1. Present Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 has been preferred by the petitioner for an appropriate order to appoint sole Arbitrator or Arbitrators for deciding the disputes and differences that have arisen between the parties as regards Work Order / Contract dated 05.09.2002.
2. That the Government of Gujarat decided to implement an ambitious project estimated to cost Rs.4700 Crores for supply of drinking water to Saurashtra, Kachchh, North Gujarat and Panchmahals covering 8215 villages and 135 urban centers. That as it was major project requiring hi-tech engineering and management inputs in the field of water supply, civil engineering, mechanical engineering, electrical and electronic engineering, project finance, project management, operational management etc., it was resolved by Government of Gujarat to create and establish a company to be named as 'Gujarat State Drinking Water Infrastructure Company Limited' under the provisions of the Companies Act, 1956. That said Company was registered as Government company with the Registrar of Companies at Ahmedabad under the provisions of the Companies Act, 1956. That said Company had ownership pattern by way of equity participation initially to the extent of 49.5% from the Government of Gujarat, 49.5% from the Gujarat Water Supply and Sewerage Board. That respondent Company to achieve ultimate goal of implementing the said project for supply of drinking water was in need of consultant / consultancy services for obtaining Right of User (ROU) under the Gujarat Water and Gas Pipeline Act, 2000. Therefore, contract / agreement was entered into between the petitioner and respondent no.1 for consultancy services for undertaking work ROU under the aforesaid Act for laying transmission pipelines. Scope of services to be rendered by the petitioner was :
To collect village records 7/12, record of rights form no.6 and village form 8A.
To obtain sales statistics of concerned villages for last 5 years & other related information.
To prepare detailed map after completion of fieldwork and mark on the map survey number, record measurements and design in ROU strip of 30 meters.
(a) To prepare notice u/s. 3(1) and serve them as per Rules and Act.
(b) To prepare and serve notices to persons who have taken objections against notification of section 3(1).
To prepare notice u/s. 6(1) and serve them as per Rules and Act.
To prepare Compensation Award u/s. 10 and serve them to every person and before issuing cheques (payment) notice is to be served to concerned persons i.e. legal owner or occupier of land as per concerned village revenue record and to maintain records there of.
All notices to be prepared and served to the land owners / concerned persons as per Act and Rules.
All correspondence to be done as per instruction of CA.
To obtain ROU under Gujarat Water and Gas Pipelines (Acquisition of Right of User in land) Act 2000.
To assist CA in all formalities under the Act & Rules, CA will be provided with a jeep with a good driver.
To prepare estimates for properties, crops & other damages incurred based on measurements supplied by owner.
To prepare all relevant papers on behalf of GWIL.
To ensure legal status of ROU in relevant revenue records after notification u/s. 6(1).
3. It is the case on behalf of the petitioner that pursuant to the above contract and works, the petitioner started the works immediately and the petitioner has completed the works also. However, during the course of execution of the works, a lot of delay intervened because of numerous reasons attributable to the respondents herein and consequently the time for completing execution of these works had to be extended from time to time. That above work has been completed by the petitioner by 05.03.2008 and final bill for the work was also submitted by the petitioner on 28.09.2006 and 28.10.2007 and final bill has also been paid by respondent Company on 02.04.2008. It is the case on behalf of the petitioner that during the above period when extension had to be allowed by the respondent Company and execution of the works by the petitioner was going on, the petitioner had brought to the notice of the respondents that huge losses and financial damage was suffered by the petitioner in view of escalation in overhead expenses, compensation for bank guarantee commission, loss of profit since the petitioner's resource were held up for the works in question, unproductive expenses like salaries paid to the idling staff etc. and the petitioner had also referred to such factors while writing letters for extension in time for executing the works. It is the case on behalf of the petitioner that even after completion of the work, the petitioner had requested the respondents to bear the burden of loss and damages caused by them to the petitioner and it was also brought to the notice of the respondents that loss and damages to the tune of Rs.1.20 Crores were caused to the petitioner and the amount would be over Rs.1.70 Crores when interest on such loss and damages was also considered. It is the case on behalf of the petitioner that by letter dated 23.04.2008, 19.05.2008, 05.06.2008 and 04.07.2008 aforesaid subject was discussed by the petitioner and requests were made to the respondents for paying the above amounts. It is the case on behalf of the petitioner that though all the above letters were received by respondents but there was no response from them. It is the case on behalf of the petitioner that even thereafter, as there was no response and in view of persistent follow-up by the petitioner, ultimately the respondent invited the petitioner for discussion on 24.07.2008 and the petitioner attended the said meeting held on 24.07.2008 but responsible officers of the respondent Company did not attend the meeting, therefore, another meeting was decided to be held for the said purpose. Meeting thereafter fixed for 02.08.2008 was postponed by the respondents and thereafter, no further attempt was made by the respondents to resolve petitioner's grievance. It is the case on behalf of the petitioner that thereafter petitioner served upon respondent specific notice dated 14.08.2008 invoking section 11 of the Arbitration and Conciliation Act, 1996 with regard to the works in question nominating their Arbitrator. However, neither there was any reply to the said notice nor respondents nominated any person as their Arbitrator and therefore, petitioner has preferred present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint sole Arbitrator to resolve dispute between the parties arising out of aforesaid contract.
