Patna High Court
J. K. Engicon Private LimitedversusThe State of Bihar
- Decided
- Disposal
- DISPOSED
- Bench
- THE CHIEF JUSTICE
Holding
The unilateral appointment clause in Clause 25 is void and severable, but the substantive arbitration agreement survives, and the court may appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Summary
J.K. Engicon Private Ltd filed a request under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator pursuant to Clause 25 of its contract with the State of Bihar for road‑work on the Ekma‑Masrakh road. The respondents argued that the contract did not provide a valid arbitration mechanism because Clause 25 vested exclusive appointment power in the Engineer‑in‑Chief, relying on the earlier judgment in State of Bihar v. Kashish Developers. The petitioner relied on the same clause, which after a hierarchy of internal remedies, allowed arbitration, and on the Supreme Court’s decision in Hindustan Construction Co. Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., which held that unilateral appointment clauses are void but the arbitration agreement survives and the court may appoint an arbitrator under Section 11(6). The High Court accepted this reasoning, declared the unilateral appointment provision severable, and exercised its power under Section 11(6) to appoint Justice Shyam Kishore Sharma as arbitrator. The order disposed of the request petition and directed the parties to cooperate with the arbitrator.
Issues considered
- Whether Clause 25 of the contract constitutes a valid arbitration agreement within the meaning of Section 7 of the Arbitration and Conciliation Act despite its unilateral appointment provision.
- Whether the court can appoint an arbitrator under Section 11(5) and 11(6) when the contractual appointment mechanism is void.
- Whether the decision in State of Bihar v. Kashish Developers is binding precedent on the present petition.
- Whether the petition for appointment of an arbitrator is maintainable.
Legislation cited
- Arbitration and Conciliation Act, 1996 — s. 11(5), 11(6), 7(4)(c)
Subjects
- Arbitration
- Appointment of arbitrator
- Section 11
- Unilateral appointment clause
- Severability
- Public‑private contract
- Road construction dispute
- Bihar
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
REQUEST CASE No.52 of 2025
======================================================
J. K. Engicon Private Limited a company having its head office at Hathua
Chhawani, Chatardhari Bazar, P.S. Bhagwan Bazar, District - Chhapra, Bihar,
duly represented by its Director Vikas Kumar Singh, aged about 37 years,
Gender - Male, son of Jitendra Singh, Resident of Barwa Khurd, Daudpur,
District -Saran, Bihar
... ... Petitioner
Versus
1. The State of Bihar through the Secretary, Road Construction Department,
Government of Bihar, Patna
2. The Engineer-In-Chief, Head-Quarter, Road Construction Department, 3rd
Floor, Vishweshwaraiya Bhawan, Patna, Bihar
3. The Chief Engineer, North Bihar Wing, Road Construction Department,
Patna, Bihar
4. The Superintending Engineer, Saran Circle, Road Construction Department,
Patna, Bihar
5. The Executive Engineer, Chhapra Road Division, Road Construction
Department, Patna, Bihar
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Prashant Kumar, Advocate
Mr. Divyam Kumar, Advocate
For the Respondents : Mr. Vikas Kumar, Advocate
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
ORAL JUDGMENT
Date : 13-02-2026
This request case has been filed under Section 11(5)
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and 11(6) of the Arbitration and Conciliation Act, 1996
(hereinafter ‘1996 Act’) by J.K. Engicon Private Limited with
the prayer for appointment of an arbitrator for adjudication of
dispute between the parties in accordance with the Arbitration
Agreement as contained in Clause 25 of the Agreement No. 06-
SBD/2020-2021.
2. It is the case of the petitioner that such agreement
was executed between the petitioner and Respondent no. 5 for
execution of IRQP (Improvement of Riding Quality
Programme) Work on the Ekma to Masrakh Road via Shajitpur,
coverying KM0.000 to KM 31.60, under Road Division
Chhapra for the year 2020-21, for a contract value of Rs.
24,98,74,047/- (at 16.95% below the BOQ rate).
Subsequently, a supplementary agreement to the said
agreement was also executed between the parties for an
additional sum of Rs. 87,76,528/- covering the Electrical Utility
Shifting work alongside the main IRQP project.
