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Jharkhand High Court · body

2005 DIGILAW 191 (JHR)

RUNGTA PROJECTS LTD. v. TENUGHAT VIDYUT NIGAM LTD

2005-03-02

M.Y.EQBAL

body2005
Judgment : ( 1 ) IN the instant petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 the petitioner has prayed for appointment of Arbitrator in relation to disputes and differences which have arisen between the petitioner and the respondents in connection with the contract for transportation of coal in various collieries. ( 2 ) THE petitioner carried out the work of transportation of coal. It has executed the work of transportation of coal for the collieries of Tapin North and Tapin South, patratu Thermal Power Station, Lalpania, bokaro pursuant to the letter of intent issued on behalf of Tenughat Vidyut Nigam limited, (In short TVNL), Patna. In course of time disputes and differences arose on account of non-settlement of various claims. The petitioner said to have made several representations to the various authorities of the respondents for settlement of claim and lastly by a notice dated 21/3/2003 requested for reference of the disputes and differences to Arbitration in terms of arbitration clause in the agreement. When the request of the petitioner was not responded, the instant petition has been filed. ( 3 ) THE respondent-TVNL, Jharkhand besides denying the existence of disputes and differences, has stated in its counter affidavit that the instant application is not maintainable. ( 4 ) THE respondent-TVNL, Patna, in their counter affidavit have raised objection with regard to the jurisdiction of this court to entertain this petition. According to the respondent Section 10 of the Companies Act bars any High Court other than the High Court having territorial jurisdiction over the registered office of the Company from entertaining any case concerning their companies i. e. TVNL. ( 5 ) I have heard Mr. Pandey Neeraj Rai, learned counsel for the petitioner, Mr. A. Allam, learned counsel for the Tenughat vidyut Nigam Ltd. Patna and Mr. Delip jerath, learned counsel for the Tenughat vidyut Nigam Limited, Ranchi. ( 6 ) MR. Pandey Neeraj Rai, learned counsel firstly contended that issue with regard to territorial jurisdiction of the Honble Chief justice or his delegatee to entertain an application under Section 11 of the arbitration and Conciliation Act must be raised before and decided by an arbitral tribunal. Learned counsel submitted that Section 16 of the said Act provides for power of the arbitrator to rule on his own jurisdiction. Learned counsel submitted that Section 16 of the said Act provides for power of the arbitrator to rule on his own jurisdiction. Such objection to jurisdiction includes an objection on the ground of the arbitral tribunal having been improperly constituted. In this connection learned counsel relied upon the decision of the Supreme Court in the case of Konkan Railway Corporation limtted and Ann v. M/s. Rani Construction pvt. Limited, (2002) 2 SCC 388 : ( AIR 2002 sc 778 ) and also in the case of Food Corporation of India v. Indian council of Arbitration, AIR 2003 SC 3011 . In the alternative, learned counsel submitted that objection with regard to jurisdiction of this court is not tenable as the petitioner is invoking jurisdiction of this court as per Section 11 (12) (b)read with Section 2 (1) (e) of the Act which depends upon the territorial jurisdiction of the civil Courts at Bokaro. Even if the Honble Chief justice of the Patna High Court may have also territorial jurisdiction in addition to the Honble chief Justice of this Court then in such situation the application filed here is maintainable in view of Section 11 (11) of the said Act. ( 7 ) MR. A. Allam, learned counsel for the t. V. N. L. Patna on the other hand firstly submitted that disputes and differences cannot be referred to arbitration for the reason that in terms of the agreement no extra claim was to be entertained. Learned counsel further submitted that all correspondences were made by the petitioner with the registered office of T. V. N. L. and the notice for appointment of Arbitrator was made before the chairman-cum-Managing Director, TVNL patna, therefore, instant application before the Chief Justice, Jharkhand High Court is not maintainable. Learned counsel also referred to Section 10 of the Companies Act and submitted that in view of Section 10 any petition is enter-tainable only within the jurisdiction of the Court where the registered office of the Company situates. Learned counsel in this regard relied upon the decisions of the Supreme Court in the case of union of India and Anr. v. M/s. Sohan Lal puglia, 2003 AIR SCW 6679, in the case of state of Orissa and Ors. v. Gukulananda Jena, 2003 AIR SCW 3772. ( 8 ) MR. Learned counsel in this regard relied upon the decisions of the Supreme Court in the case of union of India and Anr. v. M/s. Sohan Lal puglia, 2003 AIR SCW 6679, in the case of state of Orissa and Ors. v. Gukulananda Jena, 2003 AIR SCW 3772. ( 8 ) MR. Delip Jerath, learned counsel for the TVNL Ranchi on the other hand submitted that since all requests and correspondences were made by the petitioner with the tvnl Patna and no demand was ever raised before the TVNL Ranchi or Bokaro, the instant application before this Court against respondent TVNL Ranchi is not at all maintainable. ( 9 ) RESPONDENT-COMPANY, namely, TVNL ltd. , is a limited Company registered under the Companies Act, 1956 and was an Undertaking of the undivided State of Bihar prior to reorganization of Bihar and its Head office was situated at Patna. In the year, 2000, TVNL Limited Company issued a tender notice dated 12-2-2000 under the signature of Chief Engineer, TVNL inviting tenders for transportation of coal by road