H. LATHAKUMARI versus VAMANAPURAM BLOCK PANCHAYAT ANP ORS.

Citation: [2009] 9 S.C.R. 10 · Decided: 07-07-2009 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

" 
[2009] 9 S.C.R. 10 
" 
A 
H. LATHAt<UMAR! 
-· 
v. 
VAMANAPURAM BkOCK PANCHAYAT ANP ORS, 
(Civil Appeal No, 4152 of 2009) 
B 
JU~Y 7, 2009 
[R.V. RAVEENDRAN AND J.M. PANCHAL, JJ.] 
cl, 
Arbitration and Conciliation Act, 1996: s. 11 -
Pan9,h~y§ti 
Raj Departmentdid not decide to delete the arbitrntiqn c.l~use 
c in its contracts in terms of Gov~mm~nt Qr(l~r dat~d 19.11, 1988 
which was applicable to PWD contracts - The agreement 
between appellant and Respondent- Panchayat contained 
..,, 
arbitration clau$e - Hence, dispute referable to arbitration -
,... 
Madras Detailed Standard Specifications - Clause 73. 
D 
The parties entered into a contract agreement d~t~~ 
15.3.1999 containing arbitration clause. Di~p~t~ ar9se in 
respect of said contract. The appellant filed an applici!tion 
under Section 11 of the Arbitration and Conciliation Act, 
E 1996 seeking appointment of an Arbitrator. The first 
respondent denied the claims and also contended that 
there was no arbitration agreement. The contention of the 
~ 
respondents was that the government had decided to 
scrap arbitration by Government Order dated 19.11.19~8~ 
-· 
F 
High Court dismissed the application. Hence ttle appeal, 
Allowing the appeal, the Court 
HELD: A reading of the order dated 19.11, 1988 clearly 
shows that the deletion of the ~rbitration clause wa& 
G direeted only in re9~rd tQ the Publio Work Department 
~ 
contracts. In fact, it specifieally pr9vided that the question 
of adopting such delet!Qn by other departments of the 
Government or by s~tutory bodies would be examined 
~-
by the concerned department/statutory body. Admittedly, 
..... 
H 
10 
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H. LATHAKUMARI v. VAMANAPURAM BLOCK 
11 
PANCHAYAT AND ORS. 
n~j~her the first respondent nor the Panchayat Raj 
Oepartment, de.cided. to delete the ~rbitration clause. On 
the other hand, the first r~sP.011dent entered into an 
agreement with the appellant long after the said 
Government Order dated 19.11.1988, that Is, on 15.3.1999 
and did not choose to delete clause 73 from the MOSS 
made part of the agreement. If the first respondent 
wanted to delete the arbitration agreement, it ought to 
Ju~ye scored out clause 73 from the MOSS which 
\nGh~ded ~ !Jr~!~ration clause in the agreement. That was 
not done. lo fact, in PWO contra~ts, to which the bar on 
arbitration was applied, the printed form of Articles of 
Agreement'was amended to includQ a clause which 
confirmed that the "contractor has also signed the copy 
of the Madras petailed Standard Specifications excluding 
&l!JY§@ 7~ and other clauses relating to arbitration ...... " 
6ignifi~irnUy §Y~'1 an exclusion was not made in the 
article& of Agr@@m~nt enter~E! hy tfle first respondent 
Panchayat. Thu& the @rbitrnti911 cla~§ft \Vi§ intended to 
form a part of the contract between the parties. Therefore, 
the disputes between the parties were referable to 
arbitration in terms of the said arbitration agreement. The 
first respondent is directed to refer the disputes to the 
§yp@rintending Engineer in terms of the arbitration 
agreement ~gntained in clause 73 of MOSS. [Paras 5 and 
7] [15-A-H; 16-A-B] 
CIVIL. APPHl,,lATf; JURlf).PICTION : Civil Appeal No. 
4152 pf 2009. 
A 
B 
c 
D 
E 
F 
From the Judgment qnd Order dated 13.01.2003 in 
Arbitration Request -No. 9 of 2.001 ~nd order dated 14.12.2005 G 
in O.P. No. 12477 of 2003 of the High Court of Kerala at 
Ernakulam. 
P. Sureshan and Shakil Ahmed Syed for the Appellants. 
R. Sathish for the Respondent. 
H 
12 
SUPREME COURT REPORTS 
[2009) 9 S.C.R. 
,.. 
A 
The Judgment of the Court was delivered by 
R.V. RAVEENDRAN, J. 1. Leave granted. Heard both 
parties. 
B 
2. The Vamanapuram Block Panchayat, first respondent 
herein, entered into a "contract agreement" dated 15.3.1999 
with the appellant under which the work of "RIDF-111, Pangode 
'),.__ 
Sivakshetram - Thannichal Road improvements" was entrusted 
to her as per the articles of agreement, plans, specifications 
....... 
and conditions of contract approved by the Superintending 
c Engineer, Commissionerate of Rural Development, State of 
Kerala. The Articles of agreement confirmed that the contractor 
had also signed the copy of the Madras Detailed -standard 
--+ 
Specifications (for short 'MOSS') and addenda volume thereto 
in acknowledgement of being bound by all the conditions of the 
)' 
D clauses. The MOSS which thus became a part of the contract 
· between the parties, provided for settlement of disputes by 

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