STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.versusAMBER BUILDERS

                          [2020] 1 S.C.R. 779                             779


                 STATE OF GUJARAT THROUGH                                 A
                   CHIEF SECRETARY & ANR.
                                  v.
                        AMBER BUILDERS
                   (Civil Appeal No. 8307 of 2019)                        B
                          JANUARY 8, 2020
      [DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]
        Gujarat Public Works Contracts Disputes Arbitration
Tribunal Act, 1992 – Issue as to whether the Gujarat Public Works         C
Contract Disputes Arbitration Tribunal constituted u/s. 3 of the said
Act has jurisdiction to make interim orders in terms of s.17 of the
1996 Act – Respondent-contractor was awarded contract for
strengthening a section of National Highway under work order dtd.
31.07.07, which contained an arbitration clause – According to
                                                                          D
the contractor, he completed the work on 30.04.08 and final bill
was paid – Road was damaged and the State called upon the
contractor to repair the damaged portion and according to the
contractor, this repair was completed – Case of the contractor is
that in terms of the contract, the contractor was only liable to remove
defects for period of 3 years which period ended on 30.04.11 –            E
State issued letter dtd. 11.11.14 calling upon the contractor to pay
Rs.1,09,00,092/- on the premise that the contractor had not carried
out the road repair work in accordance with the contract –
Challenged – Writ petition allowed by the High Court – Held:
Appropriate remedy for the contractor was to approach the arbitral
                                                                          F
tribunal constituted under the 1992 Act, since that would have
jurisdiction to decide whether the notice issued by the Government
was legal notice and whether the Government was, in fact, entitled
to recover any amount from the contractor – It would also be within
the jurisdiction of the Tribunal to decide whether the contractor
made out prima facie case for grant of interim relief – Insofar as the    G
powers vested in the Arbitral Tribunal in terms of s.17 of the 1996
Act are concerned, such powers can be exercised by the Tribunal
constituted under the 1992 Act because there is no inconsistency in
these two Acts as far as the grant of interim relief is concerned –
Merits of the case purposely not gone into – Judgments of the High
                                                                          H
                                 779
780            SUPREME COURT REPORTS                      [2020] 1 S.C.R.


A     Court set aside – Liberty given to the contractor to approach the
      Gujarat Public Works Contract Disputes Arbitration Tribunal – If
      the Tribunal is approached within 2 months from today, tribunal
      not to dismiss the claim on the issue of limitation and to decide the
      same on merits – Arbitration and Conciliation Act, 1996 – ss.2-43
      and ss.9, 17 – Arbitration Act, 1940.
B
            Gujarat Public Works Contracts Disputes Arbitration Tribunal
      Act, 1992 – ss.2(a), 3, 8(3), 9, 12, 13, 21 – Scheme of the Act –
      Discussed.
            Arbitration and Conciliation Act, 1996 – ss.9, 17 – Held: s.9
C     empowers the Court to grant interim measures – However, s.9(3)
      clearly provides that once an arbitral tribunal is constituted, the
      Court shall not entertain an application u/s.9(1) unless the Court
      comes to the conclusion that such circumstances exist which would
      make the remedy u/s.17, which provides for interim measures to be
      granted by the arbitral tribunal, not efficacious.
D
             Arbitration and Conciliation Act, 1996 – Applicability of Part
      I of the Act to arbitrations carried out under any other enactment –
      Held: Part I of the Act i.e. from s.2 to s.43 deals with Arbitration
      and s.2(2) clearly states that the said Part would apply to all
      Arbitrations which take place in India – s.2(4) makes it clear that
E     other than ss.40(1), 41 and 43, Part I of the Act shall apply to all
      arbitrations even if they are carried out under any other enactment
      as if the arbitrations were pursuant to an arbitration agreement
      except insofar as the provisions of Part I are inconsistent with the
      other enactment or any rules made thereunder.
F           Disposing of the appeals, the Court
             HELD: 1.1 Section 9 of the Arbitration and Conciliation
      Act, 1996 empowers the Court to grant interim measures.
      However, Section 9(3) clearly provides that once an arbitral
      tribunal is constituted, the Court shall not entertain an application
G     under Section 9(1) unless the Court comes to the conclusion that
      such circumstances exist which would make the remedy under
      Section 17 not efficacious. Section 17 of the A&C Act provides
      for interim measures to be granted by the arbitral tribunal. Part I
      of the A&C Act i.e. from Section 2 to Section 43 deals with
      Arbitration and Section 2(2) clearly states that the said Part would
H
STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                         781
               v. AMBER BUILDERS