from its collieries, of CCL. The petitioner submitted its offer which was accepted and a contract was executed. Thereafter, a letter of intent dated 16-8-2000 was issued by the chief Engineer, TVNL. ( 10 ) IT appears from annexures 1 and 1/ 1 to the request petition that after re-organization of Bihar under Re-organization Act, 2000, a notification dated 27-2-2001 was issued by the Govt. of Jharkhand, Water resources and Energy Department whereby the TVNL became an undertaking of the govt. of Jhark-hand. It is stated that the govt. of India, Ministry of Power, issued another notification dated 31st October, 2002 inter alia ordering that the assets and liabilities of TVNL shall be deemed to be of the State of Jharkhand with effect from such taking over. ( 11 ) ALTHOUGH the letter of intent was issued from the Head Office at Patna and contract was entered into by the authorities of tvnl at Patna but the entire work relating to transportation was executed within the State of Jharkhand. ( 11 ) ALTHOUGH the letter of intent was issued from the Head Office at Patna and contract was entered into by the authorities of tvnl at Patna but the entire work relating to transportation was executed within the State of Jharkhand. Clause 39 of the contract contains the arbitration clause which reads as follows :- "dispute relating to interpretation of condition : In case, any dispute or difference arise between the contractor and the General Manager-cum-Chief Engineer, Tenughat tps or his representative or either of them up to any question relating to the interpretation of any of the conditions or clause or anything contained or as to any question, claim, rights or liabilities of the parties whether during the progress of the work or completion or abandonment thereof, then either party shall forthwith given to the other notice of such dispute/difference making the specific amount of claim, if any and shall be referred to the sole arbitration of the Chairman/managing Director, Tenughat Vidyut nigam Ltd. , Patna or to an officer to be appointed by him (Chairman/managing director) and decision of the arbitrator shall be final, conclusive and binding upon both the parties and the provisions of the Indian Arbitration Act of 1940 any statutory modification thereof shall apply to all such arbitrations. " ( 12 ) SO far the objection taken by the respondents that Section 10 of the companies Act bars any High Court other than the high Court having territorial jurisdiction or the registered office of the company from entertaining any case concerning the companies is concerned, I do not find any substance in the said objection because of the subsequent development which took place by the division of the State of Bihar and notifying the respondent-companies as an undertaking of the Govt. of Jharkhand. In any view of the matter Section 16 of the Arbitration and Conciliation Act provides for the powers of the arbitrator to rule on his own jurisdiction and as such any objection to the jurisdiction of the Arbitral Tribunal is required to be raised before it only. of Jharkhand. In any view of the matter Section 16 of the Arbitration and Conciliation Act provides for the powers of the arbitrator to rule on his own jurisdiction and as such any objection to the jurisdiction of the Arbitral Tribunal is required to be raised before it only. The supreme Court, in the case of M/s. Konkan railway Corporation Limited and another v. M/s Rani Construction Private Ltd. , (2002) (2) SCC, 388 : ( AIR 2002 SC 778 ) has held that if the jurisdiction of Arbitral Tribunal is challenged as being improperly constituted, it would be open to the aggrieved party to require the Arbitral Tribunal to rule on its own jurisdiction. Similarly in the case of Food corporation of India v. Indian Council of Arbitration, (A. I. R. 2003 S. C. 3011), it has been held that the question relating to legality and propriety of constitution of Arbitral Tribunal is a matter which falls within the jurisdiction of Arbitral Tribunal. ( 13 ) RECENTLY in the case of State of Orissa and others v. Gokulananda Jena, (2003) (6)SCC 465 : ( AIR 2003 SC 4207 ) their lordship observed as follows :- "however, we must notice that in view of section 16 read with Sections 12 and 13 of the Act is interpreted by the Constitution bench of this court in M/s. Konkan railways (Supra) almost all disputes which could be presently contemplated can be raised and agitated before the Arbitrator appointed by the Designated Judge under Section 11 (6) of the Act. From the perusal of the said provisions of the Act, it is clear that there is hardly any area of dispute which cannot be decided by the Arbitrator appointed by the designated Judge. " ( 14 ) BE that as it may, admittedly, major part of cause of action arose within the jurisdiction of Jharkhand State and within the district of Bokaro and, therefore, Section 20 of the C. P. C. read with Section 2 (l) (c) and Section 11 (XII) (b) of the Arbitration and Conciliation Act, 1996 confers territorial jurisdiction to this Court to entertain a petition under Section 11 of the Act. IB. IB. Admittedly by notice dated 21-3-2003 (annexure 6 to the Arbitration application) Tenughat Thermal Power Station, lalpania, Bokaro, requested for reference of the dispute to the sole Arbitrator within 30 days but the latter did not respond to the said notice. Consequently, it is fit and proper for this Court to appoint an independent person as sole Arbitrator for adjudication of the dispute. This Court, therefore, appoints Mr. Justice P. K. Sarkar, a retired Judge of the patna High Court as sole Arbitrator. He is requested to enter into reference and give his award within four months from the date of entering into the reference. Order accordingly. --- *** --- .