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2005 DIGILAW 250 (JHR)

Dinesh Lal Das v. Bharat Coking Coal Ltd.

2005-03-30

M.Y.EQBAL

body2005
JUDGMENT M.Y. Eqbal, J. 1. In this Request Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in short the Act), the petitioner has prayed for appointment of Arbitrator and for reference of the dispute to the Arbitrator for adjudication and for giving an award. 2. Petitioners case is that he is engaged in contract work amongst others in the respondents-Bharat Coking Coal Ltd. (in short BCCL). Under the orders of the competent authority of the respondents and in order to meet the urgent need of the company the petitioner agreed to complete the work in terms of the specification provided to him. The Engineer so deputed, recommended the works completed by the petitioner stage by stage and prepared bills which were duly verified by the Executive Engineer but in spite of submission of the bills the petitioner has not been paid the amount for the work done by him. When the respondents did not take any step, the petitioner gave legal notice on 23.10.2001. The petitioner, thereafter, approached this Court by filing a writ petition being WPC No. 5856/2002 which was eventually withdrawn by him in order to avail the alternative remedy. The petitioner, thereafter, sent notice dated 24.10.2003 for referring the dispute to the Arbitrator in terms of Clause 9 of the general terms and conditions of the contract. 3. In the counter affidavit filed by the respondents-BCCL it is stated that the application under Section 11(6) of the Act is not maintainable as no agreement has ever been entered into between the petitioner and the respondents. It is stated that work orders were issued in respect of the works mentioned in serial Nos. 1 to 4 whereas no work order was issued in respect of the work at serial Nos. 5 and 6. The respondents further stated that no formal agreement has ever been executed between the petitioner and the respondents for the reason that the value of the work was less than five lacs. According to Clause 4,08.2 of the Civil Engineering Manual an agreement is executed on non-judicial stamp paper only when the contract value is Rs. 5 lacs or more. 4. Mr. A.K. Sahani, learned counsel appearing on behalf of the petitioner submitted that earlier the petitioner moved this Court by filing a writ petition but the same was withdrawn in order to avail the remedy provided in the agreement. 5 lacs or more. 4. Mr. A.K. Sahani, learned counsel appearing on behalf of the petitioner submitted that earlier the petitioner moved this Court by filing a writ petition but the same was withdrawn in order to avail the remedy provided in the agreement. According to the learned counsel the question with regard to existence of the arbitration clause is to be determined only by the Arbitrator. Learned counsel relied upon a decision of the Supreme Court in the case of Hythro Power Corporation Limited v. Delhi Transco. Ltd., 2003 (4) JLJR 21 (SC). 5. I am fully conscious of the law laid down by the Supreme Court in the Constitution Bench judgment in Konkan Railway Corporation Ltd. v. Rani Construction Pvt. Ltd., 2002 (2) SCC 388 , on the point that the Chief Justice or his designate, while exercising power under Section 11 of the Act, merely discharges administrative function and, therefore, he has no jurisdiction to adjudicate upon the contentious issues between the parties on the existence or the validity of the Arbitration Agreement but in the instant case the facts are quite different. In the instant application filed under Section 11(6) of the Act it is the admitted case of the petitioner that he was allotted work verbally with a stipulation to complete the work by 15.1.2001. Paragraph 6 of the Request Petition is worth to be quoted hereinbelow which reads as under : "That the petitioner was allotted the work mentioned at Serial No. 3 vide work order No. BCCL : WWZ : CIVIL : WORK ORDER : 2000-01 : 375 dated 24.2.2001. It is relevant to mention here that the work was allotted to the petitioner verbally with a stipulation to complete the work by 15.1.2001." That was perhaps the reason that before filing the earlier writ petition a legal notice was sent by the petitioner to the respondents, a copy of which has been annexed as Annexure 6 to the instant application. In the said legal notice dated 23.10.2001 the petitioner has made a claim and asked the respondents to pay the entire dues failing which he would be entitled to claim the amount with interest by taking resort to legal remedy available under the scheme both civil and criminal. There is no whisper in the said legal notice about the execution of any agreement with the respondents for the execution of the work. There is no whisper in the said legal notice about the execution of any agreement with the respondents for the execution of the work. The earlier writ petition which was filed by the petitioner being WPC No. 5856/2002 was withdrawn by the petitioner on 29.9.2003 in order to avail alternative forum either in terms of the contract or by filing an application before a Court of competent jurisdiction. The order dated 29.9.2003 passed in W.P. (C) No. 5856 of 2002 reads as under : "Head Mr. A.K. Sahani, learned counsel appearing for the petitioner and Mr. A.K. Mehta assisted by Mr. Rupesh Kumar. The petitioner in the instant case prays for an appropriate direction upon the respondents to pay his dues in relation to the work undertaken and completed by him. The details of the work done has been specified in paragraph 7 of the writ application and the petitioner has stated with reference to Annexures 4, 5 and 6 that there cannot be any dispute in relation to the entitlement of the petitioner to the bills submitted by him. However, from the pleadings made, it is apparent that the matter relates to a money claim and in paragraph 4 of the counter affidavit, the respondents have clearly stated that the petitioner had served a legal notice upon them. They have further stated at paragraph 8 that the claims made by the petitioner are disputed. In that view of the matter Mr. A.K. Sahani, learned counsel for the petitioner sought leave of this Court to be allowed to withdraw this writ application so as to enable the petitioner to avail the alternative forum indicated either in the contract or by filing a suit before a Court of competent civil jurisdiction. Consequently, the writ application is allowed to be withdrawn and liberty sought for is granted. The petitioner may opt for either of the two forum as indicated above." 6. The petitioner, thereafter, sent a notice dated 24.10.2003 to the respondents asking them to appoint an Arbitrator. In the said notice also there is no mention of any agreement entered into between the petitioner and the respondents. 