HIGH COURT OF JAMMU AND KASHMIR AT JAMMU. CIA No. 23 of 2007 Capt Parkash Singh Petitioner Power Grid Corporation of India & Ors Respondent
! Mr.Vivek Sharma, Advocate
^ Mr. R. K. Gupta, Advocate
Coram Mr Justice Sunil Hali, Judge
Date : 21/07/2008
: Judgment :
This civil appeal has arisen from an order passed by the
Principal District Judge, Jammu dated 26.9.2007 rejecting the
application of the appellant filed under section 9 of the Arbitration
and Reconciliation Act, 1997 (hereinafter for short referred as the
‘Act’). The appellant was allotted contract for providing security to
Power Grid Corporation in September 2005 for a period of two years.
The contract came to an end in September 2007 and was not further
extended by the respondents. It is not in dispute that the power to
grant extension of the contract was to be done by the respondents
within a period of 30 days from the date the contract came to an end.
Such an extension could be granted only if the respondents found the
work of appellant as satisfactory. The option to extend the contract
was with the respondents and the same could be extended for a period
of one year. Since the contract was not extended the appellant
invoked section 17 of the agreement seeking reference to the
arbitrator, as according to him, there was a dispute which was
referable to the arbitrator. It is also not in dispute that the contract
has been allotted to some other agency and the said agency is
operating the contract from September 2007.
The appellant had raised a dispute regarding the
aforementioned contract having not been extended in his favour and
feeling aggrieved of the same filed an application under section 9 of
the Act seeking direction not to allot contract till the matter was
decided by the arbitrator.
The trial court rejected the application of the appellant. The
questions which are required to be considered in the appeal are:
(A) whether any dispute had arisen which was
referable to an arbitrator in face of this fact that the
contract came to an end in September 2007 and the
option to extend the contract lies with the
respondents.
(B) whether the respondents could be compelled to
extend the contract of the appellant after it was
satisfied that the service provided by the appellant
was not satisfactory.
In other words, whether the Corporation can be
compelled by an injunction or interim relief in any other form
to conclude with the service to be provided by the appellant.
Coming to the first question, it is not in dispute that the
contract had come to an end in September 2005 and the same
could be extended at the option of the respondents. It is at the
option of respondents that the contract would have been
extended. In the present case, contract was not extended
because the service provided by the appellant was not found to
be satisfactory. This, in my opinion did not constitute any
dispute.
Section 7 of the Act defines an arbitration agreement:
“(1) In this part, “arbitration agreement” means
agreement by the parties to submit to arbitration
all or certain disputes which have arisen or which
may arise between them in respect of a defined
legal relationship whether contractual or not.”
The wording of this section clearly mentions that there has to
be an arbitration agreement by the parties to submit to arbitration all
or certain disputes which have arisen or which may arise between
them in respect of a defined legal relationship whether contractual or
not. In essence there has to be a dispute which is referable to an
arbitrator. Sub clauses (1) and (2) of clause 14 of contract agreement
clearly envisage that the contract had come to an end after the period
of two years and this extension is at the option of the respondents.
Respondents have not granted any extension in the matter. The effect
was that contract had come to an end and consequently by referring to
the said clause no dispute had arisen.
It is not the case of the appellant that the respondents had
exercised option in extending the contract or there is any
interpretation required to be made in respect of the terms of the
agreement which is construed to be matter of dispute between the
parties. It is pure and simple conclusion of the contract where no
dispute can be referred to the arbitrator. Appellant’s case is also
based on the facts that no extension was granted by the respondents.
Appellant has in his memo of appeal clearly stated that the period of
contract could be extended for a period of one year on satisfactory
performance. In my opinion application under section 9 was
misconceived as there was no dispute referable to the arbitrator.
The appellant has not raised any dispute regarding the
interpretation of the agreement nor has he complained of any breach
on this count. The appellant has tried to raise a dispute which did not
arise after scanning through the contents of the contract agreement. It
is only said that the contract has to be extended for a further period of
two years after admitting the fact that the option to extend the same
lies with the respondents. This, in my opinion would not constitute
any dispute.
Second question relates as to whether contract of personal
service can ordinarily and specifically be enforced against the
respondents. The trial court has very elaborately dealt with this
question. The trial court has held that service rendered by the
appellant to the corporation involves private security for their lives
and property by deploying security guards at Power Grid Kishenpur
Sub Station and T/L Office Batote as per terms and conditions of the
contract.
The Corporation has in its written statement referred to
number of instances to support its view that the services provided by
the appellant during the contract period of two years were not
satisfactory. In such circumstances the Corporation could not be
compelled by any injunction or any other interim relief to continue
the service being provided by the appellant.
The contract in question involves providing of security
personnel by the appellant. It cannot be compelled to allot the
contract to the appellant after it has been found that their services
were not satisfactory. In view of this I do not find any merit in this
appeal which is dismissed along with connected CMP.
Jammu
21.7.2008