Ramji Das Dhal Construction ... vs Union Of India on 21 June, 2021
Madhya Pradesh High Court
Ramji Das Dhal Construction … vs Union Of India on 21 June, 2021 Author: Chief Justice
WP-7924-2
[1]
THE HIGH COURT OF JUDICATURE FOR MADHYA PRADESH,
AT JABALPUR
(DIVISION BENCH)
WP-7924-2020
M/s. Gemini Promoters Builders Private Ltd.
Vs.
Union of India and others
AND
WP-7925-2020
M/s. Ramji Das Dhal Construction Private Limited ………… Peti
Vs.
Union of India and others
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Coram :
Hon’ble Mr. Justice Mohammad Rafiq, Chief Justice Hon’ble Mr. Justice Vijay Kumar Shukla, Judge
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Presence :
Mr. K.C. Ghildiyal, Advocate for the petitioners in both th
Mr. Jitendra Kumar Jain, Assistant Solicitor General alongw
Vikram Singh, Advocate for the respondents-Union of India.
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O R D E R (Oral)
(21.06.2021) Per: Mohammad Rafiq, Chief Justice Heard through Video Conferencing.
These two writ petitions have been filed by M/s. Gemini Promoters & Builders Private Limited and M/s. Ramji Das Dhal Construction Private Signature SAN Not Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [2] Limited with identical prayers are directed against common respondents, therefore, both were herd together to be decided by this common order.
2. Facts in brief are that petitioner- M/s. Gemini Promoters & Builders Private Limited in WP-7924-2020, on being found successful bidder in response to Notice Inviting Tenders (NIT) dated 22.02.2017 was awarded contract for “Provision of 5 AC Sheds at Air Force Station Amla” for a
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Ramji Das Dhal Construction … vs Union Of India on 21 June, 2021
lumpsum amount of Rs.37,96,77,000.00/- vide letter dated 08.09.2017 and a work order to that effect was issued to it on 21.09.2017. Similarly, petitioner- M/s. Ramji Das Dhal Construction Private Limited in WP-7925- 2020, on being found successful bidder in response to Notice Inviting Tenders (NIT) dated 22.02.2017 was awarded contract for “Provision of Married Accommodation for DSC Personnel at Air Force Station Amla” for a lumpsum amount of Rs.14,12,95,807.20/- vide letter dated 29.08.2017 and a work order to that effect was issued to it on 12.09.2017. A letter dated 10.04.2019 was issued to the petitioners by the respondent No.4- The Garrison Engineer (Air Force) Amla, District Betul (M.P.) stating that as per Clause 29 of Special Condition of the Contract Agreement, in case of both the petitioners, the provision of Goods and Service Tax (GST) with effect from 01.07.2017 have been made part of the Contract Agreement. It was further stated that as per Government of India Notification No.11/2017 dated 28.06.2017, the rate of GST on works contract with effect from 01.07.2017 was fixed @ 18% which was subsequently revised vide Government of India Notification No.24/2017 dated 21.09.2017 to 12%. Since the bid submission Signature Not and date of subject Contract Agreement was 18.08.2017 in case of SAN Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [3] petitioner- M/s. Gemini Promoters & Builders Private Limited and 26.07.2017 in case of petitioner- M/s. Ramji Das Dhal Construction Private Limited, which dates fell between the period of 01.07.2017 and 21.09.2017, the applicable rate of GST on due date of receipt of tender/bid submission end date in the subject was 18%. The letter further stated that rate of GST at the time of submission of bid was 18% and the petitioners while submitting the bid had quoted the rates keeping in mind the prevailing rates of GST i.e. 18% on works contract. In view of however decrease in rate of GST to the tune of 6%, the same is required to be regularized through minus adjustment. The petitioner- M/s. Gemini Promoters & Builders Private Limited was asked to deposit a sum of Rs.66,00,000.00/- and the petitioner- M/s. Ramji Das Dhal Construction Private Limited was asked to deposit a sum of Rs.34,21,140.00/-, i.e. 6% of the their total contract value, within 15 days, failing which the amount was proposed to be recovered from its running bills.
