Umri Pooph Pratappur (Upp) Tollways Pvt. Ltd. vs. M.P. Road Development Corporation

1

REPORTABLE

IN THE SUPREME COURT OF INDIA
2025 INSC 907
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9920 OF 2025
[Arising out of SLP (C) No. 13415 of 2025]

UMRI POOPH PRATAPPUR (UPP)
TOLLWAYS PVT. LTD. ... APPELLANT

VERSUS

M.P. ROAD DEVELOPMENT CORPORATION
AND ANOTHER ... RESPONDENTS

J U D G M E N T

R. MAHADEVAN, J.

Leave granted.

2. This appeal has been preferred against the final judgment and order dated
1
09.09.2024 passed by the High Court of Madhya Pradesh at Jabalpur in Writ
Petition (Civil) No. 14569 of 2022 filed by Respondent No. 1 – Madhya Pradesh
Road Development Corporation. By the impugned judgment, the High Court
allowed the writ petition and quashed the orders dated 02.06.2022 and 07.06.2022
Signature Not Verified
Digitally signed by
VISHAL ANAND
Date: 2025.07.30
16:38:16 IST
Reason:

1
Hereinafter referred to as “the High Court”

2

2
passed by the International Centre for Alternative Dispute Resolution –
Respondent No.2 and the Arbitral Tribunal, respectively. For ease of reference,
the orders impugned in the writ petition, are extracted below:
Order dated 02.06.2022 passed by the ICADR
“…
The ICADR has made thorough examination of all the points of the Claimant and
Respondent including the aforesaid nine attachments with email dated 24.05.2022
and due deliberation and consideration of all the points raised by both the
Claimant and Respondent particularly Arbitration Agreement, the judgement in
Writ Petition no. 11783/2021 dt.03.09.2021 and Orders sheets of Madhyastham
Adhikaran at Bhopal and it has come to the following conclusions:

1. ICADR is the proper forum for the arbitration of disputes arising out of
execution of Concession Agreement dated 05.01.2012 between M/s. Umri Pooph
Pratappur Tollway Private Limited and Madhya Pradesh Road Development
Corporation Ltd. and the same can be ascertained from Arbitration Agreement
incorporated in Article 44.3.1 and 44.3.2.

2. The Judgement in Writ Petition nо. 11783/2021 dt.03.09.2021 gives clear
finding that ICADR is the proper forum for Arbitration of dispute arising from the
Concession agreement dated 05.01.2012.

3. In view of and from the orders sheets of Madhyastham Adhikaran at Bhopal, it
is ascertained that the Madhyastham Adhikaran at Bhopal has not entered upon
reference of the arbitration and therefore not in seisin of the aforementioned
arbitrable disputes.

Therefore, in view of Rule 5(2) of the ICADR Arbitration Rules, 1996, inter alia,
provides that where a party fails to appoint an arbitrator within 30 days from the
receipt of a request to do so from the other party, the appointment shall be made
upon request of the party, by ICADR. However, in view of Reply of MPRDCL vide
letter No. 2941/83/BOT/MPRDC Bhopal dated 13.05.2022 to Arbitration Notice
dated 06.05.2022 of the Claimant whereby the Respondent has declined to
nominate their Arbitrator, hence, ICADR need not wait for expiry of 30 days.

Since the Respondent has failed to appoint their arbitrator in terms of clause
44.3.1 of the Agreement, now, therefore, I, R.K. Rathore, Secretary General of the
International Centre for Alternative Dispute Resolution (ICADR), in

2
For short, “ICADR”

3

exercise of the powers vested in me under Rule 5(2) read with Rule 35(3) of
ICADR Arbitration Rules, 1996, do hereby appoint the following arbitrator on the
behalf of Respondent:
Shri Jagdish Prasad Shukla, IRSE (Retd.)
Former Principal Engineer/Northern Railway Chief Managing Director/
Rail Vikas Nigam Ltd. &
Member Administration/Central Administrative Tribunal
Add: 501, Ridgewood, Omaxe Forest Sector-92,
Noida.
Cell No. 9958998686
E-mail: jpshukla46@gmail.com

The two appointed arbitrators will select the third Arbitrator, i.e. Presiding
Arbitrator, as provided in clause 44.3.2 of the above mentioned Agreement.”

Order dated 07.06.2022 passed by the Arbitral Tribunal
“…
Notice for preliminary hearing

1) The Concessionaire/ Claimant has appointed Shri Kamlesh Kumar as
Arbitrator on their behalf. The ICADR on behalf of Madhya Pradesh Road
Development Corporation Limited has nominated Shri J. P. Shukla as Arbitrator
for MPRDC Ltd.

2) The above said nominee Arbitrators of the parties by mutual consent have
appointed me the Presiding Arbitrator to adjudicate the matter in dispute relating
to the above-mentioned subject vide email date 05.06.2022. I have accepted to act
as Presiding Arbitrator in the above referred dispute on 05.06.2022 and the same
was communicated to all concerned by email.

3) In pursuance there off, the parties to the dispute are hereby notified that
Preliminary hearing of the Arbitral Tribunal will be held on 18.06.2022 (11.00
AM) through video conferencing Wherein timeline for submission of the Statement
of Claims (SOC) and Statement of Defense (SOD) and the procedure for
conducting the Arbitration will be discussed and decided. The claimant shall
arrange to send meeting link to all concerned for the video conferencing well in
advance.

4) The Parties to dispute may kindly note that I have received the proposal of my
appointment as Presiding Arbitrator on 05.06.2022 and on same day i.e., on
05.06.2022 accepted to act as Presiding Arbitrator. Therefore, the period of 6
months for filing the statement of claims (SOC) and statement of defense (SOD)

4

as specified in Sub Section 4 of Section 23 of Arbitration and Conciliation Act,
1996 (Amendment 2019) shall be reckoned from 05.06.2022 and such period end
on 04.12.2022.

5) In the meantime, the Respondent is directed to file a certified copy of Agreement
between the Respondent and Claimant to all the Tribunal Members with a copy
to the Claimant.

6) My Disclosure under section 12(1 b) as schedule VI of the Arbitration and
Conciliation Act 1996 (Amendment 2019) is enclosed for reference of parties to
the dispute.
….”


3. The brief facts necessary for adjudication of the present appeal are as
follows:
3.1. The appellant and Respondent No.1 entered into a Concession Agreement
dated 05.01.2012 for the development of the Umari – Pooph – Pratappur Road on
a Build, Operate and Transfer (BOT – Toll + Annuity) basis. The total cost of the
project was Rs. 73.68 crores for the augmentation of the existing road from
T-Junction of SH-45 at Umari Village to 43.775 km on the Umri – Pooph –
Pratappur section of Major District Road (MDR) in the State of Madhya Pradesh,
as stipulated in Clause 48.1 of the Concession Agreement. The implementation
period was fixed at 24 months from the appointed date.

3.2. In accordance with Article 9.1.1 and Schedule F of the Concession
Agreement, the appellant furnished a performance security of Rs. 3.68 crores in
the form of an irrevocable and unconditional bank guarantee, vide Bank
Guarantee No. 00494121PG000028 dated 03.07.2012 issued by Allahabad Bank.

5

An Escrow Agreement was also executed on 20.06.2012 among the appellant,
Respondent No.1 and Allahabad Bank.

