CTS INDUSTRIES LTD Vs. IRCON INTERNATIONAL LTD

JUDGEMENT

(1.) HEARD Shri Deepak Kumar Jaiswal, learned counsel for the petitioner. The petitioner entered into a contract with Ircon International Ltd.-a Company incorporated by the Central Government, Ministry of Railways for supply of boulders. It appears that some disputes have arisen on which the petitioner as a contractor invoked clauses 71.1; 72.0; 72.1, and 72.2.2 of the Contract Agreement between the parties dated 9.4.2007. Having failed to get any response he has filed this writ petition seeking a writ of mandamus commanding the respondent to take decision on his representations dated 4.8.2008, 15.11.2008 and 12.1.2008 seeking reference for dispute for consideration under Clause 72.2.2 of of GCC of Contract Agreement dated 9.4.2007. The petitioner has prayed for a writ of mandamus commanding the respondent for conciliation proceeding under Section 61 & 62 of the Arbitration & Conciliation Act, 1996. A perusal of the clauses of Conciliation/Arbitration, in clause 17.2.2 and subsequent clauses of the agreement, would show that in case of any dispute the petitioner as a contractor can refer the matter to the Managing Director initially for appointment of a conciliator. The Managing Director could either himself act as conciliator or may on his behalf appoint another person to act as a sole conciliator. In clause 17.2.4 in case the Contractor opts for settlement of dispute through conciliation at the first stage and if the efforts to resolve all or any of the disputes through conciliation fail, the Contractor may refer to the Managing Director for settlement of such disputes or differences through Arbitration. In the present case the letters referred to in prayer no.1 have been sent to the General Manager, Ircon International Limited Orai (U.P.). The petitioner has not approached the Managing Director for appointment of a conciliator. The provisions for Conciliation provided in Part-III of the Arbitration and Conciliation Act, 1996 would show that the conciliation is voluntary in nature to be made by mutual consent of the parties to the agreement. The party initiating conciliation has to send a written invitation under Section 62 of the Act to the other party to conciliate briefly identifying subject of the dispute and that the conciliation proceeding shall commence when the other party accepts in writing the invitation to conciliate. If the other party rejects the invitation, there will be no conciliation proceedings. Sub section (4) of Section 62 of the Act provides as follows:- "62... (4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly." In the present case the petitioner has to first approach the Managing Director designated in the agreement as the authority for conciliation. If the petitioner does not receive any response within thirty days, he may apply for arbitration in accordance with the agreement. The conciliation proceedings like mediation are voluntary in nature. Even if there is a clause for conciliation in the agreement, if a competent authority nominated by the company is not willing to enter into conciliation proceedings, the Court would not, by a writ of mandamus, compel any party to either act as conciliator or to appoint a conciliator. In such case the parties are at liberty to invoke the arbitration clause. The writ petition is disposed of with these observations and with liberty to the petitioner to adopt the modes of alternative dispute resolution strictly in accordance with the clauses stipulated in the agreement.