apply to all Arbitrations which take place in India. Section 2(4)       A
makes it absolutely clear that other than Section 40(1), 41 and
43, Part I of the A&C Act shall apply to all arbitrations even if
they are carried out under any other enactment as if the
arbitrations were pursuant to an arbitration agreement except
insofar as the provisions of Part I are inconsistent with the other
                                                                        B
enactment or any rules made thereunder. A plain reading would
show that the provisions of Part I of the A&C Act would apply to
all arbitrations where the place of arbitration is within India. Even
statutory arbitrations under other Acts would be governed by
Part I. The only exception is that if there is any departure from
Part I in the special enactment then the special enactment will         C
prevail and the A&C Act will give way to the special enactment.
[Paras 12, 13 and 15][787-D-E; 788-F-H; 789-A]
       1.2 Reference and procedure of the Tribunal is governed
by Chapter 3 of the Gujarat Public Works Contracts Disputes
Arbitration Tribunal Act, 1992. Section 8 provides that where           D
any dispute within the meaning of the said Act, arises between
the parties, the said dispute shall be referred to arbitration under
the said Act whether the agreement in question contained an
arbitration clause or not. Basically, the intention of the State
Legislature was that all disputes relating to works contract
between the State Government and the persons executing the              E
works defined as works contract would be compulsorily referred
to the Arbitral Tribunal constituted under Section 3 of the Gujarat
Act. Section 8(3) clearly provides that where the Tribunal admits
a reference under sub-section (2) it will make an award or an
interim award giving its reasons thereof. This Section recognizes       F
the power of the Tribunal to make interim awards. However, the
Tribunal took a view that an interim award could not be in the
nature of an injunction. The practice and procedure of the Tribunal
is governed by Section 9 of the Act. Section 12 of the Act vests
revisional powers in the High Court of Gujarat where an award
or any interim award can be challenged on the grounds set out           G
therein. The High Court also has suo motu powers in this regard.
Section 13 specifically bars the jurisdiction of the Civil Courts.
This clearly means that powers vested in a Civil Court under the
A&C Act, such as the powers to grant interim relief in terms of
Section 9 of the A&C Act and the powers for setting aside an            H
782            SUPREME COURT REPORTS                      [2020] 1 S.C.R.


A     award under Section 34 of the Act cannot be exercised by Civil
      Courts insofar as the awards made under the Gujarat Act are
      concerned. As far as Gujarat Act is concerned, the power to set
      aside/modify an award is vested in the High Court under Section
      12. The appropriate remedy for the contractor was to approach
      the arbitral tribunal constituted under the Gujarat Act since that
B
      would have jurisdiction to decide whether the notice issued by
      the Government was a legal notice and whether the Government
      was, in fact, entitled to recover any amount from the contractor.
      It would also be within the jurisdiction of the Tribunal to decide
      whether the contractor has made out a prima facie case for grant
C     of interim relief. The Court is purposely not going into the merits
      of the case because once it is held that the Tribunal has the
      jurisdiction to entertain and adjudicate upon the dispute it would
      not be proper to make any comments on the merits. [Paras 16-
      18][789-B-E, H; 790-A, C-E]
D            1.3 On a conjoint reading and a careful analysis of the Acts
      together, the Court is of the view that insofar as the powers vested
      in the Arbitral Tribunal in terms of the Section 17 of the A&C Act
      are concerned, such powers can be exercised by the Tribunal
      constituted under the Gujarat Act because there is no
      inconsistency in these two Acts as far as the grant of interim
E     relief is concerned. This power is already vested in the tribunal
      under the Gujarat Act and Section 17 of the A&C Act compliments
      these powers and therefore it cannot be said that the provisions
      of Section 17 of the A&C Act are inconsistent with the Gujarat
      Act. The judgments of the High Court of Gujarat are set aside.
F     However, liberty is given to the contractor(s) to approach the
      Gujarat Public Works Contract Disputes Arbitration Tribunal and
      if the Tribunal is approached within 2 months from today, the
      tribunal shall not dismiss the claim on the issue of limitation. It
      shall decide the same on merits. [Paras 21, 22][793-D-G]
G           Gangotri Enterprises Limited v. Union of India and
            Others (2016) 11 SCC 720 : [2016] 2 SCR 1074 – held
            per incuriam.
            State of Karnataka vs. Shree Rameshwara Rice Mills,
            Thirthahalli (1987) 2 SCC 160 : [1987] 2 SCR 398;
H
STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                              783
               v. AMBER BUILDERS

