Kkspun India Ltd. vs Commissioner
2022 Latest Caselaw 7413 MP

                          1
        IN THE HIGH COURT OF MADHYA PRADESH
                     AT JABALPUR
                           BEFORE
             HON'BLE SHRI JUSTICE VIVEK AGARWAL
                              &
             HON'BLE SHRI JUSTICE VISHAL DHAGAT
                   ON THE 19th OF MAY, 2022

             WRIT PETITION No. 11819 of 2022

     Between:-
     KKSPUN     INDIA    LTD.   THROUGH  ITS
     AUTHORISED        REPRESENTATIVE    MR.
     SIDDHANT GUPTA AGED ABOUT 36 YEARS
     REGISTERED CORPORATE OFFICE AT DSIIDC,
     SHED NO. 103, SCHEME NO. 1 OKHLA
     INDUSTRIAL AREA, PHSE II, NEW DELHI R/O
     USHA BHAWAN, 1ST FLOOR, BEHIND OLD BUS
     STAND, TCI, BISRA ROAD (DELHI)

                                                  .....PETITIONER
     (BY SHRI VIVEK TANKHA, SENIOR ADVOCATE ASSISTED BY
     SHRI RAHUL GUPTA, ADVOCATE)

     AND

1.   COMMISSIONER MUNICIPAL CORPORATION
     KATNI KATNI (MADHYA PRADESH)

2.   EGIS INDIA CONSULTING ENGINEERS PVT.
     LT D . PROJECT OFFICE C-26 VIDYA NAGAR
     HOSHANGABAD ROAD MADHYA PRADESH
     ALSO AT REGISTERED OFFICE T-305 TF
     TIRUPATI PLAZA SECTOR-9 POCKET IV PLOT
     NO. 11 DWARKA NEW DELHI (DELHI)

3.   STATE BANK OF INDIA COMMERCIAL BRANCH
     6TH FLOOR IFCI TOWER NEHRU PLACE NEW
     DELHI (DELHI)

4.   YES BANK LIMITED SCO-4 GROUND FLOOR
     SECTOR-16 FARIDABAD (HARYANA)

5.   CHIEF ENGINEER DEPARTMENT OF URBAN
     ADMINISTRATION   AND    DEVELOPMENT
     DEPARTMENT STATE OF MADHYA PRADESH
     NOT MENTION (MADHYA PRADESH)
                                    2
                                                             .....RESPONDENTS
        (BY SHRI SWAPNIL GANULY, DEPUTY ADVOCATE GENERAL
        FOR RESPONDENT NOS.1 & 5
        SHRI RAVIKANT PATIDAR, ADVOCATE FOR RESPONDENT NO.2 )

      T h is petition coming on for hearing this day, JUSTICE VIVEK
AGARWAL passed the following:
                                    ORDER

Petitioner has filed this petition being aggrieved of the action of respondent No.1 in filing an appeal against the orders of the Superintending Engineer, Urban Administration and Development, Division Jabalpur in Arbitration Case on 09/03/2022.

Learned senior counsel for the petitioner submits that in terms of the

provision contained in Clause 12, which deals with Dispute Resolution System and part of the tender document Annexure P/2 there could not have been any appeal by the Municipal Commissioner to the Appellate Authority as is provided under Clause 12.4. Learned senior counsel submits that appeal provided under Clause 12.4 is for the claimant who has the right to raise a dispute in terms of various provision of Clause 12 of the agreement (Annexure P/2) and the Municipal Corporation is precluded from raising a dispute. It is submitted that only remedy available to the Corporation is to file a dispute before the Madhyastham Adhikaran in terms of the provisions contained in Section 7-A of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983. Reliance is also placed on the judgment of Full Bench of this Court in B.B.Verma and another vs. State of M.P. and another, 2007 (4) MPLJ 6 1 0 , which provides that for a breach of the contract by the Contractor, recovery of damages cannot be made without adjudication by the Superintending Engineer or the Tribunal. Placing reliance on this judgment of Full Bench, it is submitted that the petitioner be protected as he will be out of

business if interim protection is not granted in his favour.

Shri Swapnil Ganguly, learned Deputy Advocate General for respondent Nos. 1 & 5 in his turn submits that Clause 5.16 of the writ petition reveals that this petition has been filed in apprehension of some action being taken whereas the fact of the matter is that the Appellate Authority as provided under Clause 12.4 of the Agreement is already ceased of the matter and it has not yet taken any decision either way so as to give rise to any apprehension to the petitioner. It is also submitted that Clause 7-A of the Writ Petition i.e the relief clause prays for restraining the respondent No.1 from encashing the Bank Guarantees as detailed out in Annexure P/14 issued by the petitioner in favour of respondent No.1.

After hearing learned counsel for the parties, it is necessary to reproduce Clause 12 of the Agreement for better understanding and appreciation of the facts.

