- (1.) Counsel for the applicant submitted that an agreement was entered into between the parties on 5.7.2007 for transportation of coal which is to be supplied by Eastern Coalfields Limited. Without making coal available it was expected by the Eastern Coalfields Limited that this applicant should lift certain minimum quantity of coal and therefore, penalty was imposed upon (sic--by?) the Eastern Coalfields Limited and sizeable amount has been deducted from the amount legally payable to the applicant. This is an illegal deduction by respondent No. 1. Huge amount has been deducted by respondent No. 1 which is to be returned to this applicant because unless the coal is available there is no question of transportation of the same whatsoever arises. For this dispute which has been arisen a letter was written to the Engineer-Incharge by this applicant dated 6th July, 2011 and reminder was also given to the said authority again on 27th May, 2013 and instead of denying any other things on merits the answer was given by respondent No. 1 whereas, the request was made by the applicant to refer the matter to an Arbitrator. No reply has been given by respondent No. 1 that there is no existence of the arbitration clause. Further counsel for the applicant is relying upon clause-12 of the agreement dated 5th July, 2007 especially General Terms and Conditions (G.T.C.) which is annexed with Section-1 Instructions to Bidders, which is Annexure-1 to the memo of this application. Counsel for the applicant is also relied upon the guidelines especially clause-2, which are issued in the form of Office Memorandum dated 14th May, 2008 issued by the Government of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises, which are at Annexure 3 to the memo of this arbitration application. Upon conjoint reading of this clause-12 of the agreement and clause-2 of the Office Memorandum (Annexure-3), it is submitted by the counsel for the applicant that the Arbitrator may kindly be appointed for resolving the disputes between the parties and thus, the applicant is ready if this court is appointing any retired Hon'ble Judge of this Court as an Arbitrator.
(2.) I have heard counsel for the respondents, who has submitted that there is no arbitration clause in the agreement and the Office Memorandum is of subsequent date then that of an agreement and the order of the settlement of the dispute has been provided in the settlement of disputes clause itself and hence, this application may not be entertained by this Court.
(3.) Having heard counsels for both the sides and looking to the facts and circumstances of the case and the agreement between the parties, it appears that:-- "(i) this applicant is a Contractor, who was assigned the work of transporting the coal which was made available by Eastern Coalfields Limited. There is a dispute about the penalty already levied by the Eastern Coalfields Limited from the applicant for non-lifting the coal of a targeted quantity and the applicant submits that there was no availability of the targeted coal at all. (ii) On 6.7.2011, a letter was written by this applicant to the Engineer-Incharge to resolve the dispute and again reminder was given on 27th May, 2013 for referring the dispute to the Arbitrator. It was never replied by the respondents that there is no existence of the arbitration clause at all on the contrary, the reply was given on merits of the claim of the applicant. (iii) For the ready reference clause No. 12 of the agreement reads as under:-- "12. Settlement of disputes:-- It is incumbent upon the contractor to avoid litigation and disputes during the course of execution. However, if such disputes take place between the contractor and the department effort shall be made first to settle the disputes at the company level. The contractor should make request in writing to the Engineer-Incharge for settlement of such dispute/claims within 30 (thirty) days of arising of the cause of dispute/claim failing which no disputes/claims of the contractor shall be entertained by the company. If difference persists the settlement of the dispute/claim with Govt. Agencies shall be dealt with as per the Guidelines issued by the Ministry of Finance, Government of India in this regard. In case of parties other than Govt. Agencies the redressal of the dispute may be sought in the Court of law." This clause is to be read with Office memorandum dated 14th May, 2008 which is at Annexure-3. Clause 1 and Clause 2 read as under:-- "Disputes between Government departments and Central Public Sector Enterprises (CPSEs) are settled through the Permanent Machinery of Arbitration (PMA), which does not fall within the purview of any arbitration law. The other mechanism is the Committee on Disputes (CoD), which ensures that no litigation between departments/CPSEs reaches a court or tribunal without clearance by the CoD. The CoD mechanism has been put in place in pursuance of the direction of the Supreme Court in case of ONGC v. Collector of Central Excise, 1992 Supp2 SCC 432. 2. The mechanism of PMA or CoD does not deal with a dispute between a private party on the one hand and a government department or CPSE on the other. For such cases arbitration is resorted to under the Arbitration and Conciliation Act. 1996. It has come to the notice of the Government that arbitration in such cases is taking a long time. Such delays give an adverse message to investors. Instead of expediting dispute resolution, arbitration results in delay. Therefore, it has been decided to develop a suitable monitoring mechanism for arbitration cases in which Government or one of its CPSEs is a party.";