Rites Ltd. Represented Through Its … vs M/S Supreme Bkb Deco Jv Represented … on 22 January, 2025

Jharkhand High Court

Rites Ltd. Represented Through Its … vs M/S Supreme Bkb Deco Jv Represented … on 22 January, 2025

Author: Gautam Kumar Choudhary

Bench: Gautam Kumar Choudhary

IN THE HIGH COURT OF JHARKHAND AT RANCHI
                     W. P. (C) No. 311 of 2025
                           -----

1. Rites Ltd. represented through its Chairman and Managing Director,
having Registered office at SCOPE Minar, Laxmi Nagar, Delhi and
Corporate Office at RITES Bhawan, Plot No.1, Sector 29, P.O &
P.S.-Sector 29, Dist.-Gurgaon represented by Jeetendra Kumar Khan
(JGM) RITES Ltd.

2. Damodar Valley Corporation, represented through its Chairman
office at DVC Towers, VIP Road, Kolkata, P.O & P.S.-VIP Road,
represented by Sangya Dash (Manager HR) DVC Ltd.

                                        ...      ....          Petitioners
                           Versus

M/s Supreme BKB DECO JV represented through Mr. Sushil Kumar
Agarwal, having its Head Office at Surya Auto Campus, Dhansar,
Dhanbad, P.O & P.S.-Dhansar, Dist.-Dhanbad
… …. Respondent

—–

CORAM: HON’BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY

—–

For the Petitioners : Mr. M.S. Mittal, Sr. Advocate
Mr. Srijit Choudhary, Advocate
For the Respondent : Mr. Sumeet Gadodia, Advocate
Mrs. Shilpi Sandil Gadodia, Advocate
Mr. Prakhar Harit, Advocate
Mr. K. Hari, Advocate
Ms. Sanya, Advocate

—–

Oral Order
05 / Dated : 22.01.2025

1. This writ petition has been filed for quashing the order
passed by learned sole Arbitrator on 06.10.2024 allowing the
amendment petition filed by the claimant-respondent under Section 23
(3) of the Arbitration and Conciliation Act, 1996 (hereinafter called the
Act, 1996 and under Order 6 Rule 17 of the Code of Civil Procedure,
1908.

2. The petitioners are the respondents in the arbitral
proceeding, which is with respect to the dispute between the petitioners
and the claimants pertaining to the contract dated 23.03.2015 regarding
tender floated by Damodar Valley Corporation and construction of
bridge on river Konar along with its approach road over bridge ROB on
Gomoh – Barkakana railway line at BTPS.

3. The sitting of the sole arbitrator commenced on
06.11.2022 and the term of the arbitration proceeding is to expire on
17.02.2025.

4. The claimant has preferred the following claim against
the respondent:

i. To declare that the respondent was liable for fundamental
breach of the contract dated 23.03.2015;
ii. To declare that the claimant was entitled to payment of
escalation and price variation on the basis of current price in
indices for the remaining work done;

iii. To admit the statement of claimant as being submitted by the
claimant; and
iv. To award amount towards all the claims along with past,
pendente lite and future interest as claimed under
Chapter- IV of the statement of claim; and
v. To grant any other relief as it may deem fit and proper.

5. Interim order allowing the amendment petition has been
assailed on the ground that the documents, which have been relied upon
and brought on record by way of amendment petition, were available
with the claimant and no reason has been assigned why it was not
produced at the earlier stage. In the amendment application it has not
even been stated that due diligence was exercised, and they failed to
trace these documents. Specific objection in this regard was taken in
this regard by the writ petitioners but the same has not been considered
by the learned Arbitrator.

6. Order 6 Rule 17 of CPC is categorical in the sense that
Court’s jurisdiction to allow application for amendment is taken away
unless the party establishes where it could not have raised the issue
before the commencement of the trial despite due diligence. Further,
under Section 23 (3) of the Act, 1996 such an amendment cannot be
allowed unless the parties agreed thereto.

2

7. It is further argued that the jurisdiction of this Court
under Articles 226 and 227 of the Constitution of India is intended to
meet a situation where a party is rendered remediless and since the
arbitral proceeding was in its penultimate stage, therefore, the
petitioners had no other remedy except to invoke the writ jurisdiction of
this Court. Reliance is placed on in para 18 of (2022) 1 SCC 75
(Serosoft Solutions Private Ltd. Vs. Dexter Capital Advisors Pvt. Ltd.)
wherein it has been held
“This power needs to be exercised in exceptional rarity, wherein one
party is left remediless under the statute of clear ‘bad faith’ shown by
one of the parties. This high standard said by this Court is in terms
of the legislative intention to make the arbitration fair and efficient.”