3. Both the petitioners submitted their reply to the aforesaid letter. Petitioner- M/s. Gemini Promoters & Builders Private Limited by its reply drew attention of the respondent No.4 to the Corrigendum No.8 Serial Page No.435 Serial No.1 against sub para-2 and stated that the amendment to contract clearly provided that no reimbursement/refund on account of GST was admissible under the subject contract. Similarly, the petitioner- M/s. Ramji Das Dhal Construction Private Limited drew attention of respondent No.4 to the Corrigendum No.1 Serial No.1 Amendment Schedule A Notes Signature Not No.15 which provided that with implementation of GST the effect of same SAN Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [4] shall be deemed to be included in the quoted rates and no reimbursement/refund on this account shall be admissible. It was further pointed out by both the petitioners that as Schedule A Notes will supersede the Special Condition Clause 29 of Contract Aagreement, no recovery could be effected towards GST. On receipt of reply submitted by the petitioners, the respondent No.4 issued letter dated 10.04.2019 to M/s. Gemini Promoters & Builders Private Limited and letter dated 30.04.2019 to M/s. Ramji Das Dhal Construction Private Limited advising them to directly take up this issue with the respondent No.2- The Chief Engineer (Air Force), Military Engineer Services, Nagpur. Subsequently however, the petitioners have discovered that the respondent No.2 had directed the respondent No.4 to recover the claimed
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Ramji Das Dhal Construction … vs Union Of India on 21 June, 2021
amount of GST refund through the next RAR of the petitioners. The petitioners, therefore, made representations to the respondent No.2, but to no avail. Hence, these petitions.
- Mr. K.C. Ghildiyal, learned counsel for the petitioners submitted that since facts in the preset cases are not in dispute, therefore writ petitions can be directly entertained by this Court despite the provision of alternative remedy of Dispute Resolution Board in Clause 71 of the Agreement and thereafter of Arbitration as provided in Clause 70 of the Agreement. It is contended that Schedule A Notes of the agreements (as amended through Corrigendum No.8 Serial Page No.435 Serial No.1 against sub para-2 in case of petitioner- M/s. Gemini Promoters & Builders Private Limited and Corrigendum No.1 Serial No.1 Amendment Schedule A Notes No.15 in case Signature Not of petitioner- M/s. Ramji Das Dhal Construction Private Limited) in the case SAN Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [5] of both the petitioners clearly provides that with implementation of GST the effect of the same shall be deemed to be included in the quoted rates and no reimbursement/refund on this account shall be admissible. Therefore, neither the respondents would be required to reimburse any amount to the contractors/petitioners nor the contractors/petitioners would be required to refund any amount to the respondents.
- Mr. Vikram Singh, learned counsel for the respondents opposed the prayer and submitted that writ petitions cannot be entertained in a contractual dispute particularly when efficacious alternative remedy is available to the petitioners in the contract itself. He referred to Special Condition 39 of the Contract and terms of Condition 71 of General Conditions of Contract filed alongwith the reply to the writ petitions at Annexure-R/1.
- Mr. K.C. Ghildiyal, learned counsel for the petitioners in rejoinder submissions contended that according to Clause 71 of the General Conditions of Contract if valuation of the disputed amount is more than 10 crores, it has to go to Dispute Resolution Board and not to the Conciliator, but the said clause also provides the procedure for the constitution/appointment of Dispute Resolution Board/Conciliator, which shall be as laid down in the Contract Agreement i.e., Clause 70 of the General Condition of Contract. But, Clause 70 provides that unless both parties agree in writing such reference shall not take place until after the Signature Not completion or alleged completion of the Works or termination or SAN Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [6] determination of the Contract. Reference to the Dispute Resolution Board therefore cannot be made without the consent of the petitioners.
- We have given our anxious consideration on the rival submissions of the parties and perused the record.
- We have decided not to go into the interpretation of Corrigendum No.8 Serial Page No.435 Serial No.1 against sub para-2 in case of petitioner- M/s. Gemini Promoters & Builders Private Limited and Corrigendum No.1 Serial No.1 Amendment Schedule A Notes No.15 in case of petitioner- M/s. Ramji Das Dhal Construction Private Limited as the first issue that we are required to consider is whether an efficacious alternative remedy is indeed available to the petitioners. It is not in dispute that the petitioners have approached this Court during the currency of the execution of the contract.
