Tripura High Court
Sri Arun Kumar Dey vs The Oil And Natural Gas Corporation ... on 11 July, 2025
Page 1 of 11
HIGH COURT OF TRIPURA
AGARTALA
Arb. P. No.5 of 2025
Sri Arun Kumar Dey, Contractor, son of Late Biraj Mohan Dey, resident of
A.D. Nagar, Police Line, P.O. A. D. Nagar-799003, P.S. A. D. Nagar,
District-West Tripura;
......... Petitioner(s).
VERSUS
1. The Oil and Natural Gas Corporation Limited (ONGC), Tripura Asset,
Badharghat Complex, Agartala, P.O. ONGC-799014, P.S. - Amtali,
District-West Tripura, represented by the Executive Director;
2. The Chief Engineer (Civil), Oil and Natural Gas Corporation Limited
(ONGC), Tripura Asset, Badharghat Complex, Agartala, P.O. ONGC-
799014, P.S. - Amtali, District-West Tripura;
......... Respondent(s).
For Petitioner(s) : Mr. Abhijit Sengupta, Advocate.
For Respondent(s) : Mr. Jyotirmoy Das, Advocate.
HON'BLE THE CHIEF JUSTICE MR. APARESH KUMAR SINGH
Order
11/07/2025
Heard Mr. Abhijit Sengupta, learned counsel for the petitioner
and Mr. Jyotirmoy Das, for the respondents.
2. Petitioner has invoked Clause 25.1.12 of the agreement dated
27.01.2022 entered into between the parties pursuant to tender No.TC2EC
21003 floated for execution of the work 'Board purchase for construction of
seven numbers of drill sites, its drill site accommodation and its approach
road for drilling for exploratory location of Tripura Asset, Oil and Natural
Gas Corporation Limited (for short, ONGC)'. Petitioner was awarded work
for execution of three numbers of drill sites for a total value of
Rs.8,56,33,802/- i.e. Rs.2,85,44,600/- for each site. The stipulated period of
the work was 12 months from the date of handing over of the first site. The
agreement was executed on 27.01.2022. Petitioner deposited performance
bank guarantee of Rs.25,69,015/- on 07.12.2021 in favour of GM
(Mechanical), I/C, Tender and Technical Cell Engineering Service, ONGC,
Tripura Asset. However, petitioner was handed over only two numbers of
drill sites, namely, BMST and ROBJ.
3. It is submitted by learned counsel for the petitioner that
petitioner completed the said work to the satisfaction of the ONGC and
handed over two sites to them. Though petitioner submitted bank guarantee
for three sites but third site was not handed over to him till then. Petitioner
made reminders for handing over the third site as a result of which he had
been incurring overhead expenses. He was informed vide letter dated
07.06.2024 that the third site will not be handed over to him since the
contract period was for one year which is already over. Petitioner denied the
allegations vide his letter dated 30.08.2024 (Annexure-4). Petitioner claimed
10% of the expected profit for non-execution of the work amounting to
Rs.28,54,460/- from the respondent-ONGC. Petitioner submitted his demand
contained in letter dated 31.08.2024 (Annexure-5) for a claim of
Rs.33,34,460/- for loss of profit and remuneration of site engineer and
supervisor. Thereafter, he submitted an application for referring the dispute
to the respondent-ONGC under Arbitration Clause 25.1.12 (Annexure-6)
dated 14.11.2024.
4. The respondent-ONGC asked the petitioner to submit
application for mediation/re-conciliation vide communication dated
07.01.2025. On 03.05.2024 petitioner found that an amount of
Rs.46,00,069.85/- was credited to his account against the bill dated
21.03.2024 but they were short in payment of his full bills. On verification it
was found that an amount of Rs.77,55,760/- has been deducted from his bills
without assigning any reason. Thereafter, petitioner filed a writ petition
bearing WP(C) No.500 of 2024 which was disposed of vide judgment dated
26.07.2024 directing the respondent-ONGC to consider his case in the light
of his legal notice dated 14.05.2024 within a period of two months
(Annexure-11). The respondent-ONGC replied vide communication dated
06.11.2024 that the amount of Rs.77,55,760/- has rightly been recovered
from his bills as per the terms of the contract (Annexure-12).
