{"id":54712,"date":"2010-07-27T00:00:00","date_gmt":"2010-07-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-state-of-kerala-vs-k-v-joseph-sons-on-27-july-2010"},"modified":"2015-11-09T22:54:26","modified_gmt":"2015-11-09T17:24:26","slug":"the-state-of-kerala-vs-k-v-joseph-sons-on-27-july-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-state-of-kerala-vs-k-v-joseph-sons-on-27-july-2010","title":{"rendered":"The State Of Kerala vs K.V.Joseph & Sons on 27 July, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
The State Of Kerala vs K.V.Joseph & Sons on 27 July, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nRP.No. 960 of 2009()\n\n\n1. THE STATE OF KERALA,\n                      ...  Petitioner\n2. THE SUPERINTENDENT OF ENGINEER,\n\n                        Vs\n\n\n\n1. K.V.JOSEPH & SONS,\n                       ...       Respondent\n\n                For Petitioner  :GOVERNMENT PLEADER\n\n                For Respondent  :SRI.RAJIV ABRAHAM GEORGE\n\nThe Hon'ble MR. Justice PIUS C.KURIAKOSE\n\n Dated :27\/07\/2010\n\n O R D E R\n                   PIUS C. KURIAKOSE, J.\n          -----------------------------------------------\n         RP. No. 960 of 2009 in A.R. No. 1 of 2007\n          -----------------------------------------------\n            Dated this the 27th day of July, 2010\n\n                           O R D E R\n<\/pre>\n
      The respondents in Arbitration Request No. 1 of 2007,<\/p>\n
viz., the State and the Superintending Engineer seek review<\/p>\n
of the order of this Court dated 25-6-2007 in the arbitration<\/p>\n
request on various grounds.        The arbitration request was<\/p>\n
submitted by the applicant therein (hereinafter referred to<\/p>\n
as the contractor) under sub-sections (6) and (8) of Section<\/p>\n
11 of Arbitration and Conciliation Act, 1996. The prayer in<\/p>\n
the request was that        Justice B.M.Thulasidas, a former<\/p>\n
Judge of this Court nominated by the applicant as          their<\/p>\n
nominee, be        appointed as the sole arbitrator for<\/p>\n
adjudicating upon the disputes and differences which have<\/p>\n
arisen between the contractor and the respondents in the<\/p>\n
arbitration   request     (hereafter    referred    to   as the<\/p>\n
Government). It was averred that the work of “CRF Works –<\/p>\n
Improvements to Kadambanad – Mannady – Enathu-<\/p>\n
RP. No. 960\/09
\n                              -2-<\/span><\/p>\n
Ezhamkulam Road in Pathanamthitta District” was awarded<\/p>\n
to the contractor and a formal contract agreement was<\/p>\n
executed between the contractor and the Government on<\/p>\n
25-5-2004. Disputes arose between the parties during the<\/p>\n
course of the execution of work and by Annexure-I notice<\/p>\n
produced along with the A.R. the contractor treated the<\/p>\n
contract as ended and called upon the Government to pay a<\/p>\n
sum of Rs.34,75,89,178.40 together with interest within 30<\/p>\n
days.     As the above claim was rejected by Annexure-II,<\/p>\n
letter invoking the arbitration clause contained in the<\/p>\n
agreement, the contractor sent Annexure – III containing<\/p>\n
the names of five retired Judges of this Court, one of them<\/p>\n
a former Chief Justice of the High Court of Madhya Pradesh,<\/p>\n
to be considered by the Government for appointing one<\/p>\n
among them as the sole arbitrator for adjudicating the<\/p>\n
disputes and differences between the parties. It is on the<\/p>\n
allegation that in spite of elapse of more than two months<\/p>\n
RP. No. 960\/09
\n                               -3-<\/span><\/p>\n
after Annexure – III was received by the Government there<\/p>\n
was no response from the side of the Government and it<\/p>\n
was under such circumstances that the contractor appointed<\/p>\n
Justice B.M.Thulasidas as their nominee arbitrator and<\/p>\n
issued Annexure- IV calling upon the Government to appoint<\/p>\n
their nominee arbitrator under clause 25.3 of the conditions<\/p>\n
of contract. The applicant referred to clause 25.3(c) of the<\/p>\n
general conditions of contract as well as the special<\/p>\n
conditions of contract and stated that if one of the parties<\/p>\n
failed to appoint its arbitrator in pursuance of sub-clause (a)<\/p>\n
and (b) within 30 days, then the Council, I.R.C. should<\/p>\n
appoint arbitrator on behalf of the defaulting party. There<\/p>\n
was no response from the Council, I.R.C. to Annexure – V<\/p>\n
