Jain Infraprojects Limited Vs. Kolkata Municipal Corporation - Court Judgment

SooperKanoon Citationsooperkanoon.com/76288
CourtKolkata High Court
Decided OnJul-19-2016
JudgeSoumen Sen
AppellantJain Infraprojects Limited
RespondentKolkata Municipal Corporation
Excerpt:
order sheet ap1726of 2015 in the high court at calcutta ordinary original civil jurisdiction original side jain infraprojects limited versus kolkata municipal corporation before: the hon'ble justice soumen sen date : 19th july, 2016. mr.sanjib kumar mal, mr.atanu raychowdhury, ms.reshmi ghosh, mr.p.majumdar, adv.adv.adv.adv.mr.samrat sen, sr.adv.mr.ambar nath banerjee, adv.the court: there is no dispute either as to the existence of an arbitration agreement or that the disputes has arisen out of the said arbitration agreement and are required to be decided and resolved through arbitration. only dispute is with regard to the applicability of the arbitration clause being clause no.24 of the agreement dated 8th november, 2011, or the settlement and dispute resolution clause being clause no.c620. the petitioner has relied upon an agreement dated 8th november, 2011 which contains an arbitration clause being clause no.24 which reads as follows: “24. in the event of any dispute or difference arising out or in connection with this contract the same shall be settled amicably by negotiation between the authorized representatives of both the parties failing which such dispute or difference shall be resolved by an arbitration and conciliation act, 1996 and/or any statutory modifications thereof and the award rendered by the arbitral tribunal shall final and binding on the parties- the venue of arbitration shall be kolkata, india only and the language used shall be english.” the petitioner has also disclosed in the supplementary affidavit the general conditions of contract which also contains a clause relating to settlement of disputes of arbitration being clause no.c620. mr.samrat sen, learned senior counsel appearing on behalf of the respondents has submitted that the petitioner would be required to invoke clause 24 of the agreement dated 8th november, 2011 and not clause c620 where the appointing and accepting authority is mayor, kolkata municipal corporation. the respondents possibly cannot dispute that the general conditions of the contract also govern the agreement but disputes the applicability of the arbitration clause in the general condition. there cannot be any dispute that the general conditions of contract would also govern the agreement dated november 8, 2011. mr.sen has referred to the proviso to the “settlement of dispute and arbitration” clause which curves out an exception to the effect that where otherwise provided in the contract all questions and disputes relating to various matters shall be dealt with as mentioned under the said clause c620. it was under the said clause that there is a reference to an appointing authority before whom the arbitration has to be invoked. the general conditions are contained in the tendered document dated 6th december, 2010. subsequently, an agreement was entered into on 8th november, 2011 between the corporation and the petitioner. the said agreement contains an arbitration clause. clause 24 does not specify the authority before whom the letter of invocation is to be made. clause 25 of the agreement dated november 8, 2011 makes volume i and volume ii of the tendered document, as part of the contract. the said document contains clause c620. in absence of any specific authority being named and/or mentioned in clause 24 of the agreement dated 8th november, 2011, the letter of invocation of the appointing authority being the mayor, kolkata municipal corporation on 17th june, 2015, in my view, does not suffer from any infirmity. the form of letter of invocation is also appended to the general conditions of contract. there is no apparent conflict between clause 24 of the parent agreement and clause c620 of the general terms and conditions. the parties are not in dispute that the dispute raised is arbitrable and is required to be decided by arbitrator. it is not in dispute that the petitioner had raised certain disputes and a notice for appointment of the arbitrator was sent to the respondent authorities by a letter dated 17th june, 2015. the appointing authority, however, has failed to appoint an arbitrator within a period of thirty days from the date of receipt of the said request. the appointing authority appears to have sat over the notice under section 21 of the arbitration and conciliation act, 1996 for a period of more than the judicially recognized outer limit of 30 days. in view of the failure to appoint an arbitrator, the present request has been made for appointment of an arbitrator under section 11 of arbitration and conciliation act, 1996. the petitioner says that upon the failure of the appointing authority to respond to the notice invoking arbitration agreement or appointing an arbitrator within the judicially recognized period of 30 days, such authority has forfeited its right to make any appointment and the hon’ble chief justice and/or her designate can only appoint an arbitrator. in view of the failure to appoint an arbitrator within the judicially recognized period of 30 days, a valuable right has accrued in favour of the petitioner and the petitioner is entitled to carry such a request to the chief justice of this court or her designate. mr.samrat sen, learned senior counsel has expressed an apprehension that the order may be construed to mean that the petitioner would be precluded from raising objection with regard to admissibility of claims of the petitioner by referring to the clause concerning “excepted matters”. in my view, such apprehension is misplaced. in deciding an application under section 11 of the arbitration and conciliation act, the court is not required to go into merits of the claim. under such circumstances, the hon’ble mr.justice bhaskar bhattacharya, the former chief justice of the gujarat high court is appointed as arbitrator at a consolidated remuneration in accordance with the fourth schedule to the amended act of 1996 to be shared by the parties in equal measure at the firs.instance subject to the direction as to costs as may be contained in the final award. the arbitrator is requested to conclude the reference within a period of 15 months of the statement of claim being lodged before him. the application is thus disposed of. hence there shall be no order as to costs. (soumen sen, j.) dg2/snn
Judgment:

ORDER

SHEET AP1726of 2015 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE JAIN INFRAPROJECTS LIMITED Versus KOLKATA MUNICIPAL CORPORATION BEFORE: The Hon'ble JUSTICE SOUMEN SEN Date : 19th July, 2016.

