P.K. Balasubramanyan, C.J.@mdashThis appeal is filed by the petitioner in WP (C) No. 6754 of 2002. The appellant is a partnership firm and had entered into three contracts with the respondents. The appellant is hereinafter referred to as the contractor and the respondents as the Department of Road Construction.
2. The contractor had entered into three contracts. Job No. 515 was the subject matter of the contract-dated 18.3.1999. It was for the widening of the national highway between kilometers 53 to 63. The second contract of even date related to Job No. 560, the widening of the national highway from kilometers 67 to 75. The third was Job No. 538 and the contractor entered into a contract for that on 2.7.2000 and it was also for widening of another strip of the national highway. The period for completion of the work in all these contracts was one year.
3. The contractor approached this Court by taking the stand that he had completed the contracts relating to Job Nos. 515 and 516 and that only Job No. 538 remained to be completed. Even though Job Nos. 515 and 516 had been completed, the Department of Road Construction was not closing the agreements relating to those contracts and were seeking to adjust the amounts due to the contractor from Job No. 538, towards amounts allegedly due towards the contracts covering Job Nos. 515 and 516. The contractor prayed for the issue of a writ of mandamus directing the Department of Road Construction not to make any deduction of amounts from any other work undertaken by the contractor; to direct the Department of Road Construction to refund the amounts already so deducted and to declare that the communication informing the contractor of such deductions was ab initio void and illegal and that the amount covered by such deductions be refunded. The Department of Road Construction resisted the writ petition by contending that the disputes were pure disputes arising put of contracts and that the contractor was not entitled to approach this Court under Article 226 of the Constitution of India to have the disputes removed. It was also contended that towards the contract covered by Job Nos. 515 and 516, overpayments have been made and the Department of Road Construction was entitled to adjust such overpayments from the amounts due to the contractor and there was nothing illegal or improper in adjusting that part of the amount covered by over- payment. There was also no inequity in it. The learned Single Judge after referring to the case set out in the writ petition and in the counter-affidavit filed on behalf of the respondents came to the conclusion that certain grounds were mentioned in the counter affidavit for not closing contract Nos. 515 and 516 and in that background, the Court was not inclined to exercise its jurisdiction under Article 226 of the Constitution of India or to direct the respondents to close the contracts without taking into consideration all the aspects and the terms and conditions of the contracts. He held that regarding adjustments also, it was a fit case where the contractor was to be referred to the alternate remedy available to it under law by way of arbitration or by approaching the civil Court. The learned Single Judge found that no satisfactory decision could be rendered in the dispute between the parties on the materials made available. Thus, leaving the contractor to his remedy in a civil Court or elsewhere, the writ petition was dismissed.
4. Challenging the dismissal of the writ petition, this appeal was filed. Apart from contending that the learned Single Judge should have decided the disputes in these proceedings itself without driving the parties to a litigation in the civil Court, counsel for the appellant, the contractor, sought to contend that there was an identical arbitration clause in the three agreements entered into between the parties and it was a fit case where this Court, in this appeal, should appoint an Arbitrator for taking a decision on the disputes. In fact on an earlier occasion when the matter came up and when this suggestion came up, the Division Bench presided over by the Chief Justice (this is mentioned in the context of Section 11(6) of the Arbitration and Conciliation Act, 1996), asked counsel for the Department of Road Construction whether the respondents were wiling to have an Arbitrator appointed in this proceeding, though this arose from a proceeding, initiated under Article 226 of the Constitution of India and the appeal was under Clause 10 of the Letters Patent. The contractor also filed an additional affidavit expressing its willingness to have the disputes arbitrated upon by any one of the persons mentioned in that affidavit, to be appointed as an Arbitrator by this Court. But counsel for the Department of Road Construction, on instructions, submitted that there was no arbitration clause in the agreements and the respondents were not in a position to agree to have an Arbitrator appointed in the circumstances. Counsel submitted that excess amounts have been paid towards contract Nos. 515 and 516 and all that has happened is to recover the said over payments by way of adjustment of the amounts due to the contractor and since nothing unjust or inequitable was involved, the respondents were not in a position to agree to the appointment of an Arbitrator. Counsel contended that the writ petition was not maintainable. He also pointed out that the works done in certain portions were found to be sub-standard quality and the contractor was asked to rectify the defects and the same remained to be done any in that situation, there is no question of any amount being due to the contractor or of the contracts being closed as claimed by the contractor.
