The Superintending Engineer, Highways Department v. Honourable Justice V. Ramaswami (Retired) and Others
2002-08-27
V.KANAGARAJ
body2002
DigiLaw.ai
Judgment :- The above writ petition has been filed praying to issue a writ of Certiorari to call for the records of proceedings obtained for appointment of Arbitraror in O.P.No.461/2001, dated 7.12.2001 on the file of the first respondent and to pass orders as the Court may deem fit and proper in the circumstances of the case. 2. On a perusal of the materials placed on record and upon hearing the learned counsel for the petitioner and the respondents as well, it comes to be known that the second respondent is a Class-I Contractor of the National Highways, Madras Circle and they were issued with a work order dated 19.1.1998 by the Government for improvement of the Mount-Poonamallee Road K.M.0/0-10/8; that an agreement was signed on 23.1.1998 by the second respondent and the petitioner herein; that as per the said contract, the work was to be completed in a period of 18 months from the date of handing over the site to the petitioner; that the second respondent completed the entire work only by 30.9.2000 and when he was paid on 24.10.2000 under the head Final Bill, he received the same under protest and thereafter alleging that the delay in completing the work is attributable only to the petitioner herein who had not cleared and handed over the site to him for quite a long time, the second respondent herein had filed a Claim Petition before the petitioner herein on 22.5.2001 claiming a sum of Rs.4,56,63,739/= towards the differential rates and other losses suffered on account of the reasons attributable to the Department and the said claim petition had been rejected by the petitioner herein by his letter dated 28.6.2001. 3. It further comes to be known that thereafter invoking Clauses 52 and 53 of the Agreement, the second respondent herein had filed O.P.No.461 of 2001 before The Honourable The Chief Justice, High Court, Madras under Section 11(5) of the Arbitration and Conciliation Act, 1996 thereby praying to appoint an Arbitrator to resolve the dispute and The Honourable The Chief Justice, by the order dated 7.12.2001 had appointed The Honourable Mr.Justice V.Ramaswami, Retired Judge, Supreme Court of India as Arbitrator to enter upon the arbitration and pass an award after affording opportunity to parties. Aggrieved, the petitioner has come forward to file the above writ petition on certain grounds as brought forth in the grounds of writ petition. 4.
Aggrieved, the petitioner has come forward to file the above writ petition on certain grounds as brought forth in the grounds of writ petition. 4. The main contention of the petitioner is that the claim for appointment of an Arbitrator could be invoked if and only the claim is for an amount of Rs.2 lakhs or below and if the claim exceeds the monetary value of Rs.2 lakhs, the same shall be referred to the Civil Court having jurisdiction for decision according to Clause 53 of the agreement dated 23.1.1998 and since in the case in hand, the claim is more than Rs.2 lakhs and having accepted the same in the agreement, the second respondent is estopped from seeking appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The petitioner would further submit that the order of The Honourable The Chief Justice of the High Court, Madras is construed to be an administrative order, even according to the full bench judgment of the Supreme Court in KONKAN RAILWAY CORPORATION LTD. AND OTHERS vs. M/S.MEHUL CONSTRUCTION CO. reported in 2000(III)CTC 686 and no appeal is provided for specifically under Section 37 of the Act. 5. During arguments, the learned counsel appearing on behalf of the petitioner would only extract the facts contained in clause 53 of the agreement under the head `resolution of disputes and settlement of claims by arbitration' and would exhort that on facts it is not a matter which could be referred to the Arbitrator as it has been done on the part of The Honourable The Chief Justice as per his order dated 7.12.2001 made in O.P.No.461 of 2001, but the remedy lies only before the civil Court as it is further agreed upon in the agreement. The learned counsel for the petitioner would lay emphasis on Para No.7 of the judgment of the Apex Court reported in 2000(III)CTC 686 = AIR 2000 SC 2821 wherein it is held: "... In S.L.P.(Civil) No.11522-11526 of 1999, the order of the learned Chief Justice of Bombay High Court in appointing an Arbitrator is the subject matter of challenge.
The learned counsel for the petitioner would lay emphasis on Para No.7 of the judgment of the Apex Court reported in 2000(III)CTC 686 = AIR 2000 SC 2821 wherein it is held: "... In S.L.P.(Civil) No.11522-11526 of 1999, the order of the learned Chief Justice of Bombay High Court in appointing an Arbitrator is the subject matter of challenge. Since the order of appointment passed by the learned Chief Justice is administrative in nature and the learned Chief Justice does not function as a Court or a Tribunal, the said order is not amenable to the jurisdiction of this Court under Article 136 of the Constitution...." 6. In the above judgment, the Honourable Apex Court has held in the manner aforementioned in a Special Leave Petition filed under Article 136 of the Constitution of India testifying the maintainability of the order passed by The Honourable The Chief Justice of the Bombay High Court and the Apex Court has further held that `the manner in which the order has been passed by the learned Chief Justice is administrative in nature and the same could not be construed to have been passed functioning as a Court or Tribunal and the same is not amenable to the jurisdiction of the Apex Court under Article 136 of the Constitution of India' thus dismissing the application filed by the petitioner therein seeking the Special Leave. 7. However, in the subsequent paragraphs, dealing with another Special Leave Petition of the like nature pertaining to an order passed by the learned Chief Justice of Gauhati High Court refusing to appoint an Arbitrator, the Honourable Apex Court, in the judgment cited supra, reiterating that since the ultimate order by the learned Chief Justice is administrative in nature as has been held already, has observed: "... The aggrieved party, however, has a remedy to approach the High Court for issuance of a writ of mandamus, if so advised, in accordance with law. It is clarified that the learned Chief Justice not having functioned as a Court or Tribunal and the order being administrative in nature, the observations and findings are not binding and will not be taken into consideration by the Arbitral Tribunal, if an objection to validity or existence of Arbitration Agreement is taken before it.
