top of page

Arbitration & Conciliation Act – Even statute arbitration under other acts would be govern

STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR. V.  AMBER BUILDERS CIVIL APPEAL NO. 8307 OF 2019 @ SPECIAL LEAVE PETITION (CIVIL) NO. 36095 OF 2016 With CIVIL APPEAL NO. 8308 OF 2019 @ SPECIAL LEAVE PETITION (CIVIL) NO. 36096 OF 2016 On 08th January 2020.

In this case, both the appeals filed by the state of Gujarat are allowed by the Supreme Court bench comprising of Justice Deepak Gupta and Justice Aniruddha Bose.

The respondent was a contractor who was engaged in the contract for strengthening a section of National Highway. According to him, he completed the work and the bill was also paid. He also says that in the contract he was liable to remove the defects for a period of three years. After the expiry of the said year, the contractor wrote a letter to the state asking to release the security amount. The state in response issued a letter to the contractor saying to pay a sum of Rs.1,09,00,092 as the repair work had not been conducted in accordance with the contract made.

“The appellant State threatened to withhold the payments from the security deposits and bills of other pending works.” A writ petition was filed by the contractor in the High Court of Gujarat claiming that the State does not have the power to withhold the amount payable to the contractor under other contracts or recover the amount from payments made under other contracts until the liability of the contractor were determined and quantified by a Court jurisdiction. The HC allowed the petition by saying that the state cannot recover the payment dues and they are payable to the contractor. Further, it was held that the state has the permission or right to look for recovery from any other means other than the contractor. Aggrieved by this judgment the state ha applied for appeal in the Supreme Court.

The issue of law is whether the High court of Gujarat or the Gujarat Public Works Contract Disputes Arbitration Tribunal has the jurisdiction to pass an order in respect to  the worker contract

Learned senior counsel Shri Preetesh Kapoor appearing on the behalf of the state has made a contention that the High Court does not have the jurisdiction to order for the writ filed.  “He submits that, in fact, the remedy, if any, of the respondent contractor was to approach the State Tribunal as constituted under the Gujarat Act and the writ court could not have granted such relief.”

Shri. K. G. Sukhwani, learned counsel appearing for the respondent- contractor submits that the tribunal does not have the jurisdiction as it is was not such an authority in the Gujarat Act. “if the Gujarat Act does not empower the Tribunal to grant injunction, and it cannot take recourse to the Code of Civil Procedure, 1908 for grant of interim relief.”

The High court decision of asking the state to pay the amount to the respondent is based on the case Gangotri Enterprises Limited vs. Union of India and Others. The SC held that the reference made by the High Court is due to lack of care because the said case has been overruled by the H.M. Kamaluddin Ansari case.

“Part I of the A&C Act i.e. from Section 2 to Section 43 deals with Arbitration and Section 2(2) clearly states that the said Part would apply to all Arbitrations which take place in India. Section 2(4) makes it absolutely clear that other than Section 40(1), 41 and 43, Part I of the A&C Act shall apply to all arbitrations even if they are carried out under any other enactment as if the arbitrations were pursuant to an arbitration agreement except insofar as the provisions of Part I are inconsistent with the other enactment or any rules made there under.”

The Court stated that the intention of the Stage Legislature was that all disputes relating to works contract between the State Government and the persons executing the works defined as works contract would be compulsorily referred to the Arbitral Tribunal constituted under Section 3 of the Gujarat Act.

“In this case, there was a general condition that entitled the Government to recover the damages claimed by appropriating any sum which may become due to the contractor under other pending bills.”

The SC has gone through various provisions one such is Section 17 of the A&C Act which provides interim measures to be granted by the arbitral tribunal. The contention made by the State has been proved.

“In terms of the Section 17 of the A&C Act are concerned, such powers can be exercised by the Tribunal constituted under the Gujarat Act because there is no inconsistency in these two Acts as far as the grant of interim relief is concerned.”

The SC held that the contractor is with the rights of approaching the Gujarat Public Works Contract Disputes Arbitration Tribunal within 2 months from the date of order. The appeal has been allowed by setting aside the judgment of the High Court.

–  Manusri Ramakrishna

Comentarios


Articles

bottom of page