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2017 DIGILAW 1005 (JK)

Bhawani Traders v. Union Of India

2017-11-14

SANJEEV KUMAR

body2017
JUDGMENT : 1. In this appeal filed by the appellant under Section 37 of the Jammu and Kashmir Arbitration and conciliation Act, 1997 (hereinafter referred as the Act) order passed by the Principal District Judge, Udhampur under Section 9 of the Act, whereby appellants petition has been dismissed and the interim order issued on 10.05.2016 was vacated, is under challenge. 2. The petitioner filed an application under Section 9 of the Act before the Court of Principal District Judge, Udhampur (hereinafter referred to as the trial court) claiming, inter alia, a direction to the respondents not to proceed with the finalization of fresh tender published on 09.03.2016 with respect to the work allegedly executed by the appellant with respect to which dispute had arisen between the appellant and the respondents. The appellant also moved an application for appointment of independent Commissioner for measurement of work done by the appellant under CA No.CEUZ/RAJ-40/2010-11 for the work of completion of incomplete work of construction of high security wall at Nadpur. Application filed under Section 9 of the Act as also the miscellaneous applications filed by the appellant came to be considered by the trial court, who vide order impugned dismissed the application and declined the interim relief claimed by the appellant. Learned trial court, however, directed the respondents to take prompt steps for referring the dispute raised by the appellant to arbitration in terms of Condition 70 of the GCC for timely redressal of the grievance of the appellant. It is against this order the petitioner has approached this Court by way of appeal under Section 37 of the Act, taking various grounds without prejudice to each other. 3. Before considering the ground of challenge taken by the appellant in this appeal, it would be apposite to take note of the facts leading to the filing of this appeal. The appellant, who is an approved contractor of Military Engineering Services (MES), entered into a contract with the Chief Engineer, Udhampur Zone for execution of left over work of erecting high security wall at Nadpur. The work order in its favour was issued and the execution of work was to commence from 07.01.2011 and was to be completed by or before 06.09.2011. It is admitted case of the parties that the contract awarded to the appellant was a written contract to be executed subject to terms and conditions laid down in the contract. The work order in its favour was issued and the execution of work was to commence from 07.01.2011 and was to be completed by or before 06.09.2011. It is admitted case of the parties that the contract awarded to the appellant was a written contract to be executed subject to terms and conditions laid down in the contract. It appears that the appellant could not complete the allotted work within the stipulated period, therefore, extension was granted till 19.11.2012. The appellant again failed to meet the deadline, as a result whereof the respondents cancelled the contract vide letter dated 19.11.2012. The appellant appears to have made several representations to the respondents for revival of the contract, which were considered by the respondents and the work was revived on 15.05.2013 with a direction to the appellant to complete the same by or before 02.09.2014. On the alleged failure and default on part of the appellant to complete the work, respondents again cancelled the work. On cancellation of the work, the respondents constituted a Board of Officers on 15.10.2014 to prepare the inventories of the completed and incomplete work in respect to the allotted work of the appellant. The Board, accordingly, prepared the inventories in absence of the appellant. It is also not in dispute that on 23.09.2016 again at the request of the appellant a Board of Officers was again convened to submit its report to the higher authorities. However, the appellant, though, present during preparation of the inventories did not put his signatures on the report prepared by the Board of Officers with regard to the position of work done by the appellant on spot. It may be noted that in the meanwhile, the respondents also initiated exercise for allotment of the left over work of construction of high security wall at Nadpur and issued fresh advertisement notification for inviting tenders from the eligible contractors. In the context of aforesaid factual background, it appears that the appellant without waiting for the appointment of arbitrator in terms of arbitration clause contained in the contract entered into between the appellant and the respondents, approached the trial Court by way of application under Section 9 of the Act, seeking interim measures so as to prevent the respondents from going ahead with the advertisement notice for allotment of the contract for the left over work of the appellant. The appellant also sought a direction to the respondents to constitute an independent commission to conduct measurements of the work done by it so as to preserve the subject matter of arbitration proceedings to be held by the arbitrator as and when appointed under the contract. The application came to be contested by the respondents. The matter was considered at length by the trial court, who vide order impugned dismissed the application being devoid of merit. 4. I have heard learned counsel for the parties, perused the record and gone through the impugned order. 5. It is the contention of the appellant that in view of the dispute with regard to the work in question having arisen between the appellant and the respondents, which is required to be adjudicated upon by the arbitrator, to be appointed by the respondents, respondents cannot be allowed to go ahead with the allotment of balance work under the contract without first settling its accounts. Learned counsel for the appellant submits that the aforesaid aspect was not considered by the trial court. The contention aforesaid is devoid of any merit for the reason that the appellant, in law, would be entitled to compensation for the breach of contract, if any, made by the respondents and this aspect is required to be adjudicated upon by the arbitrator as and when the same is appointed in terms of the Contract. Learned trial court has already directed the respondents to appoint the arbitrator at the earliest and has held the dispute raised by the appellant as arbitrable. 