1 2025:CGHC:27297 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR Civil Revision No. 170 of 2017 Sadbhav Engineering Limited A Company Incorporated Under The Provisions Of The Companies Act 1956 Having Its Registered Office At Sadbhav House, Opposite Law Garden Police Chowki, Ellisbridge, Ahmedabad, Gujrat, 380006, Gujarat ... Revisionist/Applicant versus 1.Public Works Department Through The Engineer-In- Chief, Government Of Chhattisgarh, Sirpur Bhawan, Civil Lines, Raipur, Chhattisgarh, 492001. 2.State Of Chhattisgarh, Through The Secretary, Department Of Urban Administration And Development, Mahanadi Bhawan, Mantralaya, Naya Raipur, District Raipur, Chhattisgarh. ... Respondents For Revisioner/ Applicant :Mr. Sarojanand Jha assisted by Mr. Abhyuday Singh and Ms. Rajreeta Ghosh, Advocates For Respondents/State :Mr. Rahul Tamaskar, G.A. HARNEET KAUR Digitally signed by HARNEET KAUR Date: 2025.06.28 12:11:31 +0530 2 SB- Hon'ble Shri Justice Sanjay K. Agrawal Order On Board 23.06 .2025 1. Invoking the jurisdiction of this Court under Section 19 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 (hereinafter, ‘the Adhiniyam’), the applicant has preferred this civil revision calling in question the legality, validity and correctness of award and order dated 02/08/2017 (Annexure A-1) passed by the concerned Tribunal under the Adhiniyam whereby the reference petition bearing No. 20/2015 preferred by the applicant herein has been dismissed holding it to be non-maintainable invoking the provisions contained in Order 7 Rule 11 of CPC read with Section 7(5) of the Adhiniyam. 2. The aforesaid challenge has been made on the following factual backdrop :- (i) Respondent No. 2 envisaged a programme to develop roads in the State of Chhattisgarh under Chhattisgarh State Roads Sector Development Project (CSRSDP) which has to be implemented in 3 differed phases and in pursuance of the said objective, under Phase 2, the Public Works Department (respondent No. 1) invited bids from pre-qualified bidders on 01/05/2007 for Contract Package No. 7 for the rehabilitation and upgradation of State Highway from Abhanpur to Rajim to Gariyaband which was awarded to the applicant on 20/11/2007 for an amount of Rs. 58,38,67,354/- (Annexure A-4). (ii) Pursuant to the execution of the Contract Agreement on 17/12/2007 (Annexure A-6), respondent No. 2 appointed SMEC International Pvt. Ltd. as the Engineer under Clause 3 of the Contract Agreement for Contract Package 7. Subsequently, the applicant herein issued a letter to the Engineer seeking the approval of respondent No. 1 for appointment of M/s GKC Projects Ltd. as sub-contractor and the same was approved by respondent No. 1 in terms of Clause 4.4 of the GCC and sub-clause 4.4 of the PCC vide letter dated 23/04/2008 (Annexure A-8) to the extent of 25% of total work. (iii) The work under the Contract was completed by the applicant through M/s GKC Projects Ltd. on 27/11/2009 and a work completion certificate 4 was also issued by respondent No. 1 on 17/12/2009 certifying the applicant as the ‘main contractor’ and M/s GKC Projects Ltd. as the ‘sub-contractor’ (Annexure A-13). (iv) Pursuant thereof, since some dispute arose between the parties with regard to the Contract, the applicant invoked arbitration under Contract and the parties nominated their respective arbitrators and an Arbitral Tribunal was constituted under the arbitration clause in the Contract Agreement. However, as respondent No. 1 failed to agree to the fees proposed by the Arbitral Tribunal and there was a stalemate, the applicant filed a writ petition before this Court bearing WPC No. 1810/2014 wherein, this Court vide order dated 18/12/2014 (Annexure A- 28) granted liberty to the applicant to have its disputes adjudicated by moving the Arbitral Tribunal under the Adhiniyam. (v) Accordingly, the applicant herein filed reference petition before the Tribunal under the Adhiniyam being Reference Case No. 20/2015 (Annexure A-42) and after removal of defects including payment of Court fees of Rs. 8,96,345/-, it was admitted, but the respondents 5 filed an objection application (Annexure A-30) seeking dismissal of the reference petition alleging that there has been a breach of contract as Clause 4.4 of the GCC and sub-clause 4.4 of the PCC clearly provide that ‘the contractor shall not subcontract more than 25% of the