Madhya Pradesh High Court
Sadbhav Engineering Ltd. Through … vs Narmada Valley Development Authority … on 20 June, 2025
NEUTRAL CITATION NO. 2025:MPHC-IND:14852
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PAVAN KUMAR DWIVEDI
ON THE 20 th OF JUNE, 2025
ARBITRATION APPEAL No. 116 of 2025
SADBHAV ENGINEERING LTD. THROUGH YOGENDRA CHOUHAN
Versus
NARMADA VALLEY DEVELOPMENT AUTHORITY (NVDA) AND
OTHERS
Appearance:
Shri Manoj Kumar Sharma, learned senior counsel with Shri Siddharth
Patel and Shri Abhinav Dhanodkar, learned counsel appeared for the appellant
through video conferencing.
Ms. Mridula Sen, learned Govt.Advocate for the respondents/State.
ORDER
1. The appellant has filed this appeal against order dated 17.06.2025 passed
by the learned Commercial Court (District Judge Level) in MJC AV No. 32/2021,
whereby the application filed by the appellant under section 9 of the Arbitration
and Conciliation Act, 1996 has been rejected by the learned Court on the ground
of Maintainability as well as on merits.
Undisputed facts :
2. The undisputed facts of the case are as under:
2.1 The appellant is a Joint Venture Company constituted on 22.03.2011
under the provisions of the Indian Companies Act, 1956.
2.2 The respondent no. 1 Narmada Valley Development Authority (NVDA)
is an organization of Government of M.P. constituted for planning water resources
development in Narmada basin in terms of notification no. 501-2-NVDA-XXVII-
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83 dated 16.07.1985 which was published in M.P. Gazette Notification dated
09.08.1985.
2.3 The NVDA issued NIT No. 13/G/CE/2010-11, Indore on 11.10.2010
thereby inviting tender on turnkey basis for the following work:
“Execution of Omkareshwar Right Bank Life Canal including its
distribution network up to 40 Ha. chak for culturable command area
(CCA) of about 29947 Ha. on “Turn-key” basis, comprising work of
survey, planning, design, drawing, estimation, preparation of land
acquisition cases, preparation of cases for forest land, if any, shifting
and re-installation of H.T. and L.T. Electrical Lines, Telephone Lines,
Water supply lines etc. with regulation and control of complete water
by SCADA system, excavation earth work and cement concrete lining
of main flow canal from RD 51.281 KMN to RD 125.00 KM
(excluding V.R.B. at RD 51.281 KM Wasvi – Sirsodia Road) and
construction of all inline structures up to outlet such as
V.R.B.D.R.B,.D.O.L.H.R., Escape cum C.R., Drainage Culvert, Super
passage, Aqueduct, canal crossing, fall, etc. including construction of
distribution chambers, inspection chambers, distributaries, minors and
sub-minors with multiple outlets and all related structures, construction
of residential and non-residential buildings with Internal roads,
plantation along both sides of Internal roads and along with main canal,
supply of raw water in villages of command area at suitable locations,
preparation of all relevant documents for constitution of Water Users
Association of command area and commissioning of entire system and
operation and maintenance of complete commissioned system for one
year.”
2.4 The appellant and others submitted their bid. The respondent no. 1
opened the bids on 31.12.2010, the bid of the appellant was accepted,
consequently agreement dated 26.03.2011 was executed. The work was to be
completed within a period of 36 months including the rainy season from the date
of the issuance of work order. The work order was issued to the appellant on
26.03.2011.
2.5 It is also undisputed that the agreement under its clause 70 provided for
dispute resolution mechanism and in case of failure of in-house process of dispute
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resolution, any party to the contract can raise/refer dispute to the Arbitration
Tribunal constituted under the provisions of the Madhya Pradesh Madhyastham
Adhikaran Adhiniyam, 1982.
