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TMI Blog2007 (8) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... ractual services for one or more consultancy packages for supervision of civil works under the supervision consultancy packages. As per the terms of packages the consultant was required to administer services as Engineer ensuring that the contractual clauses related to quality and quantity are respected and the works are implemented with the provisions and specifications within the time schedule. The applicant submitted proposals for one among the packages for supervision of civil work under the supervision consultancy packages and the proposal of applicant was accepted. That the work under the contract could not be completed in time, though the consultancy period was extended by non-applicant. Ultimately the contract was terminated by non- applicant. The applicant claimed his dues upon termination and also claimed release of security deposits, but this prayer was not accepted by the non-applicant. Thereafter the applicant served a notice claiming Rs.68.15 lacs from the non-applicants and by invoking Clause 8.2 of special conditions of contract, submitted panel for approval of the authority to be appointed as an arbitrator to decide the dispute between the parties. Clause 8.2 of sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract. A notice inviting tender was issued for construction of road under the Pradhan Mantri Gram Sadak Yojna and the contract with the applicant was to provide consultancy service for supervision of civil work of aforesaid contractor. (v) Under Clause 10.2 of the agreement a mechanism is provided for resolution of dispute relating to terms and conditions of the contract. Clause 10.2 reads as under: If any dispute or difference of any kind whatsoever shall arise in connection with or out of this contract and which is not amicably settled between consultant and General manager as per provisions of Clause 10.2 of the agreement the same shall be referred for settlement to the dispute redressal committee which shall consist of the following: Chief Executive Officer, MPRRDA - Chairman Chief General Manager of the respective zone - Member General Manager (Tech.) Member Secy. The committee shall give its decision within 60 days. Any party not satisfied with the decision of the committee shall be free to refer the case for arbitration under the provisions of the Arbitration and Conciliation Act, 1996." (vi) That the agreement between the applicant and non-applicant falls un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was agreed by both the parties that the arbitration clause of the terms of contract shall prevail. Reliance is placed to the Apex Court judgment in Delhi Transport Corporation Ltd. v. Rose Advertising [ [2003] 3 SCR 678]. Shri Rajendra Shrivastava, learned Counsel for non-applicant supported the case of the non-applicant as raised in the reply. It is submitted by learned Counsel for non-applicant: (a) That condition no. 3, 4.2, 4.3, 4.4, 4.5, 4.6 and 4.7 defines the nature of work, which was awarded to the applicant under the consultation package. From the perusal of aforesaid clauses, no conclusion can be gathered except that it was a works contract with the non-applicant. (b) That the non-applicant firstly entered into a contract providing construction of rural roads with another contractor and thereafter entered into a contract with the applicant for supervision of aforesaid works contract. The entire supervision was of works contract and the existence of applicant depended on the works contract to be executed by another contractor. In absence of any works contract to the contractors the applicant could not exist, so the contract of applicant falls within the purview of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected with execution, discharge or satisfaction of any such works contract. 7. Reference to Tribunal - (1) Either party to a works contract shall irrespective of the fact whether the agreement contains an arbitration clause or not, refer in writing the dispute to the Tribunal. (2) Such reference shall be drawn up in such form as may be prescribed and shall be supported by an affidavit verifying the averments. (3) The reference shall be accompanied by such fee as may be prescribed. (4) Every reference shall be accompanied by such documents or other evidence and by such other fees for service or execution of processes as may be prescribed. (5) On receipt of the reference under subsection (1), if the Tribunal is satisfied that the reference is a fit case for adjudication, it may admit the reference but where the Tribunal is not so satisfied it may summarily reject the reference after recording reasons therefor. 7-A Reference petition - (1) Every reference petition shall include whole of the claim which the party is entitled to make in respect of the works-contract till the filing of the reference petition but no claims arising out of any other works-contract shall be joi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, prevail in that State. The Adhiniyam of 1983 received the assent of the President on 7th October 1983. The assent was first published in M.P.Gazette Extraordinary dated 12.10.1983. Section 2(3) of the Act of 1996 provides that this part shall not affect any other law in force by which certain disputes may be submitted to the arbitrator. It is a settled law that the Parliamentary law shall prevail over the State law only in case of repugnancy and not otherwise. But Section 2(3) of the Act of 1996 specifically saves the State law in respect of specified matters to which Adhiniyam of 1983 applies. Section 3 and 7 of the Adhiniyam of 1983 specifically provides jurisdiction to the arbitral Tribunal constituted under the Act of 1983 in respect of the disputes which falls under the Adhiniyam of 1983. So the contention raised by the applicant that the Act of 1996 will prevail over the Act of 1983 has no substance. The second contention of applicant is that the Clause 8.2 of the special conditions, provides an arbitration clause and as per the agreement the applicant has rightly filed the present application and respondent is not a public undertaking within the meaning of Section 2(g) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overn their relationship. In the present case, Clause 25 of the agreement is the arbitration clause. Sub-clause (d) of Clause 25 has a bearing on the controversy in hand and therefore same is reproduced as under: Subject to as aforesaid, the provision of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause. The above clause shows that the parties agreed to be governed by the law as in force at the relevant time. Section 85(2) of the 1996 Act recognizes such an agreement between the parties. The conduct of the arbitration proceedings and the participation of the parties therein shows that the parties acted under the 1996 Act. Even the arbitrator proceeded on that understanding and gave his award in pursuance of the 1996 Act. Therefore, the impugned judgment of the High Court appears to be totally unassailable. We are unable to find any ground or reason to differ with the view taken by the High Court on the main issue. The arbitration Clause 10 of the agreement provides as under: 10.2 Dispute Settlement Any dispute between the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tancy for the work of construction/upgradation of rural roads in Madhya Pradesh under the Pradhan Mantri Gram Sadak Yojna scheme. Clause 4.2, 4.3, 4.5, 4.6 and 7.1 are relevant, which provides construction, supervision to check quality of materials and works, measurement of works, scrutinize the claim raised by the contractor and help the management to clear the payment. The petitioner was to monitor progress of the work with certain services as enumerated in Clause 4.6 and to submit various reports as enumerated in Clause 7.1of the scheme. The aforesaid all the works are related to the works contract. Clause 2 of the terms of reference provides objectives for providing consultancy services, which reads thus: 2. Objective The objectives of the proposed Consultancy Services are: i. Proper management of civil works contract as 'Engineer' in terms of civil works contract including field measurements and quality assurance work. ii. Comprehensive supervision of project implementation activities carried out by the Contractors to ensure complete compliance with the drawings, technical specifications and various stipulations contained in the Contract Documents. iii. Effic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s into a contract with any person for construction, repairs and maintenance of road then it becomes a works contract, as defined in Section 2(i). Similarly, definition of "works contract", also include an agreement in relation to all other matters relating to execution of any of the said work i.e., road. In other words, if in execution of main work as in this case road, any other agreement is entered into by State Government with any person for accomplishing execution of road work then the said agreement would also be regarded as "works contract" within the meaning of Section 2(i) ibid. In my considered view, therefore, the agreement in question (Annexure P-1) being in the nature of providing all kind of consultancy services by the petitioner to State Government which are necessary for construction and development of road and hence, it becomes a "works contract" as defined under Section 2(1) ibid. In other words, it is a contract which falls in second category of "works contract" in its inclusive definition namely "all other matters relating to execution of any of the said work" i.e., road. In view of aforesaid settled position, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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