[Cites 19, Cited by 0]
Madhya Pradesh High Court
M/S Tirupati Buildeon Private Ltd. ... vs The State Of Madhya Pradesh on 17 March, 2026
NEUTRAL CITATION NO. 2026:MPHC-JBP:22033
1 AC-58-2023
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 17 th OF MARCH, 2026
ARBITRATION CASE No. 58 of 2023
M/S TIRUPATI BUILDEON PRIVATE LTD. APRIVATE LIMITED
COMPANY
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Shreyash Dharmadhikari with Shri Teerthesh Bharilya - Advocate for
the petitioner.
Shri D. R. Vishwakarma - Government Advocate for the State.
ORDER
This instant petition has been filed under Section 11(6) of the Arbitration
and Conciliation Act, 1996 for appointment of Arbitrator. The present petitioner
was awarded a contract of construction of C.C. roads by Public Works Department
of State of Madhya Pradesh and arising out of the said contract, various disputes
arose between the parties which has led the present petitioner to approach this
Court for appointment of sole Arbitrator as per General Conditions of Contract,
clause 25.3(a) and (b) which provides that the arbitration would be conducted in
accordance with the provisions of Arbitration and Conciliation Act, 1996 and that
the Arbitrator will be appointed in a particular manner as laid down in the
aforesaid provisions.
2. The State has raised a preliminary objection that in view of the law
having been settled by the Supreme Court in catena of cases, the Works Contract
of the State of Madhya Pradesh and Instrumentalities and Corporations would not
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2 AC-58-2023
be subjected to Act of 1996 but statutory arbitration would be maintainable before
MP Arbitration Tribunal which has been constituted under MP Madhyastam
Adhikaran Adhiniyam, 1983 and therefore, on the aforesaid ground it is
contended that this Court may not necessarily appoint the Arbitrator because the
Act of 1996 does not apply and once the Act of 1996 does not apply then even the
application under Section 11 is not maintainable.
3. Upon considering the aforesaid rival assertions it is seen that as per
Adhiniyam 1983 Works Contact is defined under clause 2(i) which is as under :
"2(i) "works-contract" means an agreement in writing or a letter of
intent or work order issued for the execution of any work relating to
construction, repair or maintenance of any building or superstructure,
dam, weir, canal, reservoir, tank, lake, road, well, bridge, culvert,
factory, work-shop, powerhouse, transformer or such other works of the
State Government or Public Undertakings or of the Corporations of the
State as the State Government may, by notification, specify in this
behalf at any of its stages, entered into by the State Government or by
an official of the State Government or by Public Undertakings or
Corporation or by any official of the State Government for and on
behalf of such Corporation or Public Undertakings and includes an
agreement for supply of goods or material and all other matters relating
to the execution of any of the said works and also includes the services
so hired for carrying out the aforesaid works and shall also include all
concession agreement, so entered into by the State Government or
public undertakings or Corporation, wherein a State support is involved
or not."
4. The contract in question relates to Construction of Cement Concrete road
by Public Works Department, that does fall within the definition of "Works
contract" as per section 2(i) of the Adhiniyam 1983.
5. Faced with the situation, the counsel for the petitioner has argued that
since the Arbitrator has the jurisdiction to rule on his own jurisdiction and once at
the stage of appointment of Arbitrator only the existence of arbitration agreement
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is to be seen, therefore, this court may leave the issue of jurisdiction to be
adjudicated by the Arbitrator and the Court may appoint Arbitrator in view of
provisions of the Contract.
6. The aforesaid argument may be attractive in the first flush but the
question here arises about the applicability of Act of 1996 and if the Act of 1996
itself does not apply then this application for appointment of Arbitrator under the
said Act may not be maintainable. The mutual agreement would not make
applicability of Act of 1996 dehors the mandatory provisions of statutory law i.e.
Adhiniyam 1983.
7. The question of applicability of Adhiniyam 1983 and non-applicability of
Act of 1996 has been conclusively decided by the larger Bench of the Hon'ble
Supreme Court in the case of M.P. Rural Road Development Authority v. L.G.
