TaxTMI 
TaxTMI 
2025 (8) TMI 162
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....n of all the points of the Claimant and Respondent including the aforesaid nine attachments with email dated 24.05.2022 and due deliberation and consideration of all the points raised by both the Claimant and Respondent particularly Arbitration Agreement, the judgement in Writ Petition no. 11783/2021 dt.03.09.2021 and Orders sheets of Madhyastham Adhikaran at Bhopal and it has come to the following conclusions : 1. ICADR is the proper forum for the arbitration of disputes arising out of execution of Concession Agreement dated 05.01.2012 between M/s. Umri Pooph Pratappur Tollway Private Limited and Madhya Pradesh Road Development Corporation Ltd. and the same can be ascertained from Arbitration Agreement incorporated in Article 44.3.1 and 44.3.2. 2. The Judgement in Writ Petition nо. 11783/2021 dt.03.09.2021 gives clear finding that ICADR is the proper forum for Arbitration of dispute arising from the Concession agreement dated 05.01.2012. 3. In view of and from the orders sheets of Madhyastham Adhikaran at Bhopal, it is ascertained that the Madhyastham Adhikaran at Bhopal has not entered upon reference of the arbitration and therefore not in seisin ....
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....0 AM) through video conferencing Wherein timeline for submission of the Statement of Claims (SOC) and Statement of Defense (SOD) and the procedure for conducting the Arbitration will be discussed and decided. The claimant shall arrange to send meeting link to all concerned for the video conferencing well in advance. 4) The Parties to dispute may kindly note that I have received the proposal of my appointment as Presiding Arbitrator on 05.06.2022 and on same day i.e., on 05.06.2022 accepted to act as Presiding Arbitrator. Therefore, the period of 6 months for filing the statement of claims (SOC) and statement of defense (SOD) as specified in Sub Section 4 of Section 23 of Arbitration and Conciliation Act, 1996 (Amendment 2019) shall be reckoned from 05.06.2022 and such period end on 04.12.2022. 5) In the meantime, the Respondent is directed to file a certified copy of Agreement between the Respondent and Claimant to all the Tribunal Members with a copy to the Claimant. 6) My Disclosure under section 12(1 b) as schedule VI of the Arbitration and Conciliation Act 1996 (Amendment 2019) is enclosed for reference of parties to the dispute. ...." 3. ....
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....te substantial portions of the work, resulting in an escalation of the total project cost to Rs. 99.80 crores. 3.5. Subsequent delays and disruptions allegedly occurred due to breaches of contractual obligations by Respondent No. 1. Consequently, the appellant raised 19 claims before the Independent Engineer invoking Article 44.2 of the Concession Agreement for amicable resolution and compensation. These claims were also submitted to the Secretary, PWD. While some claims were accepted during conciliation proceedings, most were rejected, and no payments were released to the appellant. 3.6. With no resolution forthcoming, the appellant initiated proceedings before the Madhya Pradesh Arbitration Tribunal by filing Reference Case No. 61 of 2018. Notice in the said reference was issued on 13.08.2018. 3.7. Thereafter, the appellant invoked Clause 44.3.1 of the Concession Agreement and approached the ICADR. Respondent No. 1 raised objections under Section 7 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 For short, "the 1983 Act". Nevertheless, the ICADR, by order dated 02.06.2022, proceeded to appoint arbitrators to adjudicate the disputes. The Arbitral Tribunal issu....
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....of the 1996 Act was not barred by the 1983 Act. 4.3. It was further emphasized that if the parties had intended to refer disputes to the Tribunal under the 1983 Act, the agreement would have specifically provided for such reference. Whereas, Clause 44.3.1 of the Concession Agreement mandates arbitration under the aegis of ICADR, New Delhi. Therefore, the jurisdiction of the Madhya Pradesh Arbitration Tribunal cannot override this binding contractual mechanism. 4.4. The learned Senior Counsel placed reliance on paragraph 79 of the decision of the Madhya Pradesh High Court in Viva Highways Ltd v. Madhya Pradesh Road Development Corporation Ltd 2017 SCC OnLine MP 1448, which held that the Madhya Pradesh Arbitration Tribunal under the 1983 Act has jurisdiction only over "ascertained" claims. It also acknowledged that "ascertained" claims have a specific connotation. In the present case, the appellant's claims are, at best, "ascertainable", and therefore, outside the jurisdiction of the Tribunal. Even assuming, without conceding, that the claims could be considered "ascertained", it was incumbent upon the High Court or Tribunal to undertake an inquiry to classify the nature of the....
