Susajja Jv Anand Llp vs Bhopal Municipal Corporation

NEUTRAL CITATION NO. 2026:MPHC-JBP:67922
1 AC-66-2026
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR

BEFORE
HON'BLE SHRI JUSTICE DEEPAK KHOT
rd
ON THE 3 OF SEPTEMBER, 2026
ARBITRATION CASE No. 66 of 2026
SUSAJJA JV ANAND LLP
Versus
BHOPAL MUNICIPAL CORPORATION
Appearance:
Shri Anshuman Singh with Shri Shri Anuj Shrivastava - Advocate for
the applicant.
Shri S.M. Guru - Advocate for the respondent.
ORDER
The applicant has filed the present application under Section 11(6) of
the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act
of 1996' for the sake of brevity) for appointment of an arbitrator to resolve
the dispute arose between the parties in terms of Agreement/Contract -
Annexure A/2.
2. It is the case of the applicant that in 2024, the non-applicant issued
an RFP for “Old Waste Remediation through Bioremediation, Biomining
and Disposal of Residual Waste with Processing and Disposal of Fresh
Waste” at Adampur Chawni, Bhopal (“Project Site”), along with subsequent
addenda. The Applicant was declared as a successful bidder for both legacy
and fresh waste vide Letter of Intimation dated 03.10.2024 (“LOI”) pursuant
to which the applicant and the non-applicant executed the contract , copies
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
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whereof are collectively filed as Annexure A/2.

3. Pursuant to award of the contract and handing over of the Project
Site, the applicant faced persistent infrastructural deficiencies attributable to
non-applicant. Despite repeated representations, the deficiencies, including
damaged tipping floor, absence of windrow platform, inadequate sheds,
drainage and internal roads, damaged boundary walls and landfill-related
issues, remained unresolved, causing disruption of operations and daily
financial losses to the applicant.
4. It is submitted that a dispute also arose regarding the quantity of
legacy waste. Although the RFP estimated 2,50,000 MT, the quantity was to
be determined through a contour survey. The non-applicant appointed
MANIT vide letter dated 21.10.2024. The applicant informed non-applicant
on 13.11.2024 that the survey had assessed the quantity at approximately
10,63,000 MT and that the Applicant had paid Rs. 2,95,000 towards survey
charges. However, without communicating the final quantity, the non-
applicant cancelled MANIT’s appointment on 17.12.2024 without assigning
any reason.
5. It is submitted that meanwhile, the non-applicant failed to rectify the
infrastructural deficiencies or to resolve the dispute regarding the quantity of
legacy waste. The applicant was consequently incurring continuous losses
and additional expenditure to maintain operations. Further, substantial
amounts towards processing of fresh waste remained unpaid.
6. It is submitted in these circumstances, the applicant issued an Intent
to Terminate Letter dated 07.07.2025, calling upon non-applicant to cure the
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
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contractual breaches within 15 days. As on that date, Rs.4,34,68,776/-

remained outstanding towards invoices for processing of fresh waste.
7. It is submitted that despite expiry of the stipulated 15-day period
and continued inaction on the part of non-applicant, the applicant was
constrained to terminate the Contract vide Termination Notice dated
22.07.2025
8. Pursuant to the Termination Notice, the applicant informed non-
applicant that the Project Site would be handed over and its machinery,
equipment and manpower would be removed. Accordingly, vide letter dated
24.07.2025, the Applicant formally handed over the Project Site along with
the materials lying therein.
9. It is submitted that non-applicant vide letter dated 21.07.2025
received by the applicant on 29.07.2025 denied the breaches alleged by the
applicant. The Applicant duly replied vide letter dated 08.08.2025, rebutting
the allegations and reiterating its case. Thereafter, non-applicant issued a
termination letter dated 11.08.2025 (Annexure A/17), received by the
Applicant on 13.08.2025, whereby non-applicant disputed the applicant’s
lawful termination, alleged breaches on the part of the applicant and sought
to impose penalties and deductions which were arbitrary, illegal and contrary
to the Contract.
10. It is submitted that thereafter, non-applicant threatened to invoke
the applicant’s bank guarantee, compelling applicant to approach this
Hon’ble Court in W.P. No. 32149/2025. Vide order dated 14.08.2025
(Annexure A/18), this Hon’ble Court stayed the invocation/encashment of
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
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the bank guarantee.

