Sompel Jv Pvt. Ltd vs State Of Madhya Pradesh And Another

Heard on admission.

Petitioner is aggrieved by order dated 04/11/2016 passed by the State of Madhya Pradesh through its Urban Development and Environment

Department, Bhopal, whereby representation preferred by the petitioner pursuant to order dated 08.09.2015 passed in Civil Appeal No.6931/2015 has

been rejected.

Relevant facts giving rise to the controversy briefly are that for the development of new township at Thatipur, Gandhi Road, Gwalior, State of Madhya

Pradesh appointed M.P. Housing and Infrastructure Development Board as a supervising agency in the year 2007 on the land admeasuring 30.06

hectares under redensification scheme. The Board on the basis of request for qualification (RFP) invited proposals from the qualified developers as

per terms and conditions stipulated in RFP dated 29.02.2008.

The applicant, M/s Som Distilleries and Breweries Ltd. in consortium with M/s Patel Engineering Ltd was selected as the successful bidder. Letter of

Acceptance was issued on 26.08.2008 requiring the bidder to comply with the terms and conditions within three weeks. The LOI was accepted and

acknowledged on 01.09.2008.

The petitioner, thereafter, sought extension to comply with the stipulations contained in the Letter of Acceptance. The time was extended by the

Empowered Committee till 31.08.2009 with the stipulation that the petitioner shall execute the project development agreement and comply with the

terms and conditions on or before the said date.

Since the petitioner despite affording repeated opportunities and extensions for a period of almost two years failed to comply with the terms and

conditions of Request For Proposal (RFP) and Letter of Acceptance (LOA), the State Government vide Order No.F-23-1/06/32-1 dated 02.08.2010

withdrew the Letter of Acceptance and forfeited the bid security of Rs.Five Crores by invoking bank guarantee submitted by the petitioner.

Whereagainst the petitioner preferred a Writ Petition bearing No.4374/2010 before the High Court. Said writ petition was dismissed by order dated

24.08.2011 whereagainst the petitioner preferred a Civil Appeal No.6931/2015 arising out of the SLP(C) No.24748 of 2011) which was allowed vide

order dated 08.09.2015 in the following terms:-

“Leave granted.

Heard Mr. Vivek Tankha, learned senior counsel for the appellants and Mr. Sunil Gupta, learned senior counsel for the respondents.

Having heard learned counsel for the parties, we are of the considered opinion that the High Court should not have entered into the realm of disputed

questions of fact and thereafter record a number of findings against the appellants. Such an approach is not permissible in exercise of jurisdiction

under Article 226 of the Constitution of India.

On a query being made, learned counsel for the parties very fairly stated that there is no arbitration clause.

Mr. Tankha, learned senior counsel would submit that the appellant is interested to make a representation to the State Government with fresh facts so

that the State Government would be made aware of all the details and thereafter may change its view or mindset but the same may not be possible if

the findings recorded by the High Court are upheld. In our considered view, the submission put forth by learned counsel for the appellants is absolutely

fair and there can be no cavil over the same.

In view of the aforesaid, the order rendered by the High Court is set aside and liberty is granted to the appellants to make a representation with details

within a period of six weeks hence. The same shall be disposed of by the competent authority of the State Government or, if necessary, by constituting

a Committee within a period of eight weeks after affording an opportunity of hearing to the appellants' representative or representatives. Be it noted,

we have not expressed any opinion on the merits of the claim of the appellants. Needless to say, the competent authority or the committee to be

constituted shall consider the matter afresh without being influenced by any view that is taken earlier.

With the aforesaid liberty and direction, the appeal is allowed and the order passed by the High Court is set aside. There shall be no order as to

costs.â€​

It was in furtherance to the directions issued by the Hon'ble Supreme Court, the State Government constituted an Empowered Committee and a

decision was taken by the impugned order on the representation preferred by the petitioner.

At the outset learned Senior Counsel was called upon as to whether when a dispute has arisen out of NIT for proposed contract whether petitioner

has no alternative statutory remedy, learned Senior Counsel referring to the judgment by the Hon'ble Supreme Court dated 08.09.2015 submits that

there is no arbitration cause. However, when attention is drawn to Clause 26.1 and 26.2 of the terms and conditions of the Notice Inviting Tender

which are in the following terms:-

26.1 Amicable Resolution

(a) Save where expressly stated to the contrary in this Agreement, any dispute, difference or controversy of whatever nature between the Parties,

howsoever arising under, out of or in relation to this Agreement (the “Disputeâ€) shall in the first instance be attempted to be resolved amicably in

accordance with the procedure set forth in clause (b) below.

(b) Either Party may require such Dispute to be referred to the Principal Secretary/ Secretary for the Housing and Environment Department of

GoMP, for the time being, for amicable settlement. Upon such reference, both the Parties shall meet at the earliest mutual convenience and in any

event within fifteen (15) days of such reference to discuss and attempt to amicably resolve the Dispute. If the Dispute is not amicably settled within

fifteen (15) days of such meeting between the Parties, either Party may refer the Dispute to arbitration in accordance with the provisions of Clause

26.2 below.

26.2 Arbitration

 (a) Procedure

Subject to the provisions of Clause 26.1, any Dispute, which is not resolved amicably, shall be finally settled by binding arbitration under the Arbitration

and Conciliation Act, 1996. The arbitration shall be by a panel of three arbitrators, one to be appointed by each Party and the third to be appointed by

two arbitrators appointed by the Parties. The Party requiring arbitration shall appoint an arbitrator in writing, inform the other Party about such

appointment and call upon the other Party to appoint its arbitrator. If within fifteen (15) days of receipt of such intimation the other Party fails to

appoint its arbitrator, the Party seeking appointment of arbitrator may take further steps in accordance with Arbitration Act.â€​

learned counsel for the petitioner has no explanation to tender except to state that incorrect statement was made before the Hon'ble Supreme Court

that there is no arbitration clause.

Since there exists an arbitration clause for redressal of the dispute raised by the petitioner, we are not inclined to entertain the petition and dismiss the

same, however, with a liberty to the petitioner to avail the remedy as per the agreement in question.

No cost.