notice which was sent to them.             It is under such<\/p>\n
circumstances that the A.R. was submitted to this court and<\/p>\n
Annexure – VI produced along with the A.R. is the copy of<\/p>\n
the arbitration clause contained in condition No.3 of the<\/p>\n
RP. No. 960\/09
\n                              -4-<\/span><\/p>\n
special conditions of contract forming part of the contract<\/p>\n
agreement. A detailed counter affidavit was filed on behalf<\/p>\n
of the Government refuting the various claims of the<\/p>\n
applicant.     However, towards the end of the counter<\/p>\n
affidavit it was stated that in case this Court is inclined to<\/p>\n
appoint Arbitral Tribunal, either Justice T.V.Ramakrishnan,<\/p>\n
former Judge of this Court or Sri.E. Kurian Mathew, Chief<\/p>\n
Engineer (Retired) be appointed as the sole arbitrator.<\/p>\n
Despite the above stand taken in the counter affidavit, at<\/p>\n
the Bar both sides submitted that it is ideal to have both<\/p>\n
Justice T.V.Ramakrishnan and Sri.E.Kurian Mathew as the<\/p>\n
Arbitral Tribunal. This Court however, on considering the<\/p>\n
submissions addressed on behalf of the parties became<\/p>\n
inclined to allow the arbitration request and appointed<\/p>\n
Sri.B.M.Thulasidas,   retired  Judge   of  this   Court   and<\/p>\n
Sri.Kurian Mathew, retired Chief Engineer, Kerala PWD as<\/p>\n
joint arbitrators for constituting the Arbitral Tribunal to<\/p>\n
RP. No. 960\/09
\n                              -5-<\/span><\/p>\n
adjudicate on the disputes. It is the above order that is<\/p>\n
sought to be reviewed by the Government by filing the<\/p>\n
instant review petition.\n<\/p>\n
      2. It is   urged that the Superintending Engineer<\/p>\n
entered into the subject contract with the contractor only in<\/p>\n
his official capacity and by order of the Governor.      It is<\/p>\n
apparent from G.O. (MS) No. 53\/78\/PW&E dated 8-5-1978<\/p>\n
that the Government had ordered that the system of<\/p>\n
arbitration in Public Works Engineering    Contracts will be<\/p>\n
restricted to contracts with estimated PAC of Rs.2 lakhs and<\/p>\n
below. Later by Annexure-I GO (MS)45\/85\/PW dated 16-5-<\/p>\n
1985 the Government dispensed with the system of<\/p>\n
arbitration in engineering contracts in the contract works in<\/p>\n
Public Works Department completely, irrespective of the<\/p>\n
PAC and further the Government directed the Chief Engineer<\/p>\n
(General) that necessary instructions be given to all officers<\/p>\n
of the PWD to implement Annexure – I G.O. by deleting the<\/p>\n
RP. No. 960\/09
\n                             -6-<\/span><\/p>\n
arbitration clause from all tender forms and agreements.<\/p>\n
It is urged that pursuant to Annexure – I G.O. the<\/p>\n
Government issued Annexure – II G.O. (GO (MS) 10\/85\/PW<\/p>\n
& E dated 27-1-1986 introducing amendments to be<\/p>\n
incorporated in the notice inviting tender for works, the<\/p>\n
tender form, the form of agreement and the special<\/p>\n
conditions to the agreement in respect of PWD works. It is<\/p>\n
urged that by virtue of Annexures I and II, the Government<\/p>\n
expressly and unequivocally declared that arbitration shall<\/p>\n
not be a means of settlement of all or any of the disputes or<\/p>\n
claims or anything on account of any contract entered into<\/p>\n
between the PWD Contractor and the Government of Kerala.<\/p>\n
It is pointed out that it was obligatory on the part of the<\/p>\n
Superintending Engineer who is the second review petitioner<\/p>\n
to have deleted the arbitration clause in the special<\/p>\n
conditions of contract which is part of the printed format of<\/p>\n
the agreement in question. It is also pointed out that in<\/p>\n
RP. No. 960\/09
\n                             -7-<\/span><\/p>\n
the    works   contract agreement,     admittedly   executed<\/p>\n
between the parties there is a clause that arbitration shall<\/p>\n
not be a means of settlement of disputes or claims. It is<\/p>\n
submitted that the existence of the arbitration clause in the<\/p>\n
special conditions which is due to non deletion of that clause<\/p>\n
by the Superintending Engineer can be treated only as an<\/p>\n
inadvertent omission. It is urged in the memorandum of<\/p>\n
review petition that under the cover of arbitration the<\/p>\n
contractor is claiming unconscionable compensation amount<\/p>\n
