Madhya Pradesh High Court
M/S Vijaya Energy Equipment, ... vs West Central Railway Jabalpur on 5 December, 2022
Author: Sushrut Arvind Dharmadhikari
A.C. No. 24/2020
1
IN THE HIGH COURT OF MADHYA PRADESH
AT J A B A L P U R
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND
DHARMADHIKARI
ON THE 05th OF DECEMBER, 2022
ARBITRATION CASE No. 24 of 2020
BETWEEN:-
M/S VIJAYA ENERGY EQUIPMENT, BHOPAL,
PLOT NO. 102-A, SECTOR-F, INDUSTRIAL
AREA, GOVINDPURA, BHOPAL-462023
THROUGH PROPRIETOR SHYAM S. VERMA,
S/O MOTI LAL VERMA, OCCUPATION-
CONTRACTOR, R/O G-147, GAUTAM NAGAR,
BHOPAL.462023. FAX NO.0755-4262997,
EMAIL- [email protected]
(MADHYA PRADESH)
.....APPLICANT
(BY SHRI RAJESH KUMAR SONI - ADVOCATE)
AND
WEST CENTRAL RAILWAY, JABALPUR
THROUGH GENERAL MANAGER, WEST
CENTRAL RAILWAY, INDIRA MARKET,
1. JABALPUR-482001
FAX NO.- NOT KNOWN, EMAIL-NOT-
KNOWN
DEPUTY CHIEF ENGINEER (BRIDGE)
LINE, WEST CENTRAL RAILWAY,
JABALPUR-482001
2.
FAX NO. NOT KNOWN, EMAIL-NOT
KNOWN
.....RESPONDENTS
(BY SHRI SANJAY SARWATE - ADVOCATE)
A.C. No. 24/2020
2
This petition coming on for orders this day, the court passed the
following:
ORDER
Heard finally with the consent of both the parties.
This application has been filed by the applicant - M/s Vijaya
Energy Equipment, Bhopal under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') with
the prayer that this Court may appoint an independent Arbitrator as the
applicable clause in the agreement between the parties is in conflict with
the prevailing law.
2. Brief facts leading to filing of the case are that the respondent-
Railway floated a tender for the following work: "Regirdering of Niwar
Bridge, DN Road, 3/33.53M Span @ KM 1067/2-3 (Non Standard
Riveted Open Web Through Girder Span With Non Standard Welded
Open Web Through Girder Span) on Jabalpur- Manikpur Section of
Jabalpur Division." The total contract value of the work was
Rs.3,90,56,113.00. The date and time for submission of tender was
10.02.2015 at 16:00 hours, and the date of opening of the tender was
10.02.2015 at 16:15 hours. The applicant submitted its tender which was
accepted and Letter of Acceptance (LOA) dated 09.04.2015 was issued
to the applicant. An agreement was executed between the applicant and
the respondent-Railway. As per the agreement, the work had to
commence w.e.f. 09.04.2015 and was required to be completed by
08.10.2016. The total completion period of work was 18 months. As per
tender conditions, the applicant was required to deposit Security Deposit
A.C. No. 24/2020
of Rs.19,52,810/-. The applicant was also required to submit
Performance Guarantee in the form of BG (Bank Guarantee). In this
case, the old bridge girders of DN line were required to be changed and
the proposed course of action was to slide the newly constructed girders
to UP line; and the UP line girders were to be slided to DN line, while
the DN line old girders were to be junked to scrap. For this purpose, the
flow of water (water way) in the river below, was to be regulated
through large pipes installed in the riverbed, and over the pipes earth
filling was done over which staging was erected for positioning of new
girders at respective spans.
3. For the purpose of stopping the passing of train, Mega Block was
to be handed over to the applicant for 6:00 hours. As per the procedure,
the new girders were to be kept parallel to the UP side girders. New
girders would replace UP side girders, which will replace DN side
girders and DN side girders were to be junked as scrap. For this purpose
Launching pad was constructed parallel to UP side and dismantling pad
was constructed parallel to DN side. But as per this existing scheme
Mega Block was not made available to the applicant. It is pertinent to
mention here that since launching of span No. 1 was being planned by
mid of March-2018, the applicant hoped to complete launching of
second span by mid of April-2018, and third span by 15 th June, 2018.
Apart from this, further ancillary works would be completed by
15.07.2018. Therefore, the applicant submitted an application for
extension of time on 07.03.2018 and in such application it was
submitted that the work will be completed by 15.07.2018. The applicant
submitted Bar Chart for completion of work of regirdering of Niwar
A.C. No. 24/2020
Bridge over Jabalpur-Manikpur Section of Jabalpur Division vide letter
dated 20.03.2018. The respondent-Railway granted extension up to
15.07.2018, vide letter dated 28.03.2018. As per letter received from
Assistant Engineer, Bridge Line dated 20.05.2019, the applicant was
again required to lower the girder from span S1 and move it to safe
location, considering the coming monsoon. This lowering of girders and
moving to safe location was required due to block not given by the
Railway.
4. It was also found that as per the drawing given by the railway, the
bearing was purchased in accordance with the drawing of the railway,
but it was found that the newly purchased bearing was fouling with the
old bearing and, therefore, a new design was given. But, in-spite of that
Mega Block was not made available. Due to commencing of rainy
season, the entire Launching Pad had to be dismantled on account of
which an expenditure of Rs.19,11,758/- was incurred by the applicant.
