M/S Tamnna Construction vs Union Of India
2022 Latest Caselaw 4296 Raj/2

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

S.B. Arbitration Application No. 24/2020 M/s Tamnna Construction, Ganesh Bhawan, Infront Of Multipurpose School, Bharatpur-321001 Through Its Partner Bhudev Prasad Sharma S/o Shri Fouran Singh Aged 48 Years.

----Applicant Versus

1. Union Of India, Through General Manager, North Western Railway, Jawahar Circle, Jagatpura, Jaipur (Rajasthan).

2. Senior Divisional (Signal And Telecommunication), Engineer, Ajmer Division, North Western Railway, Ajmer.

3. Senior Section Engineer, (Signal And Telecommunication) Falna, Rajasthan.

                                                                    ----Non-Applicants


For Applicant(s)             :     Mr. Vijay Kumar Sharma
For Non-Applicant(s)         :     Mr. P.C. Sharma


           HON'BLE MR. JUSTICE PANKAJ BHANDARI
                           Order

29/06/2022

1. Applicant has filed this Arbitration Application under Section

11 of the Arbitration & Conciliation Act, 1996 seeking appointment

of a sole arbitrator.

2. It is contended by learned counsel for the applicant that

applicant and the non-applicants entered into an agreement on

23.06.2016. The applicant issued various letters to the non-

applicants for assigning the work and when the work was not

assigned, vide letter dated 01.03.2017, the applicant firm made a

written request for refunding the security money. It is also

contended that there is an arbitration clause in the agreement

entered into between the parties and applicant is entitled to have

an arbitrator appointed by the Court.

3. My attention has been drawn towards Clause 40(2) of the

agreement.

                                          (2 of 3)                       [ARBAP-24/2020]



4.   Learned      counsel    appearing        for     the    non-applicants        has

opposed the present Arbitration Application. It is contended that

as per Clause 40(2) of the agreement, the Railway has a right to

rescind the contract in terms of Clause No.62(2) of the General

Conditions of the Contract (in short 'GCC'). It is also contended

that as per Clause 41 of the agreement, exception has been made

with regard to certain clauses of the GCC and it is specifically

provided that such matter shall stand excluded from the purview

of the arbitration clause. It is argued that Clause 62(1) to (xiii) (B)

of the GCC is one of the clause which has been specifically

excluded from the purview of the arbitration clause. It is further

contended that contract was rescinded under Clause 62(2) of the

GCC and the same is not arbitrable, as there being an exception

clause in the agreement entered into between the parties.

5. Learned counsel appearing on behalf of the non-applicants

has placed reliance on "Samaritan Consultancy & Tech.

Services vs. Union of India & Ors." (S.B. Arbitration

Application No.15/2018) decided by the Rajasthan High Court on

06.09.2021, wherein Clause 62 was considered by the Court and it

was held that if there is clause which specifically excludes a

particular dispute from the purview of arbitration, then an

arbitrator cannot be appointed by the Court.

6. I have considered the contentions and perused the record.

7. From perusal of the record, it is evident that applicant

himself vide letter dated 15.12.2016 requested the non-applicants

to short close the contract and do the full and final settlement

against the contract. The non-applicants vide letter dated

27.06.2017 terminated the contract under Clause 62 of the GCC

(3 of 3) [ARBAP-24/2020]

8. On bare perusal of the GCC read with agreement entered

into between the parties, it is evident that parties had excluded

the matters falling under Clause 8, 18, 22(5), 39, 43(2), 45(a),

55, 55-A(5), 57, 57A, 61(1), 61(2) and 62(1) to (xiii) (B) of the

GCC and it was specifically mentioned that such matters shall be

deemed as 'excepted matters' (matters not arbitrable). It was

further mentioned in the Clause 41 of the of the GCC that

excepted matters shall be specifically excluded from the purview

of the arbitration clause.

9. In the present case in hand, the contract has been rescinded

under Clause 62. As per Clause 62(1) (vi) of the GCC, if the

contractor abondon the contract then also the contract can be

terminated. Even taking note of the letter written by the applicant,

it is evident that applicant himself has written to the non-

applicants to close the contract and refund the security money.

Since, the contract has been rescinded under Clause 62 and the

same falls within excepted matters as provided under the

Clause 41 of the agreement, present dispute is not arbitrable. My

view point is supported from the judgment passed by the

Rajasthan High Court in the case of "Samaritan Consultancy &

Tech. Services" (supra). Hence, I deem it proper to reject the

arbitration application.

10. Accordingly, the present Arbitration Application is rejected.

11. Parties are left to seek remedies available under and in

accordance with law.

(PANKAJ BHANDARI),J

AMIT/3

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