Authority: Calcutta High Court, Commercial Division

Order Date: 19.08.2026

Case Overview

  • Parties: Mother India Construction Union of India (petitioner, a registered MSME construction company) vs. Union of India, represented by the General Manager, South Eastern Railway (respondent).
  • Contract: Agreement No. 39/HQ/KGP/2020‑21 dated 28.08.2020 for construction of seven railway station buildings (Raghunathbari, Rajgoda, Keshabpur, Mahisadal, Barda, Basuliya Sutahata, Durgachak) under Tender No. E/KGP‑HQ‑03‑2020. Stipulated contract value Rs 4,28,03,041.03 and 18‑month completion period.
  • Timeline: Work suspended on 27.11.2020; completion period extended repeatedly up to 30.06.2024. Five stations completed; final bill (9th Running Account) accepted on 25.10.2024 and No Claim Certificate signed, leading to Completion Certificate on 22.11.2024. Remaining two stations not handed over.
  • Claims: Petitioner raised eight heads of claim (price escalation, transportation costs, loss of profit for the two unexecuted stations, overhead expenses, idle labour & machinery charges, interest) via letter dated 05.01.2026. Reconciliation meeting on 12.02.2026 failed.
  • Arbitration Issue: Petitioner argued that the General Manager of South Eastern Railway is ineligible to appoint an arbitrator under Section 12(5) of the Arbitration & Conciliation Act, 1996, invoking Section 11 for appointment of an independent arbitrator.
  • Contested Fact: Whether the No Claim Certificate and acceptance of the final bill, signed “under protest” in a letter dated 01.09.2025, extinguish the dispute or keep it alive for arbitration.
  • Legal Submissions: Petitioner relied on Supreme Court precedents (R.L. Kalathia, SBI General Insurance v. Krish Spinning) emphasizing that a protest letter can keep claims alive. Respondent relied on ONGC Mangalore Petrochemicals and Hindusthan Builders judgments asserting that delayed protest is ineffective.

Final Outcome

  • The Court held that the existence of the protest letter raises genuine, triable questions that cannot be resolved at the Section 11 stage and therefore the dispute is arbitrable.
  • The Court appointed Mr. Amitesh Banerjee, Adv. (Mob. No. 9830053066) as the sole arbitrator to adjudicate all disputes arising from Contract Agreement No. 39/HQ/KGP/2020‑21, including the eight heads of claim.
  • The Sole Arbitrator shall disclose interests per Section 12(1) and comply with Section 12(5); remuneration to be fixed as per the Fourth Schedule of the Act or by agreement.
  • All questions concerning arbitrability, admissibility, limitation, jurisdiction, and the effect of the No Claim Certificate and Completion Certificate are left open for determination by the arbitrator.
  • The petition is allowed.

Topics: Arbitration, Construction Contract Dispute