M VENKATA RAO Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is a railway contractor. According to him second respondent awarded contract for construction of retaining wall in place of damaged and leaning retaining wall between Makudi and Sirpur Town (Down Line) on 8.12.1995. Whatever be the reason the petitioner could not complete the work within stipulated time and railways authorities did not grant any extension. The petitioner again sent a communication on 10.5.2001 as well as on 15.6.2001 requesting the second respondent to make urgent arrangement for completion of work in vain. Therefore, he requested the second respondent to finalise the contract and release final amounts including security deposit and earnest money deposit. As he did not give a favourable reply, petitioner addressed second respondent on 11.12.2001 to refer the matter to arbitration. As there is no response, petitioner initially filed application under subsection (6) of Section 11 of the Arbitration and Conciliation Act, 1996 (for short, the Act) being Arbitration Application No.70 of 2002. At the time of preliminary hearing said Arbitration Application was dismissed as withdrawn presumably for the reason that the value of the contract being less than Rs.5,00,000/-(Rupees five lakhs) jurisdiction lies with the Chief Judge, City Civil Court, Hyderabad. The petitioner filed an application under Section 11(6) of the Act before the learned Chief Judge, City Civil Court, Hyderabad. The learned Chief Judge dismissed the same at S.R. stage by order dated 7.1.2003 in O.P. SR No.16122 of 2003 by passing the following order: In order to attract Arbitration Act, there should be a clause in the agreement. Hence, this petition is to be rejected as it is not maintainable under the Act as admittedly there is no clause in the Agreement entered into between the parties and legal notice cannot be treated as a clause of the agreement. The petition is rejected.

(2.) The present writ petition is filed assailing the order passed by the learned Chief Judge, and also for a direction to the learned Chief Judge to appoint Arbitrator to settle claims of petitioner and disputes under the provisions of the Act.

(3.) This Court entertained a doubt whether Writ Petition is maintainable having regard to the decision of the Supreme Court in Konkan Railways Corporation Limited v. Rani Construction Private Limited, (2002) 2 SCC 388 = 2002 AIR SCW 426 = AIR 2002 SC 778, (KONKAN-III), as well as Division Bench judgment of this Court, to which I was a member, in Union of India v. Vengamamsa Engineering Co., Juputi, 2001 (3) ALD 776. Learned Standing Counsel for Railways Mr. C.V.Rajeev Reddy has brought to the notice of this Court a latest judgment of the Supreme Court in State of Orissa v. Gokulananda Jena, 2003 (1) Decisions Today (SC) 643 = 2003 (6) SCC 465, and fairly submits that in view of latest judgment of the Supreme Court Writ Petition would lie. As this question is cropping up repeatedly, shall refer to these judgments, briefly.