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NTPC Ltd. Kahalgaon Super Thermal Power Station v/s Hindustan Steel Works Construction Ltd.

Company & Directors' Information:- NTPC LIMITED [Active] CIN = L40101DL1975GOI007966

Company & Directors' Information:- HINDUSTAN CONSTRUCTION COMPANY LIMITED [Active] CIN = L45200MH1926PLC001228

Company & Directors' Information:- INDIA STEEL WORKS LIMITED [Active] CIN = L29100MH1987PLC043186

Company & Directors' Information:- D R STEEL CONSTRUCTION COMPANY PVT. LTD. [Active] CIN = U27310WB1991PTC051847

Company & Directors' Information:- INDIA THERMAL POWER LIMITED [Active] CIN = U04010MH1993PLC171444

Company & Directors' Information:- T M STEEL WORKS PVT LTD [Strike Off] CIN = U63022MH1964PTC012894

Company & Directors' Information:- HINDUSTAN POWER AND STEEL PRIVATE LIMITED [Strike Off] CIN = U40100CT2007PTC020421

Company & Directors' Information:- S. G. POWER AND STEEL PRIVATE LIMITED [Active] CIN = U14290DL2012PTC240718

Company & Directors' Information:- R. S. STEEL AND POWER PRIVATE LIMITED [Active] CIN = U70100CT2009PTC021362

Company & Directors' Information:- R S STEEL WORKS PRIVATE LIMITED [Strike Off] CIN = U27310UP1977PTC004395

Company & Directors' Information:- V K CONSTRUCTION WORKS PVT LTD [Strike Off] CIN = U45209CH1977PTC003718

Company & Directors' Information:- STEEL CONSTRUCTION COMPANY PRIVATE LIMITED [Strike Off] CIN = U27104KA1939PTC000250

Company & Directors' Information:- SUPER CORPORATION LIMITED [Active] CIN = U19112UP2013PLC061542

Company & Directors' Information:- SUPER STEEL PVT LTD [Strike Off] CIN = U27110UP1972PTC003511

Company & Directors' Information:- S S POWER CONSTRUCTION CO PVT LTD [Strike Off] CIN = U31909WB1972PTC028554

Company & Directors' Information:- SUPER CONSTRUCTION INDIA PRIVATE LIMITED [Active] CIN = U74899DL1981PTC011519

Company & Directors' Information:- SUPER POWER PRIVATE LIMITED [Strike Off] CIN = U74899DL1981PTC012354

Company & Directors' Information:- SUPER CONSTRUCTION PRIVATE LIMITED [Active] CIN = U74899DL1982PTC014650

Company & Directors' Information:- HINDUSTAN STEEL CORPORATION LIMITED [Dissolved] CIN = U99999MH1943PTC003926

    Civil Appeal No. 11122 of 2017 (Arising Out of S.L.P. (C) No. 20724 of 2017)

    Decided On, 28 August 2017

    At, Supreme Court of India


    For the Appellant: Ranjit Kumar, Solicitor General, Inderbir Singh Alag, Sr. Advocate, Kanchan Kaur Dhodi, Jagdeep Lamba, Advocates. For the Respondents: Paramjit Singh Patwalia, Sr. Advocate, G. Umapathy, Rakesh K. Sharma, Aleog Rozario, Aditya Singh, Advocates.

Judgment Text

Leave granted.

2. The facts in the present case would show that the arbitration clause contained in the Letter of Award dated 03.02.2004 would refer matters to the Permanent Machinery of Arbitration (hereinafter referred to as 'PMA') in case of disputes.

3. The matter otherwise has a chequered history in which two Awards dated 10.04.2012 and 10.05.2012 were made by the Joint Secretary and Sole Arbitrator in which certain claims of the respondent before us were allowed and counter claims by the appellant rejected. The Member Secretary, and Appellate Authority at that time, by his order dated 11.02.2015, set aside the two awards stating that the Sole Arbitrator appears to have mixed up the facts of the present case with that of some other case.

4. The respondent challenged the aforesaid order seeking a review thereof, and by order dated 30.03.2016, the Appellate Authority dismissed the same. The respondent challenged the two Orders dated 11.02.2015 and 30.03.2016 passed by the Appellate Authority by filing a Writ Petition before the Delhi High Court.

5. The Delhi High Court, by order dated 30.05.2016, disposed of the Writ Petition by permitting the respondent to file appropriate proceedings under the Arbitration and Conciliation Act, 1996 (for short 'the Act'). As a result thereof, the respondent moved a petition under Section 34 of the Act before the Delhi High Court, wherein the learned Single Judge decided that the Chairman-cum-Managing Director of the NTPC was to decide as to whether the matter then should at all be sent to arbitration. The Chairman-cum-Managing Director, by letter dated 03.01.2017, thereafter, stated that arbitration was not acceptable to NTPC.

6. In an appeal filed against the order of the learned Single Judge, the Division Bench of the Delhi High Court, by impugned order dated 30.05.2017, modified the order of the learned Single Judge and then said that the NTPC appears, at least on three occasions, to have waived its rights so far as the non-applicability of the Arbitration Act is concerned, and then appointed Hon'ble Mr. Justice Vijender Jain (Retired Chief Justice, Punjab & Haryana High Court) as Sole Arbitrator to adjudicate the disputes between the parties.

7. Mr. Ranjit Kumar, learned Solicitor General, has argued before us that the judgment in Northern Coalfields Limited v. Heavy Engineering Corporation Limited and Another, 2016(4) R.C.R.(Civil) 160 : 2016(5) Recent Apex Judgments (R.A.J.) 144 : (2016) 8 SCC 685 referred to and relied upon in the High Court judgment requires to be re-visited. In that judgment, according to him, it is only the Court appointed resolution machinery decided by Oil and Natural Gas Commission v. CCE, 1995 Supp. (4) SCC 541 which was later on dismantled by the judgment in Electronics Corporation of India v. Union of India and Ors., (2011) 3 SCC 404, and not the PMA.

8. The Permanent Machinery of Arbitration (PMA) had been set in place earlier than the judgment in the ONGC case, as noticed in Northern Coalfields (supra) in March, 1989. Yet in the summary contained in para 23, this Court, instead of appreciating that the Committee on Disputes was set up judicially, and ran parallel to the Permanent Machinery of Arbitration, appears to have combined the two in requiring permission from the CoD to refer disputes already finally decided by the PMA to a litigative process while the CoD was in place, as was held in para 24 of the said judgment.

9. This being the case, it is clear that it requires to be determined by a Larger Bench as to whether a litigative process can yet be availed in situations like the present where, under the PMA, the Appellate order of the Secretary is final and binding on both parties.

10. For this reason, we refer the said judgment to a Bench of three learned Judges of this Court. Regard being had to the fact that the judgment delivered by the three-Judge Bench would have extremely large ramifications in that it would affect litigation between government bodies, we request the Hon'ble Chief Justice of India to constitute such a Bench at the earliest.

11. There shall be an interim stay of the arbitration proceedings before Hon'ble Mr. Vijender Jain (Retd. Chief Justice).

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br />12. Without prejudice to the fact that the law requires to be settled, it was submitted by both the learned Solicitor General and Mr. P.S. Patwalia, learned Senior Counsel, that the present case could go for decision before the Cabinet Secretariat under the PMA in terms of the office Memorandum dated 07.12.2015. The parties will be at liberty to do so, and to place the decision arrived at before the three Judge Bench. 13. The appeal is disposed of accordingly.