4. A preliminary objection is raised by the respondents with respect to remedy available to the petitioner to approach Arbitration Tribunal constituted under the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (herein after referred to as 'the Act' for short).
5. Mr.Paresh Dave, learned Advocate appearing on behalf of the petitioner has vehemently submitted that as such looking to services to be provided by the petitioner for which contract was executed between the petitioner and respondent, it does not come within the definition of ' Works Contract'. Therefore, Tribunal constituted under the aforesaid Act would not have jurisdiction to adjudicate and resolve the dispute between the parties. It is submitted that ' works contract' is defined under section 2(1)(k) of the Act and as per the Act for any dispute arising out of works contract , Tribunal constituted under the aforesaid Act would have jurisdiction. It is submitted that as per section 2(1)(k) of the Act, ' Works Contract' means a contract made by the State Government or the Public Undertaking with any other person for the execution of any of its works relating to construction, repairs or maintenance of any building or superstructure, dam, weir, canal, reservoir, tank, lake, road, well, bridge, factory or workshop or of such other work of the State Government, as the case may be, of the Public Undertaking, as the State Government may, by Notification in the Official Gazette specify. It is submitted that contract executed by the petitioner and respondent and services rendered by the petitioner does not fall within any of the work specified in the definition of Works contract . It is submitted that contract executed between the petitioner and respondent no.1 was not for execution of works relating to construction, repairs or maintenance etc. Therefore, it is submitted that this Court would have jurisdiction to appoint sole Arbitrator / Arbitrators to resolve the disputes arising out of the aforesaid contract and Tribunal constituted under the aforesaid Act would not have any jurisdiction.
6. Mr.Paresh Dave, learned Advocate for the petitioner has heavily relied upon decision of Madhya Pradesh High Court in the case of Bhilai Castings and Forgings (P) Limited v/s. M.P.Electricity Board reported in Manu/MP/1120/2006. It is submitted that in the case before the Madhya Pradesh High Court when contract was for manufacture and supply of steel with the Madhya Pradesh Electricity Board and dispute arose between them for payment of money, Contractor approached Arbitral Tribunal constituted under the Madhyastham Adhikaran Adhiniyam, 1983 (similar act), the said Tribunal dismissed said application on the ground of lack of jurisdiction holding that contract in question was not relating to works contract defined under the aforesaid Act and when said order was challenged before the Madhya Pradesh High Court, the Madhya Pradesh High Court dismissed said Revision Application confirming the view taken by the Tribunal that it had no jurisdiction as contract for manufacture and supply of steel does not come within the definition of works contract defined under section 2(1)(i) of the said Act. Relying upon aforesaid decision, it is submitted that in the present case also looking to the services rendered by the petitioner under the contract in question i.e. to collect village records 7/12, record of rights form no.6 and village form 8A and other services as provided and referred herein above, it cannot said that aforesaid consultancy services is/was relates to construction, repair and maintenance etc. as per section 2(1)(k) of the Act. Therefore, it is requested to overrule preliminary objection raised by the respondent and to refer parties to arbitration to resolve dispute between the parties.
