{"id":30803,"date":"2008-09-17T00:00:00","date_gmt":"2008-09-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/rajkamal-builders-vs-ahmedabad-municipal-corpn-ors-on-17-september-2008"},"modified":"2015-04-12T08:08:44","modified_gmt":"2015-04-12T02:38:44","slug":"rajkamal-builders-vs-ahmedabad-municipal-corpn-ors-on-17-september-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/rajkamal-builders-vs-ahmedabad-municipal-corpn-ors-on-17-september-2008","title":{"rendered":"Rajkamal Builders vs Ahmedabad Municipal Corpn. &amp; Ors on 17 September, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Rajkamal Builders vs Ahmedabad Municipal Corpn. &amp; Ors on 17 September, 2008<\/div>\n<div class=\"doc_bench\">Bench: R.V. Raveendran, Lokeshwar Singh Panta<\/div>\n<pre>                                                       1\n\n\n                     IN THE SUPREME COURT OF INDIA\n\n                     CIVIL APPELLATE JURISDICTION\n\n                      CIVIL APPEAL NO.5728 OF 2008\n             (arising out of SLP(C)No.7222 of 2006)\n\nRAJKAMAL BUILDERS                                                 ... APPELLANT\n\n                                VERSUS\n\nAHMEDABAD MUNICIPAL CORPORATION &amp; ORS.                          ... RESPONDENTS\n\n\n\n                                ORDER\n<\/pre>\n<p>          Leave granted. Heard learned counsel for the parties.\n<\/p>\n<p>          The Ahmedabad Municipal Corporation (AMC for short) decided to<\/p>\n<p>construct a bridge across the river Sabarmati. In that behalf AMC sought financial<\/p>\n<p>contribution from Ahmedabad Electricity Company (AEC), Oil &amp; Natural Gas<\/p>\n<p>Commission (ONGC) and Gujarat State Road Transport Corporation (GSRTC). As<\/p>\n<p>the cost was estimated to be Rs.11 crores, it was agreed              that AMC, AEC,<\/p>\n<p>ONGC and GSRTC will bear the cost in the ratio of Rs.4 crores, Rs.1 crore, Rs.2<\/p>\n<p>crores and Rs.4 crores respectively. According to AMC, it was further agreed that in<\/p>\n<p>the event of the cost exceeding Rs.11 crores, the excess to the extent of Rs.1 crore<\/p>\n<p>would be borne by ONGC and AEC in the proportion of 2:1. AMC appointed AEC<\/p>\n<p>as its agent for construction of the bridge. The work was entrusted to the appellant<\/p>\n<p>for execution. The cost of construction turned out to be Rs.11,38,06,000\/-. It is stated<\/p>\n<p>that the additional cost of Rs.38,06,000\/- was borne by ONGC and AEC in the ratio<\/p>\n<p>of 2:1 as per the earlier understanding.\n<\/p>\n<p><span class=\"hidden_text\">                                           2<\/span><\/p>\n<p>2.        Thereafter, the contractor raised certain disputes in regard to its claims<\/p>\n<p>aggregating to Rs.1,33,36,200\/-. The said disputes were referred to arbitration. AMC,<\/p>\n<p>AEC, ONGC and GSRTC were made respondents in the arbitration proceedings.<\/p>\n<p>The Arbitrator by award dated 15.6.1999,       awarded a sum of Rs.20,14,860\/- to the<\/p>\n<p>appellant contractor and directed that AMC and AEC shall pay the said amount<\/p>\n<p>with interest at the rate of 12% per annum from the date of award till date of<\/p>\n<p>realisation (in the manner set out in para 24 of the award). Feeling aggrieved by the<\/p>\n<p>award, AEC filed an application before the City Civil Court, Ahmedabad under<\/p>\n<p>Section 34 of the Arbitration and Conciliation Act, 1996 (&#8216;Act&#8217; for short). The City<\/p>\n<p>Civil Court by its judgment dated 15.9.2003 upheld the award directing the payment<\/p>\n<p>of Rs.20,14,860\/- with interest at the rate of 12% per annum to the contractor.<\/p>\n<p>However, the trial court held that AMC was not liable to pay any amount. It held that<\/p>\n<p>AEC was liable to pay one-third of the award amount and ONGC was liable to pay<\/p>\n<p>two-third of the award amount. Consequently it directed AEC to pay RS.6,71,620\/-<\/p>\n<p>plus interest and ONGC to pay Rs.13,43,240\/- plus interest to the contractor.<\/p>\n<p>3.        Feeling aggrieved by the modification of the award, ONGC filed an appeal<\/p>\n<p>before the High Court of Gujarat. ONGC contended that having regard to the scope<\/p>\n<p>of Section 34 of the Act, the Court ought not to have shifted the liability from AMC<\/p>\n<p>to ONGC. On the other hand AMC supported the order of the trial court. The High<\/p>\n<p>Court by its judgment dated 27.9.2005 allowed the appeal. It held that the ONGC<\/p>\n<p>could not have been made liable to pay Rs.13,43,240\/- with interest in modification of<\/p>\n<p>the award of the Arbitrator. The High Court was of the view that having regard to<\/p>\n<p>the nature of jurisdiction exercised under Section 34 of the Act, and as the provisions<br \/>\n<span class=\"hidden_text\">                                            3<\/span><\/p>\n<p>of Section 96 and Order 41 Rule 33 of CPC were inapplicable, the trial court could<\/p>\n<p>not have shifted the liability from AMC to ONGC. Therefore, the High Court set<\/p>\n<p>aside the decision of the trial court to the extent it held that ONGC was liable to pay<\/p>\n<p>Rs.13,43,240\/- with interest.\n<\/p>\n<p>4.   