of Rs.34,75,89,178\/- as against the agreed contract amount<\/p>\n
of Rs.9,98,44,495\/-. The review petition reiterates that in<\/p>\n
the teeth of Annexures I and II Government Orders<\/p>\n
providing that no contract with the executive Government<\/p>\n
as comprehended by Article 299 of the Constitution shall<\/p>\n
contain a provision for arbitration, the existence of any<\/p>\n
arbitration clause in PWD contracts contrary to the express<\/p>\n
intention of the executive Government will be inoperative.<\/p>\n
RP. No. 960\/09
\n                              -8-<\/span><\/p>\n
It is urged that provision of a contract which is contrary to<\/p>\n
the stipulations contained in any directives issued by the<\/p>\n
Governor under Article 299 will be void and unenforceable<\/p>\n
against the Government. It is contended on that basis that<\/p>\n
the arbitration clause can only be considered as nugatory<\/p>\n
and non est. It is conceded that the non-applicability of the<\/p>\n
arbitration clause in a PWD contract was not brought to the<\/p>\n
notice of this Court either by filing the statement of<\/p>\n
objections or while addressing arguments before this Court<\/p>\n
in the arbitration request.       But it is contended that<\/p>\n
participation in the arbitration request will not amount to<\/p>\n
acquiescence,waiver or ratification on the part of the<\/p>\n
Government.      The doctrine of promissory estoppel would<\/p>\n
not stand in the way of Government in assailing the<\/p>\n
provisions of arbitration clause at any stage. It is submitted<\/p>\n
that the Superintending Engineer who is an officer of the<\/p>\n
Government acted beyond the scope of his authority. It is<\/p>\n
RP. No. 960\/09
\n                             -9-<\/span><\/p>\n
pointed out that the constitutional provisions and Section<\/p>\n
175(3) of the Government of India Act, 1935 contemplate<\/p>\n
that Government contracts made in exercise of the<\/p>\n
executive power of the State shall be made by the Governor<\/p>\n
through such persons as the Governor may direct or<\/p>\n
authorise.    These provisions are enacted as a mater of<\/p>\n
public policy as the Government should not be saddled with<\/p>\n
any loss for unauthorised contracts. These provisions have<\/p>\n
been enacted in public interest and hence the omission on<\/p>\n
the part of the Government to bring to the notice of this<\/p>\n
Court Annexures I and II by filing counter affidavit in the<\/p>\n
A.R. cannot be considered as waiver by the Government of<\/p>\n
its objection. In the review petition the review petitioner<\/p>\n
relies on the judgment of the Supreme Court in State of<\/p>\n
Punjab v. Om Prakash,<\/a> 1988(2) KLT SN 71, M\/s. Jith Ram<\/p>\n
Shivkumar v. State of Haryana, AIR 1980 SCC 1285, M\/s.<\/p>\n
Leo Construction Contractors v. Government of Kerala,<\/a> 1989<\/p>\n
RP. No. 960\/09
\n                             -10-<\/span><\/p>\n
(1) KLT 215. It is also pointed out that the Superintending<\/p>\n
Engineer who had entered into the contract with the<\/p>\n
contractor in this case on behalf of the Governor was acting<\/p>\n
unauthorisedly while executing the contract in question and<\/p>\n
in this context     it is pointed out that the very same<\/p>\n
Superintending Engineer executed another contract relating<\/p>\n
to execution of work “CRF- Construction of Erumeli –<\/p>\n
Chalakkayam – Phase – 3” in the same district in tune with<\/p>\n
the      Government orders by excluding the arbitration<\/p>\n
clauses.\n<\/p>\n
      3. To the review petition the contractor has filed a<\/p>\n
detailed counter affidavit repudiating the averments made<\/p>\n
and grounds raised in the RP.      It is submitted that the<\/p>\n
review petition is not maintainable. It is pointed out that<\/p>\n
the Arbitration and Conciliation Act 1996 is a complete and<\/p>\n
comprehensive Act     by itself both as regards substantive<\/p>\n
and procedural law relating to arbitration, conciliation and<\/p>\n
RP. No. 960\/09
\n                              -11-<\/span><\/p>\n
mediation and the said statute does not provide for a review<\/p>\n
of orders passed by the Honourable Chief Justice or the<\/p>\n
designated Judge under Section 11. It is also pointed out<\/p>\n
that section 16 of the act empowering the Arbitral Tribunal<\/p>\n
to rule on its own jurisdiction including any objections with<\/p>\n