5. Petitioner again submitted an application for reference of the
dispute for arbitration under Clause 25.1.12 vide letter 18.01.2025
(Annexure-14). The respondents have once again asked him to submit
application for conciliation/mediation vide letter dated 12.02.2025
(Annexure-15). However, learned counsel for the petitioner submits that
since the petitioner has opted to invoke the Arbitration Clause he is not
inclined to go for mediation/conciliation through Outside Expert Committee
(OEC). The details of the disputes have been furnished at paragraph 6 in the
form of a chart. Earlier, the petitioner had approached this Court in
Arbitration Petition No.01 of 2025 for reference of the dispute to an
independent arbitrator but the same was withdrawn vide order dated
19.02.2025 as the entire claims were not incorporated in the petition.
Thereafter, the present petition has been filed by the petitioner.
6. Learned counsel for the petitioner submits that in these facts
and circumstances in view of the Arbitration Clause entered into between the
parties, since the respondents have not nominated an arbitrator he has been
compelled to approach this Court under Section 11(6) of the Arbitration and
Conciliation Act, 1996.
7. Respondents have appeared on notice and filed their counter-
affidavit. Mr. Jyotirmoy Das, learned counsel for the respondents has
referred to the contents of the counter-affidavit and submitted that the
petitioner had served a legal Demand Notice under Section 80 (1) on the
Executive Director, Respondent ONGC through his Advocate on 30.03.2024
for handing over of the 3rd drill site as per the contract when the contract
period was over and termination of contract already affected much earlier,
under Clause-40 of General Conditions of Contract (GCC, for short).
8. On receipt of the reply of that Demand Notice issued by ONGC
on 07.06.2024, wherein the demand for handing over of 3 rd drill site to the
contractor was rejected on the ground of expiry period of the contract and
also having his doubtful credibility, the contractor then by a letter dated
30.08.2024 had shifted his demand for handing over the 3rd drill site and
tried to defend himself by simply denying and disputing the factual
allegations of inferior workmanship, already verified against him by a team
of engineers headed by ONGC Vigilance Department.
9. The petitioner then by a demand notice dated 31.08.2024
claimed for the payment of infrastructure expenses on overhead cost, being
the salary for Supervisors and Site Engineers, amounting to Rs. 4,80,000.00
and Loss of profit @10% on the 1/3rd total contract amount for the 3rd drill
site amounting to Rs. 28,54,460.00 and the total amount of claim of
Rs.33,34,460.00 was raised.
10. Respondents contend that after expiry of the contract period
such a claim for the above infrastructure expenses for the period from
11.01.2022 to 10.01.2023 have been raised when whole of his infrastructure
set up was already engaged for execution of the other two drill sites namely
ROBJ and BMST. Therefore, no question arose for deployment of
infrastructure during that period of contract for the 3rd drill site. Moreover,
the contractor never approached the ONGC authority within the contract
validity period to take over the 3rd drill site. The contractor never prayed for
any extension of the contract period nor the ONGC authority has exercised
its option to extend the contract period by issuing any order. The agreement
is automatically terminated once it expires.
11. The contractor, after submitting his demand notice dated
31.08.2024, i.e. after the expiry of contract period, served another notice
invoking arbitration Clause 25.1.12 of the contract without waiting for the
response from the ONGC authority. The petitioner, thereafter hastily has
approached this Court vide petition No. Arb.P.01/2025 filed on 10/01/2025,
under Section 11(6) for appointment of an impartial arbitrator for
adjudication of that particular claim/dispute.
12. The above-mentioned dispute was not an arbitrable dispute as is
an 'Excepted Matter' as per the contract clause No. 40.1 and 40.8 of GCC.
Moreover, the contractor after receipt of payment advice amounting to
Rs.46,00,069.85 dated 16/04/2024 against 2nd RA Bill, served a demand
notice on ONGC dated 14.05.2024 claiming the refund of withheld amount
of Rs.77,55,760.15 which the respondent-ONGC rejected vide letter dated
06.11.2024. Therefore, this dispute already existed before filing the petition
Arb.P.01/2025 on 10.01.2025.
13. The petitioner approached this court by making the false plea
that 'certain more disputes have cropped up during this period' for
withdrawal of Arb.P.01/2025 with liberty to file a fresh petition. To cover up
the circumstances and to tag along with the earlier dispute the petitioner
served another notice again on 18.01.2025, repeatedly invoking the
arbitration clause for the same contract in order to approach this Court under
section 11(6) of the Arbitration and Conciliation Act, 1996.
