{"id":216527,"date":"2010-02-05T00:00:00","date_gmt":"2010-02-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sai-vs-gujarat-on-5-february-2010"},"modified":"2018-05-18T15:37:33","modified_gmt":"2018-05-18T10:07:33","slug":"sai-vs-gujarat-on-5-february-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sai-vs-gujarat-on-5-february-2010","title":{"rendered":"Sai vs Gujarat on 5 February, 2010"},"content":{"rendered":"
Gujarat High Court<\/div>\n
Sai vs Gujarat on 5 February, 2010<\/div>\n
Author: M.R. Shah,&Nbsp;<\/div>\n
   Gujarat High Court Case Information System \n\n  \n  \n    \n\n \n \n    \t      \n         \n\t    \n\t\t   Print\n\t\t\t\t          \n\n  \n\n\n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t \n\t\n\n\n \n\n\n\t \n\nIAAP\/92\/2009\t 12\/ 12\tJUDGMENT \n \n \n\n\t\n\n \n\nIN\nTHE HIGH COURT OF GUJARAT AT AHMEDABAD\n \n\n \n\n\n \n\nPETN.\nUNDER ARBITRATION ACT No. 92 of 2009\n \n\n \n\n\n \n\n \nFor\nApproval and Signature:  \n \nHONOURABLE\nMR.JUSTICE M.R. SHAH\n \n \n===========================================\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n1\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\tReporters of Local Papers may be allowed to see the judgment ?\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n2\n\t\t\n\t\t \n\t\t\t \n\nTo\n\t\t\tbe referred to the Reporter or not ?\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n3\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\ttheir Lordships wish to see the fair copy of the judgment ?\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n4\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\tthis case involves a substantial question of law as to the\n\t\t\tinterpretation of the constitution of India, 1950 or any order\n\t\t\tmade thereunder ?\n\t\t\n\t\n\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\n5\n\t\t\n\t\t \n\t\t\t \n\nWhether\n\t\t\tit is to be circulated to the civil judge?\n\t\t\n\t\n\n \n\n \n===========================================\n \n\nSAI\nCONSULTING ENGINEERS PVT LTD - Petitioner(s)\n \n\nVersus\n \n\nGUJARAT\nWATER INFRASTRUCTURE LTD & 1 - Respondent(s)\n \n\n===========================================\n \nAppearance : \nMR\nPARESH M DAVE for\nPetitioner(s) : 1, \nMR HS MUNSHAW for Respondent(s) : 1 -\n2. \n===========================================\n \n\t  \n\t \n\t  \n\t\t \n\t\t\t \n\nCORAM\n\t\t\t: \n\t\t\t\n\t\t\n\t\t \n\t\t\t \n\nHONOURABLE\n\t\t\tMR.JUSTICE M.R. SHAH\n\t\t\n\t\n\n \n\n \n \n\n\n \n\nDate\n: 05\/02\/2010 \n\n \n\n \nORAL\nJUDGMENT<\/pre>\n
1.\t\tPresent
\nPetition under Section 11(6) of the Arbitration and Conciliation Act,
\n1996 has been preferred by the petitioner for an appropriate order to
\nappoint sole Arbitrator or Arbitrators for deciding the disputes and
\ndifferences that have arisen between the parties as regards Work
\nOrder \/ Contract dated 05.09.2002.\n<\/p>\n
2.\t\tThat
\nthe Government of Gujarat decided to implement an ambitious project
\nestimated to cost Rs.4700 Crores for supply of drinking water to
\nSaurashtra, Kachchh, North Gujarat and Panchmahals covering 8215
\nvillages and 135 urban centers.  That as it was major project
\nrequiring hi-tech engineering and management inputs in the field of
\nwater supply, civil engineering, mechanical engineering, electrical
\nand electronic engineering, project finance, project management,
\noperational management etc., it was resolved by Government of Gujarat
\nto create and establish a company to be named as ‘Gujarat State
\nDrinking Water Infrastructure Company Limited’ under the provisions
\nof the Companies Act, 1956.  That said Company was registered as
\nGovernment company with the Registrar of Companies at Ahmedabad under
\nthe provisions of the Companies Act, 1956. That said Company had
\nownership pattern by way of equity participation initially to the
\nextent of 49.5% from the Government of Gujarat, 49.5% from the
\nGujarat Water Supply and Sewerage Board.  That respondent Company to
\nachieve ultimate goal of implementing the said project for supply of
\ndrinking water was in need of consultant \/ consultancy services for
\nobtaining Right of User (ROU) under the Gujarat Water and Gas
\nPipeline Act, 2000. Therefore, contract \/ agreement was entered into
\nbetween the petitioner and respondent no.1 for consultancy services
\nfor undertaking work   ROU under the aforesaid Act for laying
\ntransmission pipelines. Scope of services to be rendered by the