2.6 In the course of execution of the work under the agreement, dispute
regarding delay arose between the parties. The appellant attributed these delays in
execution of contract to the respondents and the respondents alleged that delay
occurred due to the action/inaction of the appellant.
2.7 The question that who is responsible for delay in the project is the bone
of contention between the parties, which is to be adjudicated upon and decided by
the Mdhyastham Adhikaran in due course of proceedings.
2.8 The NVDA alleging delay on the part of the appellant imposed a penalty
of Rs. 34.9 Crore upon it, out of which Rs. 19.33 Crore already recovered by it
and for rest it proceeded to encash bank guarantee.
2.9 The appellant filed an application under Section 9 of the Arbitration and
Conciliation Act, 1996 before the Commercial Court, Indore for grant of interim
protection against the encashment of the said bank guarantee. In the said
proceedings initially ex-parte interim order was passed by the learned Commercial
Court on 27.01.2024 thereby directing status quo with respect to bank guarantee.
2.10 The appellant during pendency of the said application, filed a
quantified claim before the M.P. Madhyastham Adhikaran, Bhopal with respect to
the same disputes, which was registered as Reference Case no. 52/2023. The same
was admitted by the learned Tribunal vide order dated 20.03.2025 and pending
consideration there at present.
2.11 Meanwhile, in the section 9 proceedings, the NVDA filed its reply
before the learned Commercial Court and raised objection to the effect that in
view of the fact that the dispute in question is covered within the jurisdiction of the
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learned M.P. Madhyastham Adhikaran, the application of the appellant filed
before the Commercial Court u/s 9 of the Act of 1996 is not maintainable.
2.12 The learned Commercial Court, while referring to a division bench
order of this court in the case of JV of EPA Systems (P) Ltd. Vs. Municipal
Corporation Gwalior, 2013 (1) MPLJ 472 , sustained the said objection on
maintainability and thus dismissed the application on the ground of
maintainability, while doing so the merits of the case were also considered and the
application was rejected on merits as well.
2.13 These above facts are the undisputed facts of the case.
Submissions of the appellant :
3. The appellant has argued that the dismissal of its application under
section 9 of the Arbitration and Conciliation Act, 1996 by the learned Commercial
Court is not sustainable in the eyes of law for the following reasons:
3.1 The learned Commercial Court failed to appreciate the strong prima
facie case of the appellant. It is submitted that fraud, irretrievable injury, and
special equities in favour of the appellant are present which have not been
considered by the learned Court.
3.2 The learned Commercial Court has not taken into account various
judgments of the Hon’ble Supreme Court, referred and supplied during the final
arguments, which clearly demonstrated that appellant’s application u/s 9 of the
Act of 1996 is not only maintainable, but deserved to be allowed.
3.3 It is also argued that in similar circumstances the learned Commercial
Court at Jabalpur has allowed MJC AV no. 123/2021 vide order dated 12.10.2021
restraining the respondent (NVDA) from encashment of Bank Guarantee. But the
same has not been considered while passing the impugned order.
3.4 The learned senior counsel while referring to the provisions of section
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17A of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 has tried to press
home the point that the word used in the said section is ‘Tribunal’ thus the
restriction as put by the first proviso to the inherent powers of the Tribunal in as
much as barring interim orders by way injunction/stay is limited to the Arbitration
Tribunal only and the same will not be applicable on the Civil Courts, thus the
exercise of powers by Court under section 9 of the Arbitration and Conciliation
Act, 1996 is not hit by the said restriction of first proviso to section 17A of M.P.
Madhyastham Adhikaran Adhiniyam, 1983.
3.5 He further argued that even the bar of jurisdiction of Civil Court in
terms of section 20 of the Act of 1983 would not come in the way of the Civil
Court while exercising powers under section 9 of the Act of 1996. Buttressing this
submission, he argued that the bar is only for those matters of which cognizance
can be taken by the Tribunal under the Act of 1983. He submits that the Tribunal
in view of the restriction under section 17A of the said Act cannot take cognizance
of the application of the appellant/claimant for considering its request for interim
relief.
