Works contract classification under the M.P. Adhiniyam rejected for a composite concession agreement, preserving arbitration under the 1996 Act.

A concession agreement was held not to fall within the restricted statutory meaning of a works contract under the M.P. Madhyastham Adhikaran Adhiniyam, 1983, because the arrangement, read as a whole and in commercial context, involved design, financing, operation, maintenance and toll collection, together with a State Support Agreement, rather than a contract merely for execution of specified works. The presence of arbitration clauses in the agreement and the State Support Agreement supported reference of disputes under the Arbitration and Conciliation Act, 1996. The respondent's earlier pleading before the arbitral tribunal, describing the arrangement as a concession agreement and not a works contract, was treated as a binding admission. The dispute was therefore correctly referable to arbitration under the 1996 Act.

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Issues: Whether the concession agreement was a works contract within the meaning of the M.P. Madhyastham Adhikaran Adhiniyam, 1983, so as to require dispute resolution before the statutory Tribunal rather than under the Arbitration and Conciliation Act, 1996.

Analysis: The dispute turned on the true construction of the agreement read as a whole and in commercial context. The statutory definition of works contract under the 1983 Act was held to have a restricted and special meaning, covering agreements for execution of specified works but not a composite concession arrangement involving detailed design, financing, operation, maintenance, toll collection, and a State Support Agreement forming part of the overall project structure. The agreement itself, as well as the State Support Agreement, contained an arbitration mechanism under the 1996 Act. The Court also treated the respondent's pleading before the arbitral tribunal, which described the agreement as a concession agreement and not a works contract, as a binding admission. On that basis, the agreement could not be recharacterised as a works contract merely because the project involved construction of a road.

Conclusion: The agreement was not a works contract under the 1983 Act, and the dispute was rightly referable to arbitration under the 1996 Act.

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