      Union of India v. Raman Iron Foundry (1974) 2 SCC                      A
      231 : [1974] 3 SCR 556; H.M. Kamaluddin Ansari &
      Co. v. Union of India (1983) 4 SCC 417 : [1983] 3
      SCR 607 – referred to.
                        Case Law Reference
[1987] 2 SCR 398               referred to               Para 6              B

[2016] 2 SCR 1074              held per incuriam         Para 19
[1974] 3 SCR 556               referred to               Para 19
[1983] 3 SCR 607               referred to               Para 19
                                                                             C
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8307
of 2019.
      From the Judgment and Order dated 18.02.2016 of the High Court
of Gujarat at Ahmedabad in Special Civil Application No. 5517 of 2015.
                                  With                                       D
      Civil Appeal No. 8308 of 2019.
      Preetesh Kapoor, Sr. Adv., A.P. Mayee, Ms. Hemantika Wahi,
Adv. for the Appellants.
      K.G. Sukhwani, Anil K. Sharma, Chirag Sukhwani, Vishwa Pal             E
Singh, Advs. for the Respondent.
      The Judgment of the Court was delivered by
      DEEPAK GUPTA, J.
      1. The main question which arises for decision in these appeals is
                                                                             F
whether the Gujarat Public Works Contract Disputes Arbitration Tribunal
(hereinafter referred to as ‘the Tribunal’) constituted under Section 3 of
the Gujarat Public Works Contracts Disputes Arbitration Tribunal Act,
1992 (hereinafter referred to as ‘the Gujarat Act’) has jurisdiction to
make interim orders in terms of Section 17 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as ‘the A&C Act’).           G
      2. At the outset, it may be noted that the Gujarat Act was enacted
with a view to compulsorily refer all disputes arising out of “works
contract” entered into by the State Government or the Public Sector
Undertakings with any other person for those works defined as “works
contract” in terms of Section 2 (k) of the Gujarat Act. As far as this       H
784             SUPREME COURT REPORTS                            [2020] 1 S.C.R.


A     case is concerned, it is not disputed that the contract entered into between
      the appellant State and the respondent-contractor was a “works contract”.
      The contract order pertaining to the parties dated 31.07.2007 contained
      an arbitration clause, relevant portion of which reads as follows:-
             “Clause : 30(1) Disputes to be referred to Tribunal : The dispute
B            relating to this contract, so far as they relate to of the following
             matters, whether such disputes arise during the progress of the
             work of or after the completin or abandoned thereof, shall be
             referred to the Arbitration Tribunal, Gujarat State…”
             3. It is not disputed that the Gujarat Act is applicable in the present
C     cases. We are mainly concerned with Clause 43.A of the contract entered
      into between the parties, which reads as follows:-
             “43.A Any sum of money due and payable to the Contractor
             (including the security deposit returnable to the contractor)
             executing any Government work or work of any District Panchayat
D            wholly financed as grant-in-aid under this contract shall be
             appropriate by any District Panchayat/Government and shall beset
             off against any claim of the Government/District Panchayat of
             Gujarat state by the District Panchayat of Gujarat State/
             Government for the payment of a sum of money arising out or
             under any other contract made by the contractor with the
E            Government/District Panchayat of Gujarat State for the work
             wholly financed as grant-in-aid by Government of Gujarat State.
             When no such amount for purpose of the recovery from the
             contractor against any claim of the Government/District Panchayat
             of Gujarat state is available, such a recovery shall be made from
F            the contractor as arrears of land revenue.”
             4. In this judgment, we are only referring to the facts of Civil
      Appeal No.8307 of 2019 @ SLP(C) No.36095 of 2016. The respondent-
      contractor was awarded a contract for strengthening a section of National
      Highway under work order dated 31.07.2007. According to the contractor,
G     he completed the work on 30.04.2008 and final bill was paid to the
      contractor. The road was damaged and, according to the contractor, this
      had occurred due to heavy rains. The State called upon the contractor
      to repair the damaged portion and, according to the contractor, this repair
      was completed after the rains stopped.

