SINGLE BENCH v. State of Chhattisgarh & Anr.

HIGH COURT OF JUDICATURE CHHATTISGARH: BILASPUR SINGLE BENCH : A.K. PATNAIK. CJ M.C.C. N0.69 OF 2003 M/S. Integral Construction Company Versus State of Chhattisgarh and another M.C.C. N0.70 OF 2003 M/S. Integral Construction Company Versus State of Chhattisgarh and another M.C.C. N0.71 OF 2003 M/S. Iritegral Construction Company Versus State of Chhattisgarh and another M.C.C-N0.1440F2005 M/S. Shyamlal Agrawal Versus The Managing Director, Chhattisgarh State Ware Housing Corporation and others M.C.C. N0.143 OF 2005 Ramavatar Agrawal Road Construction Pvt. Ltd. Company Versus State of Chhattisgarh and others M.C.C.N0.1S30F2003 M/S. Sheo Constructions, Raipur Versus State of Chhattisgarh and others Presant: Mr. V.R. Rao, Mr. Anand Kumar Tiwari and Mr. Raghvendra Pradhan learned counsel for the applicants. Mr. WS Murthy, Dy. Advocats General, with Mr. Sumesh Bajaj, learned Dy. Govt. Adv. , for the State of Chhattisgarh ^ O RD E R {Passedon 16/09/2005) These are six applications filed by the applicants under Section 11 ofthe Arbitration and Conciliation Act, 1996 making a requestto the Chief Justice of the Chhatfisgarh High Court or any person or designated by him to appoint an arbitrator to decide the disputes between institution the applicants and the respondents.

(2) The applicants havo entered into the contracts with the different departments of the State Government for execution of works. The contract provides for reference of disputes between the parties to arbitratlon. The disputes and dlfferences arising out of or connected with execution, discharge or satisfaction of any such works contract between the contractor and the 'State Government were being decided by the Arbitration Tribunal constituted under the Madhya Pradesh Madhyastham Ac'hikaran Adhiniyam, 1983. The State of Chhattisgarh was carved out of the State of Madhya Pradesh with effect from 01/11/2000 (the appointed day) under the Madhya Pradesh Reorganizatlon Act, 2000. Section 74 (1) of the Madhya Pradesh Reorganization Act, 2000 provided inter alia that the Tribunal constituted under the State Act and havjng jurisdiction over the existing State of Madhya Pradesh shall on and from the appointed day continue to function and exercise jurisdiction ,as existed before the appointed day over the State of Chhattisgarh for si period of two years the Arbitration Tribunal from the appointed day.

As a consequence, the Madhya Pradesh Madhyastham Adhikaran constituted Adhiniyam, 1983 continued to have jurisdiction up to 31710/2002 to decide the disputes and differences between the contractor and the State effect from 01/11/2002. Government arising out of the works contract, but ceased to have such The Madhya Pradesh jurisdiction with Madhyastham Adhikaran Adhiniyam, 1963, however, was adopted and ^tyled as Chhattlsgarh Madhyastliam Adhlkaran Adhlnlyam, 1983 by the State Government of Chhattisgarh by a notification issued under Section 79 of the Madhya Pradesh Reorganization Act, 2000 and the Arbitration Tribunal was constituted by the State Govemment of Chhattisgarh under Section 3 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 with effect from 01/03/2005 and the Arbitration Tribunal so constituted by the State Government started functioning with effect from 02/09/2005. c-0 (. Before 02/09/2005, however, applicants filed these present applications stating therein that they are unable to file applications before the Arbitration Tribunal; as such Arbitration Trlbunal had not been constituted and/or was not functioning in the State of Chhattisgarh.

(3) Mr. V.R. Rao learned counsel appearing for the applicants in M.C.C, Nos.69 of 2003, 70 of 2003 & 71 of 2003, Mr. Anand Kumar T'mari learned counsel appearlng for the applicants in M.C.A. No.144 of 2005 & M.C.C. No.143 of 2005 and Mr. Raghvendra Pradhan learned counsel appearing for the applicant in M.C.C, No.153 of 2003 submitted that admittedly the Arbitration Tribunal constituted under the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 started functioning only on 02/09/2005 but bafore 02/09/2005 the appliiants had filed the present appllcations under Section 11 of the Arbitratlon and Concillatlon Act, 1996 for appointment of an arbitrator as the Arbitration Tribunal was not Thay submitted that functionino in the State of Chhattisgarh. arbitration proceedings had thus commenced before 02/09/2005 and Sub- section (2) of Section 20 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 provides that nothing in sub-sedion (1) shall apply to any arbitration proceedings pending before any authority under the provisions of the Arbitration Act, or any other law relating to arbitration, and such proceedinos may be continued, heard and decided in accordance with agreement or usage or provisions of the Arbitration-Act or any other law re.ating to arbitration in all the stages, as if this Act had not come into force.