3.3. M/s. S&P Infrastructure Developers Private Limited and M/s. BLA
Infrastructure Private Limited, by Deeds of Guarantee dated 20.06.2012 and
15.05.2012 respectively, guaranteed the performance of the appellant under the
Common Loan Agreement. The appellant alleged that Respondent No.1
arbitrarily fixed the appointed date as 20.06.2012. Thereafter, the appellant
submitted the project completion schedule, work programme, and designs and
drawings for review by the Divisional Manager, who had been temporarily
appointed as the Independent Engineer. Upon acceptance, the appellant
mobilized men, materials, and machinery at the site and commenced work.

3.4. Vide Letter No. VO/TL/2012/Gen/02 dated 27.06.2012, the appellant was
informed that M/s. Vaidya Organisation had been appointed as the Independent
Engineer with effect from 01.06.2012. The Independent Engineer did not approve
the designs and drawings earlier submitted and directed the appellant not to
proceed with construction until the already executed work was reviewed and
approved. The appellant was further directed to submit revised designs and
drawings. Despite objections, revised submissions were made by the appellant on
11.07.2012, which were eventually approved. Consequently, the appellant was

6

compelled to dismantle and re-execute substantial portions of the work, resulting
in an escalation of the total project cost to Rs. 99.80 crores.

3.5. Subsequent delays and disruptions allegedly occurred due to breaches of
contractual obligations by Respondent No. 1. Consequently, the appellant raised
19 claims before the Independent Engineer invoking Article 44.2 of the
Concession Agreement for amicable resolution and compensation. These claims
were also submitted to the Secretary, PWD. While some claims were accepted
during conciliation proceedings, most were rejected, and no payments were
released to the appellant.

3.6. With no resolution forthcoming, the appellant initiated proceedings before
the Madhya Pradesh Arbitration Tribunal by filing Reference Case No. 61 of
2018. Notice in the said reference was issued on 13.08.2018.
3.7. Thereafter, the appellant invoked Clause 44.3.1 of the Concession
Agreement and approached the ICADR. Respondent No. 1 raised objections
under Section 7 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam,
3
1983 . Nevertheless, the ICADR, by order dated 02.06.2022, proceeded to
appoint arbitrators to adjudicate the disputes. The Arbitral Tribunal issued a
notice for preliminary hearing, by order dated 07.06.2022.

3
For short, “the 1983 Act”

7


3.8. Subsequently, on 24.06.2022, the appellant filed an application before the
Madhya Pradesh Arbitration Tribunal, seeking withdrawal of Reference Case
No.61 of 2018.

3.9. Aggrieved by the orders dated 02.06.2022 and 07.06.2022 passed by the
ICADR and the Arbitral Tribunal, respectively, Respondent No.1 filed Writ
Petition No.14569 of 2022 before the High Court. During the pendency of the
writ petition, the Madhya Pradesh Arbitration Tribunal allowed the appellant’s
withdrawal application by order dated 08.02.2023.

3.10. Ultimately, by judgment dated 09.09.2024, the High Court allowed the writ
petition and quashed the orders dated 02.06.2022 and 07.06.2022. Aggrieved
thereby, the appellant has preferred the present appeal before this Court.


4. The learned Senior Counsel for the appellant submitted that the writ
petition filed by Respondent No. 1 before the High Court was not maintainable
as the appellant is a private company and does not function as an instrumentality
of the State. Reliance was placed on the judgment of this Court in S.Shobha v.
4
Muthoot Finance Ltd , wherein it was held that a writ petition is maintainable

4
SPL(C) Nos.2625-2627 of 2025

8

only against a body that qualifies as ‘State’ under Article 12 of the Constitution.
Therefore, the High Court erred in entertaining the writ petition and passing the
impugned order against the appellant.
4.1. Reference was also made to the decisions of this Court in Jagmittar Sain
5
Bhagat v. Director, Health Services, Haryana and others and Kanwar Singh
6
Saini v. High Court of Delhi , to submit that the issue of maintainability of a writ
petition can be raised at any stage of the proceedings, and must be determined at
the threshold.
4.2. The learned Senior Counsel submitted that the arbitration proceedings
7
were initiated by the appellant under the Arbitration and Conciliation Act, 1996 ,
strictly in accordance with Clause 44.3.1 of the Concession Agreement dated
05.01.2012, and not as an alternative or secondary remedy. Both parties, being
fully aware of the existence of the Madhya Pradesh Arbitration Tribunal
constituted under the 1983 Act, had mutually agreed to resolve disputes through
arbitration governed by the 1996 Act and the ICADR Rules. Accordingly, the
invocation of the 1996 Act was not barred by the 1983 Act.
4.3. It was further emphasized that if the parties had intended to refer disputes
to the Tribunal under the 1983 Act, the agreement would have specifically
provided for such reference. Whereas, Clause 44.3.1 of the Concession

5
(2013) 10 SCC 136
6
(2012) 4 SCC 307
7
For short, “the 1996 Act”

9

Agreement mandates arbitration under the aegis of ICADR, New Delhi.
Therefore, the jurisdiction of the Madhya Pradesh Arbitration Tribunal cannot
override this binding contractual mechanism.
4.4. The learned Senior Counsel placed reliance on paragraph 79 of the decision
of the Madhya Pradesh High Court in Viva Highways Ltd v. Madhya Pradesh
8
Road Development Corporation Ltd , which held that the Madhya Pradesh
Arbitration Tribunal under the 1983 Act has jurisdiction only over “ascertained”
claims. It also acknowledged that “ascertained” claims have a specific
connotation. In the present case, the appellant’s claims are, at best,
“ascertainable”, and therefore, outside the jurisdiction of the Tribunal. Even
assuming, without conceding, that the claims could be considered “ascertained”,
it was incumbent upon the High Court or Tribunal to undertake an inquiry to
classify the nature of the claims. However, no such determination was carried out
in the present case.
4.5. It was contended that the Doctrine of Election has no application to the
present case. Firstly, the appellant invoked arbitration proceedings under the
Concession Agreement and did not approach the Madhya Pradesh Arbitration
Tribunal under the 1983 Act on its own volition. Secondly, arbitration was not
resorted to as an alternative, but as a binding and mutually agreed remedy under
the contract.

8
2017 SCC OnLine MP 1448

10

4.6. It was further submitted that the 1996 Act is a self-contained and
exhaustive code, based on the UNCITRAL Model Law, enacted with the
objective of promoting speed, efficiency, and uniformity in arbitral proceedings.
Therefore, allowing statutory tribunals such as the one under the 1983 Act to
override the framework of the 1996 Act would defeat the legislative intent and
undermines India’s aspiration to be country that can provide early dispute
settlement mechanism for commercial disputes through promotion of arbitration.

4.7. It was also submitted that the Madhya Pradesh Arbitration Tribunal
constituted under the 1983 Act functions more akin to a civil Court than an
Arbitral Tribunal. Section 2(d) restricts its jurisdiction to “ascertained” claims.
Section 7(5) permits summary dismissal, similar to Order 37 of the Civil
9
Procedure Code, 1908 . Section 19 limits the revisional jurisdiction of the High
Court to narrow grounds under Section 115 of the CPC, thereby excluding
recourse under Section 34 of the 1996 Act. Section 16 mandates delivery of an
award within four months of notice. However, in the present case, even after three
and a half years, no effective progress has been made, highlighting the Tribunal’s
inefficacy.


