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2017 (5) TMI 1622 - HC - Indian LawsWorks Contract - nomenclature of agreement - Whether, any agreement by whatever name called, if it falls within the meaning and definition of work contract as defined under Section 2(I) of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 has to be referred for adjudication before the M.P. Arbitration Tribunal constituted under Section 3 of the 1983 Adhiniyam? Held that - In the case of Kamini Malhotra (Supra), the learned single Judge considered the definition of works contract . In addition, the meaning of word building was also considered. It was held that the definition of works contract is in wide spectrum. Its a definition of wide amplitude and application - the nomenclature of agreement is immaterial. Any agreement by whatever name called, if it falls within the meaning and definition of works contract as per Adhiniyam of 1983, it must be treated as a works contract - By applying an artistic linguistic engineering, an agreement can be worded in a unique or a different manner. It may have a different nomenclature but these factors will not determine its real nature. Whether, in view of statutory provisions of Section 7 of the Adhiniyam of 1983, the matter has to be referred to the M.P. Arbitration Tribunal constituted under Section 3 of the 1983 Adhiniyam, even in cases where the parties have incorporated a clause in agreement regarding resolution of dispute by some other forum or under the Arbitration and Conciliation Act, 1996? - Held that - Sub-section (1) makes it clear that the aggrieved party to a works contract may refer its dispute in writing to the Tribunal irrespective of the fact whether there exists any agreement between the parties which contains an arbitration clause or not. Indisputably, the Adhiniyam of 1983 was held to be intra vires - The jurisdiction to decide a dispute in a case of a works contract is with the Tribunal constituted under the Adhiniyam of 1983 - In view of statutory mandate contained in Section 7(i) of the Adhiniyam, the parties to a works contract needs to approach the Tribunal for resolution of their dispute . Whether, the substituted definition of work contract in the M.P. Madhyastham Adhikaran Adhiniyam, 1983 by Act No. 7 of 2017 is clarificatory and is applicable to the pending or future contracts? - Held that - Since intention behind the amendment is to clarify that concession agreement will also fall within the definition of works contract, it will be an amendment by which earlier definition is substituted and not superseded . In other words, there is a difference between supersession and substitution of a provision - the amendment by Act No. 7 of 2017 is clarificatory in nature and is applicable to pending and future contracts. Any other ancillary issues arising out of the reference order - applicants/appellants advanced an alternative submission. It is contended that even if concession agreement is treated to be a works contract, the remedy under the Adhiniyam of 1983 can be invoked only when there exists a dispute between the parties - Held that - The unamended definition of dispute includes any difference relating to any claim valued at ₹ 50,000/- or more. In our view, the words any difference and any claim are much wider than the words used in the amended definition which confined the dispute to the claim of ascertained money . The Legislature has definitely restricted the definition of dispute by consciously employing the words dispute means claim of ascertained money . In unamended definition, any difference relating to any claim which was valued at ₹ 50000/- or more arising out of the execution or non-execution of works contract or part thereto was recognised as a dispute. Whereas, in the amended definition dispute is confined to claim of ascertained money . There is a remarkable difference in the language employed in both the definitions - thus, even if the present agreement is treated as a works contract, the Tribunal will have no jurisdiction to decide the difference between the parties unless it falls within the statutory definition of dispute under the Act of 1983 - A conjoint reading of section 2(d) and section 7 of the Adhiniyam makes it clear that a reference to the Tribunal can be made and entertained only when it is in relation to the dispute . This ancillary issue is answered accordingly. Reference disposed off.
Issues Involved:
1. Definition and scope of "works contract" under the M.P. Madhyastham Adhikaran Adhiniyam, 1983. 2. Applicability of the M.P. Arbitration Tribunal for disputes under the Adhiniyam despite arbitration clauses in agreements. 3. Validity and interpretation of conflicting judgments regarding "works contract." 4. Retrospective application of the amended definition of "works contract." 5. Jurisdiction of the Tribunal under the Adhiniyam to decide disputes involving claims of ascertained money. Issue-wise Detailed Analysis: 1. Definition and Scope of "Works Contract": The Full Bench examined whether agreements, including concession agreements, fall within the definition of "works contract" under Section 2(i) of the M.P. Madhyastham Adhikaran Adhiniyam, 1983. It was concluded that the definition is broad and includes any agreement in writing for the execution of construction, repair, or maintenance work. The Court overruled the judgments in Jabalpur Corridor and Ashoka Infraways, which had previously held that concession agreements do not fall within this definition. The Full Bench emphasized that the nomenclature of the agreement is irrelevant; what matters are the essential ingredients of a works contract, which include written agreements for construction, repair, or maintenance. 2. Applicability of the M.P. Arbitration Tribunal: Section 7 of the Adhiniyam mandates that disputes under works contracts must be referred to the M.P. Arbitration Tribunal, regardless of whether the agreement contains an arbitration clause. This statutory requirement overrides any contrary dispute resolution mechanisms stipulated in the agreement. The Full Bench referenced the Full Bench decision in Shri Shankarnarayan Construction Co. v. State of M.P., which upheld the jurisdiction of the Tribunal under the Adhiniyam for works contracts. 3. Conflicting Judgments on "Works Contract": The Full Bench addressed the conflict between the judgments in Kamini Malhotra, Technogem, D.D. Sharma, and Jabalpur Corridor. It was noted that the earlier judgments (Kamini Malhotra, Technogem, and D.D. Sharma) had interpreted the definition of "works contract" broadly, while Jabalpur Corridor had taken a restrictive view. The Full Bench aligned with the broader interpretation, emphasizing that the definition of "works contract" is wide and inclusive of various construction-related activities. 4. Retrospective Application of Amended Definition: The Court examined whether the amended definition of "works contract" under Act No. 7 of 2017, which included concession agreements, should apply retrospectively. It concluded that the amendment is clarificatory in nature and thus has retrospective effect. This interpretation was supported by the "Statement of Objects and Reasons" for the amendment, which aimed to clarify the inclusion of concession agreements within the definition of "works contract." 5. Jurisdiction of the Tribunal for Claims of Ascertained Money: The Full Bench clarified that the Tribunal under the Adhiniyam has jurisdiction only for disputes involving claims of ascertained money. The definition of "dispute" under Section 2(d) was interpreted to mean claims that are quantified and determined. If a dispute involves claims that are not ascertained in terms of money, such as claims for additional days of operation, it falls outside the Tribunal's jurisdiction. Consequently, parties in such cases may seek resolution under the Arbitration and Conciliation Act, 1996. Conclusion: The Full Bench concluded that any agreement falling within the definition of "works contract" as per the Adhiniyam must be referred to the M.P. Arbitration Tribunal, provided the dispute involves claims of ascertained money. The judgments in Jabalpur Corridor and Ashoka Infraways were overruled. The amended definition of "works contract" was deemed retrospective, and the Tribunal's jurisdiction was limited to disputes involving ascertained monetary claims.
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