THE STATE OF BIHAR & ORS. versus M/S BRAHMAPUTRA INFRASTRUCTURE LIMITED

Citation: [2018] 6 S.C.R. 962 · Decided: 22-03-2018 · Supreme Court of India · Bench: ADARSH KUMAR GOEL, R.F. NARIMAN, UDAY UMESH LALIT · Disposal: Dismissed
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Judgment (excerpt)

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THE STATE OF BIHAR & ORS.
v.
M/S BRAHMAPUTRA INFRASTRUCTURE LIMITED
(Civil Appeal No. 3344 of 2018)
MARCH 22, 2018
[ADARSH KUMAR GOEL, R. F. NARIMAN AND
UDAY UMESH LALIT, JJ.]
Arbitration and Conciliation Act, 1996 – s.11(6) – Bihar Public
Works Contracts Arbitration Tribunal Act, 2008 – ss.8, 9 and 22 –
Works Contract – Arbitration – State aggrieved by the appointment
of arbitrator u/s.11(6) of the Arbitration and Conciliation Act (the
Central Act) on the ground that the said Act is excluded by the
Bihar Public Works Contracts Arbitration Tribunal Act (the State
Act) – Held: The scheme of ss.8, 9 and 22 of the State Act shows
that in the absence of an agreement stipulating the applicability of
the Central Act, the State Act applies to works contracts – Since, in
the instant case, an arbitration agreement exists and stipulates
applicability of the Central Act, the State Act will not apply –
However, it will be open to the appellant-State to move to the High
Court for change of Arbitrator, if a case to this effect is made out
on an objection of neutrality.
Bihar Public Works Contracts Arbitration Tribunal Act, 2008
– s.4(3)(b) – Constitutionality of – Held: s.4(3)(b), which provides
that the tenure of the Chairman and other members of the Arbitration
Tribunal shall be at the pleasure of the Government, is inconsistent
with the constitutional scheme, particularly Art.14 of the Constitution
– s.4(1) of the Act provides for a three year tenure or till the age of
70 years whichever is earlier – Termination of the said tenure cannot
be at pleasure within the term stipulated as the arbitration tribunal
has quasi judicial functions to perform – Any termination of the
service of such member by a party to the dispute would interfere
directly with the impartiality and independence expected from such
member – The said provision is, thus, manifestly arbitrary and
contrary to the Rule of Law –  Accordingly, the said provision
declared unconstitutional – Constitution of India – Art.14 – Works
Contract.
[2018] 6 S.C.R. 962
962
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963
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3344
of 2018.
From the Judgment and Order dated 29.03.2017 of the High Court
of Patna at Patna in Request Case No. 45 of 2016.
WITH
C. A. No. 3345 of 2018.
Naman Nagrath, Rajeev Dhawan, Ms. Meenakshi Arora, Parag
P. Tripathi, Ms. Vibha Datta Makhija, Sanjay R. Hegde, Sr. Advs.,
Purushaindra Kaurav, A.G., Harsh Parashar, Zubin Prasad, Aman
Pandey, Prateek Khandelwal, Shadan Farasat, Arjun Garg, Prashant
Kumar, Saurabh Suman Sinha, Aditya Dev T., M/s. AP & J Chambers,
Rahul Narayan, Shashwat G., Ms. Renuka Sahu, Jasdeep Singh Dhillon,
Jay Savla, Sridhar Potaraju, Sudhir Mishra, Prabhat Kumar, Petal
Chandhok, Udai Khanna, Rishabh Kapur, Priyash Sharma, Ms. Abha R.
Sharma, Ms. Disha Vaish, D.S. Parmar, Ms. Sujeeta Srivastava, Harsh
Parashar, Varun Amar, Shantanu Krishna, Azim H. Laskar, Sachin Das,
Chandra Bhushan Prasad, Shivam Singh, Apoorva Srivastava, Ms.
Sugandha Batra, Ranjan Kumar Pandey, Chandan Kumar, Arjun Garg,
Jay Savla, Ms. Renuka Sahu, Jasdeep Singh Dhillon, Prabhat Chaurasia,
Ms. Hemantika Wahi, Preetesh Kapoor, Ms. Vishakha, K. Krishna Kumar,
Mishra Saurabh, Ms. Swarupama Chaturvedi, Ms. Anuradha Mishra,
Ankit Lal, Varun Mohan, Ankit Kr. Lal, Ravin Dubey, Sudhansu Pal,
Nilava Bandhopadhaya, Prateek Khanna, Advs. for the appearing parties.
The following Order of the Court was passed:
O R D E R
1. Leave granted.  We have heard learned counsel for the parties.
2. The State is aggrieved by the appointment of arbitrator under
Section 11(6) of the Arbitration and Conciliation Act, 1996 (the Central
Act) on the ground that the said Act is excluded by the Bihar Public
Works Contracts Arbitration Tribunal Act, 2008 (Bihar Act 21 of 2008)
(the State Act).
3. To appreciate the plea raised, it is necessary to refer to the
scheme of the State Act as reflected in some of the key provisions.
Sections 8, 9 and 22 of the State Act are as follows:
STATE OF BIHAR v. M/S BRAHMAPUTRA
INFRASTRUCTURE LIMITED
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“8. Act to be in addition to Arbitration & Conciliation Act, 1996. -
Notwithstanding anything contained in this Act, and of the
provisions shall be in addition to and supplemental to Arbitration
& Conciliation Act, 1996 and in case any of the provision contained
herein is construed to be in conflict with Arbitration Act, then the
latter
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