respect to the existence or validity of the arbitration<\/p>\n
agreement was introduced with the view of reducing the role<\/p>\n
of courts during the course of the arbitral proceedings. It is<\/p>\n
pointed out that the review petition is hopelessly delayed.<\/p>\n
Till the date of the R.P. in September 2009 more than 30<\/p>\n
sittings of the Tribunal had taken place as provided under<\/p>\n
Section 4 of the Arbitration Conciliation Act 1996 and in all<\/p>\n
these sittings there was full and complete participation by<\/p>\n
the review petitioners. The review petitioners are deemed to<\/p>\n
have     waived  their  right   to  object  to  the   alleged<\/p>\n
noncompliance     of  any    requirement   of   deleting  the<\/p>\n
arbitration clause.\n<\/p>\n
RP. No. 960\/09
\n                             -12-<\/span><\/p>\n
      4. As regards Annexure I G.O. relied on by the review<\/p>\n
petitioners it is contended that a proper reading of the G.O.<\/p>\n
would clearly indicate only that the decision is to dispense<\/p>\n
with existing system of referring to arbitration of disputes in<\/p>\n
Public Works Engineering Contracts, the value of which was<\/p>\n
Rs.2 lakhs and below and it is contended that directions<\/p>\n
were issued to the Chief Engineer (General) to take<\/p>\n
necessary action for implementing G.O. dispensing with<\/p>\n
arbitration relating to small contracts of Rs.2 lakhs and<\/p>\n
below. As regards Annexure II G.O. it is contended that by<\/p>\n
this G.O. amendments to notice inviting inviting tenders for<\/p>\n
works (Form No.83), form of tender (Form No.84) and form<\/p>\n
of agreement (Form No.GW 132) were indicated and it was<\/p>\n
directed that the amended forms should be used for all<\/p>\n
types of PWD works irrespective of the PAC. The contention<\/p>\n
of the Government that by virtue of the two G.Os. the<\/p>\n
Government has expressly and unequivocally declared that<\/p>\n
RP. No. 960\/09
\n                            -13-<\/span><\/p>\n
arbitration shall not be a means of settlement of all or any<\/p>\n
of the disputes or claims entered into between a PWD<\/p>\n
Contractor and the Government of Kerala is repudiated. It<\/p>\n
is submitted that in the present contract none of the forms<\/p>\n
referred to in Annexure II G.O. find a place and in fact the<\/p>\n
contract in question being      a centrally funded project<\/p>\n
national competitive bidding was resorted to and the PWD,<\/p>\n
Government of Kerala is only the executing agency and<\/p>\n
therefore the conditions applicable to national competitive<\/p>\n
bidding were made applicable to the contract. The counter<\/p>\n
affidavit refers to paragraph 16 of the counter affidavit<\/p>\n
which had been filed in a arbitration request No. 1 of 2007<\/p>\n
and contends that the review petitioners cannot now be<\/p>\n
heard to say that the Superintending Engineer did not delete<\/p>\n
the arbitration clause in the special conditions of contract.<\/p>\n
It is submitted in the counter affidavit that the parties<\/p>\n
having acted upon the contract based upon the terms<\/p>\n
RP. No. 960\/09
\n                             -14-<\/span><\/p>\n
entered into and the contractor having substantially<\/p>\n
completed the work under the contract, the review<\/p>\n
petitioners should not be permitted to go back on the terms<\/p>\n
entered into and agreed upon in writing, dealing at arms<\/p>\n
length and seek to change the terms of the agreement to<\/p>\n
deny settlement by arbitration.        The counter affidavit<\/p>\n
denies the averments in the review petition that the<\/p>\n
agreement contains a clause signed by both parties that<\/p>\n
arbitration shall not be a means of settlement of disputes.<\/p>\n
      5. It is contended that the contract being a centrally<\/p>\n
funded scheme, Annexures I and II G.Os. promulgated by<\/p>\n
the Kerala Government did not apply. The provision in the<\/p>\n
special conditions for arbitration is binding on parties<\/p>\n
especially as there is no provision in the contract providing<\/p>\n
that all or any of the G.Os. promulgated by the Government<\/p>\n
will be applicable to the contract in question. It is pointed<\/p>\n
out that when the contractor’s bid was accepted by the<\/p>\n
RP. No. 960\/09
\n                             -15-<\/span><\/p>\n
Superintending    Engineer vide selection notice dated 25-5-<\/p>\n