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....3.4 of the Concession Agreement, and other project related costs. The quashing of the arbitration proceedings by the High Court without directing adjudication either under the 1996 Act or the 1983 Act, has left the appellant without any effective legal remedy. 4.10. In light of the above submissions and case laws, the learned Senior Counsel prayed that this appeal be allowed and the impugned order be set aside. 5. Per contra, the learned Solicitor General of India appearing for Respondent No.1 submitted that there is no dispute between the parties regarding the nature of the Concession Agreement dated 05.01.2012 - it constitutes a works contract. The Government of Madhya Pradesh enacted the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, which provides for the establishment of the Madhya Pradesh Arbitration Tribunal to adjudicate disputes arising out of 'works contracts', where the State Government or a State Public Undertaking is a party. Section 2(1)(d) of the 1983 Act defines a "dispute" as a claim for ascertained or ascertainable money valued at Rs. 50,000 or more relating to differences arising from the execution or non-execution of a works contract. 5.1....
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....ibunal in Reference Case No. 61 of 2018, including claims for loss of profits and damages. These claims were ex facie time-barred under Section 7-B the 1983 Act, which requires claims to be filed within one year from the date of communication of the decision of the final authority. The appellant, having failed to comply with the limitation, sought to circumvent the statutory bar by initiating private arbitration under the 1996 Act, reflecting forum shopping and lack of bona fides. 5.6. The learned Solicitor General pointed out that Reference Case No. 61 of 2018 was admitted on 06.09.2021, and Respondent No.1 filed its written statement on 05.11.2021, raising limitation as a preliminary objection. Thereafter, the appellant invoked Clause 44.3.1 of the Concession Agreement and issued a notice under Section 21 of the 1996 Act. Simultaneously, the appellant filed an application to withdraw the reference before the Tribunal on 24.06.2022, which was allowed on 08.02.2023. 5.7. According to the learned Solicitor General, as per Rule 53(3)(b) of the Madhya Pradesh Madhyastham Adhikaran Regulations, 1985, a party that withdraws a reference without the permission contemplated under Rul....
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....of whether arbitration is under the 1983 Act or under the 1996 Act. Furthermore, even dehors the special limitation under the 1983 Act, the appellant's claims are now time-barred under the general law of limitation, as per Section 43 of the 1996 Act. The disputes arose between 2013 and 2015, and the invocation of arbitration in 2022 and thereafter in 2025 is clearly beyond the prescribed three-year limitation. 5.13. However, it was submitted that Respondent No.1 would have no objection, if the appellant were to file an application for recall of the withdrawal order and seek restoration of the Reference Petition before the Madhya Pradesh Arbitration Tribunal, which may be directed to be considered in accordance with law. 6. We have heard the learned Senior Counsel appearing for both sides and also perused the materials available on record. 7. The core issue in the present matter revolves around determining the appropriate forum for the adjudication of disputes arising out of the Concession Agreement dated 05.01.2012 entered into between the appellant and Respondent No.1. 8. At the outset, the learned Senior Counsel for the appellant submitted that the writ petition filed....
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....ic duty or positive obligation of public nature; and (viii)a person or a body under liability to discharge any function under any statute, to compel it to perform such a statutory function." 8.3. This Court in Binny Ltd v. Sadasivan (2005) 6 SCC 657, noted the distinction between public and private functions; and clarified the scope of writ jurisdiction under Article 226 in the context of private contractual disputes involving entities that may be performing public functions. The relevant paragraphs are extracted below for ready reference: "11....... It is difficult to draw a line between public functions and private functions when they are being discharged by a purely private authority. A body is performing a "public function" when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of the public as having authority to do so. Bodies therefore exercise public functions when they intervene or participate in social or economic affairs in the public interest." "29. Thus, it can be seen that a writ of mandamus or the remedy under Article 226 is pre-eminently a public law remedy and is n....
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.... other local body roads, expressways, and government buildings in Madhya Pradesh. Respondent No. 1 also, on contract, develops and maintains National Highways in or passing through Madhya Pradesh. The Madhya Pradesh Highways Act, 2004, repealing the 1936 Act, also reiterates the State's role in the development, construction, and maintenance of roads in the State. Since the right to access any part of the country, with certain exceptions and restrictions under certain circumstances, is a fundamental right guaranteed under Article 19(1)(g) of the Constitution, and the right to safe, well-maintained, and motorable roads is recognised as a part of the right to life under Article 21 of the Constitution of India, it is the responsibility of the State to develop and maintain the roads directly under its control. The contract for laying of a State Highway/District Road, when assigned by the Corporation owned and run by the government, assumes the character of a public function - even if performed by a private party - and would satisfy the functionality test to sustain the writ petition. Accordingly, in view of the statutory framework and the nature of relief sought, the writ petition invol....
