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TMI Blog2017 (5) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... have raised an objection as to maintainability of the application under Section 11(6) of the Act of 1996 on the ground that the provisions of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (Adhiniyam of 1983) are applicable for the dispute between the parties and; therefore, matter has to be referred to the Tribunal constituted under the Adhiniyam of 1983. 3. During the course of hearing before the learned Single Judge, the parties cited single bench decision of this court rendered in the case of Jabalpur Corridor (India) Pvt. Ltd. vs. M.P. Road Development Corporation, 2014 (2) MPLJ 276 and judgment of another Single Bench in the case of Mrs. Kamini Malhotra vs. State of M.P., AIR 2003 MP 13. The learned single judge opined that there is a conflict between the aforesaid two decisions and therefore ordered that the matter be placed before Hon'ble the Chief Justice for constituting a larger bench. 4. In view of aforesaid order of learned Single Judge, the matter was placed before the Division Bench. Before the Division Bench, it was fairly admitted by the parties that earlier decision in the case of Mrs. Kamini Malhotra (Supra) was not brought to the notice of the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was apprised that subsequently another IA was filed in the SLP which was again disposed of on 2.9.2015 observing that the learned Single Judge of the High Court shall consider the said application under Section 11(6) of the Act of 1996 on its own merit without getting influenced by the earlier orders passed by the High Court on 9.7.2015 and 31.7.2015 i.e. the orders passed in the writ petition and the review petition. It was pointed out that subsequent to the aforesaid proceedings before the Supreme Court, the matter has been considered and decided by the Division Bench in the case of Ashoka Infraways Ltd. In Ashoka Infraways (Supra), it was held that the agreement between the parties was a "concession agreement" and not a "works contract" relying on the decision rendered in the case of Jabalpur Corridor (Supra). 7. The Division Bench further recorded that the orders passed by the Division Bench in WP No. 1122/2015 and RP No. 191/2015 have not been set aside by the Supreme Court though it was observed that the High Court should proceed to decide the matter between the parties. The Division Bench further recorded that this fact assumed importance for the purpose of reference altho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) SCC 261 which was held to be per incuriam in L.G. Choudhary's case, and the submission pertaining to works contract has been dealt with by way of alternative submission only. Therefore, the decision in the case of Jabalpur Corridor (Supra) is of no assistance to the petitioner in the facts, as admittedly, in the instant case, the agreement in question is a works contract." 10. In the light of aforesaid events and the orders of various Benches of this Court, the Division Bench referred the issues to be decided by Full Bench by detailing them in para 14 to 16 of the reference order dated 31.1.2017. This is how this matter has travelled to this Full Bench. 11. The Full Bench broadly framed following questions for consideration: (i) Whether, any agreement by whatever name called, if it falls within the meaning and definition of work contract as defined under Section 2(I) of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 has to be referred for adjudication before the M.P. Arbitration Tribunal constituted under Section 3 of the 1983 Adhiniyam? (ii) Whether, in view of statutory provisions of Section 7 of the Adhiniyam of 1983, the matter has to be referred to the M.P. Arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for real state development in accordance with terms and conditions set forth in the said concession agreement. The reference is made to Clause D(e), (g), (h), (j) & (k) of this agreement. The attention of the Bench is drawn on the definition of 'construction' mentioned in Clause 1.2.1(f) of Article 1 of the agreement. He also relied on Article 3 of the agreement, which deals with "grant of concession". On the basis of various clauses of this article, it is urged that the petitioner obtained license or lease to construct, develop, operate and maintain the project for a period of 99 years. Emphasis is placed on the words "on lease" mentioned in the Clause 3.1.1. Clause 3.1.2 is relied upon to show that authority is under an obligation to facilitate and assist the concessionaire in obtaining all approvals and applicable permits from various government authorities/bodies. It is further submitted that clause 3.2.1 makes it clear that concessionaire has exclusive right and authority during the concession period to investigate, study, design, engineer, procure, construct, finance the project as specified in schedule 'A'. The concessionaire can enter into further contracts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such disputes which may arise after constitution of said authority/commission. 15. Shri Naman Nagrath, learned senior counsel for the applicant further relied on certain portions of the agreement which deals with "project account agreement", which is a tripartite agreement, substitution agreement etc. He submits that every such agreement in which third party (other than State or its agency) are involved, a separate dispute resolution mechanism under the Act of 1996 is prescribed. 16. The argument of the applicants is that the nature of concession agreement clearly shows that it is outside the scope of "works contract" as defined under the Adhiniyam of 1983. At the cost of repetition, Shri Nagrath, learned senior counsel submits that "works contract" is confined to (i) construction; (ii) repairs; (iii) maintenance activities whereas, as pointed out, the concession agreement is differently worded and is much wider than the definition of "works contract". 