Vide letter dated 22.05.2019, the applicant informed that by his letter
dated 12.06.2018 the applicant had demanded reimbursement of
Rs.19,11,758/- for additional work incurred by the applicant on account
of lowering of girder of 2 spans moving the assembled span out of the
river bed, removal of earth from middle span to clear river flow
waterway and removal of Hume pipes and to re-do the above procedure
in reverse for repositioning of girders. No reply has been received from
the railway to show that the letter dated 12.06.2018 regarding
reimbursement has been considered.
5. It is pertinent to mention here that after rainy season, on the
second time also, the Launching Pad was constructed but again Mega
A.C. No. 24/2020
Block was not made available, and again on account of commencing of
rainy season, the entire Launching Pad had to be dismantled, upon
which, an expenditure of Rs.21,370,58/- was incurred by the applicant.
Now, the respondent/Railway is stating that the entire work is to be done
by crane. The applicant submitted its bill for reimbursement of
Rs.40,15,518/-, which was refused and rejected, by the respondents,
without assigning any reason. Therefore, the applicant has filed the
present application before this Court under Section 11(6) of the Act of
1996 requesting to appoint a sole Arbitrator.
6. Per contra, the prayer for appointment of Arbitrator is vehemently
opposed by the learned counsel for the respondents. Learned counsel
contended that it is an admitted position that the Act of 1996 was
amended in the year 2015. At the same time, Section 12(5) of the Act
and VIIth Schedule were also amended. The Railway Administration has
also suitably amended Clause-64(3) of the General Conditions of
Contract (GCC) after the year 2015. It is submitted that under Clause-
64(3) of GCC, the Railway Board will offer a panel of three retired
railway personnel out of whom, the applicant has to choose two.
Thereafter, one out of them shall be appointed as the nominee Arbitrator.
The applicant failed to invoke the aforesaid provision, whereas the
respondent Railways was ready to invoke the aforesaid provision. It was
further submitted that the applicant had not waived of the applicability
of Section 12(5) of the amended Act, therefore, the present case falls
under the category of Clause-64(3)b of GCC. Therefore, the
independent Arbitrator cannot be appointed by ignoring the aforesaid
provision. It is further submitted that in an identical matter, this Court in
A.C. No. 24/2020
A.C. No.64/2018 (Vijay Energy Equipments Vs. West Central
Railway), reported in 2021(2) MPLJ 443 has held that GCC will
prevail. In view of the aforesaid submissions, the application under
Section 11(6) of the Act of 1966 being devoid of merits, is liable to be
rejected.
7. In reply, learned counsel for the applicant contended that the
judgment passed by this Court in the case of Vijay Energy Equipments
(supra) would not be applicable to the facts of the present case since,
similar issue was raised before the Apex Court in the case of Union of
India Vs. M/s Tantia Construction Limited passed in Special Leave to
Appeal (c) No. 12670/2020, wherein, the similar issues had cropped up.
The Apex Court had prima facie disagreed with the contentions of the
respondents for the reason that once the appointing authority itself is
incapacitated from referring the matter to arbitration, it does not then
follow that notwithstanding this yet appointments may be valid
depending on the facts of the case and has referred the matter to the
Larger Bench. The correctness of the judgment of Apex Court rendered
in the case of Central Organisation For Railway Electrification Vs.
ECL-SPIC-SMO-MCML (JV), A Joint Venture Company, (2020) 14
SCC 712 was doubted, therefore, the request has been made to
constitute a Larger Bench. In view of the aforesaid, the contention of the
respondents cannot be accepted. It is further contended that in a similar
situation the Delhi High Court in the case of Gangotri Enterprises Ltd.
Vs. General Manager Northern Railways, reported in 2022 SCC
Online Del 3556 has held that a detailed consideration has been done
and the Court had come to the conclusion that the application under
A.C. No. 24/2020
Section 11(6) of the Act is maintainable and there no impediment in
appointment of a nominee Arbitrator on behalf of the applicant. In
another judgment the Apex Court in the case of Continental India
Private Limited Vs. General Manager Northern Railway, 2022 SCC
Online SC 922 by setting aside the orders passed by the High Court
directing to constitute an Arbitral Tribunal in terms of Clause 64(3)(b) of
the GCC has been quashed and the matter has been remanded back to
the High Court for appointment of sole Arbitrator under Section 11(6) of
the Act of 1996. Therefore, this application deserves to be allowed.
8. Heard learned counsel for the parties.
9. In view of the judgments delivered by the Apex Court in the case
of Continental India Private Limited (supra), M/s Tantia
Constructions Limited (supra) and the judgment delivered by the Delhi
High Court in the case of Gangotri Enterprises Ltd.(supra), the
application deserves to be allowed. The applicant is well within his right
to get the Arbitrator nominated by invoking Section 11 (6) of the Act of
1996.
10. Considering the discussion made hereinabove, this Court
nominate Shri S.N. Khare, Former District Judge as a sole Arbitrator to
adjudicate and resolve the dispute between the parties.
11. The present application is accordingly allowed.
No order as to costs.
(S.A. DHARMADHIKARI)
JUDGE
ashish
Digitally signed by ASHISH
KUMAR LILHARE
Date: 2022.12.07 12:50:58 +05'30'
