LexVISHNU (DEAD) BY L.RS versus STATE OF MAHARASHTRA AND OTHERS
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
B
(2013] 11 S.C.R. 340
VISHNU (DEAD) BY L.RS
v.
STATE OF MAHARASHTRA AND OTHERS
(Civil Appeal No. 3680 of 2005)
OCTOBER 4, 2013
[G.S. SINGHVI, V. GOPALA GOWDA AND
C. NAGAPPAN, JJ.]
Arbitration - Irrigation project - Agreement with State
C
Government - Clause in the agreement - Nature of -
Distinction between expert determination and arbitration -
Tender submitted by appellant for irrigation project accepted
by respondent-State Government - Parties entered into
agreement - Disputes arose from execution of the project -
D Clause 30 of the agreement - If contemplated arbitration and
could be construed as an arbitration clause - Plea of appellant
that Clause ·30 of the agreement made the decision of the
Superintending Engineer binding on all parties to the
agreement and, therefore, the trial Court was right in treating
E
the same as an arbitration clause - Held: Nothing in the
language of Clause 30 from which it can be inferred that the
parties had agreed to confer the role of arbitrator upon the
Superintending Engineer of the Circle - Power conferred
upon the Superintending Engineer of. the Circle was in the
F
nature of a departmental dispute resolution mechanism -
Supervisory control was given to the Superintending Engineer
for smooth execution of the works in accordance with the
approved designs and specifications and also to ensure that
quality of work was not compromised - Further, inherent
H danger in treating the Superintending Engineer as an
Arbitrator - Task of deciding the dispute could not have been
assigned to the Superintending Engineer as he could not be
expected to make adjudication with an un-biased mind -
Even if he may not be actually biased, the contractor will
340
VISHNU (DEAD) BY L.RS. v. STATE OF
341
MAHARASHTRA
always have a lurking apprehension that his decision will not A
be free from bias - High Court rightly held that Clause 30 of
the agreement was not an Arbitration agreement - Contract.
The tenders submitted by the appellant for an
irrigation project were accepted by the Competent B
Authority and agreements were executed between the
parties on 19.5.1983 and 5.10.1983 ('B-1 Agreements'). In
January 1985, the appellant abandoned the works and
claimed damages in lieu of the alleged loss suffered by
him. Subsequently, the appellant also filed application C
under Section 20 of the Arbitration Act, 1940 for
settlement of accounts and prayed that respondent Nos.3
and 4 be directed to file Arbitration Agreement in terms
of Clause 30 of B-1 Agreement executed between the
parties and an Arbitrator be appointed to decide all the
disputes. The trial Court allowed the application and D
declared that Clause 30 of B-1 Agreement is an arbitration
clause. The trial Court also appointed the Chief Engineer
(PWD) as an Arbitrator and referred all the disputes to
him. Revision Application filed by the respondents was
allowed by the Single Judge of the High Court which held E
that Clause 30 of B-1 Agreement cannot be treated as an
arbitration clause.
The appellant contended before this Court that the
impugned order was liable to be set aside because the
F
High Court's interpretation of Clause 30 of B-1
Agreement was erroneous. It was emphasized that
Clause 30 of B-1 Agreement made the decision of the
Superintending Engineer binding on all parties to the
agreement and, therefore, the trial Court was right in G
treating the same as an arbitration clause.
Dismissing the appeals, the Court
HELD: 1.1. A conjoint reading of Clauses 29 and 30
of the B-1 Agreements entered into between the parties H
342
SUPREME COURT REPORTS
[2013] 11 S.C.R.
A
shows that the appellant had to execute all works subject
to the approval in all respects of Superintending Engineer
of the Circle, who could issue directions from time to time
about the manner in which work was to commence and
execute. By virtue of Clause 30, decision of the
B
Superintending Engineer of the Circle was made final,
conclusive and binding on all the parties in respect of all
questions relating to the meaning of the specifications,
designs, drawings, quality of workmanship or materials
used on the work or any other question relating to claim,
c right, matter or things arising out of or relating to the
contract designs, drawings, specifications, estimates,
instructions, orders, etc. These two clauses by which the
Superintending Engineer was given over all supervisory
control weExcerpt shown. Read the full judgment & AI analysis in Lexace.