9
For short, “the CPC”

11

4.8. Additionally, it was submitted that although the appellant had initially
invoked the jurisdiction of the Tribunal under the 1983 Act, it was compelled to
withdraw the reference due to an inordinate delay of over four years, and because
the claims were only “ascertainable” and not “ascertained”. Therefore, the ratio
in Madhya Pradesh Rural Road Development Corporation Ltd v. L.G.
10
Chaudhary Engineers and Contracts is not applicable to the present case.

4.9. Finally, it was submitted that the appellant’s claims, aggregating to
Rs.280.1566 crores pertain to expenses incurred, damages under Clauses 4.2 and
10.3.4 of the Concession Agreement, and other project related costs. The
quashing of the arbitration proceedings by the High Court without directing
adjudication either under the 1996 Act or the 1983 Act, has left the appellant
without any effective legal remedy.
4.10. In light of the above submissions and case laws, the learned Senior Counsel
prayed that this appeal be allowed and the impugned order be set aside.
5. Per contra, the learned Solicitor General of India appearing for
Respondent No.1 submitted that there is no dispute between the parties regarding
the nature of the Concession Agreement dated 05.01.2012 – it constitutes a works
contract. The Government of Madhya Pradesh enacted the Madhya Pradesh
Madhyastham Adhikaran Adhiniyam, 1983, which provides for the establishment

10
(2018) 10 SCC 826

12

of the Madhya Pradesh Arbitration Tribunal to adjudicate disputes arising out of
'works contracts', where the State Government or a State Public Undertaking is a
party. Section 2(1)(d) of the 1983 Act defines a "dispute" as a claim for
ascertained or ascertainable money valued at Rs. 50,000 or more relating to
differences arising from the execution or non-execution of a works contract.

5.1. It was further submitted that Respondent No.1 is a wholly owned entity of
the State of Madhya Pradesh, and that any Concession Agreement executed by it
falls within the ambit of a 'works contract' under Section 2(1)(i) of the 1983 Act.
Section 7(1) provides for mandatory reference of such disputes to the Madhya
Pradesh Arbitration Tribunal, notwithstanding any arbitration clause in the
agreement. Section 20 bars the jurisdiction of civil Courts in such matters, thereby
establishing the Tribunal as the exclusive forum. Furthermore, Section 2(4) of the
1996 Act, preserves the operation of special statutory forums like the Madhya
Pradesh Arbitration Tribunal, reinforcing this exclusivity.
5.2. Reliance was placed on the judgment of a three-judge bench of this Court
in Madhya Pradesh Rural Road Development Authority v. L. G. Chaudhary
Engineers and Contractors (supra) , which upheld the exclusive jurisdiction of
the Madhya Pradesh Arbitration Tribunal for disputes arising out of works
contracts. Similarly, in Viva Highways Ltd. (supra) , a Full Bench of the Madhya
Pradesh High Court confirmed the Tribunal’s exclusive jurisdiction, and the

13

Special Leave Petition (Civil) No.17070/2017 filed against the same was
dismissed by this Court on 18.04.2018.

5.3. The learned Solicitor General also referred to the decisions in State of
11
Chhattisgarh v. M/s. KMC Construction , ARSS Damoh - Hirapur Tolls (P) Ltd.
12
v. M.P. Road Development Corporation , and Madhya Pradesh Rural Road
13
Development Authority v. Backbone Enterprises Limited , where this Court
reiterated that disputes arising out of a works contract, must be adjudicated
exclusively by the Madhya Pradesh Arbitration Tribunal.

5.4. Accordingly, the learned Solicitor General contended that since the
Concession Agreement is a “works contract” and Respondent No. 1 is a State-
owned corporation, any dispute arising therefrom falls squarely within the
Tribunal’s exclusive jurisdiction. The appointment of a private arbitral tribunal
under the aegis of ICADR is in direct contravention of the statutory framework,
and the High Court rightly intervened to quash the arbitration proceedings under
the 1996 Act.

5.5. It was further submitted that the appellant had raised inflated claims
amounting to Rs.280.1566 crores before the Madhya Pradesh Arbitration

11
(2018) 10 SCC 839
12
2018 SCC OnLine SC 3899
13
(2018) 15 SCC 660

14

Tribunal in Reference Case No. 61 of 2018, including claims for loss of profits
and damages. These claims were ex facie time-barred under Section 7-B the 1983
Act, which requires claims to be filed within one year from the date of
communication of the decision of the final authority. The appellant, having failed
to comply with the limitation, sought to circumvent the statutory bar by initiating
private arbitration under the 1996 Act, reflecting forum shopping and lack of
bona fides .

5.6. The learned Solicitor General pointed out that Reference Case No. 61 of
2018 was admitted on 06.09.2021, and Respondent No.1 filed its written
statement on 05.11.2021, raising limitation as a preliminary objection. Thereafter,
the appellant invoked Clause 44.3.1 of the Concession Agreement and issued a
notice under Section 21 of the 1996 Act. Simultaneously, the appellant filed an
application to withdraw the reference before the Tribunal on 24.06.2022, which
was allowed on 08.02.2023.

5.7. According to the learned Solicitor General, as per Rule 53(3)(b) of the
Madhya Pradesh Madhyastham Adhikaran Regulations, 1985, a party that
withdraws a reference without the permission contemplated under Rule 53(2) is
barred from instituting a fresh reference on the same subject matter. Since the
appellant withdrew its claim without such leave, it is now barred from re-agitating
the same claims before any forum, including private arbitration. The conduct of

15

the appellant, therefore, amounts to an impermissible attempt to sidestep statutory
restrictions.

5.8. Reference was made to Deep Industries Ltd v. Oil and Natural Gas
14
Corporation Ltd , where this Court upheld the High Court’s power to exercise
writ jurisdiction and quash arbitration proceedings coram non judice.

5.9. It was argued that contractual terms cannot override statutory mandates. If
a statute designates a specific forum for adjudication, parties cannot, by mutual
agreement, confer jurisdiction on an alternate forum. Clause 44.3.1 of the
Concession Agreement, to the extent that it provides for private arbitration, is
void ab initio in the context of a works contract governed by the 1983 Act. In
support, reliance was placed on Booz Allen and Hamilton Inc v. SBI Home
15
Finance Ltd .
5.10. It was further submitted that the term ‘ascertained money’ under Section
2(1)(d) includes consequential reliefs. Moreover, the amendment to the 1983 Act
post – Viva Highways , includes unascertained money claims within the definition
of “dispute”. Thus, the Tribunal has jurisdiction even over claims where
quantification may occur during adjudication.


14
(2020) 15 SCC 706
15
(2011) 5 SCC 532

16

5.11. The learned Solicitor General also submitted that the appellant’s claims
totalling Rs. 280.1566 crores were clearly quantified and sought money relief
alone. No declaratory or indeterminate relief was prayed for. The appellant’s
conduct in attempting to re-agitate these very claims before the ICADR Tribunal
– despite having withdrawn the earlier reference under Rule 53(3)(b) – reveals its
intent to circumvent the statutory bar. Accordingly, the Madhya Pradesh
Arbitration Tribunal under the 1983 Act remained the appropriate and exclusive
forum, and the High Court rightly quashed the arbitration proceedings initiated
under the 1996 Act.