5. On the contractual disputes that have arisen, it is clear that the learned Single Judge could not be faulted for declining to exercise jurisdiction under Article 226 of the Constitution of India and in leaving the contractor to approach the civil Court or an alternate forum of arbitration for setting the disputes. On our part, we are fully inclined to agree with the stand adopted by the learned Single Judge on the facts and in he circumstances of the case. We are also satisfied that the disputes cannot satisfactorily be decided in this proceeding under Article 226 of the Constitution of India. We are, therefore, one with the learned Single Judge in declining jurisdiction under Article 226 of the Constitution of India. In fact, learned counsel for the contractor, the appellant, did not pursue this aspect of the case, but really concentrated his fire on getting an Arbitrator appointed.
6. According to learned counsel for the respondents, the Department of Road Construction, the clause for arbitration in such agreements had been one away with by virtue of the decision dated 18.11.1992 taken by the Government, as can be seen from Annexure-A produced along with the counter affidavit filed in the Letters Patent Appeal on behalf of the respondents on 11.11.2003 and in that context, the mere fact that in the contracts entered into in the years'' 1999 and 000. Clause 23 thereof had not been specifically struck out, would not enable the contractor to claim the existence of the arbitration clause and to seek the appointment of an Arbitrator. It was also submitted that this was not a proceeding under the Arbitration and Conciliation Act, 1996 or a proceeding invoking the jurisdiction of the Chief Justice or his nominee u/s 11(6) of the Act and in that situation, the question of appointment of an Arbitrator does not arise. It was further submitted that an excess payment had been made and an adjustment has been made and since nothing unjust was done, there was no reason for this Court to take the extraordinary step of appointing an Arbitrator in this proceeding initiated by the contractor. I appears that Clause 23 of the contract providing for a resolution of the disputes referred to therein by the Superintending Engineer, was not specifically struck out in these contracts, though it appears that the Government had taken a decision to do away with the arbitration clause in the year 1992 as submitted by the learned Government counsel by way of an order. Of course, there was some controversy before us as to whether that decision of the Government was carried into effect by the concerned Gazette notification being published. Counsel for the contractor had a case that the contractor had no notice of doing away with the arbitration clause in such contracts and in that situation, a decision cannot now be taken that there was no arbitration clause in the contract.
7. Clause 23 of the contract, which had not been struck out in those contracts, entered into by the parts, provides for the resolution of disputes by the Superintending Engineer. This is not a case where the said clause was invoked seeking resolution of the disputes by the Superintending Engineer and on a failure to respond, the Chief Justice or his nominee was being approached in terms of Section 11(6) of the Arbitration Act. Of course, if such an approach had been made, in the light of the decision of the Supreme Court in
8. We must also remind ourselves that we are siting in appeal over the decision of the learned Single Judge, who declined to exercise his discretionary jurisdiction under Article 226 of the Constitution of India. In his proceeding, wherein undoubtedly, contractual disputes have been sought to be raised before this Court, we have necessarily to agree with the learned Single Judge in the stand adopted by him. With respect, he is justified in thinking that this is not a fit case for exercise of jurisdiction by this Court under Article 226 of the Constitution of India. The learned Single Judge has left the contractor to other remedies available under law either by approaching the civil Court or by way or seeking arbitration. In this context, we are also of the view that it is not necessary or appropriate to consider in this appeal whether an Arbitrator should be appointed to decide all the questions, including the question whether there exists a valid arbitration clause in the agreements between the parties and the scope of the clause relied upon.
In this situation, we decline to grant any relief to the appellant. Agreeing with the learned Single Judge, we dismiss this appeal without prejudice to the rights of the appellant, if any, to pursue other remedies that may be open to it.
