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2007 DIGILAW 757 (GAU)

Subhash Projects and Marketing Ltd. v. Government of Arunachal Pradesh

2007-11-20

J.CHELAMESWAR

body2007
JUDGMENT J. Chelameswar, C.J. 1. These four petitions are filed under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator. The petitioner is one and the same in all these four petitions. 2. The Chief Engineer in the Department of Power, Government of Arunachal Pradesh, invited the sealed tenders for execution of four Hydro Electric Projects known as "Nuranang Hydro Electric Project (3x2 MW)", "Sidip Micro Hydel Project (3x1 MW)", "Liromoba Micro Hydel Project (2x1 MW)" and "Sipit Micro Hydel Project (2x1 MW)" on 26.09.1992 in the case of 1st and 3rd and on 06.09.1992 in the case of 2nd and 4th of the above mentioned projects, respectively. The petitioner was found to be the most competent bidder in all the four cases. Thereafter, agreements were entered into between the petitioner and the respondents on 18.03.1993 in the 1st two cases and on 30.11.1993 in the latter two cases. 3. The total value of the contract in each one of the cases is Rs. 2496.05 lakhs, Rs. 1690.39 lakhs, Rs. 1815.00 lakhs and Rs. 1507.00 lakhs, respectively. 4. Each one of the contracts contained an arbitral agreement under Section 23 of the Part II of the General Conditions of the Contract. The existence of such arbitral agreement is not in dispute. 5. In the 1st case, it is the claim of the petitioner that the contract was executed completely and commissioned the project. It is the further assertion of the petitioner that the Chief Engineer, Department of Power, Government of Arunachal Pradesh issued a certificate on 30.09.1997 certifying that the project was completed and commissioned in July 1996 to the satisfaction of the respondents. 6. In the 2nd case, the petitioner admitted that the contract could not be executed completely. Of course, the petitioner attributed it to the breaches of the obligations arising under the relevant contract on the part of the respondents. The petitioner also made a categorical statement at paragraph 7 of the petition that by letter dated 18.06.2004, the respondents terminated the contract. 7. Coming to the 3rd case, once again, the petitioner admitted that the contract could not be completely executed because of certain breaches of the contractual obligations committed by the respondents. The petitioner also made a categorical statement at paragraph 7 of the petition that by letter dated 18.06.2004, the respondents terminated the contract. 7. Coming to the 3rd case, once again, the petitioner admitted that the contract could not be completely executed because of certain breaches of the contractual obligations committed by the respondents. The petitioner further admitted at paragraph 7 that by letter dated 18.06.2004, the respondents withdrew the civil portion of the project, but requested the petitioner to complete the supply of hydro electric equipments. 8. Coming to the last case, once again, the petitioner stated at paragraph 7 that by letter dated 18.06.2004, the petitioner terminated the contract claiming certain breaches of the contractual obligations on the part of the respondents. 9. It appears from these petitions that during the subsistence of the contract, the petitioner had earlier approached this court seeking appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 for adjudication of certain disputes between the petitioner and the respondents, which arose during the subsistence of those contracts. This court, by its order dated 16.03.2001, appointed a former Chief Justice of this court for adjudicating the said disputes. 10. For the sake of completion of the narration of facts, it must be stated here that during the pendency of the arbitration proceedings, the respondents approached the court as defined under the Arbitration and Conciliation Act and initially obtained a stay of the further proceedings of the arbitrator insofar as the proceedings pertaining to the 2nd, 3rd and 4th of the above mentioned contracts respectively are concerned. 11. Aggrieved by such stay order, the petitioner approached this court earlier and by order dated 26.05.2004, this court vacated the above mentioned interim order in all the above mentioned three cases. 12. I am informed that in all the above mentioned three cases, the arbitrator, eventually, passed the awards, which, in turn, are challenged before the competent court and the adjudication is pending. Insofar as the 1st case is concerned, apparently, no award is passed so far and some adjudication in regard to the maintainability of the proceedings is still pending before the concerned civil court, the details of which are not available on record. 13. Insofar as the 1st case is concerned, apparently, no award is passed so far and some adjudication in regard to the maintainability of the proceedings is still pending before the concerned civil court, the details of which are not available on record. 13. In all the above mentioned four cases, it is the case of the petitioner that the petitioner executed further works subsequent to the raising of the disputes referred to earlier and, therefore, the petitioner is entitled to receive some amount for such works executed. 14. In each of the above mentioned four cases it is the claim of the petitioner that the petitioner once again called upon the respondents to refer the disputes to the arbitrator and as the respondents did not take any steps for referring the disputes raised by the petitioner within thirty days from the date of receipt of the notice in each one of the cases, the petitioner chose to approach this court by way of these present petitions. 15. The respondents are served in all the four cases and filed their affidavit in opposition in each one of the cases and are represented by the learned Advocate General, Mr. N. Dutta. 16. Heard Mr. P.C. Markanda, learned Counsel appearing for the petitioner and Mr. N. Dutta, learned Advocate General, Arunachal Pradesh for the respondents. 17. The learned Counsel appearing for the petitioner reiterated the averments made in these petitions and submitted that in view of the admitted fact that there is an arbitral agreement between the parties for resolving the disputes between the parties and in view of the fact that the respondents did not act upon the notice issued by the petitioner calling upon the respondents to refer the disputes to the arbitrator, the petitioner is entitled in each of the cases to have an arbitrator appointed through these petitions. 18. On the other hand, learned Advocate General argued that huge amount have already been paid by the respondents to the petitioner to the tune of Rs. 35 crores approximately and notwithstanding the tall claims of the petitioner not even a single unit of electricity is generated so far in any one of the projects including the project which the petitioner claims to have successfully completed. The learned Advocate General, therefore, submitted that the petitioner is not entitled for any further relief in these petitions. 19. 35 crores approximately and notwithstanding the tall claims of the petitioner not even a single unit of electricity is generated so far in any one of the projects including the project which the petitioner claims to have successfully completed. The learned Advocate General, therefore, submitted that the petitioner is not entitled for any further relief in these petitions. 19. The fact that there are four contracts between the petitioner and the respondents is not in dispute. The fact that in each one of the cases written agreements were entered into between the parties and each of such agreements contains an arbitration clause is also not in dispute. The fact that the petitioner called upon the respondents in each one of the present cases to refer certain disputes for arbitration is also not in dispute. 20. Whether the claims of the petitioner are bona fide or genuine is a matter which requires an examination by some impartial body. The fact that notwithstanding the receipt of the huge amount of money not even a single unit of electricity is generated in the above mentioned four projects executed by the petitioner completely or partly by itself may not be determinative of the rights and obligations of the parties to the contracts. Assuming for the sake of argument not even a single unit of electricity is generated in anyone of the above mentioned four projects, whether the petitioner is responsible for such state of affairs or is there any act of omission on the part of the respondents which contributed to the existence of such a state of affairs is a matter which is still required to be examined by some impartial body. 21. Therefore, I am of the opinion that all the four petitions are required to be allowed directing the appointment of an arbitrator. It is open to the respondents to raise all the objections either questions of facts or law before the arbitrator. 22. Shri Syed Shah Md. Quadri, a retired judge of the Supreme Court, is appointed to adjudicate the disputes between the parties in each one of the petitions. Petitions are accordingly allowed, but in the circumstances without cost. Registry is directed to communicate a copy of this order to Shri Justice Quadri.