17. It is common ground that the judgment passed in Kamini Malhotra (Supra) was related to construction of a "water tank". On this factual basis, this Court opined that it falls within the definition of "works contract". The conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecognized by the railway administration. 21. It is an admitted fact between the parties that during pendency of these matters, Section 2(i) which defines "works contract" has been amended by notification dated 17.01.2017. It is also not in dispute that constitutionality of the amended definition of "works contract" is not the subject matter of challenge in the present matters. 22. Shri Nagrath and Shri Jai Savla submits that a conjoint reading of "Statement of Object and Reasons" and amended definition of "works contract" makes it clear that it is prospective in nature. The "Statement of Object and Reasons" shows that in order to overcome the effect of the order passed in the matter of Jabalpur Corridor (Supra), the amendment was brought into force by issuing the notification dated 17.01.2017. 23. The stand of the applicants is that even this amendment in the definition of "works contract" will not bring the "concession agreement" within its purview. Shri Nagrath submits that mere use of word "substitution" does not mean that it is essentially retrospective in nature. Reliance is placed on Bhagat Ram Sharma Vs. Union of India, 1988 SCC (Suppl)-30. He placed heavy reliance on (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is a common ground that in the present cases, if applicant/appellant ultimately succeed, they will get some extension of period to operate/function which shall be in terms of further days and not in terms of any ascertained money. Shri Nagrath, in addition to aforesaid, urged that the definition of "dispute" was earlier wider which included any kind of differences between the parties which definition was amended w.e.f. 24.4.1990 and it is now restricted to the claims of "ascertained money". His contention is that this amendment shows that the legislature intended to restrict the meaning of "dispute" and, therefore, no useful purpose would be served in relegating the parties to approach the tribunal constituted under the Adhiniyam of 1983. 27. Shri Shekhar Sharma, learned counsel for the applicant appearing in AC No. 79/16 contended that Article 366(29-A) deals with the "works contract". As per the judgment of Supreme Court in (2004) 8 SCC-1 (Zile Singh vs. State of Haryana and others), the amendment in the definition of "works contract" will not relate back to the date of original definition. During the course of arguments, he contended that the judgment of Viatech (supra) ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of "work" as given in the Black's Law Dictionary. By placing reliance on "Statement of Object and Reasons" behind insertion of new definition, it is urged that amendment in the definition is clarificatory in nature. It does not create any new burden or liability on the parties. Such clarificatory notification has retrospective operation. Moreso when the legislature has chosen to use the word "substitution" in place of "amendment". He relied on certain portion of the book "Principles of Interpretation of Statute by Justice G.P. Singh". 32. Shri Kourav, learned Additional Advocate General relied on the findings given in the case of Kamini Malhotra and D.D. Sharma (Supra) wherein the respective Single benches have opined that the definition of "works contract" under the Adhiniyam is a wide definition whereas in Jabalpur Corridor (Supra) a contrary finding is given that it is a restrictive definition. It is submitted that the judgment of Jabalpur Corridor (Supra) is passed in ignorance of the earlier view taken by the benches of similar strength and, therefore, the judgment of Jabalpur Corridor (Supra) is a per incuriam judgment. Moreso, when the earlier judgment in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in view of judgment of Supreme Court in AIR 2000 SC 2587 (Kunhayammed & Ors. vs. State of Kerala), it is clear that when SLP is dismissed in limine, the findings given by the Supreme Court does not mean that the order of the High Court got a stamp of approval on merits or it got merged in the order of Apex Court on the basis of doctrine of merger. Such findings on merits can be presumed only when order is passed after grant of leave and SLP is converted into a civil appeal. 37. In rejoinder submission, Shri Nagrath reiterated his earlier stand. In addition to that, he relied on 2003 (2) MPLJ-46 (MP Housing Board vs. Satish Kumar). The point raised is that the word "dispute" as defined in section 2(1)(d) of the Adhiniyam does not take within its fold the disputes which are not related with "ascertained money". 38. In support of the oral submissions, written submissions were filed. 39. We have heard the parties at length and perused the record related to the said submissions. 40. Before dealing with rival contentions, it is useful to quote the unamended and amended definition of "works contract" hereinbelow in juxtaposition. Underlined portion of amended definition shows tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the respondents in the above context submitted that, Water Treatment Plant, essentially consists of building and water tanks. It was therefore submitted that the name "Water Treatment Plant" used in the contract between the parties, by itself would not exclude the said work executed by the appellant, from the category or definition of 'Works Contract'. It has been submitted that the Water Treatment Plant was construction of such buildings and tanks, the details of which are given in (Annexure R-3). It was submitted in the above context that all the components of Water Treatment Plant basically consisted of building or storage tanks. In the above context photographs (Annexure R-4) to (Annexure R-9) are also filed, to indicate the nature of work and construction relating to the Water Treatment Plant executed by the appellant. 