5.12. It was further submitted that by withdrawing the reference without seeking
liberty under Rule 53(2), the appellant has irrevocably abandoned its claims. The
consequence under Rule 53(3)(b) is substantive and bars re-litigation of the same
subject matter. This bar applies irrespective of whether arbitration is under the
1983 Act or under the 1996 Act. Furthermore, even dehors the special limitation
under the 1983 Act, the appellant’s claims are now time-barred under the general
law of limitation, as per Section 43 of the 1996 Act. The disputes arose between
2013 and 2015, and the invocation of arbitration in 2022 and thereafter in 2025
is clearly beyond the prescribed three-year limitation.

5.13. However, it was submitted that Respondent No.1 would have no objection,
if the appellant were to file an application for recall of the withdrawal order and

17

seek restoration of the Reference Petition before the Madhya Pradesh Arbitration
Tribunal, which may be directed to be considered in accordance with law.

6. We have heard the learned Senior Counsel appearing for both sides and
also perused the materials available on record.

7. The core issue in the present matter revolves around determining the
appropriate forum for the adjudication of disputes arising out of the Concession
Agreement dated 05.01.2012 entered into between the appellant and Respondent
No.1.

8. At the outset, the learned Senior Counsel for the appellant submitted that
the writ petition filed by Respondent No.1 was not maintainable against the
appellant as it was directed against a private party. It is well settled that the
remedy under Article 226 of the Constitution is not confined to individuals
seeking enforcement of fundamental rights. Even juristic persons, including State
Corporations, are entitled to invoke the writ jurisdiction for enforcement of legal
rights. However, when a State Corporation seeks relief against a private party,
the maintainability of the writ petition must satisfy certain threshold
requirements, namely, that the dispute involves a public law element rather than
being confined to the realm of private contractual obligations, and that the private

18

party is performing a public duty or is subject to a statutory obligation in relation
to the State entity.

8.1. In the present case, Respondent No.1 is a State - owned entity and the
project in question pertains to the development of Umri – Pooph – Pratappur Road
under a Concession Agreement on a BOT (Toll + Annuity) basis. Although the
dispute emanates from a works contract governed by the said agreement, the writ
petition was not filed for enforcement of any contractual obligation. Rather, it
was filed to challenge the invocation of arbitration by the appellant under the
Arbitration and Conciliation Act, 1996, despite the existence of a statutory
remedy before the Madhya Pradesh Arbitration Tribunal constituted under the
Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983. The issue,
therefore, pertained to the availability and exclusivity of a statutory dispute
resolution mechanism, and not merely to the adjudication of a claim on merits
arising out of a private contractual dispute.

8.2. In this context, reference was made to the decision in Federal Bank Ltd. v.
16
Sagar Thomas , wherein, this Court provided a classification of entities against
whom a writ petition may be maintainable. The following paragraph is pertinent:
“18. From the decisions referred to above, the position that emerges is that a writ
petition under Article 226 of the Constitution of India may be maintainable
against (i)the State (Government); (ii)an authority; (iii)a statutory body; (iv)an

16
(2003) 10 SCC 733

19

instrumentality or agency of the State; (v)a company which is financed and owned
by the State; (vi)a private body run substantially on State funding; (vii) a private
body discharging public duty or positive obligation of public nature ; and (viii)a
person or a body under liability to discharge any function under any statute, to
compel it to perform such a statutory function.”

17
8.3. This Court in Binny Ltd v. Sadasivan , noted the distinction between
public and private functions; and clarified the scope of writ jurisdiction under
Article 226 in the context of private contractual disputes involving entities that
may be performing public functions. The relevant paragraphs are extracted below
for ready reference:
“11……. It is difficult to draw a line between public functions and private
functions when they are being discharged by a purely private authority. A body is
performing a “public function” when it seeks to achieve some collective benefit
for the public or a section of the public and is accepted by the public or that
section of the public as having authority to do so. Bodies therefore exercise public
functions when they intervene or participate in social or economic affairs in the
public interest.”

“29. Thus, it can be seen that a writ of mandamus or the remedy under Article
226 is pre-eminently a public law remedy and is not generally available as a
remedy against private wrongs. It is used for enforcement of various rights of the
public or to compel the public/statutory authorities to discharge their duties and
to act within their bounds. It may be used to do justice when there is wrongful
exercise of power or a refusal to perform duties. This writ is admirably equipped
to serve as a judicial control over administrative actions. This writ could also be
issued against any private body or person, especially in view of the words used in
Article 226 of the Constitution. However, the scope of mandamus is limited to
enforcement of public duty. The scope of mandamus is determined by the nature
of the duty to be enforced, rather than the identity of the authority against whom
it is sought. If the private body is discharging a public function and the denial
of any right is in connection with the public duty imposed on such body, the
public law remedy can be enforced. The duty cast on the public body may be
either statutory or otherwise and the source of such power is immaterial, but,
nevertheless, there must be the public law element in such action. Sometimes, it

17
(2005) 6 SCC 657

20

is difficult to distinguish between public law and private law remedies. According
to Halsbury's Laws of England, 3rd Edn., Vol. 30, p.682,

"1317. A public authority is a body, not necessarily a county council,
municipal corporation or other local authority which has public statutory
duties to perform and which perform the duties and carries out its
transactions for the benefit of the public and not for private profit."

There cannot be any general definition of public authority or public action. The
facts of each case decide the point.”
…..

Applying these principles, it can very well be said that a writ of mandamus can be
issued against a private body which is not a State within the meaning of Article
12 of the Constitution and such body is amenable to the jurisdiction
under Article of the Constitution and the High Court under Article 226 of the
Constitution can exercise judicial review of the action challenged by a party. But
there must be a public law element and it cannot be exercised to enforce purely
private contracts entered into between the parties.”

8.4. Respondent No. 1 was incorporated on 14.07.2004 to develop, build,
maintain, and operate the State Highways, District or other local body roads,
expressways, and government buildings in Madhya Pradesh. Respondent No. 1
also, on contract, develops and maintains National Highways in or passing
through Madhya Pradesh. The Madhya Pradesh Highways Act, 2004, repealing
the 1936 Act, also reiterates the State’s role in the development, construction, and
maintenance of roads in the State. Since the right to access any part of the country,
with certain exceptions and restrictions under certain circumstances, is a
fundamental right guaranteed under Article 19(1)(g) of the Constitution, and the
right to safe, well-maintained, and motorable roads is recognised as a part of the
right to life under Article 21 of the Constitution of India, it is the responsibility

21

of the State to develop and maintain the roads directly under its control. The
contract for laying of a State Highway/District Road, when assigned by the
Corporation owned and run by the government, assumes the character of a public
function – even if performed by a private party – and would satisfy the
functionality test to sustain the writ petition. Accordingly, in view of the statutory
framework and the nature of relief sought, the writ petition involves a public law
element and was thus maintainable before the High Court. The decisions relied
upon by the appellant are factually distinguishable and pertain to materially
different contexts. As such, they do not advance the appellant’s case and have no
application to the facts and legal issues involved in the present case.

