Beas Valley Power Corporation Ltd. v. Pradeep Chand Katoch
2012-10-05
V.K.SHARMA
body2012
DigiLaw.ai
JUDGMENT : V.K. Sharma, J. Since common questions of law and fact are involved in all the above titled applications under Section 8 of the Arbitration and Conciliation Act, 1996 (in short 'the Act'), read with Section 151 of the Code of Civil Procedure, 1908, the same are being disposed of by a common order. 2. Facts necessary for disposal of these applications may be briefly noticed. Beas Valley Power Corporation Limited (in short 'the Corporation'), is the plaintiff in all the above titled civil suits. The defendants in these suits are contractors, who have been awarded different works by the plaintiff-Corporation. Indisputably some of the contractors have also filed civil suits against the plaintiff-Corporation, which are pending trial in the court of the learned Civil Judge (Sr. Division), Joginder Nagar, District Mandi, H.P. Whereas the aforesaid applications under Section 8 of the Act have been moved by the defendants-contractors herein, with a prayer to refer the parties to arbitration, the plaintiff-Corporation herein, has also raised a preliminary objection in its written statements filed before the court at Joginder Nagar, in the aforesaid cases to the effect that those suits cannot proceed further and instead the parties therein are liable to be referred to arbitration. 3. The respective contentions raised on behalf of the parties apart, the learned counsel for the plaintiff-Corporation submits at the very outset that the matter arising out of the above applications under Section 8 of the Act, is squarely covered under judgment dated November 13, 1996 passed by a Division Bench of this Court in FAO No. 142 of 1985, State of Himachal Pradesh v. Surinder Singh, text whereof is as under, which in turn is based on a judgment rendered by the Hon'ble Supreme Court in Vishwanath Sood v. Union of India and another, AIR 1989 SC 952 :- "The appeal is by the State against the judgment of Single Judge of this Court delivered in March 20, 1984 in C.S. No. 45 of 1983. The learned Judge has accepted the award passed by the arbitrator and directed a decree to be passed in terms of the said award.
The learned Judge has accepted the award passed by the arbitrator and directed a decree to be passed in terms of the said award. While doing so the learned Judge has over-ruled the objection raised by the appellant that Clauses 2,3 and 10-C of the agreement could not be made subject matter of the arbitration and the latter had no jurisdiction with regard to the dispute raised by the plaintiff under those clauses. As per the said clauses, decision of the department regarding the quantum of compensation was final and that could not be made subject matter of the arbitration. For coming to the said conclusion and overruling the objection raised by the appellant, the learned Judge has followed with the judgment of the division bench of this court in case Union of India v. Vishwa Nath etc.. I.L.R. 1977 H.P. 543 which was in turn followed by him in case Chaudhry Nurudin and Bros. v. State of H.P., I.L.R. 1983 H.P. 405. 2. It is now brought to our notice by the learned Advocate General that the judgment of the Division Bench of this Court in Union of India v. Vishwa Nath has been reversed by the judgment of the Supreme Court in Vishwa Nath Sood v. Union of India & another, AIR 1989 S.C. 952 . The Supreme Court concluded the arbitration clause and pointed out that the exceptions in the opening words of the arbitration clause, viz. "except where otherwise provided in the contract" placed the question of awarding compensation outside the purview of the Arbitrator. The compensation, determined either by the Engineer-in-Charge or on further reference by the Superintending Engineer was not capable of being called in question before the arbitrator. Thus, the basis of the judgment of the learned Judge in the suit is gone and it is held that clauses 2, 3 and 10C of the agreement between the parties were outside the scope of the arbitrator's jurisdiction. Consequently, the judgment and decree passed by the learned Judge is set aside. The award passed by the arbitrator is also set aside and the case is remitted to the arbitrator for fresh disposal in accordance with law with reference to those matters which fallen under clause 25 of the agreement. The appeal is disposed of accordingly. There will be no order as to costs." 4.
The award passed by the arbitrator is also set aside and the case is remitted to the arbitrator for fresh disposal in accordance with law with reference to those matters which fallen under clause 25 of the agreement. The appeal is disposed of accordingly. There will be no order as to costs." 4. In view of the above, when Clauses 2, 3 and 10-C of the agreement relating to the case of State of Himachal Pradesh v. Surinder Singh, (supra), which admittedly are in pari materia with Clauses 2 and 3 of the agreements under consideration in the present cases, which are extracted herein below, have been held to be outside the purview of arbitration, the present applications under Section 8 of the Act seeking to refer the parties to arbitration, are accordingly dismissed being without any merit:- "CLAUSE 2: The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be essence of contract on the part of the contractor and shall be reckoned from the fifteenth day after the date on which the order to commence the work is issued to the contractor. The work shall throughout the stipulated period of the contract be proceeded with all due diligence and the contractor shall pay as Compensation an amount equal to one percent of such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the amount of the estimated cost of the whole work as shown in the tender, for every day that the work remains un-commenced/unfinished, after the proper dates. And further, to ensure good progress during the execution of the work, the contractor shall be bond in all cases in which the time allowed for any work exceeds one month (save for special jobs) to complete one-eighth of the whole of the work before one forth of the whole time allowed under the contract has elapsed, three-eighth of the work, before one forth of such time has elapsed and three fourth of the work before three fourth of such time has elapsed. However for special jobs if a time-scheduled has been submitted by the Contractor and the same has been accepted by Engineer-in-charge; the contractor shall comply with said time schedule.