They also referred to the provisions of Sub-section (4) of Section 2 of the Arbitration and Conciliation Act, 1998 in support of their submission that the Chhattlsgarh Madhyastham Adhtkaran Adhlniyam, 1983 would be deemed to be an arbitration agreement and the provisions of Arbitration and Conciliation Act, 1996 including Section 11 thereof except in so far as the provisions therein are inconsistent with the provisions of the said Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983. (4) Mr. WS Murthy, Dy. Advocate General, on the other hand, submitted that now the Arbitration Tribunat has been constituted under the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 and had started functioning with effect from 02/09/2005, the applicants should move the said Tribunal for settlement of their disputes with the State Government. 4 £7 (5) Section 20 of the Chhattisgarh Madhyastham AdhiKaran Adhiniyam.

1983 as well as Sub-section (4) of Sedion 2 of the Arbitration and Conciliation Act, 1996 are quoted herein below: "20. Bar ofjurlsdlctlon or clvl) court- (1) As from the constltutlon of the Trlbunal the date of Y-' notwithstanding anything contained in Arbitration Aot, 1940 for the time being in (No. 10 of 1940)or any other law, force, or in any agreement or usage to the contrary, no civil court shal! have jurisdiction to entertain or decide any dispute of which cognizance can be taken by the Tribunat \ under this Act. (1-A) Notwithstanding anything contained in sub- seotion (1), a Civil Court may entertain and decide any dispute of the nature specffied in the said sub-seotion referred to it by a pereon in the capacity of indigent person. (2) Nothing in sub-seotion (1) shall apply to any arbitration prooeeding either pending before any arbitrator or umpire or before any court or authority under the provisions of Arbitration Act, or any other law relating to arbitration, and suoh ptooeedinge may be oontinued, heard and deoide^ in aocordanoe with agreement or usage or provisions of Arbitration Act or any other iaw relating to arbitration in all theirstages, as ifthis Act had not come into force".

Sub-sectlon (4) of Sectlon 2 of the Arbltratlon and Conclllatton Act, 1996 reads as under: "2 the arbitration were pursuant (4) This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as to an drbitration agreement and as if that other enactment were an arbitratlon agreement, except in so far as the provisions of this Part are inoonsistent with that other enaotment or wlth .any rules made thereunder". It will be clear from the provisions of Sub-section (1) of Section 20 that as from the date of the Tribunal no civil court has the constitution of ./-< o Jurisdiction to entertain or decide any dispute of which cognizance can be taken by the Tribunal under the Act. It will be further clear from Sub- section (2) of Sectlon 20 that the provlsions of Sub-section (1) of Sectlon 20 will not apply to any arbitration proceeding pending before any arbitrator or umpire or before any court or authority under the provisions of ^the Arbitration Act or any other law relating to arbitration, The Arbitration Tribunal constituted under the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 and started functioning wiih effect from 02/09/2005 but by the said date each of tha applicants before this Court had made a request to the Chief Justice to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Assuming thatthe Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 was the arbifa-ation agreement behveon the parties as provided in Sub-section (4) of Section 2 ofthe Arbitration and Conciliation Act, 1996, the provisions of Part-l of the said Act of 1996 including Section 11 (6) apply also to arbitration under the Chhattisgarh Madhyastham Adhikaran Adhiniyam, proceedings pending before the Chief Justice stood saved under Sub- section (2) of Section 20 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 I am, therefore, of 1983 the prima facie view that the Arbitration Tribunal under constitution and functioning of Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 w'rth effect from 02-09-2005 would not be a bar for the Chlef Justice to pass an order appointing an arbitrator in these proceedings. (6) Accordingly, 1 appoint Shri Justice B.C. Verma as arbitrator in M.C.C. No,69 of 2003, M.C.C. No.70 of 2003 & M.C.C. No.71 of 2003, Shri JustIceK.L. Shrivastava as arbitrator in M.C.C. No.153 of 2003 and in M.C.C. No.143 of 2005 & M.C.C' No.144 of Shri Justice S.K. Tiwari 2005, subject to their consent. — Sd/- ChiefJustice ^ , BrajesR*