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....ng to construction, repair or maintenance of any building or superstructure, dam, weir, canal, reservoir, tank, lake, road, well, bridge, culvert, factory, work-shop, powerhouse, transformer or such other works of the State Government or Public Undertakings or of the Corporations of the State as the State Government may, by notification, specify in this behalf at any of its stages, entered into by the State Government or by an official of the State Government or by Public Undertakings or Corporation or by any official of the State Government for and on behalf of such Corporation or Public Undertakings and includes an agreement for supply of goods or material and all other matters relating to the execution of any of the said works and also includes the services so hired for carrying out the aforesaid works and shall also include all concession agreement, so entered into by the State Government or public undertakings or Corporation, wherein a State support is involved or not. Notification No.17/E/85/96/XXI-B(II)-21 Dt.4.11.1996 of Govt. of M.P. Law Deptt. [The agreements in writing for the execution of the work relating to construction, repair or maintenance of electric line....
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....any other manner or when a dispute arises during the pendency of the works contract: Provided that if a reference petition is filed by the State Government, such period shall be thirty years. Section 20 - Bar of jurisdiction of Civil Court. - (1) As from the date of the constitution of the Tribunal and notwithstanding anything contained in Arbitration Act, 1940 (No.10 of 1940) or any other law, for the time being in force, or in any agreement or usage to the contrary, no Civil Court shall have jurisdiction to entertain or decide any dispute of which cognizance can be taken by the Tribunal under this Act. 10.1. It is thus evident that Section 2(1)(i) of the 1983 Act defines 'works contract' to expressly include concession agreements executed by the State or its instrumentalities, regardless of whether direct financial support from the State is involved. Section 7 clearly mandates that all disputes arising from such works contract shall be referred to the Madhya Pradesh Arbitration Tribunal, even if the agreement contains an arbitration clause to refer the dispute under any enactment. The Arbitration and Conciliation Act, 1996 repealed the Arbitration Ac....
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....ion of Larger Bench will draw the curtains on this aspect. (iii) The judgment of Jabalpur Corridor (supra) reported in 2014 (2) MPLJ 276 and Ashoka Infraways Ltd. (supra) reported in 2016 (2) MPLJ 685 are overruled. (iv) The substituted definition of "works contract" is clarificatory in nature, hence it will be retrospective in operation. (v) The words "claim of ascertained money" have a definite connotation and therefore only such difference arising out of execution or non-execution of a 'works contract' which are related with claims of above nature will be covered under Section 2(1)(d) of the Adhiniyam of 1983". 11.1. The correctness of the aforesaid judgment was challenged before this Court in SLP (C) No. 17070 of 2017 and SLP (C) Nos.1635-1637 of 2018, both of which were dismissed. As a result, the legal position laid down in Viva Highways stands affirmed. It is also pertinent to note that the appellant herein was a party to those very proceedings before this Court and is thus fully aware of the binding nature of the ruling. 11.2. While the learned Senior Counsel for the appellant has attempted to distinguish the decision in Viva Highway....
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.... 19. Loan installment amount of bank which could not be paid till date due to delayed payments of Annuity by MPRDC 15.00 20. Loss of further business 138.80 21. Declaring award of grant of extension of time for 941 days against 335 days approved by MPRDC in light of letter No. UPP/MDR/MPRDC/2012/HQ-11, dated 30.04.2014 and UPP MDR MPRDC/2012 HQ-21 dated 20.06.2015 0 22. Cost of Litigation As per award 23. Interest antelite, pendentelite and future As awarded by the Tribunal TOTAL 280.1566 11.3. It is well settled that a claim which can be determined through evidence and quantification falls within the ambit of the term 'ascertained'. Furthermore, post Viva Highways, the Legislature amended section 2(1)(d) of the 1983 Act to expressly include "unascertained" money claims within the definition of "dispute". This amendment was enacted precisely to override the restrictive interpretation of "ascertained" claims and to expand the Tribunal's jurisdiction to cover all monetary disputes - whether ascertained or not. 11.4. In this context, reference may be made to the decision in Gangotri Enterprises Ltd v. Madhya Pradesh Road ....