However for special jobs if a time-scheduled has been submitted by the Contractor and the same has been accepted by Engineer-in-charge; the contractor shall comply with said time schedule. In the event of the contractor failing to comply with this condition and shall be liable to pay as compensation an amount equal to one percent or such smaller amount as the Superintending Engineer, (whose decision in writing shall be final) may decide on the said estimated cost of the whole work for every day that the quantity of work remains incomplete provided always that the entire amount of compensation to be paid under the provisions of this clause shall not exceed ten percent on the estimated cost of the work as in the tender. CLAUSE 3: The Engineer-in-charge may without prejudice to this right against the contractor in I any respect of any delay or inferior workmanship or otherwise to any claims for damage in respect of any breaches of the contract and without prejudices to any rights or remedies under any of the provisions of this contract or otherwise and whether the date of completion has or have not elapsed by notice in writing absolutely determine the contract in any of the following cases. (i) If the contractor having been given by the Engineer-in-charge a notice in writing to rectify, reconstruct or replace any defective work or that the work is being performed in any inefficient or otherwise improper or unworkman like manner shall omit to comply with the requirements of such notice for a period of seven days thereafter or if the contractor shall delay or suspend the execution of the work so that either in the judgement of the Engineer-in-charge (which shall be final and binding) he will be unable to secure completion of the work by the date for completion or he has already failed to complete the work by that date. (ii) If the contractor being a company shall pass a resolution or the court shall make an order that the company shall be bound up or if receiver or manager on behalf of a creditor shall be appointed or if circumstance shall arise which entitle the Court of Creditor to appoint a receiver or manager or which entitle the court to make a winding up order. (iii) If the contractor commits breach of any of the terms and condition of this contract.
(iii) If the contractor commits breach of any of the terms and condition of this contract. (iv) If the contractor commits any act mentioned in clause 21 thereof. When the contractor has made himself liable for action under any of the case aforesaid, the Engineer-in-charge on behalf of the Nigam shall have powers: (a) To determine or rescind the contract as aforesaid of which termination or rescission notice in writing to the contractor under the hand of the Engineer-in-charge shall be conclusive evidence. Upon such determination or rescission the security deposit of the contractor shall be forfeited and shall be absolutely at the disposal of Nigam. (b) To employ labour paid by the HPJVVN Ltd. and to supply materials to carry out the works or any part of the work debiting the contractor, with at the cost of the labour and the price of the materials (of the amount of which cost and price certified by the Engineer-in-charge shall be final and conclusive against the contractors) and crediting him with the value of the work done in all respects in the same manner and at the same rates as if it had been carried out by the contractor, under the terms of his contract. The certificate of the Executive Engineer as to the value of the work done shall be final and conclusive against the contract or provided always that action under the sub-clause shall only be taken after giving notice in writing to the contractor. Provided also that if the expenses incurred by the Nigam are less that the amount payable to the contractor at his agreement rates, the difference shall not be paid to the contractor.
Provided also that if the expenses incurred by the Nigam are less that the amount payable to the contractor at his agreement rates, the difference shall not be paid to the contractor. (V) After giving notice to the contractor to measure up the work of the contractor and to take such part thereof as shall be un-executed out of his hands and to give it to another contractor to complete in which case any expenses which may be incurred in excess of the sum which would have been paid to the original contractor if the whole work had been executed by him (of the amount of which excess the certificates in writing of the Engineer-in-charge shall be final and conclusive shall be borne and paid by the original contractor and may be deducted from any money due to him by Nigam under this contract or on any other account whatsoever or from his security deposit or the proceeds of sales thereof or a sufficient part thereof as the case may be. In the event of any one or more of the above courses being adopted by the Engineer-in-charge the contractor shall have no claim to compensation for any loss sustained by him by reason of his having purchased or procured any materials or entered into any engagements or made any advances on account or with a view to the execution of the work or the performance of contract. And in case action is taken under order any of the provisions aforesaid, the contractor shall not be entitled to recover or be paid any sum of any work thereto for actually performed under the contract unless and until the Engineer-in-charge has certified in writing the performance of such work and the value payable in respect thereof and he shall only be entitled to be paid the value so certified." 5. All the applications stand disposed of in the above terms.