ACE Construction Mines & Mineral Cooperative Society Limited v. Rajasthan State Mines and Minerals Limited
2006-07-26
SHIV KUMAR SHARMA
body2006
DigiLaw.ai
Judgment Shiv Kumar Sharma, J.-Heard rival submissions. 2. The present application has been moved by M/s. ACE Construction Mines and Mineral Cooperative Society Limited (in short applicant) for appointment of arbitrator to decide the dispute between the Applicant Company and Rajasthan State Mineral Development Corporation Limited (in short the RSMDCL) merged with Rajasthan State Mines and Mineral Limited (for short RSMML). 3. The facts in brief are that the applicant is a cooperative society mainly doing the business of transportation of heavy materials. The applicant entered into a contract with RSMDCL for transportation of lime stone gittis from the mining quarries to the railway siding vide letter of intent dated 13.09.2002. The applicant company also entered into a separate contract with RSMML for transportation etc. of lime stone gittis from the mining quarries to the railway siding vide letter of intent dated 12.09.2002. Both the contracts entered into between RSMML and RSMDCL were identical. Clauses G-21.0 to G.21.3 of the contract read as under:- "G-21.0 Arbitration of Disputes G-21.1 If any dispute and/or difference arises at any time or on any matter, herein contained or in relation to this contract, such dispute and/or differences shall be referred to the arbitration as per provision of the Arbitration and Reconciliation Act, 1996. The award of the arbitrator/s will be final and binding on both sides. 1.G.21.2 The venue of the arbitration shall be Jaipur/Udaipur City for RSMDCL/RSMML respectively only and sittings outside Jaipur/Udaipur shall not be held. 2.G.21.3 Jurisdiction: The Court of Jaipur/Udaipur for RSMDCL/RSMML respectively in the State of Rajasthan shall only have the jurisdiction, on any issue arising out of the contract." 4. As per the contract the applicant was required to transport lime stone gittis from crushers at Sanu mining quarries to Jaisalmer Railway siding. The tendered distance of crushers from the railway siding was 112 kms and 126 kms pertaining to RSMML and RSMDCL. Since the RSMDCL and RSMML were not having weigh bridges to weigh multi axle vehicles, carrying gittis had to take longer route of 6.6 kms for weighing. This resulted into increase in the cost of fuel which applicant had to spend in addition to extra wear and tear and time loss of vehicles and the applicant also paid the weighment charges for weighment of multi axle vehicles to the non enroute private higher capacity weighbridge which was notified by the companies.
This resulted into increase in the cost of fuel which applicant had to spend in addition to extra wear and tear and time loss of vehicles and the applicant also paid the weighment charges for weighment of multi axle vehicles to the non enroute private higher capacity weighbridge which was notified by the companies. As per the contract the applicant could have used multi axle vehicles for transportation purpose. The applicant submits that the multi axle vehicles are of superior quality and are having more laden capacities than the uni axle vehicles. The applicant submitted running bills for payment of weighing charges, increased cost on fuel etc. but the RSMML and RSMDCL did not pay the weighing charges and the increased cost of fuel etc. The applicant also did additional work of loader loading of the past stocks of 10.30 mm size byproduct of LS Gittis lying at mines etc. but no payment was released by RSMML. These works were imposed on the applicant by the companies during the subject contract period, in deviation to the specified tendered conditions. The payments payable to the applicant were delayed by RSMML during the contract period. In these circumstances the applicant submitted applications on 010.2005 and 110.2005 for appointment of arbitrator. On request from the companies the applicant continued to work w.e.f. 25.09.2004 till 27.05.2005. For expediting early release of due payments the applicant submitted "No claim certificates to the companies on 18.06.2005 and 20.06.2005. The companies released Rs. 79,52,343 Rs. 81,75,261 pertaining to Mines 1 and Mines 2 total Rs. 16,30,9228.00. The applicant submits that they are yet to receive Rs. 34,41,0423. The applicant further submitted by the applicant. 5. The RSMML filed reply to the application and raised preliminary objection regarding the maintainability of the application. The RSMML submitted that the contract between the parties was entered into in respect of transportation of lime stone gitti from the mines situated at Sanu Limie Stones Mines. Jaisalmer to the Jaisalmer Railway siding and loading the same into wagons. The agreement between the parties was entered at Jodhpur on 210.2003. The agreement in Clause 25 (3) clearly specified that the Court of Jodhpur in the State of Rajasthan shall only have the jurisdiction on any issue arising out of the contract.