9. Assailing the impugned judgment passed by the High Court, the learned
Senior Counsel for the appellant submitted that the Madhya Pradesh Arbitration
Tribunal constituted under the 1983 Act is competent to entertain disputes only
where there is an ascertained claim exceeding Rs.50,000/-. In the present case,
there is no such ascertained monetary claim raised, and hence, the appellant was
not obliged to approach the said Tribunal. Further, it was submitted that Clause
44.3.1 of the Concession Agreement contains a valid arbitration clause, which
entitles the appellant to invoke arbitration under the 1996 Act.

9.1. In contrast, the learned Senior Counsel for Respondent No.1 contended
that the Concession Agreement relates to the construction and development of a

22

State Highway/District Road and squarely falls within the ambit of a ‘works
contract’ as defined under section 2(1)(i) of the 1983 Act. It was further submitted
that the 1983 Act, being a special law, has an overriding effect and mandates that
disputes arising out of such works contracts must be adjudicated exclusively by
the Madhya Pradesh Arbitration Tribunal.

10. It is not in dispute that the road in question is a State Highway/District
Road and forms part of the assets of the State of Madhya Pradesh. Admittedly,
the Concession Agreement qualifies as a “works contract”. The State Legislature
enacted the 1983 Act to establish a special statutory mechanism for adjudication
of disputes arising out of works contracts involving the State Government or its
instrumentalities, including public sector undertakings. The relevant provisions
of the 1983 Act are extracted below, for better appreciation:
“ Section 2 (1)(d) – “Dispute” means claim of ascertained or ascertainable money
valued at Rupees 50,000 or more relating to any difference arising out of the
execution or non-execution of a works contract or part thereof.”

Section 2 (1)(i) - “works-contract” means an agreement in writing or a letter of
intent or work order issued for the execution of any work relating to construction,
repair or maintenance of any building or superstructure, dam, weir, canal,
reservoir, tank, lake, road, well, bridge, culvert, factory, work-shop, powerhouse,
transformer or such other works of the State Government or Public Undertakings
or of the Corporations of the State as the State Government may, by notification,
specify in this behalf at any of its stages, entered into by the State Government or
by an official of the State Government or by Public Undertakings or Corporation
or by any official of the State Government for and on behalf of such Corporation
or Public Undertakings and includes an agreement for supply of goods or
material and all other matters relating to the execution of any of the said works
and also includes the services so hired for carrying out the aforesaid works and
shall also include all concession agreement, so entered into by the State

23

Government or public undertakings or Corporation, wherein a State support is
involved or not.

18
[The agreements in writing for the execution of the work relating to
construction, repair or maintenance of electric lines, water supply and
sewerage/drainage system shall also be “works contract”]”

“Section 3 - Constitution of Tribunal
The State Government shall by notification constitute an Arbitration Tribunal for
resolving all such disputes or differences pertaining to works contract or arising
out of or connected with execution, discharge or satisfaction of any such works
contract.”

“Section 7 – Reference to Tribunal
(1) Either party to a works contract shall irrespective of the fact whether the
agreement contains an arbitration clause or not, refer in writing the dispute to the
Tribunal”
….
7-A Reference Petition
(1) Every reference petition shall include whole of the claim which the party is
entitled to make in respect of the works contract till the filing of the reference
petition but no claims arising out of any other works contract shall be joined
in such a reference petition
(2) …

7-B Limitation
(1) The Tribunal shall not admit a reference petition unless –

(a) the dispute is first referred for the decision of the final authority under the
terms of the works contract; and
(b) the petition to the Tribunal is made within one year from the date of
communication of the decision of the final authority:
Provided that if the final authority fails to decide the disputes within a period of
six months from the date of reference to it, the petition to the Tribunal shall be
made within one year of the expiry of the said period of six months.

(2) Notwithstanding anything contained in sub-section (1), where no proceeding
has been commenced at all before any Court preceding the date of commencement
of this Act or after such commencement but before the commencement of the
Madhya Pradesh Madhyastham Adhikaran (Sanshodhan) Adhiniyam, 1990, a
reference petition shall be entertained within one year of the date of
commencement of Madhya Pradesh Madhyastham Adhikaran (Sanshodhan)

18
Notification No.17/E/85/96/XXI-B(II)-21 Dt.4.11.1996 of Govt. of M.P. Law Deptt.

24

Adhiniyam, 1990 irrespective of the fact whether a decision has or has not been
made by the final authority under the agreement.
(2-A) Notwithstanding anything contained in sub-section (1), the Tribunal shall
not admit a reference petition unless it is made within three years from the date
on which the works contract is terminated, foreclosed, abandoned or comes to an
end in any other manner or when a dispute arises during the pendency of the
works contract:
Provided that if a reference petition is filed by the State Government, such period
shall be thirty years.

Section 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.

10.1. It is thus evident that Section 2(1)(i) of the 1983 Act defines ‘works
contract’ to expressly include concession agreements executed by the State or its
instrumentalities, regardless of whether direct financial support from the State is
involved. Section 7 clearly mandates that all disputes arising from such works
contract shall be referred to the Madhya Pradesh Arbitration Tribunal, even if the
agreement contains an arbitration clause to refer the dispute under any enactment.
The Arbitration and Conciliation Act, 1996 repealed the Arbitration Act, 1940.
The 1940 Act was in force when the Madhya Pradesh Arbitration Tribunal Act,
1983 came into force. The reference contemplated under the 1983 Act implies
that the claims covered by the Act shall be decided only by the Tribunal
constituted under its provisions, when it comes to a works contract with the State
Government, an instrumentality of the State, or a State Corporation. The
nd
Arbitration and Conciliation Act, 1996 came into force on 22 August, 1996. A

25

reading of sub-sections (3), (4), and (5) of Section 2 of the 1996 Act also
illustrates that reference to a special tribunal under a special enactment would
survive, irrespective of the existence of a mechanism under the 1996 Act. Further,
we do not see any repugnancy between the enactments. Section 20 of the Act,
1983 imposes a bar on the jurisdiction of civil Courts, thereby reinforcing the
exclusive and overriding nature of the statutory mechanism established under the
1983 Act.

11. In Viva Highways Ltd (supra), a Full Bench of the Madhya Pradesh High
Court categorically held that where an agreement qualifies as a “works contract”
under Section 2(1)(i) of the 1983 Act, and the dispute falls within the scope of
Section 2(1)(d), the reference to the Madhya Pradesh Arbitration Tribunal
constituted under Section 3 of the 1983 Act is mandatory, notwithstanding the
presence of any arbitration clause in the agreement. The relevant portion of the
Full Bench decision is extracted below:

“82. On the basis of foregoing analysis, we may summarize our conclusions as
under:
(i) If an agreement by whatever name called falls within the definition of “works
contract” and difference between the parties is covered in the definition of
'dispute' as defined under the Adhiniyam of 1983, it has to be referred for
adjudication before the Tribunal constituted under Section 3 of the Adhiniyam of
1983.

(ii) In view of statutory provision of Section 7 of the Adhiniyam of 1983, even in
cases where the parties have incorporated a clause in such agreement regarding
resolution of dispute by some other forum or under the Act of 1996, the forum

26

subject to (i) above, would be the Tribunal under the Adhiniyam of 1983. This
conclusion, however, will presently not include the cases of terminated contract,
which aspect is pending consideration before a Larger Bench of the Supreme
Court. The decision of Larger Bench will draw the curtains on this aspect.