3.6 The learned Senior Counsel in support of his submissions has referred
to the decisions of the Hon’ble Supreme Court rendered in (2020) 2 SCC 540 and
(2022) 1 SCC 712.
3.7 While referring to the said case laws counsel for the appellant contended
that the Hon’ble Apex Court considered the fact that remedy before the Tribunal
was inefficacious for the purposes of grant of interim relief and thus, it was held
that even when the Arbitraral Tribunal is constituted interim relief can be granted.
4. Heard learned senior counsel for the appellant and perused the case file.
Issues :
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5. This court, after hearing the appellant and perusal of the impugned order
as well as the record of the case, finds that there are following issues to be
considered:
(i) Whether an application under section 9 of the Arbitration and
Conciliation Act, 1996 would be maintainable in a case where the
jurisdiction lies with the M.P. Madhyastham Adhikaran in terms of the
provisions of the Madhya Pradesh Madhyastham Adhikaran
Adhiniyam, 1983 in view of the clear provisions of section 17A and 20
of the Act of 1983?
(ii) Whether, in case the section 9 application is found maintainable,
case for interim measures is made out?
Findings :
6. The provisions of section 17A and section 20 of the Madhya Pradesh
Madhyastham Adhikaran Adhiniyam, 1983 provide as under:
“17-A. Inherent powers.– Nothing in this Act shall be deemed to limit
or otherwise affect the inherent powers of the Tribunal to make such
order as may be necessary for the ends of justice or to prevent abuse of
the process of the Tribunal :
Provided that no interim order by way of injunction, stay or
attachment before award shall be granted :
Provided further that the Tribunal shall have no power to
review the award including the interim award.
20. Bar of jurisdiction of Civil Court. — (1) As from the date of the
constitution of the Tribunal and notwithstanding anything contained in
Arbitration Act, 1940 (No.10 of 1940) or any other law, for the time
being in force, or in any agreement or usage to the contrary, no Civil
Court shall have jurisdiction to entertain or decide any dispute of which
cognizance can be taken by the Tribunal under this Act.
(1-A) Notwithstanding anything contained in sub-section
(1), a Civil Court may entertain and decide any dispute of the
nature specified in the said sub-section referred to it by a
person in the capacity of indigent person.
Explanation.– For the purpose of this sub-section “indigent
person” shall have the meaning assigned to it in the Code of
Civil Procedure, 1908 (No.5 of 1908).]
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(2) Nothing in sub-section (1) shall apply to any arbitration
proceeding either pending before any arbitrator or umpire or
before any Court or authority under the provisions of
Arbitration Act, or any other law relating to arbitration, and
such proceedings may be continued, heard and decided in
accordance with agreement or usage or provisions of
Arbitration Act or any other law relating to arbitration in all
their stages, as it this Act had not come into force.”
7. A bare perusal of the provisions of section 17A makes it clear that it in
no way restricts power of the Madhyastham Tribunal to take cognizance of any
aspect of the matters which fall within its jurisdiction, what it restricts is only
interim measures.
8. As regards the bar of jurisdiction of Civil Courts, section 20 of the said
Act declares in sub-section (1) that notwithstanding anything contained in
Arbitration Act, 1940 (which would include the Act of 1996 by implication) or
any other law, or in any agreement or usage to the contrary, no civil court shall
have jurisdiction to entertain or decide any dispute of which cognizance can be
taken by the Tribunal under the Act of 1983.
9. As such a conjoint reading of section 17A and 20 of the Act of 1983
makes it abundantly clear that for all those matters of which cognizance can be
taken by the Madhyashtham Tribunal, jurisdiction of Civil Court is barred. And
what has been restricted by the proviso is only the stage of grant of relief and not
the relief itself as such it cannot be said that as the Tribunal is not empowered to
grant interim relief, thus there is no bar on the jurisdiction of the Civil Courts.