\npetitioner was :\n<\/p>\n
To
\n\tcollect village records 7\/12, record of rights form no.6 and village
\n\tform 8A.\n<\/p>\n
To
\n\tobtain sales statistics of concerned villages for last 5 years &
\n\tother related information.\n<\/p>\n
To
\n\tprepare detailed map after completion of fieldwork and mark on the
\n\tmap survey number, record measurements and design in ROU strip of 30
\n\tmeters.\n<\/p>\n
(a)\tTo
\n\tprepare notice u\/s. 3(1) and serve them as per Rules and Act.\n<\/p>\n
(b)\tTo
\n\tprepare and serve notices to persons who have taken objections
\n\tagainst notification of section 3(1).\n<\/p>\n
To
\n\tprepare notice u\/s. 6(1) and serve them as per Rules and Act.\n<\/p>\n
To
\n\tprepare Compensation Award u\/s. 10 and serve them to every person
\n\tand before issuing cheques (payment) notice is to be served to
\n\tconcerned persons i.e. legal owner or occupier of land as per
\n\tconcerned village revenue record and to maintain records there of.\n<\/p>\n
All
\n\tnotices to be prepared and served to the land owners \/ concerned
\n\tpersons as per Act and Rules.\n<\/p>\n
All
\n\tcorrespondence to be done as per instruction of CA.\n<\/p>\n
To
\n\tobtain ROU under Gujarat Water and Gas Pipelines (Acquisition of
\n\tRight of User in land) Act 2000.\n<\/p>\n
To
\n\tassist CA in all formalities under the Act & Rules, CA will be
\n\tprovided with a jeep with a good driver.\n<\/p>\n
To
\n\tprepare estimates for properties, crops & other damages incurred
\n\tbased on measurements supplied by owner.\n<\/p>\n
To
\n\tprepare all relevant papers on behalf of GWIL.\n<\/p>\n
To
\n\tensure legal status of ROU in relevant revenue records after
\n\tnotification u\/s. 6(1).\n<\/p>\n
3.\t\tIt
\nis the case on behalf of the petitioner that pursuant to the above
\ncontract and works, the petitioner started the works immediately and
\nthe petitioner has completed the works also. However, during the
\ncourse of execution of the works, a lot of delay intervened because
\nof numerous reasons attributable to the respondents herein and
\nconsequently the time for completing execution of these works had to
\nbe extended from time to time.  That above work has been completed by
\nthe petitioner by 05.03.2008 and final bill for the work was also
\nsubmitted by the petitioner on 28.09.2006 and 28.10.2007 and final
\nbill has also been paid by respondent Company on 02.04.2008. It is
\nthe case on behalf of the petitioner that during the above period
\nwhen extension had to be allowed by the respondent Company and
\nexecution of the works by the petitioner was going on, the petitioner
\nhad brought to the notice of the respondents that huge losses and
\nfinancial damage was suffered by the petitioner in view of escalation
\nin overhead expenses, compensation for bank guarantee commission,
\nloss of profit since the petitioner’s resource were held up for the
\nworks in question, unproductive expenses like salaries paid to the
\nidling staff etc. and the petitioner had also referred to such
\nfactors while writing letters for extension in time for executing the
\nworks. It is the case on behalf of the petitioner that even after
\ncompletion of the work, the petitioner had requested the respondents
\nto bear the burden of loss and damages caused by them to the
\npetitioner and it was also brought to the notice of the respondents
\nthat loss and damages to the tune of Rs.1.20 Crores were caused to
\nthe petitioner and the amount would be over Rs.1.70 Crores when
\ninterest on such loss and damages was also considered.  It is the
\ncase on behalf of the petitioner that by letter dated 23.04.2008,
\n19.05.2008, 05.06.2008 and 04.07.2008 aforesaid subject was discussed
\nby the petitioner and requests were made to the respondents for
\npaying the above amounts.  It is the case on behalf of the petitioner
\nthat though all the above letters were received by respondents but
\nthere was no response from them.  It is the case on behalf of the
\npetitioner that even thereafter, as there was no response and in view
\nof persistent follow-up by the petitioner, ultimately the respondent
\ninvited the petitioner for discussion on 24.07.2008 and the
\npetitioner attended the said meeting held on 24.07.2008 but
\nresponsible officers of the respondent Company did not attend the
\nmeeting, therefore, another meeting was decided to be held for the
\nsaid purpose. Meeting thereafter fixed for 02.08.2008 was postponed
\nby the respondents and thereafter, no further attempt was made by the
