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TMI Blog2007 (10) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the 1983 Adhiniyam, the petitioner filed the M.C.C. under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'the 1996 Act') contending that the 1983 Adhiniyam being repugnant to the provisions of the Act of 1996 is void by operation of Article 254 of the Constitution and making a prayer to the Chief Justice of the High Court under Section 11(6) of the Act of 1996 to appoint an Arbitral tribunal comprising of three members to decide the disputes between the petitioner and the respondents arising under the works contract. The petitioner also filed the Writ Petition under Article 226 of the Constitution making a prayer to the Court to declare that the provisions of the 1983 Adhiniyam were impliedly repealed by the 1996 Act and to declare the provisions of the 1983 Adhiniyam to the extent irreconcilable with the provisions of the 1996 Act as void and unenforceable and to further declare that the parties to the works contract are governed by the provisions of the 1996 Act. The respondents filed an Interlocutory Application (LA. No. 609 of 2003) in the MCC contending that the High Court had no jurisdiction to entertain a dispute arising under the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the 1996 Act therefore covered every matter relating to arbitration including arbitration between a State Government and a contractor arising out of a works contract and the view taken by the Division Bench of this Court in Bhanu Kumar Jain Associates (supra), that the arbitration between the State Government and a contractor arising out of a works contract has been excluded from the provisions of 1996 Act is not correct. Mr. Naganand further submitted that the provisions of 1996 Act and the 1983 Adhiniyam have to be interpreted in the light of Article 254 of the Constitution. He referred to Clause (1) of Article 254 of the Constitution, which provides that if any provision of law made by the Legislature of a State is repugnant to any provision of law made by Parliament, which Parliament is competent to enact with respect to one of the matters enumerated in the Concurrent List, then the law made by Parliament, whether passed before or after the law made by the Legislature of a State, shall prevail and the law made by the Legislature of the State shall, to the extent of repugnancy, be void. He submitted that Clause (2) of Article 254 of the Constitution, however, makes an exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly held that after the Parliament enacted the Central Amendment Act in 1976, amending the provisions of Prevention of Food Adulteration Act, 1954, the State amendment made in the Prevention of Food Adulteration Act, 1954 by the State Legislature of West Bengal by the West Bengal Amendment Act of 1973 with respect to the same matter, stood impliedly repealed under Article 254(1) of the Constitution. Mr. Naganand next submitted that the Division Bench in the case of Bhanu Kumar Jain Associates (supra), has taken a view that Sub-section (4) of Section 2 of the 1996 Act saves other enactments which are inconsistent with the provisions of the 1996 Act and that such other enactments will include the 1983 Adhiniyam and therefore, the 1983 Adhiniyam survives even after the 1996 Act came into force. He submitted that this view taken by the Division Bench in Bhanu Kumar Jain and Associates (supra), is not correct because Sub-section (4) of Section 2 of the 1996 Act is a provision which relates to statutory arbitrations and does not relate to arbitrations pursuant to an arbitration agreement. He submitted that Sub-section (4) of Section 2 of the 1996 Act is pari materia with Section 46 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitration agreement and that the provisions of the 1996 Act will therefore apply to the arbitration agreement between the petitioner and the State of M.P. is thus misconceived. Mr. Shukla cited the decision in Punjab State Electricity Board, Mahilpur v. Guru Nanak Cold Storage Ice Factory, Mahilpur and Anr. AIR 1996 SC 2684 , in which the Supreme Court has held that the provisions of Arbitration Act, 1940 will not apply to statutory arbitration under Section 52 of the Electricity Act, 1910 or under Section 76(2) of the Electricity Supply Act, 1948. He also relied on the decision in Owners and Parties Interested in the Vessel M.V. 'Baltic Confidence' and Anr. v. State Trading Corporation of India Limited and Anr. AIR 2001 SC 3381 , in which the Supreme Court has held that attempts should be made to give meaning and effect to the incorporation clause by which the parties have incorporated the arbitration clause and submitted that by Clause 4.3.29.2 of the conditions of contract, the parties have intended to incorporate the 1983 Adhiniyam for arbitration of disputes between the parties. He submitted that the contention of Mr. Naganand that the arbitration of the dispute betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracted earlier and on which learned Counsel placed considerable reliance as a guide for the determination of the scope of the Act and the policy underlying the legislation, no doubt, indicates the main purposes of the enactment but cannot, obviously, control the express operative provisions of the Act.... Hence we have to look at the language used in the provisions in the 1996 Act to find whether the provisions in the 1996 Act apply to arbitration or disputes arising out of works contract between the State of M.P. or its undertaking and the contractor. The 1996 Act has three parts: Part-I contains provisions relating to arbitration, Part-II contains provisions relating to conciliation and Part-III makes provisions for enforcement of certain foreign awards, Sub-sections (2), (3), (4) and (5) of Section 2 in Part-I of the 1996 Act are clubbed together under the heading Scope and broadly indicate the scope of arbitration under Part-I of the 1996 Act and are quoted herein below: Scope (2) This Part shall apply where the place of arbitration is in India. (3) This Part shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory arbitration will prevail over the provisions of Part-I of the 1996 Act. We may now examine whether the 1983 Adhiniyam is one such other enactment for the time being in force providing for statutory arbitration. That the 1983 Adhiniyam provides for statutory arbitration will be clear from a perusal of the different provisions of the 1983 Adhiniyam. Section 3 of the 1983 Adhiniyam provides that the State Government shall by notification constitute an Arbitration Tribunal for resolving all such disputes and differences pertaining to works contract