7. Mr.H.S.Munshaw, learned Advocate for the respondents has submitted that words defined in Works Contract provided under section 2(1)(k) is required to be given widest meaning and same is of widest amplitude. It is submitted that purpose and object to enact the aforesaid Act is to see that for any dispute between the contractor and the State Government and/or Government Undertaking when contract has been entered into for any other work relating to contraction, repair, maintenance etc., Tribunal constituted under the aforesaid Act would have jurisdiction. It is submitted that any service to be provided by any person / contractor to achieve ultimate goal of construction, repair, maintenance etc. is to be considered as 'works contract' within the meaning of section 2(1)(k) of the Act and restricted meaning to consider contract only for construction, repair, maintenance etc. should not be given while considering works contract. It is submitted that ultimate goal is to lay down pipelines for transmission of water and for that purpose respondent company was required to obtain ROU under the Gujarat Water and Gas Pipeline Act, 2000 and for that purpose contract was executed in favour of petitioner for consultancy service for undertaking work ROU under the aforesaid Gujarat Water and Gas Pipeline Act, 2000 for laying transmission pipelines. Therefore, it is submitted that any contract to provide any service for achieving ultimate result of laying pipelines is to be considered as Works Contract executed by Government / Government Undertaking in favour of contractor as same can be said to be relating to laying transmission of pipelines for supply of water. Therefore, it is requested to dismiss present petition.
8. Heard learned Advocate appearing on behalf of the respective parties at length.
9. It is to be noted that to overcome the acute scarcity of water in the highly drought prone areas of Sautrashtra, Kutch, North Gujarat and Panchmahal District of the State, the Government of Gujarat has initiated action to supply water to these areas through several pipeline projects for transmission of water from Sardar Sarovar based Canal System and Mahi Pipeline system. The Government of Gujarat has setup a Special Purpose Vehicle (SPV) named Gujarat Water Infrastructure Limited to plan, execute and maintain bulk water transmission system. Said Company identified various corridors for laying of these transmission system and as a first step, initiated actions for completing formalities to obtain Right of User (ROU) under Gujarat Water and Gas Pipeline Act, 2000 for laying transmission pipelines. Under the aforesaid contract, petitioner was required to provide work / services as stated herein above. It cannot be disputed that ultimate goal was to supply water through pipelines project and for achieving the same, respondent Company was required to either acquire land for laying down pipeline or to obtain ROU under Gujarat Water and Gas Pipeline Act, 2000. Therefore, it can be said that contract between the petitioner and respondent Company was for execution of works relating to construction, repair, maintenance etc. and the word has to be given widest amplitude and restricting the meaning with respect to actual work of construction, repair, maintenance etc. as sought to be canvassed by the petitioner cannot be accepted. Any contract for any of the work which is for achieving ultimate goal of construction, repair and maintenance such as repairing building, designs to acquire land to have survey etc. is to be considered as works contract within the meaning of section 2(1)(k) of the Act i.e. for execution of its work relating to construction, repair, maintenance etc.. Therefore, contract between the petitioner and respondent no.1 of consultancy service for obtaining ROU under Gujarat Water and Gas Pipeline Act, 2000 which is to acquire Right of User of land for the purpose of laying pipelines for supply of water, can be said to be works contract between the petitioner and respondent as per section 2(1)(k) of the Act. Therefore, Tribunal constituted under the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992, would have jurisdiction to resolve dispute between the parties arising out of aforesaid contract. Therefore, contention on behalf of the petitioner that contract entered into between the petitioner and respondent no.1 cannot be said to be works contract as per section 2(1)(k) of the Act, cannot be accepted.
10. Now so far as reliance placed upon decision of the Madhya Pradesh in the case of Bhilai Castings and Forgings (P) Ltd. (supra) is concerned it is to be noted that on facts said decision would not be applicable to the present case. In the case before Madhya Pradesh High Court contract was awarded for manufacture and supply of steel with Madhya Pradesh Electricity Board and it was specifically found by Madhya Pradesh High Court that contractor failed to show that goods were supplied in connection to work order issued by the M.P.Electricity Board and therefore, there was no 'work contract' between them as defined in section 2(1)(i) of the Madhyastham Adhikaran Adhiniyam, 1983 (Act). Therefore, considering above, Madhya Pradesh High Court confirmed the order passed by the Tribunal rejecting Reference submitted by the Contractor holding that Tribunal constituted under the aforesaid Act would not have jurisdiction. In the present case, admittedly, contract is between petitioner and respondent no.1 and as stated above, same can be said to be Works Contract as defined under section 2(1)(k) of the Act.
11. In view of above, Tribunal constituted under the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 would have jurisdiction to resolve dispute and differences arising out of contract in question and therefore, without further entering into merits of the case and /or other aspect, present petition deserves to be dismissed and accordingly it is dismissed by relegating the petitioner to approach Tribunal constituted under Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992.
With these, present petition is dismissed. No costs.
[M.R.SHAH,J.] satish Top