works’ whereas in the work completion certificate, it has been clearly mentioned that 100% of the work has been carried out by M/s GKC Projects Ltd. and not by the applicant herein which is in violation of Clause 4.4 of the GCC and sub-clause 4.4 of the PCC. The applicant herein opposed the objection application by filing reply and submitting that the sub- contract was awarded to M/s GKC Projects Ltd. with the leave of respondent No. 1 and the work completion certificate has also been issued by them citing applicant as the main contractor and M/s GKC Projects Ltd. as the sub-contractor, therefore, at this stage, objection cannot be raised by the respondents. (vi) Learned Tribunal, by impugned order dated 02/08/2017 (Annexure A-1), rejected the reference petition filed by the applicant herein holding it to be non-maintainable as per the 6 provisions contained under Order 7 Rule 11 of CPC read with Section 7(5) of the Adhiniyam stating inter-alia that entire work of the contract has been executed by M/s GKC Projects Ltd. which is in violation of Clause 4.4 of GCC and sub-clause 4.4 of PCC and it is a case of breach of contract as no work has been carried out by the applicant, being aggrieved by which, the instant civil revision has been filed by the applicant herein. 3. Mr. Sarojanand Jha, learned counsel for the applicant, would submit that learned Tribunal has erred in rejecting the reference petition filed by the applicant herein invoking the provision contained under Order 7 Rule 11 of CPC as only to the extent of Section 12 of the Adhiniyam, provisions of CPC would be applicable and the decision rendered by the Supreme Court in the matter of Ethiopian Airlines v. Ganesh Narain Saboo1 may be noticed profitably in this regard. He would further submit that sub- contracting by the applicant in favour of M/s GKC Projects Ltd. would not take away applicant’s right to sue the respondents herein. 1 (2011) 8 SCC 539 7 In support of this submission, he would rely upon the decision rendered by the Supreme Court in the matter of Zonal General Manager, IRCON International Limited v. Vinay Heavy Equipments2. In that view of the matter, the impugned order/award be set aside and the matter be remitted to the Tribunal for deciding the claim of the applicant on merits. 4. On the other hand, Mr. Rahul Tamaskar, learned Government Advocate appearing for the respondents/State, would support the impugned order and submit that applicant, in breach of Contract particularly, Clause 4.4 of GCC and sub-clause 4.4 of PCC, awarded 100% of the work to sub-contractor M/s GKC Projects Ltd, therefore, learned Tribunal has rightly rejected the reference petition filed by the applicant herein. 5. I have heard learned counsel for the parties, considered their rival submissions made herein- above and went through the records with utmost circumspection. 6. Admittedly, the Contract in question allows the main contractor to sub-contract 25% of the work 2 (2015) 13 SCC 680 8 as per Clause 4.4 of GCC and sub-clause 4.4 of PCC. The appellant herein sought permission from respondent No. 1 for appointment of M/s GKC Projects Ltd. as sub-contractor for Contract Package -7 and it was also granted by letter dated 23/04/2008 (Annexure A-8) to sub-contract the work to the extent of 25% and the work was completed on 27/11/2009 as against the scheduled completion period dated 20/12/2009, however, 100% work was executed by the sub-contractor M/s GKC Projects Ltd. and thereafter, work completion certificate was also issued by the respondent No. 1 on 17/12/2009 certifying petitioner as the ‘main contractor’ and M/s GKC Projects Ltd. as the ‘sub-contractor’ (Annexure A-13) clearly mentioning therein that vide letter dated 15/12/2009 main contractor has reported that remaining 75% of the work was also completed by sub-contractor using their own resources.] 