H
    STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                          785
           v. AMBER BUILDERS [DEEPAK GUPTA, J.]

       5. The case of the contractor is that in terms of the contract, the   A
contractor was only liable to remove defects for a period of 3 years
which period ended on 30.04.2011. On 10.09.2012, the contractor wrote
a letter to the State to release the security amount. This amount was
accordingly released vide letter dated 10.09.2012. The State issued letter
dated 11.11.2014 calling upon the contractor to pay a sum of
                                                                             B
Rs.1,09,00,092/-. This claim was based on the premise that the contractor
had not carried out the road repair work in accordance with the contract.
The appellant State threatened to withhold the payments from the security
deposits and bills of other pending works. This notice was challenged by
filing a writ petition in the High Court of Gujarat on the ground that the
State was not competent to withhold the amount payable to the contractor     C
under other contracts or recover the amount from payments made under
other contracts until the liability of the contractor was determined and
quantified by a Court or forum of competent jurisdiction. The stand of
the State was that since the work of the contractor was defective, the
State had got the work done from another person at the risk of the
                                                                             D
contractor. In case, the contractor has any dispute, he can approach the
Court and reliance was placed on Clause 43.A of the agreement quoted
above.
       6. The High Court relied upon the judgment of this Court in State
of Karnataka vs. Shree Rameshwara Rice Mills, Thirthahalli1 and
the consistent view of the Gujarat High Court in various judgments           E
referred to in the impugned judgment and held that without quantification
or crystallization of the amount sought to be recovered, the employer or
the contractor cannot unilaterally recover the said amounts from the
ongoing contract work of the same contractor in connection with another
contract. It was further directed that the State could not recover the       F
amounts sought to be recovered from the payments due and payable to
the contractor in other contracts. Liberty was, however, given to the
State to seek recovery through other means as may be permissible under
law. Accordingly vide judgment dated 18.02.2016 the petition was allowed
and the communication dated 11.11.2014 was set aside.
                                                                             G
      7. This judgment has been challenged before us. Shri Preetesh
Kapoor, learned senior counsel appearing for the State of Gujarat
contends that the High Court has no jurisdiction to pass such an order.
He submits that, in fact, the remedy, if any, of the respondent contractor
1
    (1987) 2 SCC 160                                                         H
786             SUPREME COURT REPORTS                            [2020] 1 S.C.R.


