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Khairatabad, Hyderabad, Telangana, 500004
Khairatabad, Hyderabad, Telangana, 500004

Harshit Sharma | Amity Law School, Madhya Pradesh | 11th January 2020

State of Gujarat V/s. Amber Builders Civil Appeal No. 8307/2019

FACTS OF THE CASE

  1. The respondent contractor was awarded a ‘works contract’ for strengthening a section of National Highway under work order dated 31.07.2007. 
  2. The road was damaged and, according to the contractor, this had occurred due to heavy rains. The State called upon the contractor to repair the damaged portion, and accordingly the same was done, after the rain stopped. 
  3. The case of the contractor is that in terms of the contract, the contractor was only liable to remove defects for a period of 3 years which ended on 30.04.2011. On 10.09.2012, the contractor, wrote   a   letter   to   the   State   to   release   the   security amount. This amount was accordingly released vide letter dated 10.09.2012. The State issued letter dated 11.11.2014 calling upon the contractor to pay a sum of Rs.1,09,00,092/­.   This claim was based on the premise that the contractor had not carried out the road repair work in accordance with the contract. The present appellant- State threatened to withhold the payments from the security deposits and bills of other pending works. 
  4. In respect of which the Writ Petition was preferred before the High Court of Gujarat, which was allowed vide order dated 18.02.2016 while setting aside the communication letter dated 11.11.2014 of the State. 
  5. The impugned judgment of WP was challenged before the Hon’ble Supreme Court vide the present SLP before the same. 

ISSUES RAISED

  1. Whether the Gujarat Public Works Contract Disputes Arbitration Tribunal constituted under Section 3 of the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 has jurisdiction to make interim orders in terms of Section 17 of the Arbitration and Conciliation Act, 1996? 
  2. Whether the Tribunal was to be approached while not invoking the extraordinary writ jurisdiction of the High Court, when the existing remedy already persists?  

RULING OF THE COURT/ THE COURT HELD THAT

The appeals were allowed in the favour of the appellants, directing the respondent to approach the Tribunal within 2 months from the date of the judgment and thereby the tribunal shall not dismiss the claim on the issue of the limitation. Hon’ble Apex Court, held and observed the following: 

  1. “On a conjoint reading and a careful analysis of the Acts together, we are of the view that insofar as the powers vested in the Arbitral Tribunal in terms of Section 17 of the Arbitration & Conciliation Act are concerned , such powers can be exercised by the Tribunal constituted   under   the   Gujarat   Act   because   there   is   no inconsistency in these 2 Acts as far as grant of Interim relief is concerned.  This power is already vested in the tribunal under the Gujarat Act, Section 17 of the Arbitration & Conciliation Act complements these powers and therefore it cannot be said that the provision of Section-17 of the Arbitration Act is inconsistent with the Gujarat Act.”
  2. “…. reliance was made upon the judgment of Gangotri Enterprises Limited v. Union of India & Ors. to submit that till the demand of the Government is crystallised or adjudicated upon, the Govt. cannot withhold money of the Contractor. Since this case been specifically relied upon, we are duty bound to go in the correctness of the view laid down in Gangotri Enterprises Case. the Judgment in Gangotri Enterprises is primarily based on the judgment of a two judges Bench of this Court in the Union of India v. Raman Iron Foundry.”
  3. “The judgment in Raman Iron Foundry, was specifically overruled on the issue in hand by a three judge Bench of this court in the case of H.M. Kamaluddin Ansari & Co.  v. Union of India. Thus, the judgment rendered in Gangotri Enterprises Limited Case is per incuriam because it relies upon the Raman Iron Foundry which has been specifically overruled by three Judge Bench H.M. Kamalliddin’s Case.”

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