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Nilaratanprasad Shaw Vs. State of Orissa - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberMisc. Appeal No. 335 of 1983
Judge
Reported inAIR1986Ori194; 60(1985)CLT191
ActsArbitration Act, 1940 - Sections 8, 29 and 30
AppellantNilaratanprasad Shaw
RespondentState of Orissa
Appellant AdvocateR.K. Rath, Adv.
Respondent AdvocateD.P. Sahoo, Standing Counsel
DispositionAppeal allowed
Excerpt:
.....[new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - (iii) whether the impugned award made by the arbitrator without determination of points in issue is bad in law and is to be set aside? 1982, part of the judicial index would certainly hold good in respect of contracts which came into existence after 31-10-78, but in respect of contracts entered into prior to that date, the memorandum of the works department referred to above shall prevail......to decide the disputes. after considering the claim and counter claim of the parties, the learned arbitrator by his award dated 29-11-1982 gave an award for rs. 1,81,379.93 together with interest in favour of the appellant. the appellant moved the court to make the award a rule of the court, the respondent filed objections under sections 30 and 33 of she act and prayed for rejection of the award. upon consideration of the respective cases of the parties, the learned lower court framed the following three issues : --'(i) whether the arbitrator had jurisdiction to enter into the proceeding? (ii) whether the award of interest is justified? (iii) whether the impugned award made by the arbitrator without determination of points in issue is bad in law and is to be set aside?' after.....
Judgment:

B.N. Misra, J.

1. This appeal has been filed under Section 29(l)(vi) of the Arbitration Act, 1940 (hereinafter referred to as the 'Act'). The appellant is a registered Contractor under the State Government. The respondent; entrusted him with the work of widening the : pavement of National Highway No. 5 from 209 Km. to 214/O Km. vide agreement No. 30 12 of 1973-74, Thereafter disputes arose between the parties and on being moved by the appellant, the Chief Engineer appointed the Superintending Engineer, Investigation Circle, Bhubaneswar as the Arbitrator to decide the disputes. Thereafter the appellant applied to the court for removal of the said Arbitrator and this prayer of the appellant was allowed after hearing both parties. Finally the Court appointed Shri S.K. Das, Member of the Arbitration Tribunal, Orissa as the Arbitrator to decide the disputes. After considering the claim and counter claim of the parties, the learned Arbitrator by his award dated 29-11-1982 gave an award for Rs. 1,81,379.93 together with interest in favour of the appellant. The appellant moved the Court to make the award a rule of the Court, The respondent filed objections under Sections 30 and 33 of she Act and prayed for rejection of the award. Upon consideration of the respective cases of the parties, the learned lower court framed the following three issues : --

'(i) Whether the arbitrator had jurisdiction to enter into the proceeding?

(ii) Whether the award of interest is justified?

(iii) Whether the impugned award made by the arbitrator without determination of points in issue is bad in law and is to be set aside?'

After consideration of the matter the learned lower court set aside the award and dismissed the appellant's application on finding that the sole Arbitrator Shri S.K. Das did not have jurisdiction to enter upon the reference and pass an award and that the award of interest by the learned Arbitrator beyond the date of the award was without jurisdiction.

2. Mr. R.K. Rath, learned counsel appearing for the appellant, submitted that Shri S.K. Das, a member of the Arbitration Tribunal, was appointed as the sole Arbitrator according to the nomination filed by the learned Government Pleader who appeared for the respondent in the court below. This position is not disputed by the learned Standing Counsel who appears on behalf of the respondent in this Court. Mr. Rath has further urged that the finding of the learned Subordinate Judge that Shri S.K. Das was incompetent to sit as the sole Arbitrator cannot be sustained in law. It is pointed out that in respect of works contracts executed prior to 30-104978 the Works Department of the State of Orissa had issued instructions vide their Memorandum No. 34029 date 21-12-80 to the effect that in respect of such contracts members of the Tribunal could be individually appointed as Arbitrators. A copy of the Memorandum has been filed in this Court and the relevant portion is extracted here under. :

'It is, therefore, felt necessary that the Chief Engineer/Addl. Chief Engineers instead of appointing Arbitrators at the request of the contractors as hithertofore they were doing for settlement of disputes arising out of contracts executed prior to 30-10-78, should preferably change their strategy in the sense that they should refrain from responding to the notice received from the concerned contractors for appointment of Arbitrators, Consequently, the contractors may approach the court for appointment of Arbitrators to settle their disputes. In such cases the Departmental authorities should suggest to the court the name of any of the Members to act as Arbitrator to adjudicate upon disputes arising out of contracts. In cases, where their requests to the court are rejected, they should take steps to take the matter to the higher court.'

The instructions contained in the aforesaid memorandum are to the effect that when the contractors approach the courts for appointment of Arbitrators to settle their disputes, the departmental authorities should suggest the name of any of the members of the Tribunal to act as the Arbitrator. This instruction has been followed in this case and the learned Government Pleader had accordingly suggested the name of Shri Section K. Das for appointment as the sole Arbitrator although he was then a member of the Tribunal keeping in view the fact that the agreement in this case relates to the year 1973-74. It appears that this memorandum was not brought to the notice of the learned lower court while the matter was pending there. The observations of this Court contained in the Aug. 1982, Part of the Judicial Index would certainly hold good in respect of contracts which came into existence after 31-10-78, but in respect of contracts entered into prior to that date, the memorandum of the Works Department referred to above shall prevail. In this view of the matter, I must hold that the learned lower court erred in law in coming to hold that the appointment of Shri Section K. Das was improper and that Shri S.K. Das did not have jurisdiction to enter upon the reference and pass the award.

3. The learned lower court has further held that the learned Arbitrator did not have jurisdiction to grant interest beyond the date of the decree as the power to grant interest beyond the date of the decree vests exclusively in the court under Section 29 of the Act. This observation of the learned lower court is correct to that extent. I have gone through the award which is a non-speaking one and there are no errors of law apparent on the face of the award justifying interference by this Court. For the reasons stated above, this appeal is allowed. The impugned judgment of the learned lower court is set aside and the award of the learned Arbitrator is made a rule of the Court. In exercise of the powers contained in Section 29 of the Act, I direct that interest on the principal sums shall be paid as per directions contained in the award.

No costs.


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