The State of Gujrat vs Amber Builders
Facts of the case
Under this case, a question emerged out of a development contract between the Employer which is a State entity, and the Contractor. In one of the agreements between the parties, the Contractor was required to repair the damage of the streets which have happened because of downpours. The Contractor had supposedly not fixed the streets as per the agreement and thus, the Employer gave a notification to the Contractor stating that it will withdraw the installments from the Contractor that were made under different agreements.
Against this notification, the Contractor filed a writ in the High Court which was ruled against the employer, holding that without evaluation or crystallization of the sum tried to be recuperated, the business or the contractual worker can't singularly recoup the said sums from the ongoing provisional labor of a same temporary worker regarding another agreement. An appeal against the decision of the High Court was filed in Supreme Court.
The issue in the case
Whether, in a legal mediation under the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (Gujarat Act) the Arbitral Tribunal has purview to make interim orders as per Section 17 of the Arbitration and Conciliation Act, 1996?
The contention of the parties
The Employer's contention was that the best possible solution to the current situation accessible to the Contractor is to move toward the Arbitral Tribunal comprised under the Gujarat Act and not the High Court. The Contractor contended that such Arbitral Tribunal has no jurisdiction to allow such help and that if the Gujarat Act doesn't empower the Tribunal to pass interim order, it can't make a plan of action to the Code of Civil Procedure, 1908 for a grant between interim order.
The decision of the Court
After a better understanding of the Gujarat Act, the Court saw that Section 8(3) of the Gujarat Act unmistakably gives that where the Arbitral Tribunal concedes a reference under sub-section (2) of Section 8, it will make an award or an interim grant-giving its reasons thereof. This Section perceives the intensity of the Tribunal to make interim grants. The Court reasoned that to the extent the award of the interim award is concerned, there is no irregularity in the Gujarat Act and the Arbitration Act since the power of the Tribunal to give interim award help is given under Section 8(3) of the Gujarat Act and Section 17 of the Arbitration Act in addition to these forces.
Subsequently, in Court's view, the proper solution for the Contractor was to move toward the Arbitral Tribunal comprised under the Gujarat Act since that would have the purview to choose whether the notification gave by the Employer was a lawful notification and whether the Employer was, truth be told, qualified for recuperating any sum from the Contractor. Further, the Court saw that it would likewise be the jurisdiction of the Tribunal to choose whether the Contractor has made out an at first sight case for an award of an interim grant. In this way, the Supreme Court put aside the request for the High Court granting them freedom and to move towards the Arbitral Tribunal established under the Gujarat Act.