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Ramji Das Dhal Construction … vs Union Of India on 21 June, 2021
The work awarded to the petitioners has still not been completed. In order to appreciate the controversy, we deem it appropriate to quote following clauses:
“Clause 39 of the Special Conditions of the Contract
39. Appointment of Sole Conciliator in terms of Condition 71 of IAFW-2249: All disputes arise between the parties to the contract during execution of work or after completion or after determination/cancellation/termination of the contract including any disagreement by either party with any action, inaction, opinion, instruction, certificate or valuation by the Accepting Officer or his nominee, the matter in dispute shall be in the first place be referred the conciliation Signature SAN Not Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [7] by a sole Conciliator to be appointed by the Engineer-in-
Chief, Army Headquarters, New Delhi or in his absence the Officer officiating as Engineer-in-Chief, or Director General of Works specifically delegated by the Engineer-in-Chief in writing. In case of disagreement with the decision of sole conciliator, either party may invoke arbitration clause in terms of condition 70 of IAFW 2249.
Clause 70 of the General Conditions of Contract
70. Arbitration – All disputes, between the parties to the Contract (other than those for which the decision of the CWE or any person is by the contract expressed to be final and binding) shall, after written notice by either party to the Contract to the either of them, be referred to the sole arbitration of a Serving Officer having degree in Engineering or equivalent or having passed final/direct final Examination of sub-Division II of Institution of Surveyor (India) recognised by the Govt. of India) to be appointed by the authority mentioned in the tender documents.
Unless both parties agree in writing such reference shall not take place until after the completion or alleged completion of the Works or termination or determination of the Contract under Condition Nos. 55, 56 and 57 thereof.
Provided that in the event of abandonment of the Works or cancellation of the Contract under Conditin Nos. 52, 53 or 54 thereof, such reference shall not take place until alternative…
Clause 71 of the General Conditions of Contract “71. Conciliator – If dispute (other than those for which the decision of the CWE or any person is by the contract expressed to be final and binding) of any kind whatsoever Signature Not arises between the parties to the contract during the execution SAN Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & W P – 7 9 2 5 – 2 0 2 0 [ 8 ] o f t h e w o r k s , o r a f t e r c o m p l e t i o n o r a f t e r determination/cancellation/termination of the contract, including any disagreement by either party with any action, inaction, opinion, instruction, certification or valuation by the Accepting Officer or his nominee, the matter in dispute shall, in the first place be referred to the Disputes Resolution Board (DRB) in case of contracts valuing Rs.10 crore or more and to conciliation, by a sole
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Ramji Das Dhal Construction … vs Union Of India on 21 June, 2021
conciliator, in case of contracts valuing less than Rs.10 crore. In case of disagreement with the decision of such DRB or conciliator, any party may invoke arbitration clause.
Procedure for the constitution/appointment of DRB/Conciliator shall be as laid down in the Contract Agreement.”
Clause 71 provides for referring disputes first to the Disputes Resolution Board in case the contacts valuing to Rs.10 crore or more, which would precede reference of dispute to the arbitrator under Clause 70 of the agreement. It is therefore Clause 71 which has to be first applied and the remedy available before the Dispute Resolution Board has to be first exhausted. We are not inclined to uphold the argument that Dispute Resolution Board could be constituted only if petitioner agreed and, therefore, since the petitioners have not given their consent, such Board could not be constituted. We are therefore persuaded to uphold the preliminary objection raised by the learned counsel for the respondents and direct the respondents to constitute a Dispute Resolution Board within a period of one month from the copy of passing of this order is produced before them and further direct that the Board shall, after providing Signature SAN Not Verified Digitally signed by SAIFAN KHAN Date: 2021.06.24 10:20:08 IST WP-7924-2020 & WP-7925-2020 [9] opportunity of hearing to the petitioners as well as the respondents, give its verdict, within a period of three months thereafter. However, it would be open for both the parties to agitate their arguments with regard to the interpenetration of aforesaid corrigendums before the Board.
9. With aforesaid observations, petitions stand disposed of.
(MOHAMMAD RAFIQ) (VIJAY KUMAR SHUKLA) CHIEF JUSTICE JUDGE
s@if
Signature
SAN Not
Verified
Digitally signed by
SAIFAN KHAN
Date: 2021.06.24
10:20:08 IST
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