2004 it was specifically provided that G.Os. dated 19-8-<\/p>\n
1997 and 21-11-1992 will be applicable to the contract at<\/p>\n
hand and not Annexures I and II G.Os.\n<\/p>\n
      6. It is highlighted that in the light of the sworn<\/p>\n
statement of the Joint Secretary to Government who is the<\/p>\n
deponent in the counter affidavit dated 16-6-2007 it is futile<\/p>\n
for the review petitioners now to contend that the omission<\/p>\n
to place on record the existence of the Annexures I and II<\/p>\n
G.Os. before this Court at the time of hearing was due to<\/p>\n
inadvertence. It is contended that the filing of the review<\/p>\n
petition amounts to gross abuse of process of this Court. It<\/p>\n
is pointed out further that after completion of the pleadings<\/p>\n
12 issues were settled by the Arbitral Tribunal and that<\/p>\n
recording of evidence is over and the claimant’s counsel has<\/p>\n
completed his arguments and the counsel for respondents<\/p>\n
who are the review petitioners has commenced his<\/p>\n
RP. No. 960\/09
\n                             -16-<\/span><\/p>\n
arguments. A total of 45 sittings have been held so far by<\/p>\n
the Arbitral Tribunal spread over nearly two years and<\/p>\n
interim award published directing the petitioners to pay an<\/p>\n
amount of Rs.2.43 crores towards admitted amount for work<\/p>\n
done and the said amount was actually paid to the<\/p>\n
respondents. It is submitted     that considerable amounts<\/p>\n
have been already expended by the parties towards cost of<\/p>\n
arbitration.    It is then pointed out that numerous<\/p>\n
correspondence exchanged between the parties to the<\/p>\n
contract during the pendency of the work and thereafter<\/p>\n
various officials of the review petitioners including the 2nd<\/p>\n
review petitioner had adverted to or referred to the the<\/p>\n
arbitration clause   in the contract   all of these items of<\/p>\n
correspondence are before the Arbitral Tribunal.         The<\/p>\n
present attempt of the review petitioner is only to protract<\/p>\n
the arbitral proceedings     by attempting to mislead this<\/p>\n
Court. It is also pointed out that for numerous works in<\/p>\n
RP. No. 960\/09
\n                              -17-<\/span><\/p>\n
Kerala carried out by the Kerala PWD, Kerala Water<\/p>\n
Authority, Kerala State Transport Project etc. arbitration has<\/p>\n
been and is the means of settlement of disputes between<\/p>\n
the parties and by having the issues adjudicated by learned<\/p>\n
arbitrators of proven integrity, no prejudice is being caused<\/p>\n
to anybody.     Lastly it is submitted that in this case no<\/p>\n
prejudice will be caused to the applicants as the issues are<\/p>\n
being considered by an Arbitral Tribunal consisting of two<\/p>\n
retired Judges of this Court and a retired Chief Engineer of<\/p>\n
PWD      regarding   whose    integrity   and   learning    the<\/p>\n
Government cannot have any legitimate ground.<\/p>\n
      7. It was Sri.K.R.Ganesh, Senior Govt. Pleader who<\/p>\n
addressed arguments before me on behalf of the review<\/p>\n
petitioner. Raising very spirited and persuasive arguments<\/p>\n
on the basis of various grounds raised in the RP<\/p>\n
Sri.K.R.Ganesh submitted that there is every warrant for<\/p>\n
recalling the order of this court constituting Arbitral Tribunal<\/p>\n
RP. No. 960\/09
\n                             -18-<\/span><\/p>\n
for adjudicating the disputes between the parties. Referring<\/p>\n
to the judgment of the Supreme Court in Inderchand Jain<\/p>\n
v.Motilal, 2009(3) KLT SN 65 Mr.Ganesh submitted that<\/p>\n
power of review under Order 47 Rule 1 of the Code of Civil<\/p>\n
Procedure can be invoked for any other sufficient reason<\/p>\n
than the reasons mentioned under the above provision of<\/p>\n
the Code of Civil Procedure. In support of his argument that<\/p>\n
there is no scope for reporting the doctrine of equitable<\/p>\n
estoppel against the Government in a case where orders are<\/p>\n
passed on behalf of the Governor of Kerala by virtue of the<\/p>\n
powers under Article 229(1) of the Constitution ignoring<\/p>\n
public interest the learned Government Pleader relied<\/p>\n
strongly on the judgment of the Supreme Court in M\/s. Jit<\/p>\n
Ram Shiv Kumar v. State of Haryana, AIR 1980 SC 1285.<\/p>\n
For the same proposition the learned Govt. Pleader relied on<\/p>\n
the judgment of the Supreme Court in State of Punjab v.<\/p>\n