8. Learned counsel for the claimant-respondent has raised a
preliminary objection to the maintainability of the instant writ petition
against the interim order passed by the sole arbitrator. The interim
objection in I.A. No. 617 of 2025 proceeds on the ground that
challenge to an interim order is against the scheme of the Arbitration
and Conciliation Act. Specific reference is made to Section 5, which
passed the jurisdiction of the Court to intervene except where so
provided in the Act, 1996 which is a complete code in itself. It is
submitted that it is not legally correct that the writ petitioners are
remediless against the interim order. The challenge to said order can
also be one of the grounds in an appeal under Section 34 of the Act,
1996. Reliance is placed on (2005) 8 SCC 618 (paras 45 and 46)
wherein it has been held that under Section 37 makes certain orders of
the arbitral tribunal appealable. Under Section 34 the aggrieved party
has an avenue for ventilating its grievance against the award,
including any, in-between orders that might have been passed by the
arbitral tribunal acting under Section 16 of the Act. The party
aggrieved by an order of arbitral tribunal, unless as a right of appeal
under Section 37 of the Act, has to wait until the award is passed by
the tribunal. This appears to be the scheme of the Act. It has further
been held in this case that the object of minimizing judicial

3
intervention while the matter is in the process of being arbitrated
upon, will certainly be defeated if the High Court could be approached
under Article 227 or under Article 226 of the Constitution against
every order made by the arbitral tribunal. Therefore, it is necessary to
indicate that once the arbitration has commenced in the arbitral
tribunal, parties have to wait until the award is pronounced unless, of
course, right of appeal is available to them under Section 37 of the
Act, 1996 even at early stage. It has been thus held that the High
Court could not interfere with the order passed by the arbitrator or the
arbitral tribunal during the course of arbitration proceeding and the
parties would approach the Court only in terms of Section 37 of the
Act or in terms of Section 34 of the Act. This view has been reiterated
in 2025 SCC Online (SC) 22 (para 14).

9. On facts of the case, it is submitted that the occasion for
bringing the amendment application before the arbitrator was the
judgment of the Hon’ble Apex Court delivered on 21.09.2023, during
the pendency of the arbitral case in Batliboi Environmental Engineers
Ltd. Vs. Hindustan Petroleum Corporation Limited & Anr. reported in
(2024) 2 SCC 379 wherein it was held that Hardson formula was
couched on three assumptions:

i. contractor is not habitually or otherwise underestimating the
cost when pricing;

ii. the profit element was realistic at the time; and
iii. there was no fluctuation in the market condition and the
work of the same general level of profitability.

10. In order to bring martial facts in the light of the ratio laid
down by the Hon’ble Apex Court, the amendment was brought which
did not seek to amend the pleadings but only to bring certain facts on
record supplementing its claim.

11. Having heard the submissions advanced on behalf of both
sides and considering the materials on record, I find force in the
argument advanced on behalf of the respondent in view of the ratio

4
laid down by the Hon’ble Apex Court in (2022) 1 SCC 75 that the
power under Articles 226 and 227 of the Constitution can be invoked
for interfering with an interim order only in exceptional rarity.
Nevertheless, the power exists and in exceptional circumstance the
said power can be invoked. However, an aperture and avenue for
interference is a limited one.

12. Present case does not justify interference with the interim
order in exercise of extraordinary writ jurisdiction of this Court for the
following reasons:

Firstly, nature of amendment was necessitated in view of the
Judgment of the Apex Court in (2024) 2 SCC 379, during the
pendency of the arbitral proceeding to bring certain facts on record for
consideration by the sole arbitrator.

Secondly, Arbitral Tribunals are not bound by the strict rigors
of CPC. Even otherwise amendment is permissible at any stage of the
proceeding for the purpose of determining the real question in
controversy between the parties. It has been held in 2022 SCC On
Line SC 1128 Life Insurance Corporation Ltd Vs Sanjeev
Builders Pvt Ltd
“19. It is well settled that the court must be extremely liberal in
granting the prayer for amendment, if the court is of the view
that if such amendment is not allowed, a party, who has prayed
for such an amendment, shall suffer irreparable loss and
injury”.

Thirdly, nature of amendment does not introduce a new cause
of action or change the nature of lis between the parties, but are to
enable the learned Arbitrator to determine the real question in
controversy between the parties.

Writ Petition accordingly stands dismissed.
Pending I.A., if any, stands disposed of.

(Gautam Kumar Choudhary, J.)
AKT/Satendra

5