It is further case of the petitioner that since some
dispute arose between the parties, the petitioner issued a notice
on 24.06.2025 seeking appointment of the arbitrator to the
respondents for adjudication of the claims to the tune of Rs.
6,65,21,488/- (Rupees Six Crores Sixty-Five Lakhs Twenty-One
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Thousand Four Hundred Eight-Eight Only) in relation to arrears
for work completed, approved deviations and/or extra work
performed, price escalation and applicable taxes etc., under the
Agreement No. 06-SBD/2020-21.
3. The respondents failed to respond to the request of
the petitioner, and as such , the petitioner has filed this petition
for appointment of the arbitrator.
4. The learned counsel for the State on behalf of the
Respondent Nos. 1 to 5 has filed counter affidavit wherein a
specific stand has been taken in paragraph nos. 5 and 16, which
is as follows:
“5. That at the outset, it is submitted that
the present application is not maintainable
in view of judgment/order dated 05.10.2024
passed in Civil Review No. 181 of 2023
(State of Bihar vs. Kashish Developer
Limited) by this Hon’ble Court.
16. That in reply to the statement made in
Paragraph Nos. 15 and 16 of the petition, it
is submitted that no arbitrator can be
appointed under Section 11 of Arbitration
and Conciliation Act, 1996 as there is no
such provision in the contact as has been
held in the matter of Civil Review No. 181
of 2023, State of Bihar vs. Kashish
Developers Limited, by this Hon’ble Court
(supra).”
4.1. The learned counsel for the State also placed the
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decision of this Court in the aforesaid Civil Review Case No.
181 of 2023 wherein it is held in paragraph no. 15 as follows:
15. On the above reasoning, this Court
finds that the present cases are almost
similar to Municipal Corporation of
Greater Mumbai (supra); wherein there
was a specific clause that there shall be no
arbitration. In the present case, there is no
provision for arbitration, if the appointment
is not made by the Engineer-in-Chief or the
administrative head of the Public Works
Division. In the context of the disability
visited on the Engineer-in-Chief and the
administrative head to make appointment of
an arbitrator; the agreement does not have
a clause for arbitration and the parties will
have to approach the Civil Court or any
other appropriate forum. That this Court
failed to notice the specific provision in the
arbitration agreement is an error on the
face of record.”
5. The learned counsel for the petitioner, on the other
hand, placed the agreement and more specificly clause 25 of the
agreement which, inter alia, states as follows :
“CLAUSE-25 Except where otherwise
provided in the contract all questions and
disputes relating to the meaning of the
specifications, design, drawings and
Instructions here-in-before mentioned and as
to the quality of workmanship or materials
used on the work or as to any other question,
claim right matter or thing whatsoever in any
way arising out of or relating to contract,
designs, drawings, specifications, estimates,
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Instructions, orders or these conditions or
otherwise concerning the works or the
execution or failure to execute the same
whether arising during the progress of the
work or after the cancellation, termination,
completion or abandonment thereof shall be
dealt with as mentioned hereinafter.
(i) If the contractor considered any work
demanded of him to be outside the
requirements of the contract, or dispute any
drawings, record or decision given In writing
by the Engineer-In-Charge on any matter in
connection with or arising out of the contract
or carrying out of the contract or carrying
out of the work, to be unacceptable, he shall
promptly within 7 days request the
Superintending Engineer in writing for
written instruction or decision. Thereupon,
the Superintending Engineer shall give his
written instructions or decision within a
period of fifteen days from the receipt of the
contractor's letter.
If the Superintending Engineer falls to give
his instructions or decision in writing within
the aforesaid period or if the contractor is
dissatisfied with the instructions or decision
of the Superintending Engineer, the
contractor may, within 15 days of the receipt
of Superintending Engineer's decision, appeal
to the Chief Engineer who shall afford an
opportunity to the contractor to be heard, if
the latter so desires, and to offer evidence in
support of his appeal. The Chief Engineer
shall give his decision within 30 days of
receipt of contractor's appeal. If the
contractor is dissatisfied with this decision,
the contractor shall within a period of30 days
from receipt of the decision, give notice to the
Chief Engineer for appointment of arbitrator
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failing which the said decision shall be final
binding and conclusive and not referable to
adjudication by the arbitrator.
