NAGARJUNA CONSTRUCTION CO.LTD. Vs. STATE OF JHARKHAND

JUDGEMENT

(1.) THIS is an application for appointment of an Arbitrator under Section 11(6) read with Section 11 (8) of the Arbitration and Conciliation Act, 1996 on the averment that the applicant M/s Nagarjuna Construction Company Ltd. had been awarded a contract in response to a tender invited by the State of Jharkhand to execute, inter alia, the work of construction of Earthen Dam, Ogee Chute Profile Spillway, Right Main Canal, Left Main Canal, Approach Channel, Spill Channel, Canal Drop, Cross Drainage Work, SLR Bridge, Water Escape, Inlet, Distribution Network to irrigate 90 per cent, of command area etc. and the Petitioner participated in the tender process and was ultimately granted the aforesaid tender for executing construction work of earthen Dam and ancillary work known as 'Suru Reservoir Project'. The Order dated 14th August, 2004 to that effect was issued by the Joint Secretary, Water Resource Department, Government of Jharkhand and in view of this, an agreement was executed between the applicant and the Respondent -State of Jharkhand, wherein Clause -23 had been incorporated. This Clause 23 envisages that in case any dispute or difference arises between the parties or either of them upon any question relating to the meaning of the specifications, designs, drawings and instructions or as to the quality of workmanship or materials used on the work or as to the construction of any of the conditions or any clause or thing therein contained or as to any question, claim, rights of the parties or any matters or things whatsoever in any way arising out of or relating to the contract designs, drawings specifications, estimates, instruction Order or these conditions or otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof or as to the breach of this contract, then either party shall forthwith give to the other notice of such dispute or difference in writing and such dispute or difference shall be referred to the Engineer in Charge. The E/l will take decision within 30 days. Even if the matter is not resolved it will be referred to the Chief Engineer/Engineer in Chief where it will be resolved in 45 days. The Clause further indicates that if the party is not satisfied with the decision, then the matter may be referred for arbitration on such request as per Rule under the Arbitration & Reconciliation Act, 1996.

(2.) THE applicant has summed up its case by stating that it had started the work in 2004 and 80 per cent of the work has already been executed by the applicant on the available area. It has also been admitted that the Appellant has been paid a sum of rupees twenty three lakhs as against its claim of rupees three Crores payable by the Respondent -State for the work already executed but, the same has not been accepted or admitted by the Respondent -State.

(3.) FROM the aforesaid facts, it is clear that a dispute between the parties has prima facie arisen bonafide and it is also an admitted position that Clause 23 has been incorporated in the Agreement specifically indicating that the matter shall be referred to the Arbitrator in the event a dispute arises between the contracting parties.