High CourtDivision BenchAppeal disposed of

M/S Gangotri Enterprises Ltd. v. Madhya Pradesh Road Development Corporation and Anr.

Case / Petition Number:Civil Appeal No. 4017 of 2018
Neutral Citation:[2018] 4 S.C.R. 260

Case Details & Bench

Court
High Court
Hon'ble Judges
  • Adarsh Kumar Goel
  • R. F. Nariman
Judgment Date
2018-04-18
Court Decision / Holding
Leave granted. The Court clarified that ‘ascertained money’ under Section 2(d) includes amounts that may be ascertained during proceedings and that an employee of a party cannot be appointed as a member of the Arbitration Tribunal. The State of Madhya Pradesh is directed not to appoint its departmental employees as tribunal members. The appeal and related S.L.P.s are disposed of in terms of this order; pending applications, if any, stand disposed of.
Final Disposition
Appeal disposed of

Parties to the Case

Appellants / Petitioners

  • M/S Gangotri Enterprises Ltd.

Respondents

  • Madhya Pradesh Road Development Corporation
  • Anr.

Legal Representation & Advocates

Counsels for Petitioners

  • • Petal Chandok
  • • Ankita Sharma
  • • Rishabh
  • • M. R. A Shamshad
  • • Aditya Samaddar
  • • B. S. Banthia
  • • Swarupama Chaturvedi
  • • Saurabh S. Sinha
  • • Aditya Dev Triguna
  • • Sunil Singh Parihar

Counsels for Respondents

  • • Saurabh Mishra
  • • AAG.
  • • Jugal Kishore Gilda
  • • Purushaindra Kumar
  • • Advocate General
  • • Naman Nagrath
  • • Neeraj Kishan Kaul
  • • Parag Triathi
  • • Ms. Kiran Suri
  • • Sr. Advs.
  • • Harsh Parashar
  • • Jubin Prasad
  • • Aman Pandey
  • • G Jasdeep S. Dhillon
  • • Prabhat K. Chaurasia
  • • Ms. Renuka Sahu
  • • Jay Savla
  • • Amar Varun
  • • Shantanu Krishna
  • • Ms. Anusuya Salwan
  • • Dhurav Mishra
  • • Divyanshu Kumar Srivastav
  • • Akash Lamba
  • • Viren Sibal
  • • Vivekananda B.
  • • Vikas Sood
  • • Apporv Kurup
  • • Ms. Isha Mital
  • • Dr. Harsh Pathak
  • • Ms. Shweta Mahajan
  • • Mohit Chaubey
  • • Siddharth Shukla
  • • Neeraj Shekhar
  • • Arjun Garg
  • • Mishra Saurabh
  • • Sridhar Potaraju
  • • Sudhir Mishra
  • • Prabhat

Case Synopsis & Summary

This Civil Appeal arises from a Madhya Pradesh High Court order concerning the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983. The Supreme Court clarifies two pivotal provisions to determine the scope of disputes governed by the Act and the qualifications of arbitrators. First, Section 2(d) defines “dispute” as a claim of ascertained money of Rs. 50,000 or more arising from a works contract. The Court holds that the expression “ascertained money” includes not only amounts already ascertained but also those that may be ascertained during proceedings on basis of claims and counterclaims. This interpretation broadens the ambit of disputes that can be handled under the Act, allowing evolving monetary claims to be included as the arbitration process unfolds. Second, regarding Section 4(3)(iii), the Court reiterates that an employee of a party cannot be qualified as a member of the Arbitration Tribunal, aligning with the decision in Indian Oil Corporation Ltd. v. Raja Transport Private Ltd. The State of Madhya Pradesh is directed not to appoint its departmental employees as tribunal members. The Court disposes of the appeals with leave granted and disposes of pending applications, while emphasising policy of law and impartial tribunal appointments. The judgment cites the Indian Oil case to support its reasoning on arbitrator qualifications and the scope of “dispute.”

Provisions of Law Cited

Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, s. 2(d)Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, s. 4(3)(iii)

Legal Doctrines & Maxims

  • Policy of law

Submissions & Arguments

Contentions of Appellants / Petitioners

The applicants contend that the scope of ‘dispute’ under Section 2(d) permits inclusion of claims that may be ascertained during the proceedings, thereby enabling evolving monetary claims to be addressed within the tribunal’s jurisdiction. They also address the interpretation of arbitrator qualifications under Section 4(3)(iii), urging adherence to objective criteria and avoidance of conflicts of interest in tribunal appointments.

Contentions of Respondents

The respondents argue for strict compliance with Section 4(3)(iii), emphasizing that no person who is or has been an employee of a party should be qualified as an arbitrator, to prevent any real or perceived conflict of interest; they rely on the policy of law and precedent to support their position.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
Indian Oil Corporation Ltd. and Ors. v. Raja Transport Private Ltd.(2009) 8 SCC 520PositiveThe Court relied on this decision as precedent for disallowing an employee of a party from serving as an arbitrator, aligning with its policy of preventing conflicts of interest.

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Extracted Judgment Text

Exact text extracted from official judgment records.