A     was to approach the State Tribunal as constituted under the Gujarat Act
      and the writ court could not have granted such relief. On the other hand,
      Shri. K. G. Sukhwani, learned counsel appearing for the respondent
      submits that the Tribunal constituted under the Gujarat Act has no
      jurisdiction to grant such relief and he has placed reliance on an order of
      the State Tribunal dated 24.11.2005 wherein the Tribunal held that it can
B
      only exercise jurisdiction, powers and authority conferred on it by or
      under the Gujarat Act of which it is a creation. It was further held that if
      the Gujarat Act does not empower the Tribunal to grant injunction, and it
      cannot take recourse to the Code of Civil Procedure, 1908 for grant of
      interim relief. It also held that an order of interim injunction, as prayed
C     for like in the present case, does not fall within the ambit of ‘interim
      award’. The Tribunal held that there is no power to grant such injunction.
             8. It appears to us that since then, in Gujarat, challenges to all
      communications/orders, whereby the State taking recourse to the
      provision of the contract akin to Clause 43.A seeks to recover amounts
D     by setting it off against the claims of contractor in other contracts, are
      dealt with by the High Court.
            9. We have extracted the main issue in the opening portion of the
      Judgment. Section 2(a) of the Gujarat Act defines an ‘Arbitration Act’
      to mean Arbitration Act, 1940. It is not disputed by the parties that this
E     will now read to mean the A&C Act.
             10. We may also refer to certain provisions of the A&C Act.
      Section 2(e)(i) of the A&C Act defines ‘Court’ in the context of disputes
      other than the international commercial arbitration as follows:-
            “(i) in the case of an arbitration other than international commercial
F           arbitration, the principal Civil Court of original jurisdiction in a
            district, and includes the High Court in exercise of its ordinary
            original civil jurisdiction, having jurisdiction to decide the questions
            forming the subject-matter of the arbitration if the same had been
            the subject-matter of a suit, but does not include any Civil Court
G           of a grade inferior to such principal Civil Court, or any Court of
            Small Causes;”
            11. We may also refer to Section 2(2)& 2(4) of the A&C Act
      which read as follows:-
            “(2) This Part shall apply where the place of arbitration is in India:
H
STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                                787
       v. AMBER BUILDERS [DEEPAK GUPTA, J.]

      Provided that subject to an agreement to the contrary, the provisions    A
      of sections 9, 27 and clause (a) of sub-section (1) and sub-section
      (3) of section 37 shall also apply to international commercial
      arbitration, even if the place of arbitration is outside India, and an
      arbitral award made or to be made in such place is enforceable
      and recognised under the provisions of Part II of this Act.”
                                                                               B
        xxx                       xxx                        xxx
      “(4) This Part except sub-section (1) of section 40, sections 41
      and 43 shall apply to every arbitration under any other enactment
      for the time being in force, as if the arbitration were pursuant to
      an arbitration agreement and as if that other enactment were an          C
      arbitration agreement, except in so far as the provisions of this
      Part are inconsistent with that other enactment or with any rules
      made thereunder.”
       12. Section 9 of the A&C Act empowers the Court to grant interim
measures. However, Section 9(3) clearly provides that oncean arbitral          D
tribunal is constituted, the Court shall not entertain an application under
Section 9(1) unless the Court comes to the conclusion that such
circumstances exist which would make the remedy under Section 17
not efficacious.
      13. Section 17 of the A&C Act provides for interim measures to           E
be granted by the arbitral tribunal. It reads as follows:-
      “17. Interim measures ordered by arbitral tribunal.—(1) A
      party may, during the arbitral proceedings or at any time after the
      making of the arbitral award but before it is enforced in accordance
      with section 36, apply to the arbitral tribunal—                         F
      (i) for the appointment of a guardian for a minor or person of
          unsound mind for the purposes of arbitral proceedings; or
      (ii) for an interim measure of protection in respect of any of the
           following matters, namely:—
          (a) the preservation, interim custody or sale of any goods which     G
          are the subject-matter of the arbitration agreement;
          (b) securing the amount in dispute in the arbitration;
          (c) the detention, preservation or inspection of any property or
          thing which is the subject-matter of the dispute in arbitration,     H
788            SUPREME COURT REPORTS                            [2020] 1 S.C.R.