Jaisalmer to the Jaisalmer Railway siding and loading the same into wagons. The agreement between the parties was entered at Jodhpur on 210.2003. The agreement in Clause 25 (3) clearly specified that the Court of Jodhpur in the State of Rajasthan shall only have the jurisdiction on any issue arising out of the contract. The application for appointment of Arbitrator, therefore, could not have been filed before this Court at Jaipur and could only have been filed if at all at Jodhpur. No cause of action has arisen at Jaipur and, therefore, the present application before this Court is not maintainable and deserves to be dismissed for want of jurisdiction. The second preliminary objection was that there is no arbitrable dispute between the parties. The applicant had executed a no claim certificate in favour of the respondent. The respondent had also clearly intimated to the applicant that there remains no arbitrable dispute between the parties and, therefore, Arbitrator cannot be appointed. In reply to Para 6 of the application to the respondents averred that Clause G.21 referred by the applicant is contained in the tender document. The relevant portion of the agreement is in Clause 25 which reads as under:- "25.i. If any dispute and/or difference arise at any time or on any matter, herein contained or in relation to this contract, such dispute and or differences shall be referred to the arbitration as per provision of the Arbitration and Reconciliation Act, 1996. The award of the arbitrator/s will be final and binding on both sides. ii. The venue of the arbitration shall be Jodhpur City only and sittings outside Jodhpur shall not be held. iii. TheCourt of Jodhpur, in the State of Rajasthan shall only have the jurisdiction, on any issue arising out of the contract." 6. The respondents averred that the agreement entered into between the parties supersede the terms and conditions of the tender document to the extent of inconsistency therein. The claim of the applicant amounting to Rs. 3,37,39,049/-was denied by the respondents in reply to Para 16 of the application. Complete payment as per agreement has already been made to the applicant and nothing remains due. The respondents also denied the averments of the applicant that they have received the payment under protest.
The claim of the applicant amounting to Rs. 3,37,39,049/-was denied by the respondents in reply to Para 16 of the application. Complete payment as per agreement has already been made to the applicant and nothing remains due. The respondents also denied the averments of the applicant that they have received the payment under protest. The respondents averred that there being no arbitrable dispute, there is no cause for appointment of Arbitrator and the application deserves to be dismissed. 7. It is contended by learned Counsel for the respondent that in view of Clause 25 of the agreement only the Courts of Jodhpur have jurisdiction on any issue arising out of contract and conditions of tender cannot be made applicable since the parties had entered into agreement and gave consent to Clause 25. I find no merit in this contention. Constitution Bench of the Honble Supreme Court in SBP & Co. vs. Patel Engineering Ltd. & Anr. 2005 (8) SCC 618 indicated that power under Section 11 (6) of the Act in its entirety could be delegated by the Honble Chief Justice of the High Court to another Judge of the High Court and designation of the District Judge as the authority under Section 11 (6) of the Act by the Honble Chief Justice is not warranted on the scheme of the Act. 8. Since the instant application, has been made to Honble Chief justice, under Section 11 (6) of the Act, it hardly matters whether it was filed in the main seat at Jodhpur or Bench at Jaipur. Power of Honble Chief Justice under Section 11 (6) of the Act can not be limited to the Courts of Jodhpur only. Thus, Clause 25 of the agreement which restricts the Jurisdiction of Honble Chief Justice, in my opinion, is against the mandate of Section 11 (6) of the Act. 9. That takes me to another preliminary objection raised on behalf of respondents that no arbitrable dispute existed between the parties since the applicant issued no claim certificate in favour of respondents. 10. It appears from averments made in the application that on request from the respondents the applicant continued to work from September 2004 till 27.05.2005 and for expediting early release of due payments the applicant submitted no claim certificates on 18.06.2005 and 20.06.2005. When the respondents released only part payments the applicant received the same under protest.
10. It appears from averments made in the application that on request from the respondents the applicant continued to work from September 2004 till 27.05.2005 and for expediting early release of due payments the applicant submitted no claim certificates on 18.06.2005 and 20.06.2005. When the respondents released only part payments the applicant received the same under protest. Thereafter the applicant asked to appoint arbitrator by submitting application on 010.2005 and 110.2005 but the respondents did not pay any heed to the request made by the applicant. Under these circumstances it cannot be held that no arbitrable dispute exists between the parties. Thus the second preliminary objection raised by the respondents is also devoid of merit. 11. For these reasons, I allow the application and appoint Honble Justice M.R. Calla (Retd.) as arbitrator to resolve the dispute between the parties. The fees and other conditions shall be settled by the Arbitrator.