Nafr High Court
Case Details
1 2025:CGHC:7310 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 9 of 2024 • M/s G.N. Construction OfÏce at Collectorate Chowk, Ambikapur, District Sarguja Chhattisgarh. Through its Authorized Signatory Mr. Gaurav Singh Aged About 41 Year S/o Mr. Anil Singh, R/o House No. 162, Bhagat Singh Ward, Ambikapur, District - Sarguja Chhattisgarh. ... Applicant versus 1. South Eastern Coalfields Limited Through Chairman SECL HQ, Seepat Road, Sarkanda, Bilaspur Chhattisgarh. 2. General Manager South Eastern Coalfields Limited Raigarh Area, Chhote Atarmuda, Raigarh, Chhattisgarh. ... Respondent For Applicant
Legal Reasoning
: Mr. Harsh Dave, Advocate. For Respondent : Mr. Pankaj Agrawal, Advocate. PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2025.02.13 11:17:50 +0530 10.02.2025 Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. The applicant has prayed for the following relief(s): “a. Appoint an arbitrator as per the provisions of Arbitration and Conciliation Act, 1996 in light of clause 13 of the NIT dated 04.09.2021. 2 b. Pass any such other order as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case..” 3. The facts, in brief, as projected by the applicant are that the applicant is a partnership firm engaged in the business of mining and transportation. The applicant undertakes the said work under a contract with the large and small scale business houses and industries. The applicant firm is headquartered in the State of Chhattisgarh and has its ofÏce in the above-mentioned address. The Respondent are South Eastern Coalfields Limited (SECL), which is the largest coal producing company in the country. The respondent No.1 had floated a Notice Inviting Tender on 04.09.2021 for the purpose of loading and transporting of uncrushed and crushed coal in tipper trucks located in various areas. The scope of work included hiring of tipper trucks for transportation of coal from various coal faces to siding. Surface coal stocks and mobile crusher and for coal transportation from coal stocks to mobile crusher and mobile crusher to railway siding. Further, the tenderers were also required to hire mobile crushers for crushing of (-) 100 mm crushed and uncrushed coals at Jampali OCM, Raigarh area. The applicant, being a reputed partnership firm engaged in the business of mining and transportation amongst other things. The applicant participated in the said tender process and came out as the successful bidder for executing the work so specified therein. Consequently, vide the letter of acceptance dated 15.01.2022 and thereby the work order dated 11.02.2022, the above said assignment was handed over to the applicant as per the terms contained in the agreement executed between the applicant and the Respondent No.1. It is evident from the terms of the contract that the term of the contract will be from 14.02.2022 and 13.02.2025 culminating into a total of 1095 days. It would be pertinent to highlight here that in terms of the contract the applicant was required to 3 submit a Performance Security to the respondent SECL equivalent to 3% of the contract, which was a sum of Rs. 1,00,36,536. The applicant submitted two cheques bearing cheque Nо. 00797BGH22000009 and 00797BGH22000010 for an amount of Rs. 24,34,000 and Rs. 76,02,536/- respectively in the form of Bank Guarantee issued in favour of 'The General Manager SECL', through the Central Bank of India, Ambikapur Branch. Thereafter, the applicant commenced the execution of work awarded on the due date i.e. 14.02.2022 and continued the work with utmost diligence and security til December 2022. As per the terms of the contract, the applicant had also submitted a month wise quantity schedule with respect to the awarded work. Thereafter, the respondent SECL, in complete contravention of the terms of the contract, specifically clause 6.2 of the agreement, the respondent SECL started levying monthly penalty for the alleged shortfall of the quantity of coal. 4. Mr. Harsh Dave, learned counsel for the applicant submits that the respondent SECL alleged that the applicant could not execute the work properly and as a result it could not achieve the monthly target. The levy of such penalty was erroneous as according to the terms of the agreement such evaluation was to be done at the end of every quarter. The said approach adopted by the respondent authorities caused serious prejudice to the applicant the applicant was prevented from improving the shortfall caused in one particular month in the remaining period of the quarter. Also as per the terms of the agreement, the respondent SECL was supposed to review such performance at the end of every quarter. Needless to State that such deviation from the terms of the agreement caused great prejudice to the Petitioner. As the amount and the manner in which the Penalty was levied was also disputed by the applicant, the applicant protested against the same vide a representation dated 27.11.2022 and requested the 4 Respondent SECL to refund the amount so withheld. It is imperative to highlight that the respondent SECL has levied the penalty equivalent to 20% of the contract value of the short fall quantity which was contrary to the terms of clause 6.2 of the contract. 