A               or as to which any question may arise therein and authorising
                for any of the aforesaid purposes any person to enter upon
                any land or building in the possession of any party, or authorising
                any samples to be taken, or any observation to be made, or
                experiment to be tried, which may be necessary or expedient
                for the purpose of obtaining full information or evidence;
B
                (d) interim injunction or the appointment of a receiver;
                (e) such other interim measure of protection as may appear to
                the arbitral tribunal to be just and convenient,
                and the arbitral tribunal shall have the same power for making
C               orders, as the court has for the purpose of, and in relation to,
                any proceedings before it.
            (2) Subject to any orders passed in an appeal under section 37,
            any order issued by the arbitral tribunal under this section shall be
            deemed to be an order of the Court for all purposes and shall be
D           enforceable under the Code of Civil Procedure, 1908 (5 of 1908),
            in the same manner as if it were an order of the Court.”
            14. We may also refer to Section 31(6) of the A&C Act which
      reads as follows:-
            “31. Form and contents of arbitral award.-
E
            xxx                       xxx                         xxx
            (6) The arbitral tribunal may, at any time during the arbitral
            proceedings, make an interim arbitral award on any matter with
            respect to which it may make a final arbitral award.”
F            15. Part I of the A&C Act i.e. from Section 2 to Section 43 deals
      with Arbitration and Section 2(2) clearly states that the said Part would
      apply to all Arbitrations which take place in India. Section 2(4) makes it
      absolutely clear that other than Section 40(1), 41 and 43, Part I of the
      A&C Act shall apply to all arbitrations even if they are carried out under
      any other enactment as if the arbitrations were pursuant to an arbitration
G     agreement except insofar as the provisions of Part I are inconsistent
      with the other enactment or any rules made thereunder. A plain reading
      would show that the provisions of Part I of the A&C Act would apply to
      all arbitrations where the place of arbitration is within India. Even
      statutory arbitrations under other Acts would be governed by Part I.
H     The only exception is that if there is any departure from Part I in the
STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                                789
       v. AMBER BUILDERS [DEEPAK GUPTA, J.]

special enactment then the special enactment will prevail and the A&C          A
Act will give way to the special enactment.
       16. It is in this context that we have to examine the Gujarat Act.
We have already referred to certain provision of the Gujarat Act.
Reference and procedure of the Tribunal is governed by Chapter 3 of
the Gujarat Act. Section 8 provides that where any dispute within the          B
meaning of the said Act, arises between the parties, the said dispute
shall be referred to arbitration under the said Act whether the agreement
in question contained an arbitration clause or not. Basically, the intention
of the State Legislature was that all disputes relating to works contract
between the State Government and the persons executing the works
defined as works contract would be compulsorily referred to the Arbitral       C
Tribunal constituted under Section 3 of the Gujarat Act. Section 8(3)
clearly provides that where the Tribunal admits a reference under sub-
section (2) it will make an award or an interim award giving its reasons
thereof. This Section recognizes the power of the Tribunal to make interim
awards. However, as pointed above, the Tribunal took a view that an            D
interim award could not be in the nature of an injunction.
      17. The practice and procedure of the Tribunal is governed by
Section 9 of the Act. Section 12 of the Act vests revisional powers in the
High Court of Gujarat where an award or any interim award can be
challenged on the grounds set out therein. The High Court also has suo         E
motu powers in this regard. Section 13 which is relevant for our purpose
reads as follows:-
      “13. Bar of jurisdiction of Courts.- (1) Save as otherwise
      provided by section 12, no Civil Court shall have jurisdiction to
      deal with or decide any question which the Tribunal is empowered         F
      to deal with and decide by or under this Act and no injunction shall
      be granted by any Civil Court in respect of any action taken or to
      be taken in pursuance of any power by or under this Act.
      (2) No award or interim award or order made or proceedings
      taken under this Act by the Tribunal shall be called in question in      G
      any Civil Court.”
      Section 13 specifically bars the jurisdiction of the Civil Courts.
This clearly means that powers vested in a Civil Court under the A&C
Act, such as the powers to grant interim relief in terms of Section 9 of
the A&C Act and the powers for setting aside an award under Section
                                                                               H
790               SUPREME COURT REPORTS                          [2020] 1 S.C.R.