7. Now, the two questions that arise for consideration are as follows :- I. Whether learned Tribunal is right in rejecting the reference petition filed by the 9 applicant herein in limine invoking the provisions contained under Order 7 Rule 11 of CPC read with Section 7(5) of the Adhiniyam, without adjudicating it on merits ? II. Whether sub-contracting by the appellant in favour of M/s GKC Projects Ltd. would take away appellant’s right to sue the respondents and raising their claim ? Answer to Question No. (I) :- 8. It is no more res integra that CPC is applicable only in a limited sense to the Tribunal under the Adhiniyam as provided under Section 12 of the Ahiniyam, which states as under :- “12. Power of Tribunal or Bench regarding discovery, production of evidence, affidavit, etc. - (1) The Tribunal shall, for the purposes of this Act, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters, namely :- (a) discovery and inspection; (b) enforcing the attendance of any person and examining him on oath; (c) examining or allowing either party to a reference to examine an expert on any point at issue where opinion of such expert would be relevant under the provision of the Evidence Act, 1872; (d) compelling the production of books of account and other documents subject 10 to the provisions of Sections 123 and 124 of the Evidence Act, 1872. (e) issuing commissions; (f) calling proof of facts by affidavit of the party or of any witness and ordering that such affidavit may be read at the hearing on such conditions as the Tribunal or the Bench concerned, thinks fit.” 9. As such, section 12 of the Adhiniyam would be applicable to the proceeding before the Tribunal with regard to discovery and inspection, attendance of witnesses, expert witnesses, production of books of accounts, commissions and calling for affidavits, etc. and the provision contained under Order 7 Rule 11 of CPC has not been expressly made applicable by the said Adhiniyam to the proceeding before the Tribunal. 10. In the matter of Ethiopian Airlines (supra), the question that arose for consideration before their Lordships of the Supreme Court was whether Section 86 of CPC would be applicable in a proceeding before the Consumer Forum, to which their Lordships answered in negative and held as under :- “72. Section 86 of the Code of Civil Procedure is inapplicable to the present case because the older and more general statute has been excluded by more recent special statute, namely, the Consumer 11 Protection Act, 1986 and the Carriage by Air Act, 1972. Ethiopian Airlines is not entitled to sovereign immunity in the suit at issue in the present case. Therefore, any other consent of the Central Government is not required to subject the appellant Ethiopian Airlines, to a suit in an Indian court.” 11. In view of the provision contained under Section 12 of the Adhiniyam and in view of the aforesaid principle of law laid down by their Lordships of the Supreme Court in Ethiopian Airlines (supra), learned Tribunal is absolutely unjustified in invoking the provision contained under Order 7 Rule 11 of CPC as it has not been made expressly applicable to a proceeding before the Tribunal. It is settled principle of statutory interpretation that specific statutes that come later in time trump prior general statutes. Therefore, the Tribunal has to follow its own procedure as provided in Section 12 of the Adhiniyam and not that of the CPC. As such, question No. I is answered accordingly and the Tribunal is absolutely unjustified in invoking Order 7 Rule 11 of CPC. 12 Answer to Question No. (II) :- 12. In this regard qua ‘sub-contract’, the Supreme Court in the matter of IRCON International Limited (supra) has held that without a contractual provision making the owner liable to pay the subcontractor, the relationship between the owner and contractor, and between the contractor and subcontractor, remains distinct and observed in paragraph 9 as under :- “9. Insofar as the question of primary liability therein is concerned, the law on subcontracts and employer liability is amply clear. In the absence of covenant in the main contract to the contrary, the rules in relation to privity of contract will mean that the jural relationship between the employer and the main contractor on the one hand and between the sub-contractor and the main contractor on the other will be quite distinct and separate. No such clause to the contrary, existent in the main contract between Appellants and SIPCOT, has been highlighted before us by the Appellants, which would persuade us towards a deviation from the presumption of distinct and sole liability of the Appellant-Contractor as employer vis-a-vis the Respondent-Sub Contractor. On the contrary, much of the exercise in determining the existence of a “back to back clause” in the contracts C1 and C2 appears to be misplaced. Such an