11. Thereafter, the applicant invoked Clauses 15 and 24 of Volume II
of the Contract and submitted its quantified claims before the Competent
Authority vide Claim Notice dated 20.08.2025 (Annexure A/19). The
Competent Authority was required to decide the claims within 45 days;
however, despite repeated follow-ups and meetings, no decision was
rendered within the stipulated period.
12. It is submitted upon failing of the competent authority to provide
any decision within 45 days from the date of submission of claim notice, the
applicant preferred an appeal, however, the appellant authority refused to
decide the appeal of the applicant on the ground that it lacked jurisdiction to
adjudicate matters relating to the Swachh Bharat Mission (Urban).
13. It is submitted that Clause 15 of Volume II of the Contract
provides a multi-tier dispute resolution mechanism, requiring disputes to be
first raised before the Competent Authority, followed by an appeal to the
Appellate Authority and, thereafter, arbitration before the M.P. Arbitration
Tribunal under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam,
1983 (For short 'Act of 1983'). The Applicant duly approached both
authorities; however, as stated hereinabove, the dispute remained unresolved.
14. It is submitted that the Act of 1983 is inapplicable to the present
Contract. Section 3 of the Act of 1983 confers jurisdiction upon the M.P.
Arbitration Tribunal only in respect of disputes arising out of or connected
with a “works contract”. The term “works contract”, as defined under
Section 2(i) of the Act of 1983, is confined to agreements relating to
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
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construction, repair or maintenance of specified works, including buildings,

roads, bridges, dams, canals, etc., and also includes specified services, supply
of goods/materials and concession agreements involving State support. The
present Contract, being for waste remediation, processing and disposal does
not fall within the statutory definition of “works contract”. Accordingly, the
Act of 1983 and the jurisdiction of the M.P. Arbitration Tribunal are not
attracted.
15. However, the parties expressly agreed to refer disputes to the
Madhya Pradesh Arbitration Tribunal, clearly evidencing their intention to
arbitrate. Although the Tribunal lacks jurisdiction under the Act of 1983, the
arbitration agreement remains valid and enforceable. Accordingly, the
disputes ought to be referred to arbitration in accordance with the Act of
1996.
16. It is submitted that in compliance with Section 21 of the Act of
1996, the applicant issued a notice dated 12.02.2026 (Annexure
A/1) invoking arbitration in respect of disputes arising out of the Contract.
However, the Non-Applicant failed to respond within the stipulated period
and no arbitrator was mutually appointed between the Parties. Accordingly,
the present application under Section 11(6) of the Act of 1996 has been filed.
17. The respondents have filed reply contending therein that the the
contract is a work contract because the contract involves excavation and
remediation of municipal waste, dewatering, reclamation, construction of
sheds, platforms and other site facilities, landfill and drainage works, and
operation and maintenance of existing facilities. The Applicant itself has
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
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claimed costs for construction of a windrow platform and temporary road.

Thus, the Contract falls within the definition of “works contract” under the
Act of 1983. Further, Clause 15 specifically provides for resolution of
disputes by the Madhya Pradesh Arbitration Tribunal under the
Madhyastham Act and contains no provision for arbitration under the Act of
1996. Hence, the present application under Section 11(6) of the A&C Act as
also the Applicant’s notice dated 12.02.2026 nominating an arbitrator
thereunder, is misconceived and not maintainable.
18. It is submitted that the present claim involves disputed questions of
fact concerning site infrastructure, quantity of legacy waste, rival
termination, payments, penalties and recoveries and therefore, cannot be
adjudicated under Section 11 of the Act of 1996.
19. The sole objection which has been raised by the respondent is that,
the contract in question is a works contract, therefore, in the light of the
principle laid down by the Hon'ble Apex Court in the case of Madhya
Pradesh Rural Road Development Authority and another vs. L.G. Chaudhary
Engineers and Contractors, (2018) 10 SCC 826, the arbitration is necessary
to be referred to the Tribunal constituted under the Act of 1983.
20. It is submitted that the Scope of Contract, which is provided under
Clause 6, which refers to Appendix 1—Project Information Memorandum of
the RFP document, according to which there are certain works, which are
provided in regard to construction for the purpose of management of solid
waste, which includes digging of pit and some civil construction. Therefore,
it would be necessarily referred to "works contract" in terms of Section 2(i)
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
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of the Act of 1983.

21. It is also submitted that as the parties have agreed to resolve their
dispute through the mechanism which is provided under the Act of 1983,
therefore, the application is not maintainable.
22. Per contra, learned counsel for the applicant has placed reliance on
an order passed by the Hon'ble Apex Court in the case of Ecogreen Energy
Gwalior Pvt. ltd. vs. Municipal Corporation Gwalior passed in Civil Appeal
No. 4646/2026 decided on 21.04.2026.
23. It is submitted by the learned counsel for the applicant that in the
similar set of facts where the question of management of solid waste was
involved and a contract was issued by the Municipal Corporation, Gwalior
containing the same stipulation in regard to referring the matter, in case a
dispute arises between the parties, to the Tribunal under the Act of 1983, has
been dealt with and the Hon'ble Apex Court has come to the conclusion that
as the solid waste management is the dominant purpose for which the
agreement was executed and all the other ancillary purposes in regard to
construction thereof is in connection with the main purpose of the contract,
therefore, the contract is not a work contract and any dispute arising out of
the contract can be referred to the Arbitrator appointed under the Act of 1996
and that does not oust the jurisdiction of the Court to appoint an Arbitrator
under the Act of 1996.
24. Learned counsel for the applicant has further placed reliance upon
the order passed by this Court in the case of M/s PKH M.P. Convention
Center Pvt. Ltd. Vs. Madhya Pradesh State Tourism Development
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
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Corporation Limited- AC No.119 of 2024 decided vide order dated