Om Prakash,<\/a> 1988(2) KLT SN 71.         The learned counsel<\/p>\n
RP. No. 960\/09
\n                             -19-<\/span><\/p>\n
submitted that where there is contravention of the<\/p>\n
provisions of Article 299(1) of the Constitution, i.e., when<\/p>\n
contract is entered into in gross violation of existing<\/p>\n
Government Orders, the plea of estoppel cannot be raised<\/p>\n
against the Government, when the Government requests<\/p>\n
that a patent illegality done by the representative of the<\/p>\n
Government should be undone. Mr.Ganesh submitted that<\/p>\n
it cannot be as though the Government Orders taking away<\/p>\n
the provision for   arbitration from PWD contracts was not<\/p>\n
known to the contractor or the Superintending Engineer. In<\/p>\n
order to show that this court has noticed the Government<\/p>\n
Orders taking away the provision for arbitration for PWD<\/p>\n
contracts and approving       the Government Orders Mr.<\/p>\n
Ganesh relied on the judgment of this Court in M\/s. Leo<\/p>\n
Construction Contractors v. Government of Kerala,<\/a> 1989 (1)<\/p>\n
KLT 215. To argue that an application for review of the order<\/p>\n
passed by the designated Judge under Section 11(6) of the<\/p>\n
RP. No. 960\/09
\n                            -20-<\/span><\/p>\n
Arbitration and Conciliation Act Sri.Ganesh relied on the<\/p>\n
judgment of the Supreme Court in M\/s. Jain Studios Ltd. v.<\/p>\n
Shin Satellite Public Co. Ltd. AIR<\/a> 2006 SC 2686.<\/p>\n
(Interestingly paragraph 11 of this judgment was relied on<\/p>\n
by the counsel for the respondent also). Mr.Ganesh relied on<\/p>\n
the judgment of the Supreme Court in M.M.Thomas v. State<\/p>\n
of Kerala and<\/a> another, (2000) 1 SCC 666 to argue that as a<\/p>\n
court of record, power and duty to review its own judgment<\/p>\n
for correcting  its own mistake is inherent in every High<\/p>\n
Court. The counsel submitted that High Court is a court of<\/p>\n
record and unquestionably a superior court of plenary<\/p>\n
jurisdiction and is competent to determine the scope of its<\/p>\n
jurisdiction.  Mr. Ganash relied on the judgment of the<\/p>\n
Supreme Court in H.Lathakumari v.Vamanapuram Block<\/p>\n
Panchayat and others, 2009 KHC 4439 to submit that even<\/p>\n
the Supreme Court has recognised the Government Orders<\/p>\n
excluding arbitration clauses from PWD contracts. Sri.<\/p>\n
RP. No. 960\/09
\n                             -21-<\/span><\/p>\n
Ganesh lastly relied on the judgment of this Court in<\/p>\n
Southern Structurals Ltd. v. K.S.E. Board, 2008(1) KLT 105<\/p>\n
after referring to Section 7 of the Arbitration and<\/p>\n
Conciliation Act and Sections 10, 14, 20, 21 and 22 to argue<\/p>\n
that any contract in which an arbitration clause           is<\/p>\n
introduced by playing fraud on the Government will be a<\/p>\n
void contract and that the High Court cannot compel an<\/p>\n
unwilling party to go for arbitration on the basis of such a<\/p>\n
void contract.\n<\/p>\n
         8. The submissions of Mr.Ganash were met by<\/p>\n
Mr.Rajiv A. George, learned counsel for the respondent<\/p>\n
contractor. Mr. Rajiv referred to Sections 114 and rule 1 of<\/p>\n
Order 47 CPC and submitted that review can be allowed<\/p>\n
only on the grounds specifically mentioned         in those<\/p>\n
provisions of the Code of Civil Procedure.   Other sufficient<\/p>\n
reason envisaged by Rule 1 of Order 47 is a reason which is<\/p>\n
ejusdem generis with the reasons enumerated therein<\/p>\n
RP. No. 960\/09
\n                             -22-<\/span><\/p>\n
before. Counsel submitted that in the present case the Joint<\/p>\n
Secretary to the Public Works Department who had filed<\/p>\n
counter affidavit on behalf of the Government in Arbitration<\/p>\n
Request No. 1 of 2007 had not only not denied the existence<\/p>\n
of the arbitration clause but had reiterated its existence.<\/p>\n
Mr. Rajiv would distinguish all the decisions cited on behalf<\/p>\n
of the Government by Mr.Ganesh on facts which according<\/p>\n
to the learned counsel are peculiar in this case. Referring to<\/p>\n
the judgment of the Constitution Bench of the Supreme<\/p>\n
Court in SBP & Co. v. Patel Engineering Ltd. and another,<\/p>\n
(2005) 8 SCC 618 Mr.Rajiv submitted that under that<\/p>\n
judgment the Supreme Court had overruled the earlier<\/p>\n
Constitution Bench decision in Konkan Railway Corporation<\/p>\n
