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TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1046
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....e respondent, State of West Bengal for improvement of Chakda-Bongaon and Kapa-Barajaguli Section of State Highway 1 under the West Bengal Corridor Development Project, the appellant being the Joint Venture of two companies, namely A. L. Sudershan Construction Company Limited and Mackintosh Burn Limited submitted the bid which was accepted by the respondent on August 12, 2005 and the contract price was fixed at Rs. 79,96,70,805.00/-. The terms and conditions of the contract relating to the subject work were those stipulated in the conditions of the contract forming various parts, as well as those stipulated in the Condition of Particular Applications (hereinafter referred to as "the COPA") and the various sub-clauses thereunder. As per sub-clause 67.1 of the COPA any dispute of any kind whatsoever arising between the parties herein in connection with or arising out of the said contract would initially be referred in writing to the Disputes Adjudication Board (hereinafter referred to as "the DAB") for its decision. The said sub-clause further provided that unless the member or members of the DAB have been previously mutually agreed upon by the parties and named in the contract, the p....
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....mate dues. By a letter dated May 12, 2012 the appellant referred the disputes and differences arisen between the parties with regard to its claim against the respondent to Shri Raychaudhuri, the sole member of the DAB under Clause 67.1 of the COPA. However, by a letter dated May 27, 2012 Shri Raychudhuri informed the petitioner and the Project Director of the respondent that by letter dated December 29, 2010 he had already expressed that his service as the member of the DAB may not be required beyond January 31, 2011 and specific consent of both parties are required regarding his continuation as the member of the DAB. By a letter dated July 26, 2012 the petitioner informed Shri Raychaudhuri that it is agreeable in continuation of his service as a member of the DAB for adjudication of the disputes and differences in relation to the subject works. A copy of the said letter was also forwarded to the Project Director of the respondent seeking for his quick response. The Project Director of the respondent, being the competent authority of the respondent received the said letter dated November 26, 2012 but did not respond to the same. The respondent even did not make any proposal for app....
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....bility of the arbitral proceeding, inter alia, on the ground of absence of the reference proceeding before the DAB. Thereafter, the petitioner adduced evidence through its witness. The respondent, however, did not adduce any evidence through any witness. On February 07, 2017 the Presiding Arbitrator passed his decision that the claimant, the appellant herein having not exhausted the procedure of DAB is not entitled to maintain the arbitration proceeding. However, the Arbitrator nominated by the claimant held that in the present case when by the letter dated July 26, 2012 the claimant gave its consent to the continuance of Sri Raychaudhuri as the member of the DAB there was substantial compliance by the claimant of the requirement of sub-clause 67.1 (d) of the COPA. Even the nominee Arbitrator appointed by the respondent agreed with the decision of the nominee Arbitrator of the claimant. The respondent changed its nominee Arbitrator and filed an application before the Arbitral Tribunal for review of their majority decision dated February 7, 2018. The claimant appellant filed their counter-affidavit and raised objection to the maintainability of the said review application before the....
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....g on the decision of the Supreme Court in the case of Commissioner of Central Excise -vs- Harichand Sri Gopal reported in (2011) 1 SCC 236 cited by the respondent, the Presiding Arbitrator further held that, in case even the respondent kept silence the claimant could have availed of arbitration for resolving the disputes under sub-clause 67.4. He further held that in the present case requirement of sub-clause 67.1(d), which were not complied could not be treated as a minor of irregularity. The Presiding Arbitrator held that mechanism prescribed in sub-clause 67.1 was not exhausted by the claimant in not asking the respondent for replacement of the sole member of the DAB, the letter dated July 26, 2012 issued by the claimant was not sufficient compliance of sub-clause 67.1 (d) of the COPA and, therefore, reference of the disputes to arbitration is bad as the stage was not reached when the arbitration was availed. With these findings the Presiding Arbitrator concluded that the arbitration proceeding is not maintainable as the tribunal does not have any jurisdiction to try the disputes refer to it. However, the Arbitrator nominated by the claimant held that any provision, for its s....
