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TMI Blog2019 (5) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... dly it is clear that in case of conflict between the State Act and the Central Act, Central Act would prevail in view of Section 8 of the Bihar Public Works Contract Dispute Arbitration Act, 2008, thirdly, only in cases where the agreement in between the parties is silent with regard to the arbitration being conducted in accordance with the provisions of Arbitration and Conciliation Act, 1996 or in case there is specific stipulation of resolution of the dispute by reference to the State Tribunal, the parties would have a forum of Tribunal under the Bihar State Act, 2008 for resolution of the dispute. The judicial propriety and judicial discipline requires this Court to follow the decision rendered by the Hon'ble Apex Court in identical matters. Since the agreement in question dated 26.2.2015, governed by the provisions of the Standard Bidding document and Clause-25 of the General Condition of contract, provides for settlement of dispute and arbitration to be conducted in terms of the provisions of the Arbitration and Conciliation Act, 1996, the Bihar Public Works Contract Dispute Arbitration Act, 2008 will not apply and the provisions of the Arbitration and Conciliation A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maputra Infrastructure Ltd.), paragraphs no.2 to 6 whereof are reproduced herein below:- (2) The State is aggrieved by the appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Central Act) on the ground that the said Act is excluded by the Bihar Public Works Contracts Arbitration Tribunal Act, 2008 (Bihar Act 21 of 2008) (the State Act). (3) To appreciate the plea raised, it is necessary to refer to the scheme of the State Act as reflected in some of the key provisions. Sections 8, 9 and 22 of the State Act are as follows: 8. Act to be in addition to Arbitration Conciliation Act, 1996.- Notwithstanding anything contained in this Act, and of the provisions Shall be in addition to and supplemental to Arbitration Conciliation Act, 1996 and in case any of the provision contained herein is construed to be in conflict with Arbitration Act, then the latter Act shall prevail to the extent of conflict. 9. Reference to Tribunal and making of award. (1) Where any dispute arises between the parties to the contract, either party shall, irrespective of whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per provisions of the Central Act. Relevant portion of Clause 25 of the said Agreement is as follows:- The arbitration shall be conducted in accordance with provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modification or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under the clause. (5) The scheme of Sections 8, 9 and 22 of the State shows that in the absence of an agreement stipulating the applicability of the Central Act, the State Act applies to works contracts. Since in the present cases, an arbitration agreement exists and stipulates applicability of the Central Act, the State Act will not apply. We, thus, do not find any ground to interfere with the impugned order. (6) The appeals are dismissed. It will, however, be open to the appellant- State to move the High Court for change of Arbitrator, if a case to this effect is made out on an objection of neutrality, as submitted by learned counsel for the State. 3. It is in view of the aforesaid judgment rendered by the Hon'ble Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can award costs. It can award interests. The finality of the decision is fortified by a legal fiction created by making an award a decree of a civil court. It is executable as a decree of a civil court. The award of the Arbitral Tribunal is not subject to the provisions of the Arbitration Act, 1940 and the Arbitration and Conciliation Act, 1996. The provisions of the said Acts have no application. 26. It is clear, therefore, that in view of the aforesaid finding of a coordinate Bench of this Court on the distinct features of an Arbitral Tribunal under 5 the said M.P. Act in Anshuman Shukla case5the provisions of the M.P. Act are saved under Section 2(4) of the AC Act, 1996. This Court while 1 rendering the decision in Va Tech1has not either noticed the previous decision of the coordinate Bench of this Court in Anshuman Shukla5 or the provisions of Section 2(4) of the AC Act, 1996. Therefore, we are constrained to hold that the decision of this Court in Va Tech1 was rendered per incuriam. 27. This was the only point argued before us by the learned counsel for the appellant. 28. The principle of per incuriam has been very succinctly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1983 under Sections 2(4) and 2(5) thereof. Therefore, there cannot be any repugnancy. 41. It is clear from the aforesaid observations that in the instant case the latter Act made by Parliament i.e. the AC Act, 1996 clearly showed an intention to the effect that the State law of arbitration i.e. the M.P. Act should operate in the State of Madhya Pradesh in respect of certain specified types of arbitrations which are under the M.P. Act, 1983. This is clear from Sections 2(4) and 2(5) of the AC Act, 1996. Therefore, there is no substance in the argument of repugnancy and is accordingly rejected. 42. Therefore, the appeal is allowed and the judgment of the High Court which is based on the reasoning of Va Tech2is set aside. This Court holds that the decision in Va Tech1 has been rendered per incuriam. In that view of the matter the arbitration proceeding may proceed under the M.P. Act of 1983 and not under the AC Act, 1996. 53. In order to clarify the point further, what needs to be emphasised is that if the nature of dispute referred to the arbitrator like the instant matter, related to a dispute pertaining to construction, repair, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise and the matter could have been referred to the State Arbitration Tribunal if the dispute between the parties related to any dispute emerging out of execution of works contract which could fall within the definition of works contract given out within the definition of works contract under Section 2(i) of the M.P. Act of 1983. 58. Thus, while holding that the M.P. Act, 1983 should operate in the State of M.P. in respect of certain specified types of arbitration, the appointment of an independent arbitrator by the High Court under the Arbitration and Conciliation Act, 1996 needs to be sustained since the works contract itself is not in existence by virtue of its cancellation and hence this part of the dispute could not have been referred to the M.P. State Tribunal. 5. By referring to the aforesaid judgment rendered in the case of L.G. Chaudhary Engineers and Contractors(supra), the learned Senior Counsel has submitted that more or less similar provisions, as contained in Bihar Public Works Contracts Arbitration Tribunal Act, 2008 (hereinafter referred to as the Bihar Act, 2008 also exist in the M.P. Madhyastham Adhikaran Adhiniyam, 1983 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nguly, J. in para 42 of the reported judgment which reads as follows: (M.P. Rural Road Development case, SCC p. 509, para 42.). 