A     34 of the Act cannot be exercised by Civil Courts insofar as the awards
      made under the Gujarat Act are concerned. As far as Gujarat Act is
      concerned, the power to set aside/modify an award is vested in the High
      Court under Section 12. Section 21 of the Gujarat Act reads as follows:-
               “21. Arbitration Act to cease to apply.- The provisions of the
B              Arbitration Act, shall in so far as they are inconsistent with the
               provisions of this Act, cease to apply to any dispute arising from a
               works contract and all arbitration proceedings in relation to such
               dispute before an arbitrator, umpire, court or authority shall stand
               transferred to the Tribunal.”
C            18. We are clearly of the view that the appropriate remedy for
      the contractor was to approach the arbitral tribunal constituted under
      the Gujarat Act since that would have jurisdiction to decide whether the
      notice issued by the Government was a legal notice and whether the
      Government was, in fact, entitled to recover any amount from the
      contractor. It would also be within the jurisdiction of the Tribunal to
D     decide whether the contractor has made out a prima facie case for
      grant of interim relief. We are purposely not going into the merits of the
      case because once we hold that the Tribunal has the jurisdiction to
      entertain and adjudicate upon the dispute it would not be proper for us to
      make any comments on the merits.
E            19. Shri Sukhwani, learned counsel appearing for the respondents
      has placed reliance on a judgment of this Court in Gangotri Enterprises
      Limited vs.Union of India and Others2 to submit that till the demand
      of the Government is crystallised or adjudicated upon, the Government
      cannot withhold the money of the contractor. Since this case been
F     specifically relied upon we are duty bound to go in the correctness of the
      view laid down in Gangotri Enterprises(supra). The judgment in
      Gangotri Enterprises(supra) is primarily based on the judgment of a
      two Judges’ Bench of this Court in Union of India vs. Raman Iron
      Foundry3 In this case, this Court held that the Government had no right
      to appropriate the amount claimed without getting it first adjudicated.
G     The relevant portion of the judgment reads as follows:
               “6… But here the order of interim injunction made by the learned
               Judge does not, expressly or by necessary implication, carry any
               direction to the appellant to pay the amounts due to the respondent
      2
          (2016) 11 SCC 720
H     3
          (1974) 2 SCC 231
    STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                                 791
           v. AMBER BUILDERS [DEEPAK GUPTA, J.]

         under other contracts. It is not only in form but also in substance        A
         a negative injunction. It has no positive content. What it does is
         merely to injunct the appellant from recovering, suo moto, the
         damages claimed by it from out of other amounts due to the
         respondent. It does not direct that the appellant shall pay such
         amounts to the respondent. The appellant can still refuse to pay
                                                                                    B
         such amounts if it thinks it has a valid defence and if the
         appellantdoes so, the only remedy open to the respondent would
         be to take measures in an appropriate forum for recovery of such
         amounts where it would be decided whether the appellant is liable
         to pay such amounts to the respondent or not. No breach of the
         order of interim injunction as such would be involved in non-              C
         payment of such amounts by the appellant to the respondent. The
         only thing which the appellantis interdicted from doing is to make
         recovery of its claim for damages by appropriating such amounts
         in satisfaction of the claim. That is clearly within the power of the
         Court under Section 41 (b) because the claim for damages forms
                                                                                    D
         the subject matter of the arbitration proceedings and the Court
         can always say that until such claim is adjudicated upon, the
         appellant shall be restrained from recovering it by appropriating
         other amounts due to the respondent. The order of interim
         injunction made by the learned Judge cannot, therefore, be said to
         be outside the scope of his power under Section 41 (b) read with           E
         the Second Schedule.
           xxx                        xxx                                  xxx
         “11…We must, therefore, hold that the appellant had no right or
         authority under Clause 18 to appropriate the amounts of other
         pending bills of the respondent in or towards satisfaction of its          F
         claim for damages against the respondent and the learned Judge
         was justified in issuing an interim injunction restraining the appellant
         from doing so.”
       The judgment in Raman Iron Foundry (supra), was specifically
overruled on the issue in hand by a three Judge Bench of this Court in              G
the case of H.M. Kamaluddin Ansari & Co. vs. Union of India4. In
this case there was a general condition which entitled the Government
to recover the damages claimed by appropriating any sum which may
become due to the contractor under other pending bills. In this case, this
4
    (1983) 4 SCC 417                                                                H
792            SUPREME COURT REPORTS                             [2020] 1 S.C.R.