260 SUPREME COURT REPORTS[2018] 4 S.C.R. 260 [2018] 4 S.C.R. A M/S GANGOTRI ENTERPRISES LTD. v. MADHYA PRADESH ROAD DEVELOPMENT CORPORATION AND ANR. B (Civil Appeal No. 4017 of 2018) ## APRIL 18, 2018 ## **[ADARSH KUMAR GOEL AND R. F. NARIMAN, JJ.]** _Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983:_ C _s. 2(d) – Expression “ascertained money” occurring in s. 2(d) will include not only the amount already ascertained, but also the amount which may be ascertained during the proceedings._ _s. 4(3)(iii) – Qualification of Member of Arbitration Tribunal – Held: An employee of a party to the dispute cannot be an arbitrator_ D _– Therefore, State of Madhya Pradesh not to appoint its employee of the concerned department, as member of the Arbitration Tribunal._ _Indian Oil Corporation Ltd. and Ors. vs. Raja Transport Private Ltd._ **(2009) 8 SCC 520 : [2009] 13 SCR 510 – relied on.** E ## **Case Law Reference** **[2009] 13 SCR 510 relied on Para 4** CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4017 of 2018. F From the Judgment and Order dated 15.12.2017 of the High Court of Madhya Pradesh, Principal Seat, Jabalpur in A. C. No. 71 of 2016. Saurabh Mishra, AAG., Jugal Kishore Gilda, Purushaindra Kumar, Advs. Gen., Naman Nagrath, Neeraj Kishan Kaul, Parag Triathi, Ms. Kiran Suri, Sr. Advs., Harsh Parashar, Jubin Prasad, Aman Pandey, G Jasdeep S. Dhillon, Prabhat K. Chaurasia, Ms. Renuka Sahu, Jay Savla, Amar Varun, Shantanu Krishna, Ms. Anusuya Salwan, Dhurav Mishra, Divyanshu Kumar Srivastav, Akash Lamba, Viren Sibal, Vivekananda B., Vikas Sood, Apporv Kurup, Ms. Isha Mital, Dr. Harsh Pathak, Ms. Shweta Mahajan, Mohit Chaubey, Siddharth Shukla, Neeraj Shekhar, Arjun Garg, Mishra Saurabh, Sridhar Potaraju, Sudhir Mishra, Prabhat H 260 M/S GANGOTRI ENTERPRISES LTD. v. MADHYA PRADESH 261 ROAD DEVELOPMENT CORPORATION Kumar, Ms. Petal Chandok, Ms. Ankita Sharma, Rishabh, M. R. A Shamshad, Aditya Samaddar, B. S. Banthia, Ms. Swarupama Chaturvedi, Saurabh S. Sinha, Aditya Dev Triguna, Sunil Singh Parihar, M/S. AP & J Chambers, Prafulla Kumar Behera, Manish K. Bhardwaj, S. S. Nehra, Ms. Anuradha Mishra, Ms. Vanshaja Shukla, Varun Mohan, Swastik Singh, Manish Yadav, Ms. Swarupama Chaturvedi, B.N. Dubey, Ms. B Devika Gulati, Hitendra Nath Rath, Mayank Kshirsagar, Pavesh Joshi, Chavu Ambwani (For M/s. AP & J Chambers), B. K. Satija, Sumit Attri, K. Krishna Kumar, Hitendra Nath Rath, Nilava Bandyopadhayay, Rahul Pandey, Advs. for the appearing parties. The following Order of the Court was passed: C ## **O R D E R** 1. Leave granted. Heard learned counsel for the parties. 2. Our attention has been drawn to the definition of “dispute” under Section 2(d) of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (“1983 Act”) which is as follows: D “‘dispute’ means claim of ascertained money valued at Rupees 50,000 or more relating to any difference arising out of the execution or non-execution of a works contract or part thereof.” 3. We consider it appropriate to clarify that the expression “ascertained money” as used in Section 2(d) of the 1983 Act will include not only the amount already ascertained but the amount which may be ascertained during the proceedings on the basis of claims/ counter claims of the parties. 4. Our attention has also been drawn to Section 4(3)(iii) of the 1983 Act to submit that consistent with the policy of law and the judgment of this Court in Indian Oil Corporation Ltd. and Ors. vs. Raja Transport Private Ltd., (2009) 8 SCC 520, an employee of a party to the dispute cannot be an arbitrator. Section 4(3)(iii) of the 1983 Act is in the following terms: “4. Chairman and members of Tribunal and their qualifications.- E F G (3) No person shall be qualified for appointment as a member of the Tribunal, unless- (iii) he is or has been :- H 262 SUPREME COURT REPORTS [2018] 4 S.C.R. - A - (a) Chief Engineer in the service of the State Government in Public Works, Irrigation or Public Health Engineering Department; or - (b) a Chief Engineer in the service of the Madhya Pradesh Electricity Board; or B - (c) a Senior Deputy Accountant General of the Office of the Accountant General, Madhya Pradesh, for a period of not less than five years: C Provided that in the case of clause (iii), in exceptional circumstances, the State Government may relax the prescribed minimum period of five years to three years.” 5. We clarify that the State of Madhya Pradesh will not appoint as member of the Tribunal, its employee of the concerned department to which the dispute relates. D 6. The appeal stands disposed of as above. S.L.P.(C)….D. No. 10817/2018 and S.L.P.(C)…..D. No. 12928/ 2018: Delay condoned. E The special leave petitions shall also stand disposed of in terms of the order passed today in S.L.P. (C) No. 6513 of 2018. Pending applications, if any, also stand disposed of. Kalpana K. Tripathy F Appeal disposed of. G H