or arising out of or connected with execution, discharge or satisfaction of any such works contract. Thus, the jurisdiction of the Arbitration Tribunal is to decide all disputes and differences pertaining to works contract or arising out of or in connection with execution, discharge, or satisfaction of any such works contract. Sub-section (1) of Section 7 of the Adhiniyam states that 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 Arbitration Tribunal. This provision in the 1983 Adhiniyam makes it clear that a reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y thousand or more as defined in Clause (d) of Section 2 of the Act of 1983. This is a statutory arbitration which shall be made applicable to all the works contracts arising between private parties and the State and valuation thereof is rupees fifty thousand or more. A detailed procedure with regard to constitution of arbitration Tribunal has been given and it has been provided that no person shall be appointed as Chairman of the Tribunal, unless he is or has been a Judge of a High Court and no person shall be qualified for appointment as a member of the Tribunal unless he is or has been a District Judge of not less than seven years standing, or he is or has been a Revenue Commissioner or has held a post equivalent to the rank of Revenue Commissioner for a total period of not less than five years, or he is or has been Chief Engineer in the service of the State Government in Public Works, Irrigation or Public Health Engineering Department, or a Chief Engineer in the service of the Madhya Pradesh Electricity Board, or a Senior Deputy Accountant General of the office of the Accountant General, Madhya Pradesh for a period of not less than five years. Tenure of five years has been fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but other arbitrations including all arbitrations pursuant to arbitration agreement or consensual arbitration. The language of Sub-section (5) of Section 2 of the 1996 Act is identical to the language of Section 47 of the Arbitration Act, 1940 which provided that the provisions of the Arbitration Act 1940 would be applicable to all arbitrations and to all proceedings thereunder but subject to the provisions of Section 46 and save in so far as is otherwise provided by any other law for the time being in force. In Societe De Traction et D'Electricite Societe Anonyme v. Kamani Engineering Co. Ltd. [1964] 3 SCR 116 , the Supreme Court had the occasion to deal with the identical expression in Section 47 of the Arbitration Act, 1940 and their Lordships held that by the use of the words save in so far is otherwise provided by any law for the time being in force in Section 47 of the Arbitration Act, 1940, the Legislature has clearly made provisions of the Arbitration (Protocol and Convention) Act, 1937 applicable to consensual arbitrations under the Arbitration Act, 1940. Para 19 of the judgment of the Supreme Court in Societe De Traction et D'Electricite Societe Anonyme v. Kamani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Arbitration Tribunal. The words 'works contract' have been defined under Section 2(1)(i) of the 1983 Adhiniyam to mean an agreement in writing for execution of any of the works mentioned therein entered into by the State Government or by an official of the State Government or Public Undertakings or its official for and on behalf of such Public Undertaking and includes an agreement for the supply of goods or material and all other matters relating to the execution of any of the works mentioned therein. Thus, if a works contract, as defined in Section 2(1)(i) of the 1983 Adhiniyam contains an arbitration clause, either party to the works contract will have to refer the dispute to the Arbitration Tribunal as constituted under Section 3 of the 1983 Adhiniyam and cannot refer it to any other arbitrator for arbitration. The 1983 Adhiniyam is, therefore, a law for the time being in force relating to arbitration pursuant to an arbitration agreement between the State Government or its Undertaking and the contractor and is saved under Sub-section (5) of Section 2 of the 1996 Act from the provisions of Part-I of the 1996 Act which are inconsistent with the provisions of the 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the Legislature of a State and the provision of a law made by Parliament, in respect of any particular matter and if there is such repugnancy, the provision of a law made by the Legislature of a State will, be void to the extent of such repugnancy and the provision of the law made by Parliament shall prevail. In such cases, the Supreme Court has held that there may not be any express repeal by a later law made by Parliament on the same subject matter as the earlier law made by the State Legislature but there is implied repeal of the law made by the State Legislature because the later law made by Parliament and the law made by the State Legislature on the same subject matter cannot stand together. This will be clear from the following reasoning adopted by the Supreme Court in Zaverbhai Amaidas v. The State of Bombay (supra), cited by Mr. Naganand: It is true, as already pointed out, that on a question under Article 254(1) whether an Act of Parliament prevails against a law of the State, no question of repeal arises; but the principle on which the rule of implied repeal rests, namely, that if the subject matter of the later legislation is identical with that of the earlier, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion made in the Union law where the State law and the Union law are in respect of the same matter in the Concurrent List to find out whether by operation of Article 254(1) of the Constitution of India, the Union law will prevail over the State law and the State law would be impliedly repealed. In T. Barai v. Henri Ah Hoe and Anr. (supra), the Supreme Court further held that when repeal is by a fresh legislation on the same subject by Parliament, the line of enquiry would be whether the fresh legislation made by Parliament manifests an intention to destroy the rights and liabilities under the law made by a State Legislature and this enquiry has to be done by the Court by looking at the provisions of the new Act. The following passage from Paragraph 18 of the judgment of the Supreme Court in T. Barai v. Henri Ah Hoe and Anr. (supra), as reported in the AIR would make this point clear: 18. ...But when the repeal is followed by fresh legislation on the same subject, the Court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. 'The line of inquiry would be, not whether the new Act exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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