"Clause 12 :- Dispute Resolution System

12.1 No dispute can be raised except before the Competent Authority as defined in Contract data in writing giving full description and grounds of Dispute. It is clarified that merely recording protest while accepting measurement and/or payment shall not be taken as raising a dispute.

12.2 No issue of dispute can be raised after 45 days of its occurrence. Any dispute raised after expiry of 45 days of its first occurrence shall not be entertained and the Employer shall not be liable for claims arising out of such disputes.

12.3 The Competent Authority shall decide the matter within 45 days.

12.4 Appeal against the order of the Competent Authority can be preferred within 30 days to the

Appellate Authority as defined in the Contract data. The Appellate Authority shall decide the dispute within 45 days.

1 2 . 5 Appeal against the order of the Appellate Authority can be preferred before the Madhya Pradesh Arbitration Tribunal constituted under Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.

12.6 The contractor shall have to continue execution of the works with due diligence notwithstanding pendency of a dispute before any authority or forum."

Reading of Sub-clause 12 dealing with Disputes Resolution System reveals that the dispute can be raised by a Contractor/employee within 45 days of its occurrence. Any dispute raised after expiry of 45 days of its occurrence shall not be entertained and the employer shall not be liable for claims arising out of such disputes. Clause 12.3 provides that the competent authority shall decide the matter within 45 days that means if any dispute is raised by the Contractor within the prescribed time period mentioned in Clause 12.2, then that dispute is to be decided by the competent authority within a period of 45 days. Clause 12.4 provides for appeal against the order of competent authority to be preferred within 30 days.

The fact of the matter is that learned Senior Advocate Shri Vivek Tankha, is of the opinion and has vehemently argued that appeal is only provided for the Contractor and aggrieved party cannot be read into it. He has referred to some provisions obtaining under fiscal statute like VAT Act, Excise Act and Income Tax Act to say that appeal is only by the assessee and not by the department. The ccontention of learned Senior Advocate is that the department has only remedy of filing of dispute before the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.

As per our understanding of law, reference to fiscal statutes like VAT Act, Income Tax Act and Excise Act is of little assistance inasmuch as in the case of Vodaphone International Holdings B.V versus Union of India & Another (2012) 6 SCC 613, the Supreme Court has held that strict interpretation is to be given to the fiscal statutes. Present agreement being an agreement for execution of a works contract. In our opinion, it cannot be interpreted on the principles of strict interpretation as is provided for interpretation of fiscal statutes.

A chronology is provided. We are in agreement that is to be followed. Against the order of the competent authority, any party aggrieved can file an appeal and appeal is sine qua non for taking a matter in reference before the Madhya Pradesh Arbitration Tribunal, constituted under Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.

Thus, if hypothetically, submissions made by learned senior counsel are accepted though we have our reservations about it then a party, who fails to file an appeal as a corollary, will be precluded from raising a dispute before the Arbitration Tribunal for not challenging the decision of the competent authority. Thus, when viewed in above terms our interpretation to Clause 12.4 is that any party aggrieved of the order of the competent authority will be free to file an appeal and a party aggrieved of the order of the appellate authority will be free to raise a dispute before the Madhya Pradesh Arbitration Tribunal constituted under the Madhyastham Adhikaran Adhiniyam, 1983. That being our interpretation to the Clauses referred to by learned senior counsel and the opposite party counsel, we are of the opinion that decision of a Coordinate Bench in Writ Petition No.2062/2022 (M/s Engineering Profession Co.

Pvt. Ltd. vs. Engineer-in-Chief, M.P. Urban Development Officer) dated 31/01/2022 is binding, which clearly provides that once a mechanism for Dispute Resolution is provided then that has to be followed in its letter and spirit.

As far as Full Bench judgment in case of B.B.Verma & Another versus State of M.P. & Another (supra) is concerned, it only provides that there cannot be any coercive action of recovery without adjudication by the Superintending Engineer of the Tribunal, that means the Department on its own without adjudication of the dispute by a competent authority provided under the agreement can not take recourse to the recovery.

In the present case, the competent authority decided the dispute, thereafter the appellate authority is already contemplating the matter in appeal, therefore, in our opinion, this writ petition is premature. There is already a mechanism provided against the orders of the appellate authority and we cannot pre-empt appellate authority from taking a decision in terms of the mechanism

provided in the agreement and thus for the present, this writ petition being premature, fails and is dismissed.

At this stage, Shri Vivek Tankha, learned Senior Counsel submits that they should have a liberty to approach appropriate Forum at appropriate time. That liberty is always vested in the litigant and that is not taken away by the order passed by this Court today.

                                        (VIVEK AGARWAL)                                         (VISHAL DHAGAT)
Signature Not Verified
                                             V. JUDGE                                              V. JUDGE
  SAN
                                     manju

Digitally signed by MANJU CHOUKSEY
Date: 2022.05.20 13:37:56 IST