Ltd. v. Rani Constructions (P) Ltd.<\/a> (2002) 2 SCC 388 and<\/p>\n
held that the Chief Justice or his designate while dealing<\/p>\n
with an application  under Section 11 was bound to decide<\/p>\n
whether he had jurisdiction, whether there was a valid<\/p>\n
RP. No. 960\/09
\n                            -23-<\/span><\/p>\n
arbitration agreement, whether the person making the<\/p>\n
request was a party to the arbitration agreement and<\/p>\n
whether there subsisted a dispute\/live claim capable of<\/p>\n
being arbitrated upon and that the decision of the<\/p>\n
designated Judge      was a judicial one and not an<\/p>\n
administrative one.  The counsel submitted that this is a<\/p>\n
case where there was a concluded contract and argued that<\/p>\n
once a concluded contract comes into existence, then terms<\/p>\n
of tender cannot override the terms and conditions of the<\/p>\n
completed contract.   He relied on the judgment of the<\/p>\n
Supreme Court in Security Printing and Minting Corporation<\/p>\n
of India Ltd. and another v. Gandhi Industrial Corporation,<\/p>\n
(2007) 13 SCC 236.\n<\/p>\n
      9. I have anxiously considered the rival submissions<\/p>\n
addressed at the Bar. I have to remind myself at the very<\/p>\n
outset of the contours of the jurisdiction which is being<\/p>\n
invoked by the Government. It is trite by various decisions<\/p>\n
RP. No. 960\/09
\n                              -24-<\/span><\/p>\n
including     the  judgment   of  the  Supreme    Court   in<\/p>\n
Inderchand Jain v. Motilal, 2009(3) KLT SN 65 which was<\/p>\n
relied on by the review petitioners themselves and the<\/p>\n
judgment in Jain Studios Ltd. v. Shin Satellite Public Co.<\/p>\n
Ltd.,<\/a> 2006(5)SCC 501 that power of review is distinct in<\/p>\n
nature from appellate power.        Discovery of new and<\/p>\n
important matter or evidence which after the exercise of<\/p>\n
due diligence by the petitioner        was not within his<\/p>\n
knowledge or could not be produced by him at the time<\/p>\n
when the original order     was passed or existence of any<\/p>\n
mistake or error which is      apparent on the face  of the<\/p>\n
record or existence of “any other sufficient reason” are the<\/p>\n
only grounds on which applications for review can be<\/p>\n
entertained and allowed.         The expression “any other<\/p>\n
sufficient reason” appearing in clause ) of sub-rule (1) of<\/p>\n
Rule 1 of Order 47 has to be a reason homologous or atleast<\/p>\n
analogous      to the other reasons mentioned earlier in the<\/p>\n
RP. No. 960\/09
\n                             -25-<\/span><\/p>\n
said clause.     In other words, unless sufficient reason<\/p>\n
highlighted by the Government is ejusdem generis with the<\/p>\n
other two reasons mentioned in clause(c) the same cannot<\/p>\n
be a sufficient reasons for the purpose of clause ) at all.<\/p>\n
The      persuasive  submissions    of   Mr.    K.R.Ganesh<\/p>\n
notwithstanding, it is clear to my mind that any reason<\/p>\n
constituting ground for review under Order 47 rule 1 has not<\/p>\n
been made out by the Government in the present case. As<\/p>\n
rightly contended by the respondent contractor, the<\/p>\n
Government through the counter affidavit submitted in A.R.<\/p>\n
No. 1 of 2007 not only did not deny the existence of the<\/p>\n
arbitration clause which was being consistently relied on by<\/p>\n
the contractor but also admitted the same in paragraph 16<\/p>\n
of the counter.    While meeting the merits of the claims<\/p>\n
raised by the contractor it was contended by the<\/p>\n
Government that the claims had been raised with the<\/p>\n
malafide intention of extracting undue and unwarranted<\/p>\n
RP. No. 960\/09
\n                              -26-<\/span><\/p>\n
benefits from the arbitration clause. As stated by me in the<\/p>\n
order in A.R. 1 of 2007 the Government after refuting the<\/p>\n
claims of the applicant contractor had suggested that if this<\/p>\n
court becomes inclined to appoint an Arbitral Tribunal either<\/p>\n
Justice T.V.Ramakrishnan, former Judge of this Court or<\/p>\n
Sri.E.Kurian Mathew, retired Chief Engineer be appointed as<\/p>\n
arbitrator. In fact, at the Bar, the counsel for the applicant<\/p>\n
contractor and the Government Pleader (then Sri.Shyson<\/p>\n
P.Manguzha) submitted that it will be ideal if this court<\/p>\n