5. Mr. Dave further submits that aggrieved by the inaction of the respondent Authorities, the applicant submitted a detailed representation before the respondent SECL on 17.09.2022 highlighting the said irregularities but to no avail. As the respondent SECL was not taking a decision on the representation of the applicant, the applicant was constrained to approach this Hon'ble Court by way of WPC No. 285/2023. After hearing the parties, this Hon'ble Court vide order dated 17.01.2023 directed the respondent Authorities to decide the representation of the Petitioner considering the grounds raised by it. Thereafter, in order to frustrate the claims made by the applicant the respondent SECL issued a show cause notice to the applicant stating that the work done by the applicant is highly unsatisfactory as allegedly only 36.39% of the work awarded was completed by them. In the said notice the respondent had invoked clause 9.2 of the NIT and had branded the work executed by the applicant as unsatisfactory. The applicant filed a Petition before this Hon'ble court being WPC No. 777 of 2023 challenging the same. This Hon'ble Court vide order dated 13.03.2023 directed the respondent SECL to give the entire details of the show cause notice to the petitoner and the Petition is pending adjudication before this Hon'ble Court. Thereafter, the applicant filed another petition being WPC No. 4465/2023 seeking a direction against the respondent Authorities to disburse the undisputed amount pending at the end of respondent SECL. Undisputedly, the amount of bank guarantee deposited by the Petitioner amounting to Rs. 24,34,000 + Rs. 76,02,536 i.e. Rs. 1,00,36,536/- has been arbitrarily withheld by the respondent Authorities. The said petition was also 5 filed against the unlawful deductions made by the respondent Authorities by violating the terms of the agreement. The said deductions would roughly amount to Rs. 1,46,00,340/-. It is further submitted that under the garb of the said show cause notice, the respondent No.1 has maliciously withheld the amount of a month's bill that was payable to the Petitioner amounting to Rs. 22,00,000/-. It is further submitted that, to this date, respondents have failed to make good their liabilities raising a reasonable apprehension, keeping in view the high-handedness of the respondents, it is clear that they
Decision
would never make good their liabilities. The said petition was disposed off vide order dated 12.10.2023 giving a liberty to the applicants to avail remedies available under the conditions of the contract 6. Mr. Dave also submits that as per clause 13 of the NIT dated 04.09.2021 the applicant preferred a representation on 30.10.2023 before the concerned authority of the respondent SECL for settlement of the disputes mentioned hereinabove but to no avail. Based on the afore-said premise it is apparent that the respondent is not agreeable to settle the disputes amicably and as per the terms of the agreement, meaning thereby parties are not able to appoint an arbitrator mutually with their consent and thus is before this Hon'ble Court for its kind and benevolent indulgence seeking appointment of an independent and impartial arbitrator for arbitrating disputes between the parties herein in terms of the NIT dated 04.09.2021. As per the terms of the agreement, the seat and venue of arbitration is Bilaspur. 7. Mr. Pankaj Agrawal, learned counsel appearing for the respondent relying on the return filed on behalf of respondent, opposes this arbitration request application, however, he submits that the respondent will have no objection if any Arbitrator is appointed by this Hon’ble Court for resolving the dispute that has arisen between the parties. 6 8. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 9. A query was put to learned counsel appearing for the parties as to whether they are agreeable for a common name who can be appointed as Arbitrator, learned counsel for the parties submitted that they would have no objection if any retired Judge of this High Court is appointed as the Sole Arbitrator. They further submit that Hon’ble Mr. Justice V.K. Shrivastava, who is a retired Judge of this High Court may be appointed as the Sole Arbitrator. 10. In view of the above consensus between the learned counsel for the parties, Hon’ble Mr. Justice V.K. Shrivastava a retired Judge of this High Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties. 11. The Registry is directed to communicate this order to Hon’ble Mr. Justice V.K. Shrivastava in the proper address. 12. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 13. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) CHIEF JUSTICE Preeti