A     Court disagreed with the findings in the Raman Iron Foundry (supra)
      and held as follows:
            “21…With profound respect we find that the aforesaid observation
            is incongruous with the proposition of law laid down by this Court
            just before this observation. We find it difficult to agree with the
B           observation of the Court that the impugned order in form and
            substance being the negative the respondent could refuse to pay
            such amounts if it thinks it has a valid defence, and if it chooses to
            do so there would be no breach of the injunction order.
            22. It is true that the order of injunction in that case was in negative
C           form. But if an order injuncted a party from withholding the amount
            due to the other side under pending bills in other contracts, the
            order necessarily means that the amount must be paid. If the
            amount is withheld there will be a defiance of the injunction order
            and that party could be hauled up for infringing the injunction order.
            It will be a contradiction in terms to say that a party is injuncted
D           from withholding the amount and yet it can withhold the amount
            as of right. In any case if the injunction order is one which a party
            was not bound to comply with, the court would be loath and reluctant
            to pass such an ineffective injunction order. The court never passes
            an order for the fun of passing it. It is passed only for the purpose
E           of being carried out. Once this Court came to the conclusion that
            the court has power under Section 41 (b) read with Second
            Schedule to issue interim injunction but such interim injunction
            can only be for the purpose of and in relation to arbitration
            proceedings and further that the question whether any amounts
            were payable by the appellant to the respondent under other
F           contracts, was not the subject matter of the arbitration proceedings
            and, therefore, the court obviously could not make any interim
            order which, though ostensibly in form an order of interim injunction,
            in substance amount to a direction to the appellant to pay the
            amounts due to the respondent under other contracts, and such
G           an order would clearly be not for the purpose of and in relation to
            the arbitration proceedings; the subsequent observation of the Court
            that the order of injunction being negative in form and substance,
            there was no direction to the respondent to pay the amount due to
            the appellant under pending bills of other contracts, is manifestly
            inconsistent with the proposition of law laid down by this Court in
H           the same case.
            xxx                          xxx                         xxx
STATE OF GUJARAT THROUGH CHIEF SECRETARY & ANR.                                   793
       v. AMBER BUILDERS [DEEPAK GUPTA, J.]

      31. We are clearly of the view that an injunction order restraining         A
      the respondents from withholding the amount due under other
      pending bills to the contractor virtually amounts to a direction to
      pay the amount to the contractor-appellant. Such an order was
      clearly beyond the purview of clause (b) of Section 41 of the
      Arbitration Act. The Union of India has no objection to the grant
                                                                                  B
      of an injunction restraining it from recovering or appropriating the
      amount lying with it in respect of other claims of the contractor
      towards its claim for damages. But certainly Clause 18 of the
      standard contract confers ample power upon the Union of India
      to withhold the amount and no injunction order could be passed
      restraining the Union of India from withholding the amount.”                C
      20. In our opinion, the judgment rendered in Gangotri Enterprises
Limited (supra) is per incuriam because it relies upon Raman Iron
Foundry (supra) which has been specifically overruled by three Judge
Bench in the case of H.M. Kamaluddin Ansari (supra).
       21. On a conjoint reading and a careful analysis of the Acts together,     D
we are of the view that insofar as the powers vested in the Arbitral
Tribunal in terms of the Section 17 of the A&C Act are concerned, such
powers can be exercised by the Tribunal constituted under the Gujarat
Act because there is no inconsistency in these two Acts as far as the
grant of interim relief is concerned. This power is already vested in the         E
tribunal under the Gujarat Act and Section 17 of the A&C Act
compliments these powers and therefore it cannot be said that the
provisions of Section 17 of the A&C Act are inconsistent with the Gujarat
Act.
        22. In view of the above discussion, both the appeals filed by the        F
State of Gujarat are allowed, and the judgments of the High Court of
Gujarat are set aside. However, liberty is given to the contractor(s) to
approach the Gujarat Public Works Contract Disputes Arbitration Tribunal
and if the Tribunal is approached within 2 months from today, the tribunal
shall not dismiss the claim on the issue of limitation. It shall decide the
same on merits. Pending application(s), if any, shall stand(s) disposed           G
of.


Divya Pandey                                               Appeals disposed of.

                                                                                  H