OM CONSTRUCTION CO. versus AHMEDABAD MUNICIPAL CORP. & ANR.

Citation: [2009] 1 S.C.R. 232 · Decided: 13-01-2009 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2009] 1 S.C.R. 232 
OM CONSTRUCTION CO. 
II. 
AHMEDABAD MUNICIPAL CORP. & ANR. 
(Civil Appeal No. 107 of 2009) 
JANUARY 13, 2009 
[ALTAMAS KABIR AND MARKANDEY KATJU, JJ.) 
Gujarat Public Works Contracts Disputes Arbitration 
Tribunal Act, 1992: 
s.2(1)(k)and (i) - 'Works Contract' - 'Public Undertaking' 
- Held: The local authority could assume the garb of 'Public 
Undertaking' only pursuant to a notification published in that 
regard in official gazette. 
Arbitration and Conciliation Act, 1996: 
ss. 11 (2), (5) and (6) - Appointment of arbitrator -
Arbitration clause in agreement not providing for any 
procedure for appointment of arbitrator - Held: Since parties 
E have agreed to resolve their dispute by arbitration, provisions 
of sub-section (5) can be pressed into service to enable the 
parties to invoke powers of Chief Justice to appoint an 
arbitrator- In the circumstances of the case, in order to avoid 
delay, instead of remitting the matter to High Court, arbitrator 
F appointed. 
The appellant, a construction company, carried out 
the work entrusted to It by the respondent Corporation. 
Clause 30 of Form B-1, which was made applicable In the 
contract entered Into between the parties when 
G appellant's tender was accepted, provided for 
appointment of an arbitrator. Dispute arose with regard 
to payment. The applicant filed an application u/s.11 of the 
Arbitration and Conciliation Act, 1996 for appointment of 
an arbitrator to resolve the dispute. The High Court 
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232 
OM CONSTRUCTION CO. v. AHMEDABAD MUNICIPAL 
233 
CORP. & ANR. 
noticing the pr,ovisions of s.2(1 )(i) of the Gujarat Public 
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Works Contracts Disputes Arbitration Tribunal Act, 1992 
held that since no notification was issued under _the Act 
with respect to the respondent Corporation it wasnot a 
"Public Undertaking" and, therefore, the work entrusted 
to the appellant could not be termed as a "Work . B 
Contract" as defined u/s.2(1 )(k) of the Gujarat Tribunal 
Act and, as such, the Arbitration Tribunal of the State 
would have no jurisdiction. The High Court further held 
that since the arbitration agreement between the parties 
did not lay down any procedure for appointing an c 
arbitrator, the Designated Judge could not invoke the 
jurisdiction u/s.11(6) of the Act. 
In the appeal filed by the Construction company, the 
questions for consideration before the Court were: 
whether in the absence of a Notification in the Official D 
Gazette, the respondent Municipal Corporation could at 
all be considered as a Public Authority for the purpose 
of Section 2(1)(k) of the Gujarat Tribunal Act, 1992 and 
whether the absence of a procedure for appointment of 
an arbitrator in the arbitration agreement, would 
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constitute a bar for appointment of an arbitrator u/s 11 (6) 
or any other provision of the 1996 Act, when not only the 
parties to the proceedings, but the High Court also, had 
arrived at a conclusion that the provisions of the Gujarat 
Tribunal Act, 1992, would not be applicable in the case. 
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Allowing the appeal, the Court 
HELD: 1. There is no dispute that the Ahmedabad 
Municipal Corporation is a local authority and it could 
assume the garb of a "Public Undertaking" as defined in 
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s.2(1)(i) of the Gujarat Public Works Contracts Disputes 
Arbitration Tribunal, 1992, only pursuant to a Notification 
published in that regard in the Official Gazette. [Para 14) 
[240-8-C] 
2.1. Even if Form 8-1 loses its relevance as far as the 
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SUPREME COURT REPORTS 
[2009] 1 S.C.R. 
A contract in question is concerned, since the parties have 
agreed to resolution of their disputes by arbitration, the 
provisions of Sub-section (5) of s.11 of the Arbitration and 
Conciliation Act, 1996 can be pressed into service to 
enable the parties to invoke the powers of the Chief 
B Justice to appoint an Arbitrator. [Para 14] [240-D] 
2.2. Order of the High Court is set aside. In the 
· circumstances of the case, remitting the matter to the 
High Court would only mean another round of litigation, 
C whereas if the appointment is made by this Court, the 
matter will achieve finality, which would ultimately be 
beneficial for all concerned. Accordingly, arbitrator is 
appointed. [Para 16] (241-D] 
CIVIL AP PELLA TE JURISDICTION : Civil Appeal No. 107 
D of 2009. 
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From the Judgment and Order dated 30.11.2007 of the 
High Court of Gujarat at Ahmedabad in Petition under 
Arbitration Act No. 35 of 2007. 
S.K. Gambhir, Sanjay Kapu

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