State Act covers works contract disputes even after termination, resolving judicial conflict over Section 2(d) interpretation

The SC resolved a conflict between two judges regarding the applicability of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 versus the Arbitration and Conciliation Act, 1996 in works contract disputes. The Court held that the State Act covers disputes even after contract termination, endorsing Justice Ganguly's interpretation over Justice Gyan Sudha Mishra's contrary view. The decision clarified that Section 2(d) of the 1996 Act supports coverage of post-termination disputes, making Justice Ganguly's position the correct legal interpretation.

---

---

Issues Involved:
1. Appointment of arbitrator under the Arbitration and Conciliation Act, 1996 versus the M.P. Madhyastham Adhikaran Adhiniyam, 1983.
2. Jurisdiction and applicability of the M.P. Act versus the Arbitration and Conciliation Act, 1996.
3. Validity of arbitration proceedings and awards under the respective Acts.
4. Interpretation of Section 2(4) of the Arbitration and Conciliation Act, 1996.

Detailed Analysis:

1. Appointment of Arbitrator under the Arbitration and Conciliation Act, 1996 versus the M.P. Madhyastham Adhikaran Adhiniyam, 1983:
The core issue was whether the appointment of an arbitrator in a dispute arising out of the execution of a 'works contract' should be governed by the Arbitration and Conciliation Act, 1996 or the M.P. Madhyastham Adhikaran Adhiniyam, 1983. The appellants contended that the matter should be covered by the M.P. Act, while the High Court had overruled this objection, relying on the judgment in Va Tech Escher Wyass Flovel Ltd. v. MPSE Board and Anr. (2011) 13 SCC 261.

2. Jurisdiction and Applicability of the M.P. Act versus the Arbitration and Conciliation Act, 1996:
The Supreme Court noted a divergence in views among the judges regarding the applicability of the M.P. Act post-termination of the 'works contract.' Hon'ble Ganguly J. held that the State Act would cover disputes even after termination, whereas Hon'ble Gyan Sudha Mishra J. opined that the M.P. Act did not cover disputes related to the cancellation and termination of contracts. The Court concluded that the view expressed by Hon'ble Ganguly J. was the correct interpretation, emphasizing that the M.P. Act could not be impliedly repealed by the Central Act.

3. Validity of Arbitration Proceedings and Awards under the Respective Acts:
In several appeals, the Court addressed the validity of arbitration proceedings initiated under the M.P. Act. The Court set aside the High Court's orders that had quashed proceedings under the M.P. Act, reaffirming that the State law would prevail in terms of Section 2(4) of the Arbitration and Conciliation Act, 1996. The Court restored the proceedings before the Tribunal and allowed the appeals, emphasizing that the arbitration proceedings should be conducted under the M.P. Act of 1983.

4. Interpretation of Section 2(4) of the Arbitration and Conciliation Act, 1996:
The Court interpreted Section 2(4) of the Arbitration and Conciliation Act, 1996, which states that the provisions of the Central Act would apply to every arbitration under any other enactment unless inconsistent with that enactment. The Court referred to previous judgments, including Dhanrajamal Gobindram v. Shamji Kalidas & Co. (1961) 3 SCR 1020 and Punjab State Electricity Board, Mahilpur v. Guru Nanak Cold Storage & ICE Factory, Mahilpur and Anr. (1996) 5 SCC 411, to conclude that the State law would prevail if inconsistent with the Central Act. Consequently, the Court held that the reference under the State law was valid and could be decided accordingly.

Separate Judgments:
- C.A. No. 974/2012: The appeal was allowed, the High Court's judgment was set aside, and the arbitration proceeding was directed to proceed under the M.P. Act of 1983.
- C.A. No. 2615 of 2018: The Court set aside the impugned order and restored the proceedings before the Tribunal under the State Act.
- C.A. No. 2751 of 2018 and related appeals: The Court set aside the impugned orders and directed the transfer of proceedings to the State Tribunal.
- C.A. No. 2616 of 2018: The impugned judgment was set aside, and the award was restored, clarifying that proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, were not barred.
- C.A. No. 2762 of 2018: The matter was remanded to the High Court for a fresh decision under the M.P. Act.
- SLP(C) No. 19637/2017 and related petitions: The special leave petitions were dismissed.
- C.A. No. 11383/2017: The appeal was disposed of without interfering with the impugned order but clarified that the remedy under the Arbitration and Conciliation Act, 1996, was not affected.
- SLP(C) No. 15059/2011 and related petitions: These matters were listed for a later date.

---