14. Mr. Jyotirmoy Das, learned counsel for the respondents,
submits that the contractor has been lackadaisical in his approach in
handling the contract. The ROBJ drill site upon completion of construction
was handed over to ONGC on 25.4.2023; Post Rig building works were
completed on 14.05.2023 and the BMST drill site was handed over on
20.05.2023 after retrofitting the RCC structure. But due to inferior quality of
workmanship in the RCC work, huge horizontal crack developed on the Rig
foundation of BMST drill site, even before the drilling rig could be deployed
on the foundation. The matter was so serious that a vigilance inquiry was
conducted. On inspection by the technical team of engineers and Vigilance
department of ONGC Tripura Asset, it was found, that the failure has
happened due to inferior quality of workmanship by the contractor without
following the engineering standard and working procedure.
15. The delay in execution of the contract has attracted the Clause -
2 of GCC. Accordingly, the recovery was made from the contractor of a
sum equivalent to ½ % (half percent) of the contract price/work subject to
maximum of 10% by way of liquidated damages and withheld from the 2nd
RA Bill. Under paragraph No.12 of the counter-affidavit the respondents
have by way of tabular chart enclosed the total amount of Rs.77,55,760.15/-
recovered against the contractor for bad workmanship and liquidated
damages etc.
16. Learned counsel for the respondents submits that the petitioner
was fully aware of the other issues relating to non-handing over of the 3rd
drill site during the validity of the contract period and had in fact referred to
it in his notice dated 31.08.2024 (Annexure-5) while approaching this Court
in Arb.P.01/2025. However, he has sought to withdraw Arb.P.01/2025 to
raise additional claim in respect of the 3 rd drill site by issuing another notice
dated 18.01.2025 for reference of the dispute under Clause 25.1.12 of the
agreement. It is submitted that the petitioner cannot be allowed to improve
upon its claim relating to existing dispute as it is in teeth of arbitration
Clause 25.1.12. Moreover, the approach of the petitioner in withdrawing
Arb.P.01/2025 and thereafter raising additional claims for reference to
arbitration under the present arbitration petition is mala fide.
17. Mr. Abhijit Sengupta, learned counsel for the petitioner, has
sought to explain that the earlier arbitration application was made after
invocation of the arbitration clause in terms of notice dated 14.11.2024
(Annexure-6). He submitted that in the said notice also the petitioner has
taken a plea that the ONGC was bound to hand over the three numbers of
sites immediately after work order was issued but it failed to deliver one site
valued at Rs.2,85,44,600/- to him. Therefore, it had committed breach of
contract with him. Learned counsel for the petitioner also submits that the
petitioner had not raised any further additional claim in the present
arbitration petition. If that be so there was no reason to withdraw the first
arbitration petition.
18. I have considered the submission of the learned counsel for the
parties and taken note of the relevant materials placed from record. The
chronology of the events pleaded by the parties captured in the previous
paragraphs of this order need no repetition. In order to appreciate the
controversy, it is pertinent to refer to Clause 25.2.1 which falls under the
head 'Arbitration and Conciliation' under Clause - 25. Clause 25.1 provides
that if any dispute, difference, question or disagreement arises between the
parties hereto or their respective representatives or assignees, in connection
with construction, meaning, operation, effect, interpretation of the contract
or breach thereof which parties are unable to settle mutually, the same may
first be referred to conciliation through Outside Expert Committee ("OEC")
to be constituted by CMD, ONGC as provided thereunder. Clause 25.1.12
provides that if the parties are not able to resolve the dispute through OEC or
do not opt for conciliation through OEC, the party may invoke arbitration
clause as provided in the contract. Clause 25.2 provides for arbitration
(applicable in case of supply order/ contracts with firms, other than Public
Sector Enterprises) (Not applicable in cases valuing less than Rs.5 lakhs). It
further provides that Except as otherwise provided elsewhere in the contract,
if any dispute, difference, question or disagreement arises between the
parties hereto or their respective representatives or assignees, in connection
with construction, meaning, operation, effect, interpretation of the contract
or breach thereof which parties are unable to settle mutually, the same shall
be referred to Arbitration as provided thereunder.