appoints Justice T.V.Ramakrishnan and Sri.Kurian Mathew<\/p>\n
jointly as the Arbitral Tribunal.     The judgment of the<\/p>\n
Supreme Court in Prasun Roy v. Calcutta Metropolitan<\/p>\n
Development Authority and<\/a> another,        (1987) 4 SCC 217<\/p>\n
and State of Rajasthan v. Nav Bharat Construction Co.,<\/a><\/p>\n
(2005) 11 SCC 197 give strong support to the contention<\/p>\n
that once existence of an enforceable and valid arbitration<\/p>\n
clause between the parties is admitted, it is not open to the<\/p>\n
RP. No. 960\/09
\n                            -27-<\/span><\/p>\n
parties to raise a contention later that there was no valid<\/p>\n
enforceable arbitration agreement. It is not in dispute that<\/p>\n
the contract did contain the arbitration clause.    But the<\/p>\n
contention is that the tender conditions did not contain the<\/p>\n
arbitration clause.  But then the contract substitutes    or<\/p>\n
supersedes the tender conditions as laid down by the<\/p>\n
Honourable Supreme Court in Security Printing and Minting<\/p>\n
Corporation of India Ltd. and another v. Gandhi Industrial<\/p>\n
Corporation, (2007) 13 SCC 236.\n<\/p>\n
      10. The fact situation in the present case also<\/p>\n
dissuades me notwithstanding Annexures I and II from<\/p>\n
thinking in terms of recalling my order which was passed<\/p>\n
virtually on consent. Pursuant to the order passed by me in<\/p>\n
arbitration request No. 1 of 2007 (presently sought to be<\/p>\n
reviewed) constituting Arbitral Tribunal consisting of a<\/p>\n
retired Judge of this Court and a retired Chief Engineer of<\/p>\n
PWD whose name was suggested by the Government itself<\/p>\n
RP. No. 960\/09
\n                            -28-<\/span><\/p>\n
in their counter affidavit, those two arbitrators together<\/p>\n
would appoint again with consent of both sides another<\/p>\n
Judge of this Court as the presiding arbitrator and     the<\/p>\n
above Arbitral Tribunal consisting of two Judges and a<\/p>\n
retired Chief Engineer had entered on arbitration. Several<\/p>\n
sittings, I am told by now about 60, were conducted spread<\/p>\n
over a period of two years.     Entire evidence was taken,<\/p>\n
arguments of both sides is also completed. What remains is<\/p>\n
only the passage of the final award. An interim award was<\/p>\n
passed and published by the Arbitral Tribunal directing the<\/p>\n
review petitioners to pay to the respondent an amount of<\/p>\n
Rs.2.43 crores towards the work admittedly done and it is<\/p>\n
not disputed before me that the above interim award has<\/p>\n
been honoured. The passage and publication of the final<\/p>\n
award by the Tribunal is being postponed only because of<\/p>\n
the pendency of this review petition. I have not been<\/p>\n
convinced of any legal prejudice that may be caused to the<\/p>\n
RP. No. 960\/09
\n                              -29-<\/span><\/p>\n
Government by allowing the Tribunal to complete its<\/p>\n
proceedings and publish its final award. The learning and<\/p>\n
integrity of the persons constituting the Tribunal was not<\/p>\n
questioned before me even for a moment.          There is no<\/p>\n
reason for me to assume that the Tribunal will unmindful of<\/p>\n
the public interest involved in the matter and uphold any<\/p>\n
invalid or inconsistent claim raised by the contractor. I am<\/p>\n
satisfied that the present case is not one where the power of<\/p>\n
review can be invoked.\n<\/p>\n
      The RP will stand dismissed. No costs.\n<\/p>\n<\/p>\n
                          (PIUS C.KURIAKOSE, JUDGE)<\/p>\n
ksv\/-<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court The State Of Kerala vs K.V.Joseph & Sons on 27 July, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM RP.No. 960 of 2009() 1. THE STATE OF KERALA, … Petitioner 2. THE SUPERINTENDENT OF ENGINEER, Vs 1. K.V.JOSEPH & SONS, … Respondent For Petitioner :GOVERNMENT PLEADER For Respondent :SRI.RAJIV ABRAHAM GEORGE […]<\/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":[8,21],"tags":[],"class_list":["post-54712","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nThe State Of Kerala vs K.V.Joseph & Sons on 27 July, 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\/the-state-of-kerala-vs-k-v-joseph-sons-on-27-july-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The State Of Kerala vs K.V.Joseph & Sons on 27 July, 2010 - 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