18. It has further been submitted by the learned counsel for respondents that section 2(i) of the Adhiniyam provides that a 'Works Contract' means an agreement in writing for the execution of any work relating to construction, repair or maintenance of any building or superstructure, dam, weir, canal, reservoir, tank, etc. Learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Works Contract'. In Ghanshim Das vs. Debi Prasad and another, AIR 1966 SC 1998 the Supreme Court with reference to U.P. Zamindari Abolition and Land Reforms Act, observed: "The word building has not been defined in the Act an is, therefore, to be construed in its ordinary grammatical sense unless there is something in the context or object of the statute to show that it is used in a special sense different from its ordinary grammatical sense. So construed according to the dictionary meaning, the existence of a roof is not always necessary for a structure to be regarded as a building. Residential, buildings ordinarily have roofs but there can be a non-residential building for which a roof is not necessary. A large stadium or an open air swimming pool constructed at a considerable expense would be a building as it is a permanent structure and designed for useful purpose." 22. As noticed earlier, the use of word 'any' building etc., used in section 2(i) of the Adhiniyam appears to be a very wide connotation and 'any' work relating to building appears to have been intended to be included in the definition of 'Works Contract'. As noticed earlier, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner was to monitor progress of the work with certain services as enumerated in clause 4.6 and to submit various reports as enumerated in Clause 7.1 of the scheme. The aforesaid all the works are related to the works contract. Clause 2 of the terms of reference provides objectives for providing consultancy services, which reads thus: 2. Objectives - The objectives of the proposed Consultancy Services are: i. Proper management of civil works contract as 'Engineer' in terms of civil works contract including field measurements and quality assurance work. ii. Comprehensive supervision of project implementation activities carried out by the Contractors to ensure complete compliance with the drawings, technical specifications and various stipulations contained in the Contract Documents. iii. Efficient construction supervision by personnel who are experienced in the modern methods of construction supervision and contract management. iv. Ensure high standards of quality assurance in the supervision/execution of work. v. Completion of the work within the stipulated period of completion. Consultants will specially be responsible for quality and early completion. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement is entered into by State Government with any person for accomplishing execution of road work then the said agreement would also be regarded as "works contract" within the meaning of Section 2(i) ibid. 19. In my considered view, therefore, the agreement in question (Annexure P-1) being in the nature of providing all kind of consultancy services by the petitioner to State Government which are necessary for construction and development of road and hence, it becomes a "works contract" as defined under Section 2(1) ibid. In other words, it is a contract which falls in second category of "works contract" in its inclusive definition namely "all other matter relating to execution of any of the said work" i.e., road." It is apparent that in this case the learned Single Judge considered the effect of existence of other agreements also which are entered into for accomplishment of work which is related with activities related to a 'works contract'. 44. In the case of Jabalpur Corridor (Supra), the judgment of Kamini Malhotra (Supra) was not considered. However, the judgment passed in the case of M/s. Technogem Consultant Pvt. Ltd. (Supra) and D.D. Sharma (Supra) were relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement after completion of construction recovers the amount invested by him for completion of the project by way of toll, no State support agreement is executed in case of a works contract whereas it takes place in a case of concession agreement. The Concessionaire is not liable to pay value added tax, sales tax and other taxes under the concession agreement which are otherwise payable under the works contract. The Bench considered that 17 concession agreement were entered into between the parties in case of Jabalpur Corridor (Supra). A EPC contract was also entered into. On the basis of these "salient features" the Bench came to hold that concession agreement cannot be treated as a works contract. In addition, it was held that parties have clearly understood the agreement to be a concession agreement and decided to resolve their dispute as per the Act of 1996. 