42. Therefore, appeal is allowed and the judgment of the High Court which is based on the reasoning of VA Tech Escher Wyass Flovel Ltd. vs. M.P. SEB is set aside. This Court holds the decision in VA Tech Escher Wayss Flovel Ltd. v. M.P. SEB has been rendered in per incuriam. In that view of the matter the arbitration proceeding may proceed under the M.P. Act of 1983 and not under the Arbitration and Conciliation Act, 1996 . 10. Proceedings under the M.P. Madhyastham Adhikaran Adhiniyam, 1983 ( the State Act) were pending before the M.P. Arbitration Tribunal at Bhopal. The respondent raised an objection that in view of VA Tech Escher Wyass Flovel Ltd. v. M.P. SEB, the Arbitration and Conciliation Act, 1996 will apply and the State Act will not apply. This objection was rejected. The respondent preferred a writ petition. The High Court has upheld the objection and quashed the proceedings under the State Act. 11. The learned counsel for the State has drawn our attention to Section 2(4) of the Central Act, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) SCC 826 at 833, it is contended that the judgment rendered by the Hon'ble Apex Court in the case of M/S Brahmaputra Infrastructure Ltd. (supra) dated 22.3.2018 is per incuriam. It is further pointed out by the learned Senior counsel for the petitioner that the three Judges Bench rendering the aforesaid judgment dated 8.3.2018, though comprise of the same Hon'ble Judges, but surprisingly two contradictory judgments have been passed. Reference has been made by the learned Senior counsel for the petitioner to a judgment reported in 2013(3) PLJR (SC) 225 (Rattiram Ors. v. State of M.P. Ors.), [2014] 16 SCC 623 (Sundeep Kumar Bafna v. State of Maharashtra Anr.) and the one reported in (2004) 1 SCC681 (Babu Parasu Kaikadi (dead) by LRS Vs. Babu (dead) through L.). 9. I have heard the learned counsel for the parties and I find that earlier also this Court had an occasion to deal with the issue under consideration and had set at rest the issue of maintainability of a request case by a judgment dated 17.10.2014 passed in Request Case No. 1 of 2014 (M/S Nilkamal Ltd. v. The State of Bihar Ors.), paragraphs No. 25, 26, 27, 31, 39, 40 and 42 whereof are reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. But the law made by the Legislature of State if it has been reserved for consideration for President and has received his assent, would prevail in that State even if it is repugnant to the law made by Parliament. 27. In the present case the Arbitration and Conciliation Act, 1996 has been legislated by the Parliament whereas Bihar Public Works Contract Disputes Arbitration Tribunal Act, 2008 has been legislated by the State legislature. The Arbitration Act has been enacted following the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985 and the same was placed before the General Assembly of the United Nations recommended that all countries gave due consideration to the said Model Law, in view of the desirability of unifo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ental to Arbitration and Conciliation Act, 1996 and in case of any provision is in conflict with the Arbitration Act, 1996 to the extent of conflict Arbitration Act, 1996 the Central Act, would prevail. This Section itself denotes that State Act is supplemental not supplanting the Arbitration and Conciliation Act, 1996 and to the extent of repugnancy, Central Act will prevail over State Act. So in this situation, certainly, either in terms of the constitution, formulation and mechanism of the State Act can not prevail upon Central Act and to the extent of repugnancy the Central Act will prevail over the State Act. Legislature with its full knowledge has enacted Section 8 where specifically mentioned that the State Act is supplemental and in case of repugnancy Central Act will prevail and as such the argument of the State that in view of Section 22 of the State Act to the extent of nature of work falls under the category of works contract excluded is very hard to be accepted. 30. Sections 9, 10, 11, 12 and 13 of the State Act provide, the establishment of the Tribunal, its practice and procedure. Section 11 of the Act deals with the power of Tribunal. Section 12 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rose about the applicability of the State Act vis- -vis Central Act. The two Judges Bench of Hon'ble Supreme Court could not arrive to a conclusion, matter referred to larger Bench, there the State Act received the assent of the President of India as provided under Article 254 of the Constitution of India but in the present case the State Act was not reserved for assent of President of India and so much so Section 8 of the State Act makes it clear that in case of conflict Central Act will prevail. 41. Let the case be tested from another angle, if the agreement to contract provides a clause of international arbitration relates to work contract, provides the place of arbitration outside India and the law of Britain would apply, directing the party to move to Tribunal under the State Act will be highly inappropriate against the terms of agreement. 42. In this view of the matter, the objection raised by the office about the maintainability of the petition is not sustainable and this Court will proceed with the matter in terms of the provisions of Central Act. 10. Thus, from a bare reading of the aforesaid judgment rendered in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the provisions of the State Act of both the respective States as also have been rendered considering the fact that the M.P. Madhyastham Adhikaran Adhiniyam, 1983 has received the presidential assent whereas the Bihar Public Works Contract Dispute Arbitration Act, 2008 has not received presidential assent. 12. In any view of the matter, judicial propriety and judicial discipline requires this Court to follow the decision rendered by the Hon'ble Apex Court in identical matters and since the Hon'ble Apex Court by the aforesaid judgment dated 22.3.2018, rendered in the case of M/s Brahmaputra Infrastructure Ltd. (supra) has authoritatively laid down the law to be followed with regard to the recourse to be taken in case such as the present one, especially in paragraph-5 thereof, which has already been reproduced herein above in the preceding paragraph, the same is required to be followed in the present case as well. 13. Having regard to the facts and circumstances of the case and the law laid down by the Hon'ble Apex Court in the case of M/S Brahmputra Infrastructure Ltd. (supra), it is held that since the agreement in question dated 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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