10. Moreover, sub-section (4) section 2 of the Arbitration and Conciliation
Act, 1996 provides as under:
“2(4) This Part except sub-section (1) of section 40, sections 41 and 43
shall apply to every arbitration under any other enactment for the time
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agreement and as if that other enactment were an arbitration agreement,
except in so far as the provisions of this Part are inconsistent with that
other enactment or with any rules made thereunder.”
11. A bare reading of the above quoted provision makes it clear that in case
of inconsistency between the Act of 1996 and any other enactment, the other
enactment shall prevail. As such, in the present case the provisions of the Act of
1983 would prevail thus in view of the clear restriction by the first proviso to
section 17A of the 1983 act, the grant of interim relief is excluded and by
implication the operation of section 9 of the Act of 1996 is also excluded.
12. A Division Bench of this court in the case of Joint Venture of Envio
Pure Aqua Systems (P) Ltd. Vs. Municipal Corporation, Gwalior 2013 (1) MPLJ
472 had the occasion to consider somewhat similar situation. After considering the
provisions of both aforementioned Acts, particularly section 17A and section 9 of
the respective Acts, following findings were recorded by the Hon’ble DB in para
12 and 13 of its order:
“12. In the facts of the present case, it is apparent that the works
contract was granted to the petitioner which, could not be satisfactorily
completed, however, it was rescinded by the order dated 31-5-2012.
Clause 86.4 of the agreement applies after termination of the contract,
whereby on having any dispute, the contractor shall have right to
proceed for arbitration, referring it to M.P Arbitration Tribunal as per
Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983. The said
agreement, is the by-party agreement executed by petitioner as well as
the Corporation putting their signatures, however, parties are bound by
the terms of the said agreement. The Adhiniyam, 1983 is a special
enactment and the parties have chosen to take recourse under the said
enactment. As per section 17-A of the said Adhiniyam, it is clear that
no interim order by way of injunction, stay or attachment before award
shall be granted. While under section 9 of the Arbitration Act, 1996,
any party before or during arbitral proceedings may apply to the Court
seeking an order by way of interim measure. But as per sub-section (4)
of section 2 of the Act of 1996 if the previsions of part one of the said
Act are inconsistent with the other enactment as specified in the
arbitration agreement then the applicability of the Act of 1996 isSignature Not Verified
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excluded. Thus, the only recourse permissible to the parties is as per
terms of the agreement and to enforce the provisions of the special
enactment of 1983 wherein the grant of interim stay prior to passing the
award is not permissible. Therefore, on making request by the
appellant interim relief cannot be prayed for on an application under
section 9 of the Arbitration Act, 1996 and the trial Court has rightly
rejected the said application. In this respect judgment of Hon’ble the
Apex Court in the case of Madhya Pradesh Rural Road Development
Authority v. L.G Choudhary, Engineers and Contractor, (2012) 3 SCC
495 can safely be relied upon wherein the judgment of Va Tech Escher
Wyass Floverl Limited v. Madhya Pradesh State Electricity Board,
(2011) 13 SCC 261 has been found per incurium after detailed
discussion, one of the Hon’ble Judges has made disagreement because
the contract was not terminated and no specific terms in the agreement
to take the recourse under the special enactment was there, however,
the reference to the larger bench has been made. But in the present case
as per clause 86.4, on termination of contract the applicability of the
enactment of 1983 has been agreed upon by the parties therefore, the
disagreement of one of the Hon’ble Judges is of no help to the
appellant. Hon’ble Apex Court in the case of Ravikant Bansal v.