(iii) The judgment of Jabalpur Corridor (supra) reported in 2014 (2) MPLJ 276
and Ashoka Infraways Ltd. (supra) reported in 2016 (2) MPLJ 685 are overruled.

(iv) The substituted definition of “works contract” is clarificatory in nature, hence
it will be retrospective in operation.

(v) The words “claim of ascertained money” have a definite connotation and
therefore only such difference arising out of execution or non-execution of a
'works contract' which are related with claims of above nature will be covered
under Section 2(1)(d) of the Adhiniyam of 1983”.

11.1. The correctness of the aforesaid judgment was challenged before this Court
in SLP (C) No. 17070 of 2017 and SLP (C) Nos.1635-1637 of 2018, both of
which were dismissed. As a result, the legal position laid down in Viva Highways
stands affirmed. It is also pertinent to note that the appellant herein was a party
to those very proceedings before this Court and is thus fully aware of the binding
nature of the ruling.
11.2. While the learned Senior Counsel for the appellant has attempted to
distinguish the decision in Viva Highways on the ground that the appellant’s
claims are not “ascertained”, such an argument is untenable. The list of claims
filed by the appellant clearly discloses a quantified monetary claim of
Rs.280.1566 crores, which was specifically pleaded in the reference petition. This
squarely falls within the definition of “dispute” under Section 2(1)(d) of the 1983

27

Act, which includes both ascertained and ascertainable monetary claims. The list
of claims is reproduced below for better understanding:

28

11.3. It is well settled that a claim which can be determined through evidence
and quantification falls within the ambit of the term ‘ascertained’. Furthermore,

29

post Viva Highways , the Legislature amended section 2(1)(d) of the 1983 Act to
expressly include “unascertained” money claims within the definition of
“dispute”. This amendment was enacted precisely to override the restrictive
interpretation of “ascertained” claims and to expand the Tribunal’s jurisdiction to
cover all monetary disputes – whether ascertained or not.
11.4. In this context, reference may be made to the decision in Gangotri
19
Enterprises Ltd v. Madhya Pradesh Road Development Corporation , where this
Court observed that:
“3. We consider it appropriate to clarify that the expression "ascertained money"
as used in Section 2(d) of the 1983 Act will include not only the amount already
ascertained but the amount which may be ascertained during the proceedings on
the basis of claims/ counter claims of the parties.”

11.5. Further, in M.P. Rural Road Development Authority v. L.G. Chaudhary
Engineers & Contractors (supra), a three-Judge Bench of this Court reaffirmed
that in the context of a “works contract” in Madhya Pradesh, the 1983 Act has
overriding effect over the 1996 Act. The relevant paragraphs are extracted below
for ease of reference:
“3. The appellants raised objection that the matter being covered by a special
State Act, namely, M.P. Madhyastham Adhikaran Adhiniyam, 1983 (“the M.P.
Act”, in short), the application under Section 11 of the Arbitration and
Conciliation Act, 1996 could not be entertained. The High Court, however,
overruled the said objection relying upon the judgment of this Court in VA Tech
Escher Wyass Flovel Ltd. v. M.P. SEB [VA Tech Escher Wyass Flovel Ltd. v. M.P.
SEB, (2011) 13 SCC 261: (2012) 3 SCC (Civ) 468].


19
(2018) 16 SCC 296

30

4. When the matter was considered by a Bench of this Court on 24-1-2012 (order
in M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers and
Contractors [M.P. Rural Road Development Authority v. L.G. Chaudhary
Engineers and Contractors, (2012) 3 SCC 495 : (2012) 2 SCC (Civ) 210]), this
Court held that the judgment in VA Tech Escher Wyass Flovel Ltd. [VA Tech
Escher Wyass Flovel Ltd. v. M.P. SEB, (2011) 13 SCC 261 : (2012) 3 SCC (Civ)
468] was per incuriam insofar as it held that the M.P. Act stands impliedly
repealed by the Central Act. While Hon'ble Ganguly, J., held that the State Act
will cover a dispute even after termination of the “works contract”, Hon'ble Gyan
Sudha Mishra, J. took a different view as follows: (M.P. Rural Road Development
case [M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers and
Contractors, (2012) 3 SCC 495 : (2012) 2 SCC (Civ) 210], SCC p. 511, para 51)
“51. It is no doubt true that if the matter were before an arbitrator
appointed under the Arbitration and Conciliation Act, 1996 for
adjudication of any dispute including the question regarding the
justification and legality as to whether the cancellation of works contract
was legal or illegal, then the said arbitrator in view of the ratio of the
judgment of the Supreme Court in Maharshi Dayanand University v.
Anand Coop. L/C Society Ltd. [Maharshi Dayanand University v. Anand
Coop. L/C Society Ltd., (2007) 5 SCC 295], as also in view of the
persuasive reasoning assigned in the judgment and order in Heyman v.
Darwins Ltd. [Heyman v. Darwins Ltd., 1942 AC 356 : (1942) 1 All ER
337 (HL)] would have had the jurisdiction to adjudicate the dispute
regarding the justification and legality of cancellation of works contract
also. But the same cannot be allowed to be raised under the M.P. Act of
1983 since the definition of “works contract” unambiguously lays down in
explicit terms as to what is the nature and scope of “works contract” and
further enumerates the specific nature of disputes arising out of the
execution of works contract which would come within the definition of a
“works contract”. However, the same does not even vaguely include the
issue or dispute arising out of cancellation and termination of contract due
to which this question, in my considered opinion, would not fall within the
jurisdiction of the M.P. State Arbitration Tribunal so as to be referred for
adjudication arising out of its termination.”

5. We find from the definition under Section 2(d) of the Arbitration and
Conciliation Act, 1996 that even after a contract is terminated, the subject matter
of dispute is covered by the said definition. The said provision has not been even
referred to in the judgment rendered by Hon'ble Gyan Sudha Mishra, J.

6. In view of the above, we are of the opinion that the view expressed by Hon'ble
Ganguly, J. is the correct interpretation and not the contra view of Hon'ble Gyan
Sudha Mishra, J. Reference stands answered accordingly.


31

7. Taking up appeal on merits, we find that the High Court proceeded on the basis
of the judgment of this Court in VA Tech Escher Wyass Flovel Ltd. [VA Tech
Escher Wyass Flovel Ltd. v. M.P. SEB, (2011) 13 SCC 261 : (2012) 3 SCC (Civ)
468] which has been held to be per incuriam. The M.P. Act cannot be held to be
impliedly repealed.

8. We are, thus, in agreement with the proposed opinion of Hon'ble Ganguly, J.
in para 42 of the reported judgment which reads as follows: (M.P. Rural Road
Development case [M.P. Rural Road Development Authority v. L.G. Chaudhary
Engineers and Contractors, (2012) 3 SCC 495: (2012) 2 SCC (Civ) 210], SCC p.
509, para 42)
“42. Therefore, appeal is allowed and the judgment of the High Court
which is based on the reasoning of VA Tech Escher Wyass Flovel Ltd. v.
M.P. SEB [VA Tech Escher Wyass Flovel Ltd. v. M.P. SEB, Misc. Appeal
No. 380 of 2003, order dated 5-3-2003 (MP)] is set aside. This Court holds
the decision in VA Tech Escher Wyass Flovel Ltd. v. M.P. SEB [VA Tech
Escher Wyass Flovel Ltd. v. M.P. SEB, (2011) 13 SCC 261: (2012) 3 SCC
(Civ) 468] has been rendered in per incuriam. In that view of the matter
the arbitration proceeding may proceed under the M.P. Act of 1983 and
not under the Arbitration and Conciliation Act, 1996.”