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....a member of the Board of DAB within 28 days of the date on which a member of the Board declines to act or is unable to act as a result of death, disability, resignation or termination of appointment then the "appointing body" or "the official named in the Appendix Bid" shall, after due consultation with the parties, appoint such member of the Board, and such appointment shall be final and conclusive. Mr. Mitra pointed out that the in the present case, neither there has been any "appointing body" nor any "Official named Appendix to Bid" who could appoint a substitute member of the DAB in consultation with the parties. Therefore, according to Mr. Mitra, the claimant was justified in expressing the willingness in continuance of the service of the said Shri Raychoudhury as the member of the DAB. He further submitted that a copy of the said letter dated July 26, 2012 issued by the claimant to Shri Raychaudhuri was forwarded to and received by the competent authority of the respondent but the respondent did not respond to the same. After waiting for a period of four months by letter dated November 20, 2012 the claimant appellant informed the respondent that in view of their inaction to r....
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....al compliance of sub- Clause 67.1 (d) of COPA which was the basis of the majority decision of the Arbitral Tribunal dated February 07, 2018. According to him, a point of the procedural aspect of the arbitral proceeding arose and the Arbitral Tribunal rightly entertained the application for review of the majority decision dated February 07, 2018. It was argued that the decision of the Arbitral Tribunal dated October 01, 2018 recalling the earlier order dated February 07, 2018 suffers from no infirmity of law. He further submitted that, in any event, the claimant appellant has not filed the present appeal against the said order dated October 01, 2018 passed by the Arbitral Tribunal and as such, they cannot advance any argument to challenge the correctness of the said order. It was further argued for the respondent that the procedure followed by the Arbitral Tribunal to decide the objection raised by the respondent to the maintainability of the arbitration proceeding was absolutely correct. According to Mr. Chaudhuri, sub-Section (2) of Section 16 of the Act of 1996 in clear term lays down that a party shall not be precluded from raising a plea of lack of jurisdiction of the Arbitral ....
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.... decision of a Co-ordinate Bench of this Court in the case of Munshilal and Sons (supra) cited by the respondent. Order XXX of the Code of Civil Procedure applicable for filing a suit by firms has no application in this case. In the case of Gouranga Lal Chatterjee (supra), a Co-ordinate Bench of this Court was dealing with a case under the Income Tax Act, 1961 and held that in view of the definition of "person" in Section 2(31)(v) of the same Act a joint venture cannot be treated as a "person". Even the said decision has no application in this case. Accordingly, I hold that the present appeal filed by the appellant is maintainable. With regard to the appellant's challenge to the decision of the Arbitral Tribunal dated October 01, 2018 recalling the earlier order dated February 07, 2018 I do not find any illegality being committed by the Arbitral Tribunal. Now, I proceed to deal with the merit of the appeal filed by the appellant against the majority decision of the Arbitral Tribunal dated November 22, 2018. Sub-Clause 67.1(d) of the COPA provides that any disputes or difference arising between the parties herein in connection with, or arising out of the contract or the exe....
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.... appellant. Thus, after waiting for four months, by the letter dated December 26, 2012 the claimant appellant informed the Project Director of the respondent, being the competent authority that it seems that the process of adjudication through DAB is not possible and as such it invoked, arbitration Clause by nominating its Arbitrator. By the letter dated March 15, 2013 addressed to the claimant appellant, the Project Director of the respondent being the competent authority did not deny the claimant's assertion in the said letter dated November 26, 2012 that it seems that the process of adjudication through DAB is not possible. The respondent, however, invoked sub-Clause 67.4 of COPA and appointed Shri Tarak Nath Sinha, Retired Secretary of Housing Department, Government of West Bengal to act as an Arbitrator for adjudicating the disputes and differences arisen between the parties out of the contract. From a bare reading of the letter dated March 15, 2013 it is ex-facie evident that there was a conscious decision of the respondent to invoke the arbitration clause contained in subclause 67.4 of the COPA and as such, it appointed the nominee Arbitrator to adjudicate the disputes and d....