M/S Nondochand Naiding vs Additional Chief Engineer And Anr

Heard Mr. B. Pathak, learned counsel for the petitioner. Also heard Mr. R.M. Das, learned Standing Counsel, North Cachar Hills Autonomous

Council (NCHAC) appearing for the respondents.

The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator on the ground

that after the dispute has arisen between the petitioner and the NCHAC authorities, in terms of the Arbitration Clause 20.1 of the Special Conditions

of Contract (SCC), the matter is to be referred to the Arbitrator in accordance with the Arbitration and Conciliation Act, 1996.

Mr. R.M. Das, learned Standing Counsel, NCHAC, however, submits that the dispute arose out of termination of the contract by the Executive

Engineer and there is a specific provision under Clause 24.1 of the General Conditions of Contract (G.C.C.) of the Agreement to the effect that if the

contractor is of the view that the decision taken by the Engineer was wrong, the said decision could be referred to the Dispute Review Board, and as

such, there is an Alternative Dispute Resolution Mechanism already in place under the said Agreement and as such, before the said Arbitration Clause

is evoked, the petitioner ought to have evoked the Dispute Resolution Clause as provided under Clause 24.1 of the General Conditions of Contract and

as such, the present petition is not maintainable.

In support of his submission that if there is an existence of an Alternative Resolution Mechanism or forum available, as provided in the Agreement,

the same must be first resorted to, Mr. Das, learned Standing Counsel, NCHAC has relied upon the decision of this Court rendered in Bharat Hydro

Power Corporation Ltd. and Anr. Vs. A.S.E.B. and Anr., reported in 1999 (2) GLT 86 wherein it was held that if there is an alternative forum for

settlement of dispute, the same should be first resorted too.

Mr. Das, learned Standing Counsel, NCHAC has also referred to the decision rendered by the Hon’ble Supreme Court in M.K. Shah Engineers

and Constructions Vs. the State of M.P., (1999) 2 SCC 594 to the same effect.

It has been, accordingly, submitted by learned Standing Counsel, NCHAC that the petitioner should first invoke the said Dispute Resolution

Mechanism as provided under Clause 24.1 of the General Conditions of Contract before invoking the Arbitration Clause.

Mr. B. Pathak, learned counsel for the petitioner, on the other hand, submits that the said Clause 24.1 of the General Conditions of Contract is

applicable when the decision is taken by the Executive Engineer. He further submits that though in the present case, the termination of the contract

was by an order issued by the Executive Engineer, the Executive Engineer had no such authority to terminate the contract inasmuch as only the

“Employer†can terminate the contract as provided under Clause 59.1 of the General Conditions of the Contract, and who is the “Employerâ€

has been also defined under the aforesaid Agreement as the “Additional Chief Engineer, PWD (R&B) Hills, Assam, Haflong.

Under the circumstances, learned the Executive Engineer did not have any jurisdiction or authority to terminate the contract. Only the Additional

Chief Engineer, being the employer, could terminate the contract as provided under Clause 59.1 of the General Conditions of Contract.

Under the circumstances, this itself is also an issue which is required to be considered by the Arbitrator.

Having heard the learned counsel for the parties, this Court would now concur with the submission advanced by the learned counsel for the

petitioner for the following reasons.

Though there is a Dispute Resolution Mechanism provided under Clause 24.1 of the General Conditions of Contract, the said Clause will be

applicable only when the decision taken by the Executive Engineer which is considered to be wrong by the contractor.

In the present case, the contract was terminated by the Executive Engineer, and normally, it would have been required to be referred for the

Dispute Resolution under Clause 24.1 of General Conditions of Contract. However, it is also seen that the Executive Engineer did not have any

authority to terminate the contract. For this purpose, only the “Employer†had the right to do so and the “Employer†has been defined under

the Agreement as Additional Chief Engineer, PWD (R&B) Hills, Assam, Haflong.

This Court is of the view that even if the contract was terminated by the Executive Engineer, but since he did not have any authority, and it could

have been terminated only by the Additional Chief Engineer, PWD (R& B) Hills, Assam, Haflong, the dispute could not be resolved by resorting to

Clause 24.1.

Since the competency of the Executive Engineer to terminate the contract has been also challenged and there is a specific Clause in the Arbitration

Agreement that the “Employer†is the “Additional Chief Engineer, PWD (R &B) Hills, Assam, Haflongâ€, who could terminate the contract

as provided under the General Conditions of Contract, this Court is of the prima facie view that the said Clause 24.1 as urged upon by the learned

Standing Counsel, NCHAC appearing for the respondent will not be applicable.

Accordingly, this Court would hold that the present dispute can be resolved through Clause 20.1 of the Special Conditions of Contract.

Though this Court had made the observation about the lack of competency of the Executive Engineer to terminate the contract, in view of the

definition of “Employer†as “Additional Chief Engineer, PWD (R& B) Hills, Assam, Haflong, this issue is also open to be decided by the

Arbitrator.

Accordingly, for the reasons discussed above, the matter is referred to the Arbitrator.

Accordingly, as also agreed by the parties, this Court appoints Mr. P.C. Phukan, a retired Judge of this Court as the sole Arbitrator, subject to the

declarations to be made under Section 12 of the Arbitration and Conciliation Act, 1996 (as amended) subject to his consent and absence of any

disabling condition.

Parties will accordingly, appear before the learned Arbitrator and thereafter, the learned Arbitrator will proceed with the matter in accordance

with law.

The Registry is directed to furnish a copy of this order to Mr. P.C. Phukan, Retired Judge of this Court, the learned Arbitrator for doing the

needful.

With the above observations and directions, the present petition stands disposed of.