\nrespondents to resolve petitioner’s grievance.  It is the case on
\nbehalf of the petitioner that thereafter petitioner served upon
\nrespondent specific notice dated 14.08.2008 invoking section 11 of
\nthe Arbitration and Conciliation Act, 1996 with regard to the works
\nin question nominating their Arbitrator.  However, neither there was
\nany reply to the said notice nor respondents nominated any person as
\ntheir Arbitrator and therefore, petitioner has preferred present
\npetition under Section 11(6) of the Arbitration and Conciliation Act,
\n1996 to appoint sole Arbitrator to resolve dispute between the
\nparties arising out of aforesaid contract.\n<\/p>\n
4.\t\tA
\npreliminary objection is raised by the respondents with respect to
\nremedy available to the petitioner to approach Arbitration Tribunal
\nconstituted under the Gujarat Public Works Contracts Disputes
\nArbitration Tribunal Act, 1992 (herein after referred to as ‘the
\nAct’ for short).\n<\/p>\n
5.\t\tMr.Paresh
\nDave, learned Advocate appearing on behalf of the petitioner has
\nvehemently submitted that as such looking to services to be provided
\nby the petitioner for which contract was executed between the
\npetitioner and respondent, it does not come within the definition of
\n‘ Works Contract’. Therefore, Tribunal constituted under
\nthe aforesaid Act would not have jurisdiction to adjudicate and
\nresolve the dispute between the parties. It is submitted that ‘ works
\ncontract’ is defined under section 2(1)(k) of the Act and as
\nper the Act for any dispute arising out of   works contract ,
\nTribunal constituted under the aforesaid Act would have jurisdiction.
\nIt is submitted that as per section 2(1)(k) of the Act, ‘ Works
\nContract’ means a contract made by the State Government or
\nthe Public Undertaking with any other person for the execution of any
\nof its works relating to construction, repairs or maintenance
\nof any building or superstructure, dam, weir, canal, reservoir, tank,
\nlake, road, well, bridge, factory or workshop or of such other work
\nof the State Government, as the case may be, of the Public
\nUndertaking, as the State Government may, by Notification in the
\nOfficial Gazette specify.  It is submitted that contract executed
\nby the petitioner and respondent and services rendered by the
\npetitioner does not fall within any of the work specified in the
\ndefinition of   Works contract . It is submitted
\nthat contract executed between the petitioner and respondent no.1 was
\nnot for execution of works relating to construction, repairs or
\nmaintenance etc.  Therefore, it is submitted that this Court
\nwould have jurisdiction to appoint sole Arbitrator  \/ Arbitrators to
\nresolve the disputes arising out of the aforesaid contract and
\nTribunal constituted under the aforesaid Act would not have any
\njurisdiction.\n<\/p>\n
6.\t\tMr.Paresh
\nDave, learned Advocate for the petitioner has heavily relied upon
\ndecision of Madhya Pradesh High Court in the case of  Bhilai
\nCastings and Forgings (P) Limited v\/s. M.P.Electricity Board
\nreported in Manu\/MP\/1120\/2006. It is submitted that in the case
\nbefore the Madhya Pradesh High Court when contract was for
\nmanufacture and supply of steel with the Madhya Pradesh Electricity
\nBoard and dispute arose between them for payment of money, Contractor
\napproached Arbitral Tribunal constituted under the Madhyastham
\nAdhikaran Adhiniyam, 1983 (similar act), the said Tribunal dismissed
\nsaid application on the ground of lack of jurisdiction holding that
\ncontract in question was not relating to works contract defined under
\nthe aforesaid Act and when said order was challenged before the
\nMadhya Pradesh High Court, the Madhya Pradesh High Court dismissed
\nsaid Revision Application confirming the view taken by the Tribunal
\nthat it had no jurisdiction as contract for manufacture and supply of
\nsteel does not come within the definition of   works contract
\ndefined under section 2(1)(i) of the said Act.  Relying upon
\naforesaid decision, it is submitted that in the present case also
\nlooking to the services rendered by the petitioner under the contract
\nin question i.e. to collect  village records 7\/12, record of rights
\nform no.6 and village form 8A and other services as provided and
\nreferred herein above, it cannot said that aforesaid consultancy
\nservices is\/was relates to construction, repair and maintenance etc.