The appeal is accordingly disposed of.”

11.5.1. In a recent decision in Gayathri Project Ltd v. M.P. Road Development
20
Corporation Ltd , this Court reiterated the exposition of law laid down in L.G.
Chaudhary in clear terms, as follows:
“38 …..
i. Where the arbitration proceedings are still underway, but no statement of
defence has been filed, there it would be open for the parties to raise an
objection of lack of jurisdiction in view of the applicability of MP Act, 1983.
The parties will also be at liberty to approach the High Court by way of a
petition under Article 227 of the Constitution for seeking a transfer of the
arbitration proceedings to the M.P. State Arbitration Tribunal under the MP
Act, 1983.
ii. Where the arbitration proceedings are still underway, but statement of defence
has already been filed i.e., the relevant stage for raising an issue of
jurisdiction is already crossed, there it would not be open for the parties to

20
2025 SCC OnLine SC 1136

32

raise an objection of lack of jurisdiction in view of the applicability of MP Act,
1983. Furthermore, in such scenarios since the arbitration proceedings have
already commenced and made substantial progress, it would not be
appropriate to transfer such proceedings to the M.P. State Arbitration
Tribunal under the MP Act, 1983, and the better course of action would be to
let the arbitration proceedings conclude.
iii. As per L.G. Chaudhary (II) (supra) where the arbitration proceedings have
concluded and an award has been passed, and if no objection to the
jurisdiction in view of the applicability of MP Act, 1983 was taken at the
relevant stage then such an award cannot be annulled only on the ground of
lack of jurisdiction.
iv. Any award passed by an arbitral tribunal under the Act, 1996, where otherwise
the MP Act, 1983 was applicable, such an award may be challenged or
assailed in terms of Section 34 and thereafter Section 37 of the Act, 1996 and
other relevant provisions thereunder.
v. Any award passed by an arbitral tribunal under the Act, 1996, where otherwise
the MP Act, 1983 was applicable, such an award must be executed in terms of
the MP Act, 1983 and the relevant provisions thereunder.
vi. Where the objection based on applicability of the MP Act, 1983 had been
raised in the written statement or statement of defence, but the parties never
took steps towards challenging the jurisdiction of the arbitral tribunal under
Section 16 of the Act, 1996 or where such plea of jurisdiction was turned down
in view of the position of law that was prevailing prior to L.G. Chaudhary
(II) (supra) i.e., such challenge to the jurisdiction was decided prior to the
date of pronouncement of L.G. Chaudhary (II) (supra), then even in such
cases, as per the decision of this Court in Modern Builders (supra), the award
should not be disturbed or set-aside only on the ground of lack of
jurisdiction.”

11.6. Likewise, in State of Chhattisgarh v. KMC Constructions Ltd (supra) , this
Court set aside the appointment of an arbitrator under the 1996 Act, holding that
when a statutory mechanism under the 1983 Act exists, even a court order under
the 1996 Act cannot prevail, and parties must be relegated to the jurisdiction of
the Madhya Pradesh Arbitration Tribunal. The relevant paragraphs are extracted
below for ready reference:

33

“In view of judgment of this Court in Madhya Pradesh Rural Road Development
Authority and Anr. v. L.G. Chaudhary Engineers and Contractors, (2012) 3 SCC
495 and the order passed by this Court on 8th March, 2018 in the same matter,
the M.P. Arbitration Tribunal constituted under the M.P. Madhyastham
Adhikaran Adhiniyam, 1983, (M.P. Act) has the exclusive jurisdiction to deal with
the dispute in question. Accordingly, the impugned direction under Section 11 of
the Arbitration and Conciliation Act, 1996 cannot be sustained and is set aside.

The parties are relegated to M.P. Arbitration Tribunal which may decide the
dispute as per provisions of M.P. Madhyastham Adhikaran Adhiniyam, 1983
(M.P. Act)”

11.7. In ARSS Damoh – Hirapur Tolls Pvt. Ltd v. M.P. Road Development
Corporation (supra) , this Court refused to allow private arbitration to continue
where a works contract was involved, and directed the transfer of the pending
arbitration proceedings to the Madhya Pradesh Arbitration Tribunal, thereby
upholding the exclusive statutory forum.

11.8. Similarly, in Madhya Pradesh Rural Road Development Authority v.
Backbone Enterprises Limited (supra), this Court once again reinforced the
exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal in matters
arising from works contracts covered by the 1983 Act.

11.9. Given that the present Concession Agreement pertains to the construction
of a State Highway situated entirely within the State of Madhya Pradesh and was
awarded by Respondent No.1, a State-controlled entity, the agreement clearly
qualifies as a “works contract” under section 2(1)(i) of the 1983 Act.

34

Consequently, the dispute arising therefrom falls within the exclusive jurisdiction
of the Madhya Pradesh Arbitration Tribunal.

11.10. In view of the above statutory framework and judicial pronouncements,
the Arbitration and Conciliation Act, 1996 stands excluded by operation of law
in such matters. The private arbitration proceedings initiated by the appellant are
therefore, non est in law, and the proper forum for adjudication is the Madhya
Pradesh Arbitration Tribunal established under the 1983 Act.

12. It is further not in dispute that the appellant had, in 2018 initiated Reference
Case No.61 of 2018 before the Madhya Pradesh Arbitration Tribunal and had
obtained issuance of notice. While the said reference was pending, the appellant
simultaneously invoked arbitration under Clause 44.3.1 of the Concession
Agreement and initiated private arbitration proceedings before the ICADR
(Respondent No. 2) under the 1996 Act. This parallel invocation of remedies is
impermissible in law and squarely hit by the doctrine of election and estoppel. A
party cannot pursue two mutually inconsistent remedies under different legal
regimes arising from the same cause of action.
12.1. Even otherwise, Clause 44.3.1 of the Concession Agreement to the extent
it purports to permit private arbitration, is inoperative insofar as it seeks to
override the statutory mandate of the 1983 Act. For proper appreciation, the

35

relevant clauses relating to arbitration in the Concession Agreement are extracted
below:
“44.3 Arbitration
44.3.1 Any Dispute which is not resolved amicably by conciliation, as provided in
Clause 44.2, shall be finally decided by reference to arbitration by a Board of
Arbitrators appointed in accordance with Clause 44.3.2. Such arbitration shall
be held in accordance with the Rules of Arbitration of the International Centre
for Alternative Dispute Resolution, New Delhi (the ‘’Rules’’), or such other rules
as may be mutually agreed by the Parties, and shall be subject to the provisions
of the Arbitration Act. The venue of such arbitration shall be Bhopal and the
language of arbitration proceedings shall be English.

44.3.2 There shall be a Board of three arbitrators, of whom each Party shall select
one, and the third arbitrator shall be appointed by the two arbitrators so selected
and in the event of disagreement between the two arbitrators, the appointment
shall be made in accordance with the Rules.

