2007 (10) TMI 723 - HC - Indian Laws

Summary

Issues Involved:

1. Whether the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (1983 Adhiniyam) is repugnant to the Arbitration and Conciliation Act, 1996 (1996 Act) under Article 254 of the Constitution.
2. Whether the 1983 Adhiniyam is impliedly repealed by the 1996 Act.
3. Applicability of Section 11(6) of the 1996 Act in the context of disputes arising from works contracts governed by the 1983 Adhiniyam.
4. Whether the arbitration under the 1983 Adhiniyam is statutory or pursuant to an arbitration agreement.

Detailed Analysis:

1. Repugnancy under Article 254 of the Constitution:

The petitioner contended that the 1983 Adhiniyam is void due to repugnancy with the 1996 Act under Article 254 of the Constitution. Article 254(1) states that if a State law is repugnant to a Union law on a Concurrent List matter, the Union law prevails. However, Article 254(2) allows a State law to prevail if it has received the President's assent, unless Parliament enacts a subsequent law on the same matter. The court noted that the 1983 Adhiniyam received the President's assent and thus was not automatically void under Article 254(1). The court further found no express repeal by the 1996 Act, indicating that the 1983 Adhiniyam was not impliedly repealed.

2. Implied Repeal by the 1996 Act:

The petitioner argued that the 1996 Act, being a later law, impliedly repealed the 1983 Adhiniyam. The court examined the provisions of both Acts and concluded that the 1996 Act did not manifest an intention to repeal the 1983 Adhiniyam. Sub-sections (4) and (5) of Section 2 of the 1996 Act explicitly save other enactments providing for statutory arbitration, indicating Parliament's intention to preserve such laws. The court held that the 1983 Adhiniyam was not impliedly repealed by the 1996 Act.

3. Applicability of Section 11(6) of the 1996 Act:

The petitioner sought the appointment of an arbitral tribunal under Section 11(6) of the 1996 Act, asserting that the 1996 Act should govern the arbitration. The court found that the 1983 Adhiniyam provides for statutory arbitration, which is distinct from arbitration pursuant to an agreement. The 1983 Adhiniyam mandates referral to an Arbitration Tribunal for disputes arising out of works contracts, irrespective of an arbitration clause. Consequently, the application under Section 11(6) was deemed not maintainable as the 1983 Adhiniyam governs the arbitration process for works contracts with the State.

4. Nature of Arbitration under the 1983 Adhiniyam:

The court analyzed whether the arbitration under the 1983 Adhiniyam is statutory or pursuant to an arbitration agreement. It concluded that the 1983 Adhiniyam provides for statutory arbitration, as it allows disputes to be referred to a tribunal even without an arbitration agreement. This statutory nature was affirmed by the court's reliance on previous judgments, which established that the 1983 Adhiniyam governs arbitration for works contracts with the State, irrespective of any arbitration agreement.

Conclusion:

The court dismissed the petitioner's application under Section 11(6) of the 1996 Act and the writ petition, holding that the 1983 Adhiniyam is not repugnant to the 1996 Act and is not impliedly repealed. The 1983 Adhiniyam provides for statutory arbitration, which prevails over the provisions of the 1996 Act due to the express saving clauses in Section 2(4) and (5) of the 1996 Act. The application for arbitration under the 1996 Act was therefore not maintainable.