6. All the issues, which have been raised by the appellant before the trial court and reiterated before this Court are the issues, which form the subject matter of adjudication in the arbitration proceedings. The appellant, however, is only entitled to have the subject matter preserved lest he may be put to an irreparable loss and injury. No doubt, as already observed by the trial court the respondents constituted a Board of Officers for preparing the inventories of the completed and incomplete work of the petitioner but the fact remains that the finding of the Board constituted by the respondents were never accepted by the appellant. No doubt, as already observed by the trial court the respondents constituted a Board of Officers for preparing the inventories of the completed and incomplete work of the petitioner but the fact remains that the finding of the Board constituted by the respondents were never accepted by the appellant. Due to the dispute between the parties, there is apparently lack of trust and in these circumstances, the objection raised by the appellant with regard to the measurements taken by the Board of Officers cannot be said to be wholly unjustified. 7. The record produced before the Court also corroborates the fact that the appellant, though present at the time of taking the measurements by the Board of Officers, refused to sign the proceedings meaning thereby the appellant did not accept the measurements to be correct. Keeping in view the fact that there is total mistrust between the parties because of the dispute that had arisen with regard to the contract and that Section 9 of the Act provides for directing such measures, which are necessary to preserve the subject matter. The modification of the order passed by the learned trial court is, thus, called for. 8. As a matter of fact, all the issues raised by the appellant are those which are required to be adjudicated upon by the arbitrator. However, the preservation of the subject matter, i.e., exact measurements of the work, if any executed by the appellant is required to be preserved lest the appellant would be seriously prejudiced, so would be the proceeding before the arbitrator. For facility of reference the provision of Section 9 of the Act may be noticed:- 9. However, the preservation of the subject matter, i.e., exact measurements of the work, if any executed by the appellant is required to be preserved lest the appellant would be seriously prejudiced, so would be the proceeding before the arbitrator. For facility of reference the provision of Section 9 of the Act may be noticed:- 9. Interim measures etc., by Court A party may before or during arbitral proceedings or art any time after the making of the arbitral award but before it becomes decree of a Court, apply to a Court (i) For the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or (ii) for an interim measure of protection in respect of any of the following matters, namely;- (a) the preservation, interim custody or sale of any goods which are the subject matter of the arbitration agreement; (b) securing the amount in dispute in the arbitration; (c) The detention, preservation or inspection of any property or thing which is the subject-matter of the dispute and arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorizing any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence; (d) Interim injunction or the appointment of a receiver; (e) Such other interim measure of protection as may appear to be Court to be just and convenient, and the Court shall have the same power for making orders as it has for the purpose of and in relation to any proceedings before it. 9. Section 9, thus, expressly permits for grant of interim measure or protection in respect of preservation or inspection of any property or thing, which is subject matter of dispute and arbitration. Therefore, denial of prayer of the appellant for appointment of local commissioner that too in the given facts and circumstances, where the appellant had refused to accept the measurement made by the respondents through Board of Officers, was, therefore, not correct and was apparently occasioned by losing sight of clear mandate of Section 9 of the Act. Therefore, denial of prayer of the appellant for appointment of local commissioner that too in the given facts and circumstances, where the appellant had refused to accept the measurement made by the respondents through Board of Officers, was, therefore, not correct and was apparently occasioned by losing sight of clear mandate of Section 9 of the Act. Recording of measurement by an independent agency in respect of dispute pertaining to the construction work would be most appropriate remedy under Section 9 of the Act and the same cannot be denied by terming it as an attempt to create evidence. In the view I have taken, I am fortified by a judgment of the Delhi High Court in Prima Developers v. Lords Co-Operative Group Housing Society Ltd.; 2009 AIR (Delhi) 131. 10. In view of the aforesaid analysis, this appeal is partially allowed. The Executive Engineer, Public Works(R&B) Division Udhampur is appointed as local commissioner for taking the measurement of the work of the petitioner executed by it under No.CEUZ/RAJ-40/2010-11 with respect to the construction of high security wall at Nadpur. The local commissioner shall take the measurement in the presence of both the parties after properly notifying the parties with regard to the date and time of his visit to the site. The local commission shall complete the measurement work within a period of two weeks from the date of receipt of copy of this order. The remuneration of the Commissioner shall be Rs.10,000/- (ten thousand only), which shall be borne by the appellant. The Commissioner after taking the measurement shall provide copies of his report to both the parties. Order of the learned trial court impugned in this appeal is modified to the aforesaid extent. Consequently, the interim direction passed by this Court on 09.02.2017 shall stand vacated.