\nas per section 2(1)(k) of the Act. Therefore, it is requested to
\noverrule preliminary objection raised by the respondent and to refer
\nparties to arbitration to resolve dispute between the parties.\n<\/p>\n
7.\t\tMr.H.S.Munshaw,
\nlearned Advocate for the respondents has submitted that words defined
\nin Works Contract provided under section 2(1)(k) is required to be
\ngiven widest meaning and same is of widest amplitude.   It is
\nsubmitted that purpose and object to enact the aforesaid Act is to
\nsee that for any dispute between the contractor and the State
\nGovernment and\/or Government Undertaking when contract has been
\nentered into for any other work relating to contraction, repair,
\nmaintenance etc., Tribunal constituted under the aforesaid Act
\nwould have jurisdiction.  It is submitted that any service to be
\nprovided by any person \/ contractor to achieve ultimate goal of
\nconstruction, repair, maintenance etc. is to be considered as ‘works
\ncontract’ within the meaning of section 2(1)(k) of the Act and
\nrestricted meaning to consider contract only for construction,
\nrepair, maintenance etc. should not be given while considering works
\ncontract.  It is submitted that ultimate goal is to lay down
\npipelines for transmission of water and for that purpose respondent
\ncompany was required to obtain ROU under the Gujarat Water and Gas
\nPipeline Act, 2000 and for that purpose contract was executed in
\nfavour of petitioner for consultancy service for undertaking work ROU
\nunder the aforesaid Gujarat Water and Gas Pipeline Act, 2000 for
\nlaying transmission pipelines. Therefore, it is submitted that any
\ncontract to provide any service for achieving ultimate result of
\nlaying pipelines is to be considered as   Works Contract
\nexecuted by Government \/ Government Undertaking in favour of
\ncontractor as same can be said to be relating to laying transmission
\nof pipelines for supply of water. Therefore, it is requested to
\ndismiss present petition.\n<\/p>\n
8.\t\tHeard
\nlearned Advocate appearing on behalf of the respective parties at
\nlength.\n<\/p>\n
9.\t\tIt
\nis to be noted that to overcome the acute scarcity of water in the
\nhighly drought prone areas of Sautrashtra, Kutch, North Gujarat and
\nPanchmahal District of the State, the Government of Gujarat has
\ninitiated action to supply water to these areas through several
\npipeline projects for transmission of water from Sardar Sarovar based
\nCanal System and Mahi Pipeline system.  The Government of Gujarat has
\nsetup a Special Purpose Vehicle (SPV) named Gujarat Water
\nInfrastructure Limited to plan, execute and maintain bulk water
\ntransmission system. Said Company identified various corridors for
\nlaying of these transmission system and as a first step, initiated
\nactions for completing formalities to obtain Right of User (ROU)
\nunder Gujarat Water and Gas Pipeline Act, 2000 for laying
\ntransmission pipelines. Under the aforesaid contract, petitioner was
\nrequired to provide work \/ services as stated herein above. It cannot
\nbe disputed that ultimate goal was to supply water through pipelines
\nproject and for achieving the same, respondent Company was required
\nto  either acquire land for laying down pipeline or to obtain ROU
\nunder  Gujarat Water and Gas Pipeline Act, 2000. Therefore, it can be
\nsaid that contract between the petitioner and respondent Company was
\nfor execution of works relating to construction, repair,
\nmaintenance etc. and the word has to be given widest amplitude
\nand restricting the meaning with respect to actual work of
\nconstruction, repair, maintenance etc. as sought to be canvassed by
\nthe petitioner cannot be accepted. Any contract for any of the work
\nwhich is for achieving ultimate goal of construction, repair and
\nmaintenance such as repairing building, designs to acquire land to
\nhave survey etc. is to be considered as   works contract
\nwithin the meaning of section 2(1)(k) of the Act i.e. for execution
\nof its work relating to construction, repair, maintenance etc..
