RUBY CONSTRUCTION Vs. STATE

JUDGEMENT

(1.) THIS revision by the plaintiff arises out of a suit under the Indian Arbitration Act (hereinafter referred to as 'the Act'. The prayer in the suit is to call for the arbitration agreement and enter upon the arbitration in respect of the disputes between the parties after superseding the arbitration clause providing for making reference of the disputes to the Superintending Engineer as sole Arbitrator. In the alternative, a prayer has been made that the plaint may be registered as a regular suit and a decree as per the claims made therein be passed in favour of the plaintiff.

(2.) IT is not necessary to state the facts giving rise to the present revision in detail, for the purpose of decision on the points arising for consideration. Suffice it to say that the plaintiff, which is a registered partnership firm, entered into an agreement for construction of Revetment and Slope Protection Work on the right bank of river Ganga from Ranighat to Gulabighat at Patna, with the defendants, who are the state of Bihar and its officials. The agreement in Form F-2 was signed by the plaintiff through its partner on one side and by the Executive Engineer, Ganga Sone Flood Protection Division (defendant No. 5) on the other on 26-9-1981/28-9-1981. The work, however, could not be completed even within the extended period and the contract was closed by the department in terms of clause 3 of the said agreement and a decision to that effect was communicated to the plaintiff by the Executive Engineer on 30-12-1982. The plaintiff submitted its final bill on 27-7-1984, but no payment was made. The reasons for the non-completion of the work are, inter alia, the subject-matter of dispute between the parties and it is not necessary to refer to them in this order.

(3.) CLAUSE 24 of the NIT reads as follows :- "24. In case of any dispute arising out of the contract, the matter shall be referred to the concerned court under whose jurisdiction the work is situated." A plain reading of clause 24 shows that the underlying object was to limit territorial jurisdiction of the court in case of any dispute arising out of the contract between the parties. Although the expressions 'dispute arising out of the contract' and 'shall be referred to the concerned court' occur in the aforesaid clause, there is nothing to suggest that the object of such reference to the concerned court was to get the dispute itself arbitrated by the court. It is well known that cause of action in such cases arises at more than one place and in case of dispute, therefore, the suit can be filed at any such places. The object behind clause 24 was to exclude the territorial jurisdiction of other courts except the one within whose territorial jurisdiction the work in question was located i.e. at Patna. In my opinion, therefore, clause 24 of the NIT cannot be read as an arbitration agreement.