Madhya Pradesh Rural Road Development Authority, (2012) 3 SCC
513 held that if arbitration clause specifies to take recourse before the
M.P Arbitration Tribunal under the Adhiniyam, 1983 then on having a
dispute arbitration is to be done by the Tribunal in terms of the
agreement. In the said context the decision of this Court in the case of
Municipal Corporationj Gwalior v. A.P.S Kushwaha, (SSI Unit),
2010(2) MPHT 338 can safely be relied upon whereby the Division
Bench of this Court held that in a case of works contract, as per
Notification No. 17-E- 85-96-21-B2 dated 4-11-2006 the provisions of
the Adhiniyam, 1983 would be applicable to the public undertaking.
The Court further observed that on having applicability of the
Adhiniyam, 1983 recourse cannot be taken under the provisions of
Arbitration Act, 1996 by appointment of sole arbitrators per section 11
and the award passed by the said Arbitrator was found without
jurisdiction.
13. in view of the foregoing discussion, we have no scintilla of doubt
that as per Clause 86.4 of the agreement, the appellant may take
recourse as permissible under the Adhiniyam of 1983 making a
reference to the M.P Arbitration Tribunal, Bhopal. Under section 17-A
of the Adhiniyam, 1983 interim injunction, stay or attachment before
award has been restricted. In such circumstances, the appellant cannot
be permitted to jump upon for taking recourse of section 9 of the
Arbitration Act, 1996 or taking order of interim nature from the Civil
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Court in view of sub-section (4) of section 2 of the Arbitration Act,
1996, on having inconsistency with the provisions of the Adhiniyam,
1983 which has been agreed by the parties by way of an agreement,
thus, the recourse specified in part one of the Arbitration Act, 1996
cannot be permitted to be resorted to.”
13. As regards the reliance placed by counsel for the appellant on the
decision rendered by the Hon’ble Apex Court in the case of State of Gujrat Vs.
Amber Builders, (2020) 2 SCC 540 . A bare perusal of the said decision would
show that not only that the said decision was passed in different circumstances,
but in fact the ratio of law laid down by the Hon’ble Apex Court in that case goes
against the appellant. The Hon’ble Apex Court in para 12, 15 and 17 of the said
decision has observed as under :-
“12. Section 9 of the A&C Act empowers the Court to grant interim
measures. However, Section 9(3) clearly provides that once an arbitral
tribunal is constituted, the Court shall not entertain an application under
Section 9(1) unless the Court comes to the conclusion that such
circumstances exist which would make the remedy under Section 17
not efficacious.
……………………..
……………………..
15. Part I of the A&C Act i.e. from Section 2 to Section 43 deals with
Arbitration and Section 2(2) clearly states that the said Part would apply
to all Arbitrations which take place in India. Section 2(4) makes it
absolutely clear that other than Section 40(1), 41 and 43, Part I of the
A&C Act shall apply to all arbitrations even if they are carried out
under any other enactment as if the arbitrations were pursuant to an
arbitration agreement except insofar as the provisions of Part I are
inconsistent with the other enactment or any rules made thereunder. A
plain reading would show that the provisions of Part I of the A&C Act
would apply to all arbitrations where the place of arbitration is within
India. Even statutory arbitrations under other Acts would be governed
by Part I. The only exception is that if there is any departure from Part I
in the special enactment then the special enactment will prevail and the
A&C Act will give way to the special enactment.
………………………….
………………………….
