request in writing to the Engineer-In-Charge for settlement of dispute/claim within 30 days of arising of the cause of dispute/claim. It further provided that efforts shall be made to resolve the dispute in two stages. As noticed above the first stage of dispute resolution vide Annexure-9 at page 175 of the paper-book failed inasmuch as the majority of the claims such as diesel escalation, reimbursement of 7% CMPF pension, additional cost against the new wage policy/wage difference, service tax, loss due to poor blasting etc. were declined by the CCL. The so-called second stage of conciliation which was convened on 28th December 2023 also seems to have failed as the Minutes of Meeting clearly recorded that the Area shall strive to carry the measurement on urgent basis to facilitate earlier closure of the contract.

8. The relevant portion of Clause 13A of the Conditions of Contract reads as under:

"Sole Arbitration: In the event of any question, dispute or difference arising under these terms & conditions or any condition contained in this contract or interpretation of the terms of, or in connection with this Contract (except as to any matter the decision of which is specially provided for by these conditions), the same shall be referred to the sole arbitration of a person, appointed to be the arbitrator by the Competent Authority of CIL/CMD of

Subsidiary Company (as the case may be). The award of the arbitrator shall be final and binding on the parties of this Contract."

9. Under section 21 of the AC Act, a cause of action shall arise for giving notice to the other party for appointment of an arbitrator wherever the parties have reached a bottleneck. The rejection of the claims in the conciliation meeting held on 23rd August 2023 and a direction for early closure of the contract in the meeting of second level held on 28th December 2023 clearly demonstrate the stand of the CCL. The plea taken in the grounds set forth in the counter-affidavit that the second stage of conciliation is still going on is contrary to the CCL's own records.

10. The existence of Clause 13A is not in dispute and applicability of the Clause 13A is also not disputed. Prima facie, it also appears that the dispute raised by the applicant-Company is arbitrable. In terms of the judgment in "N.N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd." (2023) 7 SCC 1, while examining the petition under section 11(6) of the AC Act all that the Court is required to look is the existence of arbitration clause - nothing more nothing less.

11. This Court therefore requests Hon'ble Justice Virender Singh, a former Chief Justice of Jharkhand High Court to act as the arbitral Tribunal in the present case. As agreed between the parties, the fee of the learned Arbitrator shall be as per Fourth Schedule to the AC Act. This is also indicated that seat of the arbitration shall be at Ranchi and the learned Arbitrator shall be at liberty to change the venue for arbitration with the consent of the parties, which shall provide all necessary logistics if so desired by him.

12. Arbitration Application No. 03 of 2024 is allowed.

(Shree Chandrashekhar, A.C.J.)

Nishant/Vedanti