accommodation or transference of liability needs to be pinpointed in the main contract, for it is SIPCOT’s acceptance of liability of subcontractor claims which is of the essence; even a clause indicating “back to back” 13 liability in agreements C1 and C2 would not serve to novate the main contract and fasten payment liability on SIPCOT, prevented as it would be by privity, for it would be a matter of SIPCOT’s acceptance of subcontractor liability in the main contract, and not a matter of novation by imposition upon SIPCOT by two parties in a separate bilateral contract. Nothing presented before us suggests that SIPCOT’s contract with the Appellant provided for “back to back” subcontracts whereby SIPCOT would be directly answerable for the payment claims raised by contractors. That subletting was provided for by the main contract, and indeed occurred, has been found by the Arbitrator (in both Arbitrations) and affirmed by the Courts below. This however, is quite distinct from concluding that SIPCOT contractually (in the main agreement) assumed primary liability for the Subcontractor-Respondent’s payment claims in respect of agreements made with the Appellant. The fact that the Respondent was represented and present in parleys and meetings between SIPCOT and the Appellant or that it was referred to in the correspondence exchanged between them does not lead to the conclusion that a Tripartite contract had come into effect by evolution. ” 13. Similarly, Delhi High Court, in the matter of THDC India Ltd. v. M/s PCL-Intertech Lenhydro Consortium JV 3 , on a question as to “whether subcontracting bars claims” has held that in that case, the petitioner having regularised the sub-contracting and having insisted that the 3 2023 SCC Online Del 4040 14 same will not absolve the petitioner of any of its responsibilities under the contract, it became a matter of indifference whether the work was performed by the respondent itself or through its sub-contractor. The sub-contracting did not absolve the respondent from its obligations under the contract; equally, it did not obliterate the respondent’s right to raise claims upon the petitioner. 14. Coming to the facts of the present case in light of the aforesaid legal discussion, it is not in dispute that Clause 4.4 of the GCC and sub- clause 4.4 of the PCC expressly allows sub- contracting to the extent of 25% of the works, however, approval was sought by the applicant herein for appointing M/s GKC Projects Ltd. as the sub-contractor, which was duly approved by the respondent No. 1 (Annexure A-8) to the extent of 25% and even after the completion of work, the work completion certificate was issued in favour of the applicant on 17/12/2009 (Annexure A-13) clearly citing the applicant as the ‘main contractor’ and M/s GKC Projects Ltd. as ‘sub-contractor’ and stating that 100% work has been completed by the sub-contractor for 15 which payment has been made by the respondents to the applicant i.e. the main contractor except for the disputed claim of the applicant. 15. 15. Similarly, Clause 4.4 of the GCC relating to sub-contractors, clearly provides that the contractor shall be responsible for the acts or defaults of any subcontractor, his agents or employees, as if they were the acts or defaults of the contractor, unless otherwise stated in the particular conditions, as such, this shows that the privity of the contract was between the main contractor i.e. the applicant herein and respondents No. 1 and 2 herein. Thus, I am of the considered opinion that sub-contracting by the applicant to M/s GKC Projects Ltd. would not disentitle the applicant to raise its claim or sue the respondents herein in accordance with law. In that view of the matter, the Tribunal is absolutely unjustified in sustaining the objection raised by the respondents and rejecting the reference petition filed by the applicant herein. 16. Accordingly, the impugned order dated 02/08/2017 (Annexure A-1) is hereby set aside and matter is 16 remitted to the Tribunal for hearing the reference petition, which is restored to its original No., and for deciding it on merits in accordance with law on the basis of the material available on record expeditiously. 17. This civil revision is allowed. A copy of this order be sent to the concerned Tribunal for information and compliance. Sd/- (Sanjay K. Agrawal) Judge Harneet