10.02.2026 to state that even if the parties have agreed to have their
resolution of dispute by referring the matter under the Act of 1983, but if the
Court finds that the contract is not a work contract and essentially parties
have intended to resolve their dispute by arbitration, can refer the matter to
the Arbitrator under the Act of 1996.
25. Heard learned counsel for the parties and perused the record.
26. The Honorable Apex Court in the case of Ecogreen Energy (supra)
has held as under:
"4. The appellant entered into a concession agreement with the
Municipal Corporation, Gwalior on 19.05.2017 for “design,
engineering, construction, financing, procurement, operation &
maintenance for door-to-door and secondary collection,
transportation, segregation/ material recovery, treatment through
Waste to energy process in a facility and final disposal of the
Inerts in a scientifically developed landfill and closure of old
landfill within the administrative limits of the Participating ULBs
(the Project) on Design, Build, Finance. Operate and Transfer
(DBFOT) basis.

14. We have already extracted the scope and ambit of the
concession agreement between the appellant with the Municipal
Corporation which inter alia relates to design, engineering,
construction, financing, procurement, operation and maintenance
for door to door and secondary transportation, segregation,
material recovery, etc. of municipal solid waste. The agreement
may necessarily require certain civil structures to be set up but that
will be incidental and ancillary to the substantive part of the
contract. There is no doubt about the fact that the dominant
purpose for which the agreement has been executed is for setting
up the system to deal with municipal solid waste. For the present
purpose, it is sufficient if we come to the conclusion that the
concession agreement between the parties does not fall within the
four corners of a “works contract” as defined under Section 2(i) of
the Adhiniyam. It is for this very reason that the concession
agreement itself incorporates dispute resolution through the
institutional arbitration of International Centre for Alternative
Dispute Resolution, New Delhi, the relevant clause has already
extracted hereinabove."
27. From a reading of the aforesaid principle laid down by the
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Signed by: RAGHVENDRA
SHARAN SHUKLA
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Honorable Apex Court, it is demystified that the Court has to consider the

nature and scope of the work which is agreed between the parties under the
agreement and on consideration of nature of work, which is under the scope
of the agreement, if the Court comes to the conclusion that it is not a work
contract, the dispute can be referred by appointment of an Arbitrator under
the Act of 1996.
28. Now, as regards the question as to if the parties have agreed to
resolve their dispute by statutory arbitration under the Act of 1983, when the
order passed by this Court in the case of M/s PKH M.P. Convention Center
(supra) has been pondered, it is found that this Court has taken a view that
even if the parties have agreed to resolve their dispute through statutory
arbitration under the Act of 1983, but if the contract is not a works contract
then it is not amenable to the jurisdiction of the Tribunal under the Act of
1983. In such case, if the intention of the parties is to resolve the dispute
through arbitration then it can be referred to the Arbitrator under the Act of
1996.
29. Therefore, following the view taken by the Hon'ble Apex Court in
the case of Ecogreen Energy (supra) as well as by this Court in the case of
M/s PKH M.P. Convention Center (supra) , this Court is also of the
considered opinion that the contract in question is not a work contract, as it
deals dominantly for the purpose of waste management and the civil work
which is incidental to the said management cannot be said to be a works
contract. Therefore, the present application is allowed.
30. With the consent of the learned counsel for the parties and
Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
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considering the list of empanelled arbitrators issued by the M.P. Arbitration

Centre, Jabalpur, following order is passed:-
(i) Shri Sujoy Paul, Former Chief Justice of Calcutta High Court,
Address - 278A/B Narmada Road Opposite Rampur Police
Chowki, Jabalpur (M.P.) 482004, Mob.62890-12247, Email.
[email protected], who has given consent under
Section 11(8) of the Act of 1996, is appointed as sole Arbitrator to
resolve the dispute between the parties in the case.
(ii) Arbitrator shall issue notices and fix the date and suitable
venue for arbitration. Said arbitration will take place at Jabalpur.
(iii) Parties are directed to deposit necessary charges and fees as
per M.P. Arbitration Center (Domestic and International) Rules,
2019.
(iv) Director of Madhya Pradesh Arbitration Centre (Domestic and
International, Jabalpur (M.P.D.I.A.C.) shall communicate the
decision of this Court to the Sole Arbitrator.
(v) Other provisions of Section 15(3)(4) of the Arbitration and
Conciliation Act, 1996 will apply to Substitute Arbitrator.
31. Accordingly, the arbitration case is disposed of.
(DEEPAK KHOT)
JUDGE
RAGHVENDRA

Signature Not Verified
Signed by: RAGHVENDRA
SHARAN SHUKLA
Signing time: 08-09-2026
11:01:54