P. DASARATHA RAMA REDDY, CONTRACTORS, REPRESENTED BY ITS GENERAL POWER OF ATTORNEY HOLDER P. KRISHNA REDDY Vs. THE EXECUTIVE ENGINEER AND THE CHIEF ENGINEER

JUDGEMENT

(1.) THESE petitions are heard and disposed of by this common order as the question that arises for consideration is identical.

(2.) THE Petitioners were all civil contractors who had entered into independent contracts with the Respondent. It transpires that during the execution of the contract, certain disputes having arisen, claims were raised by these Petitioners and the same not having been resolved, the Petitioners are before this Court invoking Sections 11(6) and 11(8) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ' the Act' for brevity) seeking appointment of an arbitrator in terms of a clause providing for the manner for settlement of disputes in each of their contracts. The said clause reads as follows: Settlement of Disputes - Time limit for decision Clause 29: (a) If any dispute or difference of any kind whatsoever to arise between the Executive Engineer/Superintending Engineer and the Contractor regarding the following matters namely. (i) The meaning of the specification designs, drawings and instructions here before mentioned. (ii) The quality of workmanship or materials used on the work and (iii) Any other question, claim, right, matter, thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, or orders, or those conditions or failure to execute the same whether arising during the progress of the work, or alter the completion, termination or abandonment thereof, the dispute shall, in the first place be referred to the Chief Engineer who has jurisdiction over the work specified in the contract. The Chief Engineer shall, within a period of ninety days from the date of being requested by the contractor to do so, give written notice of his decision to the Contractor. Chief Engineer's decision final. (b) Subject to other form of settlement hereafter provided the Chief Engineer's decision in respect of every dispute or difference so referred shall be final and binding upon the contractor. The said decision shall forthwith be given effect to and contractor shall proceed with the execution of the work with ail due diligence. Remedy when Chief Engineer's decision is not Assistant Commissioner acceptable to Contractor. (c) In case the decision of the Chief Engineer is not acceptable to the contractor, he may apply the law courts at...(*) for settlement of dispute after giving written notice in this regard to the Chief Engineer with a period of ninety days from the date of receipt of written notice of the decision of the Chief Engineer. Time limit for notice to approach law court by contractor. (d) If the Chief Engineer has given written notice of his decision to the contractor and no notice to approach the law court has been communicated to him by the contractor within a period of ninety days from receipt of such notice, the said decision shall be final and binding upon the Contractor. Time limit for notice to approach law court by contractor when decision is not given by CE as at (b) (e) If the Chief Engineer fails to give notice of decision within a period of his ninety days from the receipt of the contractor's request in writing for settlement of any dispute or difference as aforesaid, the contractor may within ninety days after the expiry of the first named period of ninety days approach the Law Court at...(*) giving due notice to the Chief Engineer. (*) (in Sub -clauses (b) and (e) specify the place where the court under whose jurisdiction the work is situated/is located.) Contractor to execute and complete work pending settlement of dispute: (f) Whether the claim is referred to the Chief Engineer or to the Law Courts as the case may be, the contractor shall proceed to execute and complete the works with all due diligence pending settlement of the said dispute or differences. Obligations of the Executive Engineer and Contractor shall remain unsettled during considerations of dispute. (g) The reference of any dispute or difference to the Chief Engineer or the law court may proceed notwithstanding that the works shall be or be alleged to be complete, provided always that the obligations of the Executive Engineer and the contractor shall not be altered by reason of the said dispute or difference being referred to the Chief Engineer or the Law Court during the progress of the works. As the Respondents sought to contend that the above clause did not constitute an arbitration clause as contemplated under the Act and since they refused to refer the dispute to the named arbitrator, the Petitioners are before this Court. Hence, the only point for consideration is, whether the above clause is in the nature of an arbitration clause and whether the petitions are to be allowed.

(3.) FURTHER the learned Counsel for the Respondents has vehemently contended that the judgment of the apex Court in Krishna Bhagya Jala Nigam Limited's case, supra, and the judgment of this Court in the case of A. Neelakanteshwara Reddy v. The Managing Director, KBJNN in Writ Appeal 484/2007 dated 26.10.2010, are clearly rendered in the circumstance that there was no contention urged as to the aforesaid Clause -29 not being in the nature of an arbitration clause. Whereas in the present cases, the Respondent has, all along, refuted that the clause is in the nature of an arbitration clause and this would certainly make a difference in addressing the present petitions.