It is clarified that the learned Chief Justice not having functioned as a Court or Tribunal and the order being administrative in nature, the observations and findings are not binding and will not be taken into consideration by the Arbitral Tribunal, if an objection to validity or existence of Arbitration Agreement is taken before it. Such objection, if taken, shall be decided on its own merits...." On such arguments, the learned Special Government Pleader appearing on behalf of the petitioners would pray to the relief extracted supra. 8. On the part of the learned senior counsel appearing on behalf of the respondents, he would forward an order dated 18.1.2002 passed by The Honourable Mr.Justice Ramanujam as the Sole Arbitrator wherein while dealing with exactly the same question as in the case in hand, the learned Judge as an Arbitrator has observed that introduction of monetary limit of Rs.2 lakhs is only to say that for small claims of less than Rs.2 lakhs, there shall be arbitration by a departmental authority or nominee, while for higher claims there should be an arbitration through Court. The learned Judge further agreeing with the contention raised by the counsel for the claimant therein that the respondents not having raised the objection that there is no arbitration clause for claims above Rs.2 lakhs and as such no arbitrator could be appointed at the stage when The Honourable Chief Justice made the appointment of the Arbitrator, it is not open for them now to raise the objection before the arbitrator deriving jurisdiction therefrom has observed that if there is no arbitration clause as contended by the respondents counsel, the Court could not have appointed the Arbitrator and the respondents cannot now go behind the order of Court appointing the Arbitrator in their presence. On such observations, the Arbitral Tribunal has held that there is an arbitration clause of the agreement even for claims exceeding Rs.2 lakhs thus rejecting the preliminary objection raised by the respondents therein. 9.
On such observations, the Arbitral Tribunal has held that there is an arbitration clause of the agreement even for claims exceeding Rs.2 lakhs thus rejecting the preliminary objection raised by the respondents therein. 9. In consideration of the pleadings by parties, having regard to the materials placed on record and upon hearing the learned counsel for both, the only point that arises paramount for consideration and decision is `whether the order of The Honourable The Chief Justice of the Madras High Court dated 7.12.2001 made in Original Petition No.461 of 2001 in appointing the first respondent herein as the Arbitrator to resolve the dispute between the petitioner and the second respondent covered by the agreement dated 23.1.1998 relating to the improvements to Mount-Poonamallee road is liable to do anything as this Court may deem fit and proper in the circumstances of the case, as it has been prayed for in the writ petition?' 10. At this juncture, it is relevant to consider that no specific relief has been sought for on the part of the petitioner either for quashing the order impugned or in any other manner excepting to generally pray for the issue of a `writ of certiorari to call for the records of proceeding obtained for appointment of Arbitrator in O.P.No.461/2001, dated 7.12.2001 on the file of the first respondent and to pass orders as the Court may deem fit and proper in the circumstances of the case'. 11. In the above scenario, on a overall consideration of the facts and circumstances encircling the whole episode of The Honourable The Chief Justice of the Madras High Court appointing the first respondent in the subject matter pertaining to O.P.No.461 of 2001, it is clear that the appointment of the first respondent as an Arbitrator is being testified on the factual ground that clause 53 of the agreement provides for the appointment of an Arbitrator only with regard to a dispute lower than the sum of Rs.2 lakhs and not otherwise. 12.
12. A careful perusal of the order made by The Honourable The Chief Justice in effecting the appointment of the first respondent as the Arbitrator would very clearly show that the learned Chief Justice only after giving full opportunity for the learned counsel for both particularly after hearing the learned Special Government Pleader (CS) appearing for the respondents therein has decided to appoint the first respondent as the Arbitrator `to enter upon the arbitration and pass award after affording opportunity to the parties.' 13. In consideration of the plea raised on the part of the petitioner that the question of appointment of the Arbitrator would not arise in cases where the claims exceed Rs.2 lakhs, since purely being a question of fact and in further consideration that the subject had been fully heard and decided by the learned Chief Justice wherein absolutely no hint is available for the petitioner having raised the only plea on the factual position of the case before the Honourable The Chief Justice, this Court of judicial review cannot go into such factual position of the case and in the absence of any patent error or perversity in approach or legal infirmity or inconsistency having crept into the order dated 7.12.2001 of the learned Chief Justice appointing the first respondent as the Arbitrator to resolve the dispute between the petitioner and the second respondent covered under the agreement dated 23.1.1998, the same in all respects is legally sustainable and is decided accordingly. Needless to mention that the interference of this Court sought to be made into the said order of appointment of the first respondent made in the said O.P. Dated 7.12.2001 is neither necessary nor warranted in the circumstances of the case. However, it is open for the petitioner to raise such pleas before the Arbitral Tribunal, if so desired. In result, the above Writ Petition is without merit and the same is dismissed as such. However, in the circumstances of the case, there shall be no order as to costs. Consequently, W.P.M.P.No.18439 of 2002 is also dismissed.