Feeling aggrieved the contractor has filed this appeal        by special leave.The<\/p>\n<p>contractor submits that it is        not concerned whether the AMC pays or ONGC<\/p>\n<p>pays, so long as some one pays the award amount to it.The grievance of the contractor<\/p>\n<p>is that the High Court while setting aside the liability of ONGC, ought to have issued<\/p>\n<p>a specific direction to AMC to pay the amount or ought to have stated that the award<\/p>\n<p>of the Arbitrator stood restored in full. The contractor apprehends that the judgment<\/p>\n<p>of the High Court may be so interpreted that AMC may dispute its liability to pay<\/p>\n<p>Rs.13,43,240\/- with interest on the ground that there is no specific direction to them<\/p>\n<p>by the High Court to pay the said sum.\n<\/p>\n<p>5.        On a careful consideration of the judgment, we are of the view that there is<\/p>\n<p>no basis for the apprehension of the contractor-appellant. The entire judgment when<\/p>\n<p>read as a whole, makes it clear that all that the High Court intended was to shift<\/p>\n<p>back the liability from ONGC in regard to Rs.13,43,240\/- with interest and not to<\/p>\n<p>reduce the amount due to the appellant. In short the effect of the decision of the High<\/p>\n<p>Court is to restore the award to its original position. It therefore follows that the sum<\/p>\n<p>of Rs.13,43,240\/- with interest thereon will have to be paid in terms of the award.<\/p>\n<p>6.        However, this leaves us with the dispute between AMC and ONGC as to<\/p>\n<p>who should bear the said liability. As observed above, the appellant contractor is not<\/p>\n<p>concerned with this dispute. It is unfortunate that even though the liability towards<br \/>\n<span class=\"hidden_text\">                                           4<\/span><\/p>\n<p>the contractor for the sum of Rs.20,14,860\/- with interest awarded by the Arbitrator<\/p>\n<p>was not under challenge, the contractor has not been able to get the amount due to it<\/p>\n<p>for nearly a decade because of the inter-se dispute in regard to liability between the<\/p>\n<p>AMC and the ONGC.\n<\/p>\n<\/p>\n<p>7.        AMC is a statutory body established under the Ahmedabad Municipal<\/p>\n<p>Corporation Act and ONGC is a statutory Corporation established under the Oil &amp;<\/p>\n<p>Natural Gas Commission Act, 1959. In regard to disputes between Government<\/p>\n<p>departments and public sector Undertakings, there is a mechanism for amicable<\/p>\n<p>resolution of disputes by mutual negotiations or through good offices of the High<\/p>\n<p>Powered Committee constituted by the Central Government, before parties approach<\/p>\n<p>a court. (See: ONGC vs. CCE-1995 Supp(4) SCC 541). Though the dispute between<\/p>\n<p>AMC and ONGC may not strictly fall under the category of disputes referable to the<\/p>\n<p>High Powered Committee, there is no reason why an attempt should not be made by<\/p>\n<p>AMC and ONGC to sort out the dispute between them by mutual negotiations or<\/p>\n<p>through the High Powered Committee, before the issue is considered by the court.<\/p>\n<p>There is also no reason why the appellant contractor should wait for payment till the<\/p>\n<p>issue is decided as between AMC and ONGC.\n<\/p>\n<p>8.         Therefore in exercise of power under Article 142 of the Constitution, we<\/p>\n<p>direct that the amount admittedly due as per the award (the sum of Rs.13,43,240\/-<\/p>\n<p>with interest thereon) shall be paid equally (50% each by AMC and ONGC) to the<\/p>\n<p>appellant-contractor within three months from today. AMC and the ONGC shall also<\/p>\n<p>pay a sum of Rs.10,000\/- as costs to the appellant contractor. The appeal is disposed<br \/>\n<span class=\"hidden_text\">                                            5<\/span><\/p>\n<p>of accordingly in so far as the appellant is concerned.\n<\/p>\n<p>9.        Such payment will be without prejudice to the rights and contentions inter<\/p>\n<p>se between themselves. AMC and ONGC shall endeavour to sort out the dispute<\/p>\n<p>between themselves as to who is liable, in the manner stated above. In the event of<\/p>\n<p>failure, this Court will consider the question. List the matter after six months to<\/p>\n<p>enable AMC and ONGC to report about the results of their efforts of negotiated<\/p>\n<p>settlement.\n<\/p>\n<\/p>\n<p>                                                                &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.J.\n<\/p>\n<p>                                       ( R.V. RAVEENDRAN )<\/p>\n<p>                                     &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.J.\n<\/p>\n<p>                                       ( LOKESHWAR SINGH PANTA)<br \/>\nNEW DELHI,<br \/>\nSEPTEMBER 17, 2008.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Rajkamal Builders vs Ahmedabad Municipal Corpn. &amp; Ors on 17 September, 2008 Bench: R.V. Raveendran, Lokeshwar Singh Panta 1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5728 OF 2008 (arising out of SLP(C)No.7222 of 2006) RAJKAMAL BUILDERS &#8230; APPELLANT VERSUS AHMEDABAD MUNICIPAL CORPORATION &amp; ORS. &#8230; RESPONDENTS [&hellip;]<\/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":[30],"tags":[],"class_list":["post-30803","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Rajkamal Builders vs Ahmedabad Municipal Corpn. &amp; Ors on 17 September, 2008 - Free Judgements of Supreme Court &amp; 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\/rajkamal-builders-vs-ahmedabad-municipal-corpn-ors-on-17-september-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rajkamal Builders vs Ahmedabad Municipal Corpn. &amp; 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