48. In the case of Ashoka Infraways Ltd. vs. State of M.P., 2016 (2) MPLJ 685, the Division Bench relied upon and followed the judgment rendered in the case of Jabalpur Corridor (Supra). The view of the Division Bench is mainly based on the dicta of Jabalpur Corridor (Supra). In addition, it was held that the Bench is reinfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out. The definition of 'works contract' contains the word "construction", "repair" and "maintenance". These words can be further divided and bifurcated. The definition of word "construction" in the concession agreement mentioned above is an example of the same. Its a matter of common knowledge that there cannot be any construction activity without undertaking the exercise of investigation, engineering, design, procurement, etc. The aforesaid ancillary activities are essential part of a construction activity. Likewise, the word repair or maintenance can be subdivided in various sub heads. However, such division or elaboration will not change the basic nature of the activity. Thus, we are not able to agree with the view taken in Jabalpur Corridor (Supra) that definition of works contract has a restrictive meaning and has a limited connotation. The design and finance etc. are also essential parts of construction activity. 50. In Jabalpur Corridor (Supra), it was held that there are certain elements which are special to the concession agreement and such "salient features" are absent in works contract. In our view, the requirement of maintaining account of a particular nature ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... test the agreement on the anvil of definition of works contract. In the said case, the question was whether the particular agreement is a lease or licence within the meaning of Transfer of Property Act and Easement Act. The question was relating to payment of stamp duty and registration under the Indian Stamp Act and Registration Act. The aforesaid judgment is of no assistance to the applicants. 53. In the case of Kunya Ahmed (Supra), it was held that while hearing a SLP, the Supreme Court is not exercising its appellate jurisdiction. It is merely exercising its discretionary jurisdiction to grant or not to grant leave to appeal. The petitioner is still outside the gate of entry though aspiring to enter the appellate arena of Supreme Court. Whether he enters or not would depend on the fate of his petition for special leave. It is further held that neither the principle of res judicata nor the principle of public policy analogous thereto, would bar the trial of identical issues in a separate proceedings before the High Court merely on the basis of an uncertain assumption that the issues must have been decided by the Supreme Court at least by implication. In no uncertain terms, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn up in such form as may be prescribed and shall be supported by an affidavit verifying the averments. (3) The reference shall be accompanied by such fee as may be prescribed. (4) Every reference shall be accompanied by such documents or other evidence and by such other fees for service or execution of processes as may be prescribed. (5) On receipt of the reference under sub-section (1), if the Tribunal is satisfied that the reference is a fit case for adjudication, it may admit the reference but where the Tribunal is not so satisfied it may summarily reject the reference after recording reasons therefor." Sub-section (1) makes it clear that the aggrieved party to a works contract may refer its dispute in writing to the Tribunal irrespective of the fact whether there exists any agreement between the parties which contains an arbitration clause or not. Indisputably, the Adhiniyam of 1983 was held to be intra vires. A Full Bench of this Court in 2007 (4) MPHT 444, (Shri Shankarnarayan Construction Co. vs. State of M.P.) held as under: "Thus, if a works contract, as defined in Section 2(1)(i) of the 1983 Adhiniyam contains an arbitration clause, either party to the woks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.P. Madhyastham Adhikaran Sanshodhan Adhiniyam, 2016 which reads as under: "Statement of Objects and Reasons In Civil Writ Petition No. 6557/2013 M/s. Jabalpur Corridor (India) Private Limited and another versus Madhya Pradesh Road Development Corporation Limited and others, the High Court of Madhya Pradesh in its order dated 4th December, 2013 has not regarded the concession agreement in the sense of works-contract, due to which dispute under a concession agreement is settled under the Arbitration and Conciliation Act, 1996 (Nos. 26 of 1996). Various departments and public undertakings are spending huge amount of money for payment of fees to arbitrators appointed under the said Act and for conducting meeting of the arbitrators. Also there is no uniform system for settlement of such disputes. Therefore, it is proposed to substitute the definition of 'works-contract' in the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (No. 29 of 1983) so that the "concession agreement" is included in the terms "works-contract'. (Emphasis Supplied) 60. The parties are at loggerheads on the question of applicability of the amended provision. It is apt to mention that while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned. In the second part of definition, leaves, stalks and stems were mentioned but there was no mention about the seed. Tobacco seeds did not fall within the definition. Hence, Apex Court accepted the contention of the State that in absence of mentioning of words tobacco seeds in the definition clause, it will not be covered by the definition. In the present case, the amended definition is differently worded. The definition includes the services so hired for carrying out the aforesaid work and it also included the 'concession agreement'. On plain reading of the amended definition, we are unable to hold that it does not include concession agreement. The general principles laid down in the case of Vatika Township (Supra) are clear. In the said case, it is held that one established rule of interpretation is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. As noticed, the present amendment in the definition of works contract is clarificatory in nature and in statement of object and reasons and in Section 2 of amending provision, it is made clear that the definition is "substituted". At the cost of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law. Certain agreements covered by unamended provision were made void for the first time. It was found that rights and liabilities that have already accrued between the parties are sought to be taken away. In this backdrop, it was held that amended section will not apply retrospectively. In the present case, no legal statutory, vested or constitutional right of the applicants is taken away or altered by the amendment in the definition nor any fresh liability has been created. 