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....ty as to whether the cancellation of works contract was legal or illegal, then the said arbitrator in view of the ratio of the judgment of the Supreme Court in Maharshi Dayanand University v. Anand Coop. L/C Society Ltd. [Maharshi Dayanand University v. Anand Coop. L/C Society Ltd., (2007) 5 SCC 295], as also in view of the persuasive reasoning assigned in the judgment and order in Heyman v. Darwins Ltd. [Heyman v. Darwins Ltd., 1942 AC 356 : (1942) 1 All ER 337 (HL)] would have had the jurisdiction to adjudicate the dispute regarding the justification and legality of cancellation of works contract also. But the same cannot be allowed to be raised under the M.P. Act of 1983 since the definition of "works contract" unambiguously lays down in explicit terms as to what is the nature and scope of "works contract" and further enumerates the specific nature of disputes arising out of the execution of works contract which would come within the definition of a "works contract". However, the same does not even vaguely include the issue or dispute arising out of cancellation and termination of contract due to which this question, in my considered opinion, would not fall within the jurisdicti....
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....r the parties to raise an objection of lack of jurisdiction in view of the applicability of MP Act, 1983. The parties will also be at liberty to approach the High Court by way of a petition under Article 227 of the Constitution for seeking a transfer of the arbitration proceedings to the M.P. State Arbitration Tribunal under the MP Act, 1983. ii. Where the arbitration proceedings are still underway, but statement of defence has already been filed i.e., the relevant stage for raising an issue of jurisdiction is already crossed, there it would not be open for the parties to raise an objection of lack of jurisdiction in view of the applicability of MP Act, 1983. Furthermore, in such scenarios since the arbitration proceedings have already commenced and made substantial progress, it would not be appropriate to transfer such proceedings to the M.P. State Arbitration Tribunal under the MP Act, 1983, and the better course of action would be to let the arbitration proceedings conclude. iii. As per L.G. Chaudhary (II) (supra) where the arbitration proceedings have concluded and an award has been passed, and if no objection to the jurisdiction in view of the applicability o....
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....de the dispute as per provisions of M.P. Madhyastham Adhikaran Adhiniyam, 1983 (M.P. Act)" 11.7. In ARSS Damoh - Hirapur Tolls Pvt. Ltd v. M.P. Road Development Corporation (supra), this Court refused to allow private arbitration to continue where a works contract was involved, and directed the transfer of the pending arbitration proceedings to the Madhya Pradesh Arbitration Tribunal, thereby upholding the exclusive statutory forum. 11.8. Similarly, in Madhya Pradesh Rural Road Development Authority v. Backbone Enterprises Limited (supra), this Court once again reinforced the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal in matters arising from works contracts covered by the 1983 Act. 11.9. Given that the present Concession Agreement pertains to the construction of a State Highway situated entirely within the State of Madhya Pradesh and was awarded by Respondent No.1, a State-controlled entity, the agreement clearly qualifies as a "works contract" under section 2(1)(i) of the 1983 Act. Consequently, the dispute arising therefrom falls within the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal. 11.10. In view of the above statutor....
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....tration held pursuant to this Article 44 shall be final and binding on the Parties as from the date it is made, and the Concessionaire and MPRDC agree and undertake to carry out such Award without delay. 44.3.4 The Concessionaire and MPRDC agree that an Award may be enforced against the Concessionaire and/or MPRDC, as the case may be, and their respective assets wherever situated. 44.3.5 This Agreement and the rights and obligations of the Parties shall remain in full force and effect, pending the Award in any arbitration proceedings hereunder. 44.4 Adjudication by Regulatory Authority or Commission In the event of constitution of a statutory Regulatory Authority or Commission with powers to adjudicate upon disputes between the Concessionaire and the MPRDC, all Disputes arising after such constitution shall, instead of reference to arbitration under Clause 44.3, be adjudicated upon by such Regulatory Authority or Commission in accordance with the Applicable Law and all references to Dispute Resolution procedure shall be construed accordingly. For the avoidance of doubt, the Parties hereto agree that the adjudication hereunder shall not be final a....
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....e 44.4, the existence of the Tribunal under the prevailing law and its exclusive jurisdiction cannot be contractually overridden or ignored. 13.1. Accordingly, the attempt of the appellant to invoke Clause 44.3.1 of the Concession Agreement and re-agitate the issue of private arbitration - already settled in Viva Highways and affirmed by this Court - is barred by the doctrine of constructive res judicata and amounts to an abuse of the process of law. The appellant is estopped from challenging the binding nature of Viva Highways, having itself been a party to the earlier SLP proceedings, wherein the said judgment was upheld. 14. Additionally, the appellant's conduct in withdrawing the reference petition before the Madhya Pradesh Arbitration Tribunal, without seeking liberty to re-agitate the claims, and simultaneously initiating proceedings under the 1996 Act, constitutes forum shopping. This conduct, aimed at circumventing the statutory mechanism and reviving abandoned claims, is tainted with mala fides and deserves to be deprecated. 15. Further, the appellant's claims - which arise from events dating back to 2013-2015 - are also barred by limitation under Section 43 of th....