M/S Bansal Highway Construction vs The State Of Madhya Pradesh on 7 May, 2010

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                      MCC No.1224/08
                      MCC No.1225/08




7.5.2010

Shri Sanjay Agrawal, Counsel for petitioner.
This order shall decide MCC No.1224/08 (M/s Bansal Highway
Construction Vs. State of M.P. & others) and MCC No.1225/08 (M/s
Bansal Highway Construction Vs. State of M.P. & others) in which
review of order dated 3.4.2008 has been sought on similar set of facts.
For the convenience, the facts are taken from MCC No.1224/08.

This application is filed seeking review of order dated 3.4.2008
in Arbitration Case No.23/2007 by which application filed by the
applicant for appointment of arbitrator under section 11 of the
Arbitration and Conciliation Act, 1996 was rejected on the ground that
the dispute between parties would have been referred to the M.P.
Arbitration Tribunal under the provisions of the M.P. Madhyastham
Adhikaran Adhiniyam, 1983.

Learned counsel for petitioner submitted that to invoke the
jurisdiction of the said tribunal, a dispute should be of ascertained
money valuing at Rs.50,000/- or more. If the dispute is not of the
aforesaid sum of Rs.50,000/- or more, it cannot be referred to the
Tribunal under Section 7 of the Ahiniyam. It is submitted that as the
dispute was not of ascertained sum of more than Rs.50,000/-, the
tribunal was having no jurisdiction to entertain the reference. So order
dated 3.4.2008 may be reviewed.

From the perusal of the application under section 11(6) of the
Arbitration and Conciliation Act, 1996 filed as Arbitration Case
No.23/07 the applicant sought following reliefs:-

“It is, therefore, prayed that this Hon’ble Court be pleased to
appoint an arbitrator for deciding the dispute arising out of the
contract agreement.”

The applicant stated in paras 10 to 14 of the aforesaid application
thus:-

“10. That the security deposit was, thus, to consist of earnest
money plus a deduction of 5 percent from the payment made in
the running bills till the two together amount to 5 percent of the
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MCC No.1224/08
MCC No.1225/08

7.5.2010
cost of work of tender or 5 percent of the cost of the works
executed when the same exceeds the cost of work put to tender.

11. That accordingly the applicant deposited the earnest
money to the tune of Rs.1,50,000/-. The total cost of the entire
work executed by the applicant firm was to the tune of
Rs.2,14,42,016/-, upon which an amount of Rs.10,72,101/- was
deducted from the bills at the rate of 5% of the total amount of
work. The Non-applicant No.4 further, in terms of the agreement
deducted 15% of the amount from each running bills towards
performance and maintenance security. Such 15% amount come
to Rs.32,16,302/-. Thus the total amount which has been deducted
by the Non-applicant No.4 towards 5% security deposit and 15%
performance and maintenance security is Rs.42,88,403/-. The
applicant had also deposited an amount of Rs.1,50,000/- towards
earnest money deposit at the time of the submission of tender.

12. That on account of completion of the work, 75% of the
security deposit of Rs.10,72,101/- has since been released. The
amount so released was Rs.8,04,076/- and the balance 25% of
Rs.10,72,101/- is still with the Non-applicant-department which
comes to Rs.2,68,025/-. An amount of Rs.1,50,000/- which was
deposited by the applicant towards EMD has also been released .

13. That the total amount on different heads which is in
deposit in cash with the Non-applicants is as follows:-

(1) 5% Security Deposit – Rs.10,72,101/-

(i) 75% of the said amount – Rs.8,04,076/-

released on account of
completion of work

(ii) Balance 25% of security – Rs.2,68,025/-

deposit

(2) 15% of total cost of work – Rs.32,16,302/-

executed towards performance
and maintenance security

(i) Out of the said amount – Rs.20,50,000/-

Rs.20,50,000/- replaced by two
Bank guarantees of Rs.10,25,000/-
each bearing No.STA/161/05 dt.
23.7.2006 and STA/162/05 dt.

             23.7.2006

                     Balance                     -      Rs.11,66,302

14. The balance cash deposit is Rs.2,68,025/- plus
Rs.11,66,302/-, total Rs.14,34,327/-, besides the above two bank
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MCC No.1224/08
MCC No.1225/08

7.5.2010
guarantees of Rs.20,50,000/-, out of which one bank guarantee
bearing No.STA/161/05 dated 23-7-2006 has since been
encashed. The two bank guarantees of Rs.10,25,000/- each are
enclosed herewith as Annexure -P-5 & P-6, respectively. That
bank guarantee contained in Anneuxure P-5 has been
encashed.”

From the perusal of the aforesaid, it is apparent that there was
a dispute of amount more than Rs.50,000/- between the parties
though in the relief clause, no specific amount has been mentioned.
From the perusal of the aforesaid paras, there is no iota of doubt that
the dispute between the parties is existing for more than of
Rs.50,000/-, so this Court has rightly rejected the application filed by
the applicant under section 11(6) of the Act.

In view of the aforesaid, no error apparent on the fact of record
is found warranting review of the order dated 3.4.2008. These
applications are found without merit and are dismissed with no order
as to costs.

(Krishn Kumar Lahoti)
Judge

C.