17. The practice and procedure of the Tribunal is governed by Section
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9 of the Act. Section 12 of the Act vests revisional powers in the High
Court of Gujarat where an award or any interim award can be
challenged on the grounds set out therein. The High Court also has suo
motu powers in this regard. Section 13 which is relevant for our
purpose reads as follows: “13. Bar of jurisdiction of Courts. (1) Save as
otherwise provided by section 12, no Civil Court shall have jurisdiction
to deal with or decide any question which the Tribunal is empowered to
deal with and decide by or under this Act and no injunction shall be
granted by any Civil Court in respect of any action taken or to be taken
in pursuance of any power by or under this Act. (2) No award or
interim award or order made or proceedings taken under this Act by the
Tribunal shall be called in question in any Civil Court.” Section 13
specifically bars the jurisdiction of the Civil Courts. This clearly means
that powers vested in a Civil Court under the A&C Act, such as the
powers to grant interim relief in terms of Section 9 of the A&C Act and
the powers for setting aside an award under Section 34 of the Act
cannot be exercised by Civil Courts insofar as the awards made under
the Gujarat Act are concerned . As far as Gujarat Act is concerned, the
power to set aside/modify an award is vested in the High Court under
Section 12. Section 21 of the Gujarat Act reads as follows:“21. Arbitration Act to cease to apply. The provisions of the
Arbitration Act, shall in so far as they are inconsistent with
the provisions of this Act, cease to apply to any dispute
arising from a works contract and all arbitration proceedings
in relation to such dispute before an arbitrator, umpire, court
or authority shall stand transferred to the Tribunal.”
14. As such, it is clear from a bare reading of above three paragraphs that
the Hon’ble Apex Court has held that in case of bar of jurisdiction of the civil
Courts the powers vested in civil Courts under the Act of 1996 such as the powers
to grant interim relief in terms of Section 9 of the said Act and the powers for
setting aside the award under Section 34 of the Act cannot be exercised by civil
Court in so far as award made under a special enactment. Thus, contrary to the
reliance of the appellant on the said judgment of the Hon’ble Apex Court it goes
against it. In view of the clear bar under Section 20 of the Act, 1983 the civil
Courts have no jurisdiction to pass any order granting interim relief under Section
9 of the Act of 1996 in the present case also.
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15. As regards the reliance placed on the decision rendered by the Hon’ble
Apex Court in the case of Arcelor Mittal Nippon Steel India Limited Vs. Essar
Bulk Terminal Limited, (2022) 2 SCC 712 . The said decision has been rendered
by the Hon’ble Apex Court considering the aspects of Section 9 vis-a-vis Section
17 of the Act of 1996. The Hon’ble Apex Court in the circumstances of a given
case there may, even after constitution of arbitral Tribunal, protection in terms of
Section 9 be provided by Civil Court.
16. As can be seen from bare reading of provision of Section 9 of the Act of
1996, the civil Courts can entertain an application for interim measures even after
constitution of arbitral Tribunal subject to the existence of conditions, which may
not render the remedy provided under Section 17 efficacious. Thus, it is
permissible under the provisions of Section 9 vis-a-vis Section 17 of the Act of
1996 to pass interim order. But, present case is not referring the interplay of above
two sections, instead in the present case jurisdiction lies under the Act of 1983,
which specifically bars the jurisdiction of civil Court in terms of Section 20 of the
said Act. Thus, this decision is also not applicable in the present case.
17. In view of the above analysis and the law as laid down by the Division
Bench of this Court as well as by the Hon’ble Apex Court, it is crystal clear that
the Act of 1983 being a special enactment and being indisputably applicable in the
present case, will exclude the application of the provisions of the Act of 1996.
18. Even otherwise the Act of 1996 itself declares that in case of any
inconsistency the other enactment shall prevail thus in any case the provisions of
the Act of 1983 shall prevail over the provisions of the Act of 1996.
Conclusions :
19. In view of the above analysis and discussion there can be no other
conclusion except the one that the point no. (i) is to be decided against the
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appellant. As such, it is hereby held that the application of the appellant filed
under section 9 of the Arbitration and Conciliation Act, 1996 before the learned
Commercial Court Indore was not maintainable and learned Commercial Court
rightly dismissed the same being not maintainable.
20. As the point No. (i) is decided against the appellant, there is no need to
decide point No. (ii).
21. In view of the conclusion drawn hereinabove, the impugned order
passed on 17.06.2025 by the Commercial Court, Indore in MJC AV No.32/2021
rejecting the section 9 application of the appellant is hereby affirmed. The appeal
is hereby dismissed.
No order as to costs.
(PAVAN KUMAR DWIVEDI)
JUDGE
patil
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