Mr.Sanjib Kumar Mal, Mr.Atanu Raychowdhury, Ms.Reshmi Ghosh, Mr.P.Majumdar, Adv.Adv.Adv.Adv.Mr.Samrat Sen, Sr.Adv.Mr.Ambar Nath Banerjee, Adv.The Court: There is no dispute either as to the existence of an arbitration agreement or that the disputes has arisen out of the said arbitration agreement and are required to be decided and resolved through arbitration.

Only dispute is with regard to the applicability of the arbitration clause being clause no.24 of the agreement dated 8th November, 2011, or the Settlement and Dispute Resolution Clause being clause No.C620.

The petitioner has relied upon an agreement dated 8th November, 2011 which contains an arbitration clause being Clause No.24 which reads as follows: “24.

In the event of any dispute or difference arising out or in connection with this contract the same shall be settled amicably by negotiation between the authorized representatives of both the parties failing which such dispute or difference shall be resolved by an Arbitration and Conciliation Act, 1996 and/or any statutory modifications thereof and the Award rendered by the Arbitral Tribunal shall final and binding on the Parties- The venue of Arbitration shall be Kolkata, India only and the language used shall be English.” The petitioner has also disclosed in the supplementary affidavit the general conditions of contract which also contains a clause relating to settlement of disputes of arbitration being clause no.C620.

Mr.Samrat Sen, learned senior counsel appearing on behalf of the respondents has submitted that the petitioner would be required to invoke clause 24 of the agreement dated 8th November, 2011 and not clause C620 where the appointing and accepting authority is Mayor, Kolkata Municipal Corporation.

The respondents possibly cannot dispute that the general conditions of the contract also govern the agreement but disputes the applicability of the arbitration clause in the general condition.

There cannot be any dispute that the general conditions of contract would also govern the agreement dated November 8, 2011.

Mr.Sen has referred to the proviso to the “Settlement of dispute and Arbitration” clause which curves out an exception to the effect that where otherwise provided in the contract all questions and disputes relating to various matters shall be dealt with as mentioned under the said clause C620.

It was under the said clause that there is a reference to an appointing authority before whom the arbitration has to be invoked.

The general conditions are contained in the tendered document dated 6th December, 2010.

Subsequently, an agreement was entered into on 8th November, 2011 between the Corporation and the petitioner.

The said agreement contains an arbitration clause.

Clause 24 does not specify the authority before whom the letter of invocation is to be made.

Clause 25 of the agreement dated November 8, 2011 makes volume I and volume II of the Tendered Document, as part of the contract.

The said document contains clause C620.

In absence of any specific authority being named and/or mentioned in clause 24 of the agreement dated 8th November, 2011, the letter of invocation of the appointing authority being the Mayor, Kolkata Municipal Corporation on 17th June, 2015, in my view, does not suffer from any infirmity.

The form of letter of invocation is also appended to the general conditions of contract.

There is no apparent conflict between clause 24 of the parent agreement and clause C620 of the general terms and conditions.

The parties are not in dispute that the dispute raised is arbitrable and is required to be decided by arbitrator.

It is not in dispute that the petitioner had raised certain disputes and a notice for appointment of the arbitrator was sent to the respondent authorities by a letter dated 17th June, 2015.

The appointing authority, however, has failed to appoint an arbitrator within a period of thirty days from the date of receipt of the said request.

The appointing authority appears to have sat over the notice under Section 21 of the Arbitration and Conciliation Act, 1996 for a period of more than the judicially recognized outer limit of 30 days.

In view of the failure to appoint an Arbitrator, the present request has been made for appointment of an Arbitrator under Section 11 of Arbitration and Conciliation Act, 1996.

The petitioner says that upon the failure of the appointing authority to respond to the notice invoking arbitration agreement or appointing an Arbitrator within the judicially recognized period of 30 days, such authority has forfeited its right to make any appointment and the Hon’ble Chief Justice and/or her designate can only appoint an Arbitrator.

In view of the failure to appoint an Arbitrator within the judicially recognized period of 30 days, a valuable right has accrued in favour of the petitioner and the petitioner is entitled to carry such a request to the Chief Justice of this Court or her designate.

Mr.Samrat Sen, learned senior counsel has expressed an apprehension that the order may be construed to mean that the petitioner would be precluded from raising objection with regard to admissibility of claims of the petitioner by referring to the clause concerning “Excepted matters”.

In my view, such apprehension is misplaced.

In deciding an application under Section 11 of the Arbitration and Conciliation Act, the Court is not required to go into merits of the claim.

Under such circumstances, The Hon’ble Mr.Justice Bhaskar Bhattacharya, the former Chief Justice of the Gujarat High Court is appointed as Arbitrator at a consolidated remuneration in accordance with the Fourth Schedule to the Amended Act of 1996 to be shared by the parties in equal measure at the fiRs.instance subject to the direction as to costs as may be contained in the final Award.

The Arbitrator is requested to conclude the reference within a period of 15 months of the statement of claim being lodged before him.

The application is thus disposed of.

Hence There shall be no order as to costs.

(SOUMEN SEN, J.) dg2/snn