65. This is trite law that right of preferring appeal or avail legal remedy is a substantive right whereas right relating to forum is procedural in nature. It is equally well settled that in contrast to Statutes dealing with the substantive rights, Statutes dealing with merely matters of procedure are presumed to be retrospective unless such a construction is textually inadmissible. See AIR 1927 P.C. 242 (Delhi Cloth and General Mills Ltd. vs. CIT Delhi), AIR 1975 SC 1843, (Gurbachan Singh vs. Satpal Singh), AIR 1990 SC 209 (Hitendra Vishnu Thakur vs. State of Maharashtra), AIR 1994 SC 2623. Lord Denning, in Blyth vs. Blyth, 1966 (1) ALL ER 524 opined that the rule that an act of Parliament is not to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to operate their projects. How much they will earn during those additional days is not quantifiable in terms of money. Hence, the remedy under the Adhiniyam cannot be invoked and the parties may be directed to settle their dispute under the provisions of Act of 1996. The said contention is advanced on the basis of Satish Kumar Raizada (Supra). Shri Nagrath, learned senior counsel contended that the amended definition of dispute brings within its fold only claims regarding 'ascertained money'. Thus, a dispute regarding interpretation of any provision of agreement etc. cannot be a subject matter of "dispute". He submits that the amendment in the definition of "dispute" shows that the Legislature intended to restrict the meaning and confined it to the "disputes" relating to claim of ascertain money. 71. Shri Amit Seth, learned counsel for the State opposed the same by contending that before the Concessionaire submits his bid, he undertakes an exercise by which he determines the gain in terms of money. On the basis of this determination only, he decides to proceed further and prepare his bid. It is further submitted that in order to compute and ascertain the sum of money in li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack's Law Dictionary as under:
"Ascertain. To fix; to render certain or definite; to estimate and determine; to clear of doubt or obscurity. To insure as a certainty. To find out by investigation. U.S. v. Carver, 260 U.S. 482, 43 S.Ct. 181, 182, 67 L.Ed. 361. Sometimes it means to "assess"; or to "hear, try and determine".
In Webster's Dictionary, the meaning of word "ascertain" reads as under:
"ascertain 1 To learn with certainty about; find out. 2 Obs. To make certain; determine; define. See synonyms under DISCOVER. KNOW [ X X X X Extracts X X X X X X X X Extracts X X X X ..... Concessionaire will earn cannot be determined/ascertained by any guess work. For this reason, the claim of the applicants is in terms of extension of days to operate the project and they are unable to put forth a claim of ascertained money. However, at this stage, it must be made clear that when a claim is ascertainable and yet the concessionaire has not ascertained the claim in order to wriggle out of definition of "dispute", the matter would be different and in such cases the forum for adjudication would be the Tribunal under the Adhiniyam of 1983. Hence, each case needs to be examined in this regard.
77. The respondents have placed reliance on the judgment of Indore Bench in WP No. 3057/2016 (Ashoka Infraways Ltd. vs. State of M.P.). In this judgment, the court has reproduced relevant parts of minutes of Additional Work Approval Committee dated 5.6.2006. The said reproduced portion shows that claim of the Concessionaire was in terms of more days whereas the approval was given for lesser number of days. For example, the Concessionaire claimed 1542 extra days whereas the Committee decided to give extra days to the extent of 1194 days. In para 8, this court calculated and taken i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respectful agreement with the view taken by this court in Satish Kumar Raizada (Supra). In absence of claim of ascertained money, the cases of present applicants do not fall within the ambit of dispute and for this reason they cannot be relegated before the Tribunal constituted under the Adhiniyam of 1983. Thus, even if the concession agreement are works contract, in our view, the remedy before the Tribunal under the Act of 1983 is not available. The parties cannot be left remedy less and hence in our view the applicants'/appellant may pursue their remedy under the Act of 1996.
A conjoint reading of section 2(d) and section 7 of the Adhiniyam makes it clear that a reference to the Tribunal can be made and entertained only when it is in relation to "the dispute". This ancillary issue is answered accordingly.
80. So far contention of Shri Akshay Sapre is concerned, suffice it to say that in 2000 (4) SCC 285 [Molar Mal (Dead)] Through LRs. vs. KAY Iron Works (P) Ltd., the Apex Court held that if the constitutionality of a provision is not under challenge, the court has to proceed by treating it to be an intra vires provision and interpret the same. In the present proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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