(ii) Except where the decision has become
final, binding and conclusive in terms of Sub
Para (i) above disputes or difference shall be
referred for adjudication through arbitrator
appointed by Engineer-in-Chief or the
administrative head of the said P.W.D. If the
arbitrator so appointed is unable or unwilling
to act or resign his appointment or vacates
his office due to any reason whatsoever
another sole arbitrator shall be appointed in
the manner aforesaid. Such person shall be
entitled to proceed with the reference from the
stage at which it was left by his predecessor.
It is a term of this contract that the party
invoking arbitration shall give a list of
disputes with amounts claimed in respect of
each such dispute along with the notice for
appointment of arbitrator and giving
reference to the rejection by the Chief
Engineer of the appeal.
It is also a term of this contract that no
person other than a person appointed by such
Engineer-in-Chief or the administrative head
of the department as aforesaid should act as
arbitrator and if for any reason that is not
possible, the matter shall not be referred to
arbitrator at all.
It is also a term of this contract that if the
contractor does not make any demand for
appointment of arbitrator in respect of any
claims in writing as aforesaid within 45 days
of receiving the Intimation from the Engineer-
in-Charge that the final bill is ready for
payment, the claim of the contractor shall be
deemed to have been waived and absolutely
barred and the Government shall be
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discharged and released of all liabilities
under the contract in respect of these claims.
The arbitration shall be conducted in
accordance with the provisions of the
Arbitration and Conciliation Act, 1996 (26 of
1996) or any statutory modifications or re-
enactment thereof and the rules made there
under and for the time being in force shall
apply to the arbitration proceeding under this
clause.
It is also a term of the contract that if any fees
are payable to the arbitrator these shall be
paid equally by both the parties.
It is also a term of the contract that the
arbitrator shall be deemed to have entered on
the reference on the date he issues notice to
both the parties calling them to submit their
statement of claims and counter statement of
claims. The venue of the arbitration shall be
such place as may be fixed by the arbitrator
in his sole discretion. The fees, if any, of the
arbitrator shall, if required to be paid before
the award is made and published, be paid half
and half by each of the parties. The cost of
the reference and of the award (Including the
fees, if any, of the arbitrator) shall be in the
discretion of the arbitrator who may direct to
any by whom and in what manner such costs
or any part thereof shall be paid and fix or
settle the amount of costs to be so paid.”
5.1. Learned counsel for the petitioner placed
reliance in the case of Hindustan Construction Company Ltd.
-Versus- Bihar Rajya Pul Nirman Nigam Limited and Others
reported in 2025 SCC OnLine SC 2578, wherein Issue No. 2
was quoted, which is as follows :
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Issue No.2
“Whether a valid and subsisting arbitration
agreement exists between the parties within
the meaning of Section 7 of the A&C Act, and
whether Clause 25 of the agreement satisfies
the statutory requirements of an arbitration
clause.”
The Hon’ble Supreme Court after quoting the Clause
No. 25 of the agreement in paragraph no. 12.9 where similar
clause was there, has been pleased to hold as follows:
“12.11. This principle was reaffirmed in
Central Organisation for Railway
Electrification v. ECI SPIC SMO MCML
(JV)27, and conclusively settled by the
Constitution Bench in CORE II v. ECI SPIC
SMO MCML (JV)28, wherein, it was held that
unilateral appointment clauses in public-
private contracts violate Article 14 and offend
the principle of nemo judex in causa sua. The
Constitution Bench observed in paragraph 164
as follows:
"Unilateral appointment clauses in a
public-private contract fail to provide
the minimum level of integrity required
in authorities performing quasi-
judicial functions such as arbitral
tribunals. Therefore, a unilateral
appointment clause is against the
principle of arbitration, that is,
impartial resolution of disputes
between parties. It also violates the
nemo judex rule which constitutes the
public policy of India in the context of
arbitration. Therefore, unilateral
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appointment clauses in public-private
contracts are violative of Article 14 of
the Constitution for being arbitrary, in
addition to being contrary to the
equality principle under the
Arbitration Act.”
12.12. Accordingly, the portion of Clause 25
that vests exclusive appointment power in
one party and forecloses arbitration in
default of such appointment must be severed
as void and unenforceable. However, the
substantive agreement to arbitrate survives
by virtue of the doctrine of severability.”