Chaudhary Engineers and Contractors reported in (2018) 10 SCC 826 wherein
the Hon'ble Supreme Court has held as under :
11. The learned counsel for the State has drawn our attention to Section
2(4) of the Central Act, which is as follows:
"2. (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
insofar as the provisions of this Part are inconsistent with
that other enactment or with any rules made thereunder."
12. It was pointed out that the above provision was in pari materia with
Section 46 of the Arbitration Act, 1940 which was interpreted by this
Court in Dhanrajamal Gobindram v. Shamji Kalidas &
Co. [Dhanrajamal Gobindram v. Shamji Kalidas & Co., (1961) 3 SCR
1020 : AIR 1961 SC 1285] This Court held : (AIR p. 1293, para 24)
"24. ...Section 46 makes the provisions of any other
enactment or any rules made thereunder to prevail over the
Arbitration Act, if inconsistent with the latter. In view of
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these several provisions, it is clear that the Arbitration Act
applies to all arbitrations and Chapter II makes it applicable
also to arbitrations, in which the arbitration agreement is
asked to be filed in Court under Section 20 subject,
however, to this that the provisions of any other enactment
or rules made thereunder, if inconsistent with the Arbitration
Act, are to prevail."
13. The same view was taken in Punjab SEB v. Guru Nanak Cold
Storage & Ice Factory [Punjab SEB v. Guru Nanak Cold Storage & Ice
Factory, (1996) 5 SCC 411] in para 12, which is as follows : (SCC pp.
416-17)
"12. Sections 6(1), 7, 12, 36 and 37 have expressly excluded
from the operation of statutory arbitration. The rest of the
provisions per force would get attracted. But the provisions
of the appropriate statute or rules should necessarily be
consistent with the provisions of the Arbitration Act. In that
event, despite absence of an arbitration agreement, rest of the
provisions of the Arbitration Act would apply (as if there
was an arbitration agreement between the parties) and the
dispute becomes arbitrable under the Arbitration Act, as if
there was an arbitration agreement between the parties. If
there is any inconsistency, then the provisions of the
Arbitration Act do not get attracted. Section 33 expressly
gives power to the civil court to decide the existence or
validity of the arbitration agreement or the award as such. If
this question was to arise, necessarily the civil court would
be devoid of jurisdiction to decide the dispute on merits but
only in the forum of arbitration. The existence and validity
of the arbitration agreement should be decided by the civil
court. The arbitrator cannot clothe himself with jurisdiction
to conclusively decide it by himself as a jurisdictional issue.
It is for the court to decide it. The dispute on merits should
be resolved by the arbitrator and the legality of the award
would be subject to decision by the court under Section 33."
14. In view of the above, we are of the view that the State law will
prevail in terms of Section 2(4) of the Central Act. The reference under
the State law was valid and could be decided in accordance with the
State. Accordingly, we set aside the impugned order [Gammon India
Ltd. v. State of M.P., WP No. 8375 of 2010, order dated 29-11-2010
(MP)] and restore the proceedings before the Tribunal. The appeal is,
accordingly, allowed in above terms.
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8. In view of the aforesaid, the Act which would govern arbitration would
be the Adhiniyam of 1983 and Act of 1996 would not be applicable. In fact, if this
Court appoints Arbitrator then it would be doing what has been held in the case of
VA Tech Escher Wyass Flovel Ltd. v. M.P. SEB , reported in 2011(13) SCC 261 ,
which has been declared per-incuriam by the larger Bench in the case of LG
Chaudhary (supra).
9. In view of the aforesaid, as the Act of 1996 itself is not applicable,
therefore, this application for appointment of Arbitrator itself is not maintainable.
10. The application is therefore, dismissed leaving it open for the petitioner
to approach the concerned Tribunal under the Adhiniyam, 1983, if so advised. At
this stage, counsel for petitioner prayed to extend the Limitation period spent in
this petition. The petitioner is free to move application to convince the said
Tribunal to exclude the period spent in prosecuting this petition for calculation of
limitation, if permissible under the law.
(VIVEK JAIN)
JUDGE
mrs. mishra