19. The clause 25.2.1 which has been invoked by the petitioner,
reads as under:
"25.2.1 A party wishing to commence arbitration
proceeding shall invoke Arbitration Clause by
giving 60 days notice to the other party. The notice
invoking arbitration shall specify all the points of
disputes with details of the amount claimed to be
referred to arbitration at the time of invocation of
arbitration and not thereafter. If the claim is in
foreign currency, the claimant shall indicate its
value in Indian Rupee for the purpose of
constitution of the arbitral tribunal."
A careful reading of the aforesaid provision clearly indicates
that the notice invoking arbitration shall specify all the points of disputes
with details of the amount claimed to be referred to arbitration at the time of
invocation of arbitration and not thereafter.
20. Clause 25.2.2 provides for the number of the arbitrators to be
appointed depending upon the value of the claim.
21. The chronology of the dates and events referred to hereinabove
indicates that the petitioner has initially approached this Court in WP(C)
No.500 of 2024 against the amount deducted from his bills allegedly without
any reason. On the basis of the direction passed by the writ Court the legal
notice issued by the petitioner was replied by the ONGC vide
communication dated 06.11.2024 stating that an amount of Rs.77,55,760/-
has rightly been recovered from his bills as per the terms of the contract
(Annexure-12). Petitioner had thereafter, invoked the jurisdiction of this
Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 on
the basis of the dispute raised vide letter dated 14.11.2024 (Annexure-6)
upon the respondent ONGC invoking arbitration Clause 25.1.12. The said
petition was later on withdrawn by the petitioner with a plea that the entire
claims were not incorporated in that petition. In order to improve upon his
case, petitioner had in the meantime issued another arbitration notice under
Clause 25.1.12 dated 18.01.2025 (Annexure-14). That was also replied by
the respondents asking him to submit to conciliation mediation which the
petitioner refused as he had opted to invoke the Arbitration Clause and
chosen to remain outside the mediation/conciliation process through Outside
Expert Committee (OEC). The details of the disputes were furnished at
paragraph-6 in the form of a chart. The aforesaid background facts indicate
that the petitioner has indulged in raising arbitration claims through multiple
notices served upon the respondent-ONGC under Clause 25.1.12. This is
impermissible in view of clause 25.1.12 quoted hereinabove. Petitioner was
required to specify all the points of the disputes with details of the amount to
be referred to arbitration at the time of invocation of arbitration and not
thereafter. In the earlier arbitration application based upon the notice dated
14.11.2024, the respondents had filed a counter affidavit and taking a
particular stand. The petitioner, perhaps becoming wise, chose to improve
upon his case by withdrawing Arb.P.01/2025 to present a fresh petition as
his entire claims were not incorporated in the said petition. For this purpose,
he also had issued another notice invoking arbitration Clause 25.1.12 vide
letter dated 18.01.2025 (Annexure-14) which was not permissible.
Arb.P.01/2025 was permitted to be withdrawn on the request of the
petitioner with liberty. However, the withdrawal of the writ petition with
liberty could not override the specific arbitration clause agreed between the
parties under the agreement in question. Clause 25.1.12 provides that the
notice invoking arbitration should specify all the points of disputes with
details of amount claimed to be referred to arbitration at the time of
invocation of the arbitration and not thereafter.
22. Perusal of the notices dated 14.11.2024 and 18.01.2025 would
also give an impression that the petitioner has raised further claim than
originally raised in his notice dated 14.11.2024 which is impermissible
under the arbitration clause. Respondents are therefore right in contending
that the petitioner has tried to improve upon his claim despite being
conscious for the reasons for recovery of the amount of Rs.77,55,760.15
from his outstanding bills and also the reasons for non-handing over of the
3rd drill site. In such circumstances, the present petition seeking appointment
of an independent arbitrator by successive notice issued in teeth of clause
25.1.12 cannot be allowed. The approach of the petitioner in seeking
invocation of arbitration clause on repeated occasions under the same
agreement by raising different claims is misconceived.
Accordingly, the instant petition is dismissed.
Pending application(s), if any, shall stand disposed of.
(APARESH KUMAR SINGH), CJ
Munna MUNNA SAHA Digitally signed by MUNNA SAHA
Date: 2025.07.14 15:56:03 +05'30'