6. In view of such ratio laid down by the Hon’ble
Supreme Court, I am of the humble view that the portion of
Clause 25 in the agreement which has been executed in the case
in hand vesting exclusive appointment power in one party i.e.
the Engineer-in-Chief or the administrative head of the P.W.D.
and forecloses arbitration in default of such appointment, must
be severed as void and an unenforceable. However, the
substantive agreement to arbitrate survives by virtue of doctrine
of severability.
In Hindustan Construction Company Ltd. (supra), it
has been further held in paragraph nos. 12.16 and 14 as follows :
“12.16. In light of the above discussion, the
following propositions emerge:
(i) The parties' conduct clearly
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demonstrates their intention to arbitrate,
satisfying the requirement of Section 7(4)(c);
(ii) Clause 25, in its substantive
form, constitutes a valid arbitration
agreement;
(iii) The unilateral and
exclusionary appointment mechanism is void
and severable; and
(iv) This Court is empowered
under Section 11(6) to cure the defect and
appoint an independent arbitrator.
xx xx xx xx
14. In the present case, the respondents have
placed considerable reliance on the fact that
the decision in Kashish Developers, which was
referred to by the High Court in the impugned
judgment, stands "affirmed" on account of the
dismissal of the Special Leave Petition.
However, the circumstances in Kashish
Developers involved appointment made without
affording the State an opportunity to oppose it.
Whereas, the present matter arose after
extensive pleadings, objections, and
participation by both parties. The two cases are
therefore factually distinct, and such reliance
cannot justify revisiting or unsettling the
earlier appointment order.
14.1. It is necessary to restate the
well-settled legal position regarding the
precedential value of orders dismissing Special
Leave Petitions. A non-speaking dismissal of
an SLP signifies only that this Court, in its
discretion under Article 136, has declined to
interfere. It does not amount to approval of the
reasoning of the subordinate forum. The
doctrine of merger does not apply to such
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dismissals. This position has been consistently
affirmed by this Court, including
Kunhayammed v. State of Kerala; and P.
Singaravelan v. District Collector, Tiruppur.
14.2. Similarly, in State of Uttar
Pradesh v. Atul Kumar Dwived, after reviewing
earlier authorities, this Court reiterated that
dismissal of an SLP at the threshold without
reasons does not elevate the underlying
judgment to binding precedent unless
accompanied by an express declaration of law
under Article 141.
14.3. Accordingly, the respondents'
reliance on the supposed "affirmation" of
Kashish Developers is wholly misconceived. A
non-speaking dismissal of an SLP neither
endorses the reasoning of the judgment
challenged nor transforms it into binding
precedent. At best, such a decision has
persuasive value; its only legal effect is to
bring finality to the dispute between the parties
in that particular case.”
7. In view of the foregoing discussions, I am of the
humble view that in spite of the Clause no. 25, this Court has
got ample power for appointment of arbitrator and there is no
legal impediment in the adjudication of dispute by the arbitrator
more particularly when the dispute arises out of the agreement
which is being civil in nature and the petitioner having
exhausted the channel available for resolution of the dispute.
8. In view of such finding as arrived at and on
consensus of both the learned counsel for the parties, Hon’ble
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Mr. Justice Shyam Kishore Sharma, former Judge of this Court,
is appointed as learned Arbitrator to adjudicate all disputes
arising out of agreement entered into between the parties to the
lis.
9. All the pleas and issues raised, on merits, are left
open to be considered and decided by the learned Arbitrator.
10. The learned Arbitrator shall be entitled to fee as
per the Schedule of the Act.
11. Since the dispute arises out of an agreement of
the year 2021, the hearing be expedited.
Parties undertake to fully cooperate and not to take
any unnecessary adjournment.
The issue of limitation, if any, is left open to be
raised before the learned Arbitrator.
12. Joint Registrar (List) is directed to communicate
the order to the learned Arbitrator.
13. Learned counsel for the parties also undertake to
communicate the order to the learned Arbitrator.
14. The Arbitral Tribunal shall issue notice to the
parties.
15. The Request Petition stands disposed of in the
above terms.
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16. Interlocutory Application(s), if any, shall stand
disposed of.
(Sangam Kumar Sahoo, CJ)
shailendra/-
AFR/NAFR
CAV DATE
Uploading Date 16.02.2026
Transmission Date
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