44.3.3 The arbitrators shall make a reasoned award (the "Award"). Any Award
made in any arbitration held pursuant to this Article 44 shall be final and binding
on the Parties as from the date it is made, and the Concessionaire and MPRDC
agree and undertake to carry out such Award without delay.

44.3.4 The Concessionaire and MPRDC agree that an Award may be enforced
against the Concessionaire and/or MPRDC, as the case may be, and their
respective assets wherever situated.

44.3.5 This Agreement and the rights and obligations of the Parties shall remain
in full force and effect, pending the Award in any arbitration proceedings
hereunder.

44.4 Adjudication by Regulatory Authority or Commission
In the event of constitution of a statutory Regulatory Authority or Commission
with powers to adjudicate upon disputes between the Concessionaire and the
MPRDC, all Disputes arising after such constitution shall, instead of reference to
arbitration under Clause 44.3, be adjudicated upon by such Regulatory Authority
or Commission in accordance with the Applicable Law and all references to
Dispute Resolution procedure shall be construed accordingly. For the avoidance
of doubt, the Parties hereto agree that the adjudication hereunder shall not be
final and binding until an appeal against such adjudication has been decided by
an appellate tribunal or high Court, as the case may be, or no such appeal has
been preferred within the time specified in the Applicable Law."

36

12.2. It is trite law that parties cannot contract out of a statutory obligation
enacted in furtherance of public interest. In Booz Allen & Hamilton Inc. v. SBI
21
Home Finance Ltd , this Court held that arbitration is not permissible where the
legislature has reserved adjudication of disputes to a special forum. The relevant
observation is as follows:
"35. The Arbitral Tribunals are private fora chosen voluntarily by the parties to
the dispute, to adjudicate their disputes in place of courts and tribunals which are
public fora constituted under the laws of the country. Every civil or commercial
dispute, either contractual or non-contractual, which can be decided by a court,
is in principle capable of being adjudicated and resolved by arbitration unless the
jurisdiction of the Arbitral Tribunals is excluded either expressly or by necessary
implication. Adjudication of certain categories of proceedings are reserved by the
legislature exclusively for public fora as a matter of public policy. Certain other
categories of cases, though not expressly reserved for adjudication by public fora
(courts and tribunals), may by necessary implication stand excluded from the
purview of private fora. Consequently, where the cause/dispute is inarbitrable,
the court where a suit is pending, will refuse to refer the parties to arbitration,
under Section 8 of the Act, even if the parties might have agreed upon arbitration
as the forum for settlement of such disputes."

13. The appellant’s submission that both parties intended to arbitrate under the
1996 Act carries no legal weight. The object and scheme of the 1983 Act is to
channel all disputes arising from works contracts involving the State and its
instrumentalities into a specialized statutory forum to ensure uniformity,
efficiency, and public accountability. This intent is also reflected in Clause 44.4
of the Concession Agreement, which acknowledges that in the event of
constitution of a competent statutory forum, such forum would override the

21
(2011) 5 SCC 532

37

contractual arbitration clause. Although it was argued that the Madhya Pradesh
Arbitration Tribunal was not expressly contemplated under Clause 44.4, the
existence of the Tribunal under the prevailing law and its exclusive jurisdiction
cannot be contractually overridden or ignored.

13.1. Accordingly, the attempt of the appellant to invoke Clause 44.3.1 of the
Concession Agreement and re-agitate the issue of private arbitration – already
settled in Viva Highways and affirmed by this Court – is barred by the doctrine
of constructive res judicata and amounts to an abuse of the process of law. The
appellant is estopped from challenging the binding nature of Viva Highways ,
having itself been a party to the earlier SLP proceedings, wherein the said
judgment was upheld.

14. Additionally, the appellant’s conduct in withdrawing the reference petition
before the Madhya Pradesh Arbitration Tribunal, without seeking liberty to
re-agitate the claims, and simultaneously initiating proceedings under the 1996
Act, constitutes forum shopping. This conduct, aimed at circumventing the
statutory mechanism and reviving abandoned claims, is tainted with mala fides
and deserves to be deprecated.

15. Further, the appellant’s claims – which arise from events dating back to
2013-2015 – are also barred by limitation under Section 43 of the 1996 Act read

38

with the Limitation Act, 1963. The belated invocation of arbitration in 2022, and
its continuation in 2025, is thus clearly time-barred and legally unsustainable.

16. In view of the above, we find no infirmity in the reasoning or conclusion
of the High Court in quashing the private arbitration proceedings and reaffirming
the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal established
under the 1983 Act to adjudicate disputes arising from works contract involving
the State or its instrumentalities.

17. At this juncture, it is to be noted that the appellant had voluntarily
withdrawn the Reference Petition No.61 of 2018 under Rule 53(3)(b) of the M.P
Arbitration Tribunal Regulations without seeking liberty to re-file the same.
Rule 53 of the Madhya Pradesh Madhyastham Adhikaran Regulations, 1985,
deals with the withdrawal and adjustment of references and reads as follows:
“ 53. Withdrawal and adjustment of references –
(1) At any time after the institution of a reference, the petitioner may as against
all or any of the respondents abandon his reference or abandon a part of his
claim.

(2) Where the Tribunal is satisfied –
(a) that a reference must fail by reason of some formal defect, or
(b) that there are sufficient grounds for allowing the petitioner to institute a fresh
reference for the subject matter of such reference or part of a claim; it may, on
such terms as it thinks fit, grant the petitioner permission to withdraw from such
reference or such part of the claim with liberty to institute a fresh reference in
respect of the subject matter of such reference or such part of the claim.

(3) Where the petitioner-


39

(a) abandons any reference or part of claim under sub-regulation (1); or
(b) withdraws from a reference or part of a claim without the permission referred
to in sub-regulation (2); he shall be liable for such costs as the Tribunal may
award and shall be precluded from instituting any fresh reference in respect of
such subject matter or such part of the claim.”

In terms of the statutory mandate under Rule 53(3)(b), once a reference is
withdrawn without obtaining liberty to re-agitate the same, the appellant stands
precluded from initiating a fresh reference on the same subject matter. This
substantive bar also applies to any attempt to pursue the same claims before
alternative fora.

17.1. Nonetheless, considering the nature of the dispute and in the interests of
justice, and in view of the submission made by the learned Solicitor General
appearing for Respondent No.1, we are of the opinion that the appellant can be
permitted to seek revival of Reference Petition No.61 of 2018 before the Madhya
Pradesh Arbitration Tribunal.

18. Accordingly, we direct the appellant to file an application to recall the
withdrawal order dated 08.02.2023 and seek restoration of Reference Petition
No.61 of 2018 within two weeks from the date of receipt of a copy of this
judgement. Upon such filing, the Madhya Pradesh Arbitration Tribunal shall
consider the application on its own merits and pass appropriate orders, within a
further period of two weeks. If the Tribunal allows the restoration, the

40

Reference Petition shall be disposed of on merits, in accordance with law, after
affording reasonable opportunity of hearing to both parties, preferably within four
months from the date of restoration.

19. This appeal stands disposed of in the above terms. There shall be no order
as to costs.

20. Pending application(s), if any, also stand disposed of.


…………………………. J.
[J.B. PARDIWALA]




…………………………. J.
[R. MAHADEVAN]


NEW DELHI;
JULY 30, 2025.