KMC CONSTRUCTION LIMITED Vs. STATE OF CHHATTISGARH

JUDGEMENT

(1.) In an arbitral dispute arisen between the contracting parties, the applicant herein i.e. the contractor and the non-applicants herein State of Chhattisgarh, invoking the arbitration clause relating to proceeding for appointment of arbitrator, notice was issued by the applicant to the non-applicants herein for appointment of arbitrator. In the meanwhile, steps were taken by the nonapplicants to make recovery against the applicant which led the applicant to file an application under section 9 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act of 1996'). By order dated 29-4-2013, the District Judge, Raipur decided that application holding that the dispute shall be first settled by the Arbitral Tribunal in accordance with the provisions of the Act of 1996 and till then the bank guarantee shall not be encashed.

(2.) The non-applicants/State did not respond to the request of the applicant for appointment of arbitrator. Therefore, in accordance with the provisions of the arbitral agreement clause 20.6, Indian Council of Arbitration appointed Mr. V.B. Shaligram as Member Arbitrator for the non-applicants State and thereafter, the applicant preferred W.P.(C)No.21/2015 against the State seeking certain reliefs against unlawful recovery by the State in which a Division Bench of this Court by order dated 29-6-2015 directed the State to comply the order passed by the District Judge under Section 9 of the Act of 1996, dated 29-4-2013. The non-applicants/State appointed Mr. B.S. Gupta as Arbitrator and Indian Roads Congress appointed Mr. Saroop Singh, former Chief Engineer, Punjab Public Works Department, as Presiding Arbitrator. The applicant herein appointed Hon'ble Mr. Justice Deepak Verma, former Judge, Supreme Court of India as Arbitrator. Mr. Saroop Singh, Presiding Arbitrator appointed by Indian Roads Congress never gave his consent for acting as Presiding Arbitrator. Mr. B.S. Gupta, appointed by the State, has withdrawn on behalf of the State Government with effect from 15-11-2015. Thereafter, the applicant made a request to the President, Indian Roads Congress on 13-5-2016 for appointment of substitute Presiding Arbitrator of the impugned arbitral dispute, but no action has been taken leading to filing of the present application by the applicant under Section 11 (6) read with Section 15 of the Act of 1996.

(3.) The non-applicant State has filed reply stating inter alia that the work in question comes within the meaning of "works contract" under Section 2 (i) of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 (for short, 'the Act of 1983'), therefore, the dispute is cognizable by the Arbitral Tribunal constituted by the Act of 1983 and as such, the dispute is not to be referred to the Arbitral Tribunal by appointment of Arbitrator under Section 11 (6) read with Section 15 of the Act of 1996 and the applicant be relegated to the Arbitration Tribunal for deciding the dispute.