\nTherefore, contract between the petitioner and respondent no.1 of
\nconsultancy service for obtaining ROU under Gujarat Water and Gas
\nPipeline Act, 2000 which is to acquire Right of User of land for the
\npurpose of laying pipelines for supply of water, can be said to be
\n  works contract  between the petitioner and
\nrespondent as per section 2(1)(k) of the Act. Therefore, Tribunal
\nconstituted under the Gujarat Public Works Contracts Disputes
\nArbitration Tribunal Act, 1992, would have jurisdiction to resolve
\ndispute between the parties arising out of aforesaid contract.
\nTherefore, contention on behalf of the petitioner that contract
\nentered into between the petitioner and respondent no.1 cannot be
\nsaid to be   works contract  as per section 2(1)(k)
\nof the Act, cannot be accepted.\n<\/p>\n
10.\t\tNow
\nso far as reliance placed upon decision of the Madhya Pradesh in the
\ncase of  Bhilai Castings and Forgings (P) Ltd. (supra)
\nis concerned  it is to be noted that on facts said decision would not
\nbe applicable to the present case.  In the case before Madhya Pradesh
\nHigh Court contract was awarded for manufacture and supply of steel
\nwith Madhya Pradesh Electricity Board and it was specifically found
\nby Madhya Pradesh High Court that contractor failed to show that
\ngoods were supplied in connection to work order issued by the
\nM.P.Electricity Board and therefore, there was no ‘work contract’
\nbetween them as defined in section 2(1)(i) of the Madhyastham
\nAdhikaran Adhiniyam, 1983 (Act). Therefore, considering above, Madhya
\nPradesh High Court confirmed the order passed by the Tribunal
\nrejecting Reference submitted by the Contractor holding that Tribunal
\nconstituted under the aforesaid Act would not have jurisdiction. In
\nthe present case, admittedly, contract is between petitioner and
\nrespondent no.1 and as stated above, same can be said to be   Works
\nContract  as defined under section 2(1)(k) of the Act.\n<\/p>\n
11.\t\tIn
\nview of above, Tribunal constituted under the Gujarat Public Works
\nContracts Disputes Arbitration Tribunal Act, 1992 would have
\njurisdiction to resolve dispute and differences arising out of
\ncontract in question and therefore, without further entering into
\nmerits of the case and \/or other aspect, present petition deserves to
\nbe dismissed and accordingly it is dismissed by relegating the
\npetitioner to approach Tribunal constituted under Gujarat Public
\nWorks Contracts Disputes Arbitration Tribunal Act, 1992.\n<\/p>\n
\t\tWith
\nthese, present petition is dismissed. No costs.\n<\/p>\n
[M.R.SHAH,J.]<\/p>\n
satish<\/p>\n
\t\t   \u00a0\u00a0\u00a0<\/p>\n
\t\t   Top<\/p>\n","protected":false},"excerpt":{"rendered":"
Gujarat High Court Sai vs Gujarat on 5 February, 2010 Author: M.R. Shah,&Nbsp; Gujarat High Court Case Information System Print IAAP\/92\/2009 12\/ 12 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD PETN. UNDER ARBITRATION ACT No. 92 of 2009 For Approval and Signature: HONOURABLE MR.JUSTICE M.R. SHAH =========================================== 1 Whether Reporters of Local Papers […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16,8],"tags":[],"class_list":["post-216527","post","type-post","status-publish","format-standard","hentry","category-gujarat-high-court","category-high-court"],"yoast_head":"\nSai vs Gujarat on 5 February, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sai-vs-gujarat-on-5-february-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sai vs Gujarat on 5 February, 2010 - 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