LAL BABU SINGH AND ORS. Vs. STATE OF CHHATTISGARH, PANCHAYAT AND RURAL DEVELOPMENT DEPARTMENT, CHHATTISGARH RURAL ROAD DEVELOPMENT AGENCY AND ORS.

JUDGEMENT

(1.) The present batch of arbitration matters have been preferred by the contractors assailing the order passed by the District Judge refusing to entertain the application under Sec. 9 of the Arbitration and Conciliation Act, 1996 ('the 1996 Act' in short) or for appointment of arbitrator under Sec. 11(6) of the 1996 Act. While ARBA Nos. 37, 38, 41, 42 and 43 of 2015 are the appeals under Sec. 37 of the 1996 Act, the remaining cases in the batch are the applications under Sec. 11(6) of the 1996 Act. The appellants/applicants are the contractors who were awarded different contracts for construction, upgradation and maintenance of rural roads under the Pradhan Mantri Gram Sadak Yojna ('PMGSY', in short). Out of the five arbitration appeals preferred by Brij Mohan Agrawal, in three cases the contract has been executed whereas in remaining two appeals the contract has been terminated. Similarly, in other cases which are applications under Sec. 11(6) of the 1996 Act, for appointment of Arbitrator, the contract has been terminated for one reason or the other.

(2.) In the three completed contract cases appellant Brij Mohan Agrawal had earlier preferred WPC Nos. 549, 550 and 551 of 2013. The said writ petitions were disposed of by the Division Bench of this Court on 26 -4 -14 with an observation that since the petitioner is a party to the contract which contains an arbitration clause, if the petitioner so desires, he may initiate proceedings under the 1996 Act. The Division Bench further observed that if the State proceeds to recover the amount, the appellant may make a prayer for stay on submission of security deposit. Appellant Brij Mohan Agrawal, thereafter, preferred application under Sec. 9 of the 1996 Act seeking interim order for staying the recovery proceedings. The District Judge has refused to interfere on the ground that in three cases wherein the writ petitions were preferred, the appellant had already obtained observations from the High Court which would serve the purpose. In other two cases the District Judge has held that the contract executed between the parties being 'works contract', it is amenable to jurisdiction of the State Arbitration Tribunal, therefore, application under Sec. 9 of the 1996 Act is not maintainable. The District Judge, thus, concluded that it has no jurisdiction over the matter.

(3.) In the application under Sec. 11(6) the applicants averred that being successful tenderer they were awarded contract and the work order was also issued, however, because of several hindrances and impediments in execution of work due to naxal activities in the concerned area and for failure of the respondents in taking technical decisions in time, there was delay in execution of contract. Request for extension of time was made, however, the respondents terminated the contract without considering the application for extension of time. The applicants, thereafter, invoked arbitration clause as contained in clause 24 and 25 of the agreement by moving an application to claim a quantified amount, however, it remained undecided, therefore, applicants have moved an application under Sec. 11(6) of the 1996 Act for appointment of Arbitrator.