7. The High Court of Jharkhand framed a scheme for appointment of Arbitrator by the Chief Justice of the High Court called "Appointment of Arbitrators Scheme, 2001". In the said notice also there is no mention of any agreement entered into between the petitioner and the respondents. 7. The High Court of Jharkhand framed a scheme for appointment of Arbitrator by the Chief Justice of the High Court called "Appointment of Arbitrators Scheme, 2001". Clause 2 of the said Scheme categorically provides the procedure of filing a request petition under Section 11(6) of the Act. The application must be duly verified in the manner prescribed in Order VI, Rule 15 of the Code of Civil Procedure, 1908 and every such application shall be accompanied by original Arbitration Agreement or attested/certified copy thereof. In the instant case, as noticed above, no such Arbitration agreement has been filed along with the request petition. A copy of the work order was filed separately along with a blank Proforma of the standard terms and conditions which is not related to the instant claim. 8. In the facts and circumstances, when admittedly there is no Arbitration agreement, the jurisdiction conferred upon the Chief Justice or his delegate under Section 11 of the Act, cannot be exercised. In the case of Hythro Power Corporation (supra) relied upon by the counsel for the petitioner, the facts of the case was quite different from the facts of the present case. In that case the respondent-Delhi Transco Ltd. issued a notice inviting tenders (NIT) for awarding work of erection, testing and commissioning of balance work of 220 KV DC Tower Line from Samaypur to Mehrauli. The NIT contained Clause 25 which was an arbitration clause. Pursuant to the NIT the appellant submitted its tender. The respondent issued a letter of intent in favour of the appellant. According to the appellant, the respondent also sent a detailed letter showing, acceptance of the award of the work to the appellant. It was also indicated that all terms and condition of the NIT would form the part of the contract. A dispute arose and the appellant sought reference of the dispute for adjudication in terms of the arbitration clause. The respondent resisted the petition on the ground that it cannot be referred to arbitration in terms of Clause 25 contained in NIT. A dispute arose and the appellant sought reference of the dispute for adjudication in terms of the arbitration clause. The respondent resisted the petition on the ground that it cannot be referred to arbitration in terms of Clause 25 contained in NIT. On these facts their Lordship of the Supreme Court held that the dispute whether the letters and exchange of correspondences between the parties pursuant to NIT can constitute a contract and an arbitration clause can form part of the contract, is a question which is solely within the jurisdiction of the arbitral tribunal. 9. In the instant case, as noticed above the petitioner categorically stated in paragraph 6 of the application that the work was allotted to him verbally and he, after completing the work, submitted bills but the respondents did not pay the amount. In view of this admitted fact and also the fact that the request petition was not filed along with a copy of any agreement duly verified in terms of the scheme of the High Court referred to hereinabove, the question of reference of dispute to the Arbitrator does not arise. 10. At this stage I would like to refer the principles of law laid down by the Supreme Court in the case of Union of India and Ors. v. Dhanwanti Devi and Ors., (1996) 6 SCC 44 , with regard to the binding precedents. Their Lordship observed : "A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in the judgment. Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expression which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expression are to the found. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observations found therein." 11. It would, therefore, be not profitable to extract a sentence here and there from the judgment and to build upon it because the essence of the decision is its ratio and not every observations found therein." 11. Their Lordship further observed : "Therefore, in order to understand and appreciate the binding force of a decision it is always necessary to see what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and, therefore, Judges are not empty and intelligent technique in the use of precedents." 12. In Hythro Power Corporation case, (supra) the Supreme Court has relied upon the earlier decision in the case of Nimet Resources Inc. v. Essar Steels Ltd., (2000) 7 SCC 497 , and quoted the observation made by his Lordship in the said judgment. The observation reads as under :-- "I am conscious of the fact that M. Jagannadha Rao, J. in Wellington Associates Ltd. v. Kirti Mehta, (2000) 4 SCC 272 , held that the jurisdiction of the nominee of the Chief Justice of India to decide the question is not excluded by Section 16 of Act and such a power can be exercised in a suitable case. On this basis, it is no doubt permissible under Section 11 of the Act to decide a question as to the existence or otherwise of the Arbitration Agreement but when the correspondence or exchange of documents between the parties are not clear as to the existence or non-existence of an Arbitration agreement, in terms of Section 7 of the Act the appropriate course would be that the arbitrator should decide such a question under Section 16 of the Act rather the Chief Justice of India or his nominee under Section 11 of the Act. I take this view because the power that is exercised by the nominee of the Chief Justice of India under Section 11 of Act is in the nature of an administrative order. I take this view because the power that is exercised by the nominee of the Chief Justice of India under Section 11 of Act is in the nature of an administrative order. In such a case, unless the Chief Justice of India or his nominee can be absolutely sure that there exists no Arbitration Agreement between the parties it would be difficult to state that there should be no reference to arbitration. Further such a view may not be conclusive in view of the nature of the powers that are exercised under Section 11(6) of the Act." 13. Considering the entire facts and circumstances of the present case and the law discussed hereinabove, I have no doubt in my mind in holding that it is not a fit case for passing an order under Section 11(6) of the Act particularly when there was not an agreement and the work order was allotted to the petitioner verbally and also there is no whisper anywhere about the existence of the Arbitration Agreement. 14. For the reasons aforesaid I find no merit in this Request Petition which is, accordingly, dismissed.