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2009 DIGILAW 1242 (JHR)

Nagarjuna Construction Company Ltd. v. State of Jharkhand

2009-09-04

GYAN SUDHA MISRA

body2009
Order This is an application for appointment of an Arbitrator under Section 11 (6) read with Section 11 (8) of the Arbitration & Conciliation Act, 1996 on the averment that the applicant M/s Nagarjuna Construction Company Ltd. had been awarded a contract in response to a tender invited by the State. of Jharkhand to execute, inter alia, the work of construction of Earthen Dam, Ogee Chute Profile Spillway, Right Main Canal, Left Main Canal, Approach Channel, Spill Channel, Canal Drop, Cross-Drainage Work, SLR Bridge, Water Escape, Inlet, Distribution Network to irrigate 90% of command area etc. and the petitioner participated in the tender process and was ultimately granted the ,aforesaid tender for executing construction work of Earthen Dam and ancillary work known as 'Suru Reservoir Project'. The order dated 14.8.2004 to that effect was issued by the Joint Secretary, Water Resource Department, Government of Jharkhand and in view of this, an agreement was executed between the applicant and the respondent-State of Jharkhand, wherein Clause-23 had been incorporated. This clause 23 envisages that in case any dispute or difference arises between the parties or either of them upon any question relating to the meaning of the specifications, designs, drawings and instructions or as to the quality of workmanship or materials used on the work or as to the construction of any of the conditions or any clause or thing therein contained or as to any question, claim, rights of the parties or any matters or things whatsoever in any way arising out of or relating to the contract designs, drawings specifications, estimates, instruction order or these conditions or otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof or as to the breach of this contract, then either party shall forthwith give to the other, notice of such dispute or difference in writing and such dispute or difference shall be referred to the Engineer-in-Charge. The E/I will take decision within 30 days, Even if the matter is not resolved it will be referred to the Chief Engineer/Engineer-in Chief where it will be resolved in 45 days. The Clause further indicates that if the party is not satisfied with the decision then the matter may be referred for arbitration on such request as per Rule under the Arbitration & Reconciliation Act, 1996. 2. The Clause further indicates that if the party is not satisfied with the decision then the matter may be referred for arbitration on such request as per Rule under the Arbitration & Reconciliation Act, 1996. 2. The applicant has summed up its case by stating that it had started the work in 2004 and 80% of the work has already been executed by the applicant on the available area. It has also been admitted that the appellant has been paid a sum of rupees twenty three lakhs as against its claim of rupees three Crores payable by the respondent-State for the work already executed, but the same has not been accepted or admitted by the Respondent-State. 3. Hence a dispute arose in regard to the balance payment over and above rupees twenty three lakhs which has been claimed by the applicant from the respondent-State. The applicant, therefore, has come up with a case that the due payment which was claimed by the applicant has not been paid and, therefore, a dispute emerged which was raised before the Engineer-in-Chief as per Clause-23 of the Agreement. It was stated that the Engineer-in-Chief did not resolve the dispute and the respondent-State which had entered into an agreement with the applicant also did not refer the matter to the Arbitrator for adjudication of the dispute despite its provision in the agreement. 4. From the aforesaid facts, it is clear that a dispute between the parties has prima facie arisen bona fide and it is also an admitted position that Clause-23 has been incorporated in the Agreement specifically indicating that the matter shall be referred to the Arbitrator in the event a dispute arises between the contracting parties. 5. The counsel for the parties have also accepted the position that, in fact, a dispute between the parties has arisen and hence the matter is required to be referred for arbitration in view of Section 11 (6) read with Section 11 (8) of the Arbitration and Conciliation Act, 1996. 6. This Court, therefore, ascertained the names of the proposed Arbitrators for referring the dispute for arbitration and finally the counsel for the parties have agreed for appointment of Hon'ble Mr. Justice S.B. Sinha, former Judge of the Supreme Court of India to act and function as an Arbitrator for adjudicating the dispute between the parties and it is informed that his consent has 'also been obtained. Justice S.B. Sinha, former Judge of the Supreme Court of India to act and function as an Arbitrator for adjudicating the dispute between the parties and it is informed that his consent has 'also been obtained. 7. Hon'ble Mr. Justice S.B. Sinha, former Judge of the Supreme Court of India, therefore, is appointed as an Arbitrator to adjudicate the dispute which has arisen between the applicant M/s Nagarjuna Construction Company Ltd., Ranchi and the State of Jharkhand, through Department of Water Resources, Govt. of Jharkhand. The parties, therefore, are directed to approach the Arbitrator for commencing the arbitration proceeding. 8. The application for appointment of an Arbitrator accordingly is allowed and disposed of.