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Union of India (Uoi) and ors. Vs. Allied Construction Company - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberCivil Revn. Nos. 17 and 18 of 1982
Judge
Reported in54(1982)CLT363
ActsArbitration Act, 1940 - Sections 11(2) and 13; Code of Civil Procedure (CPC) , 1908 - Sections 115
AppellantUnion of India (Uoi) and ors.
RespondentAllied Construction Company
Appellant AdvocateP.C. Misra, ;S.C. Ray, ;S.P. Misra, ;D. Das, ;S.K. Choudhury and ;S. Latif, Advs.
Respondent AdvocateP. Palit, ;J. Patnaik, ;R. Mohapatra and ;A.K. Bhagat, Advs.
DispositionRevision dismissed
Cases ReferredState of Orissa v. Gangaram Chhapolia
Excerpt:
.....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]. - p palit, learned counsel for the opposite party, repelled the submissions of mr roy stating that the arbitrator is the best judge of the procedure he has to adopt and follow......the learned counsel for the petitioners, has candidly stated so. the arbitrator having refused to state a special case for the opinion of the court, the two applications were filed before the learned subordinate judge, balasore, under sections 5, 11 and 33 of the indian arbitration act for removal of the arbitrator. the said applications were numbered as miscellaneous cases nos. 135 and 136 of 1980.4. the points raised in the court below and in these revisions are identical and so, are disposed of by this common judgment. mr. s. c. roy, learned counsel for the petitioners, has urged that the applications were under section 20 of the arbitration act and inasmuch as the disputes have not been referred to the arbitrator, the proceedings before the arbitrator were void. he has further urged.....
Judgment:
ORDER

R.C. Patnaik, J.

1. These two revisions arise out of orders passed by the learned Subordinate Judge, Balasore, rejecting the two applications filed by the petitioners for removal of the arbitrator.

2. The opposite party entered into agreements with the petitioner, namely, contract No. 20 of 1971-72 and contract No. 7 of 1971-72 for construction of storage and residential quarters at Chan-dipur in the district of Balasore. Disputes having arisen. Original Suits Nos. 36 of 1974 and 37 of 1974 were filed under Section 8 read with Section 20 of the Indian Arbitration Act, 1940. The applications were allowed and an engineer was appointed to act as arbitrator. Miscellaneous Appeals Nos. 9 of 1977 and 10 of 1977 were filed in this Court. The challenge was relating to the personnel of the arbitrator. In para 3 of the Judgment of this Court, disposing of both the appeals in a common judgment, it has been held:--

''It is not disputed that a notice for reference of the dispute to arbitration had been issued to the competent authority and no action was taken by him. The provisions of Sub-section (2) of Section 8 of the Arbitration Act are clear. If the appointment under the arbitration clause is not made within fifteen clear days after service of the notice, the court is entitled on the application of the party who gives the notice and after giving the other parties an opportunity of being heard to appoint an arbitrator.....and the revisions were dismissed. The petitioners carried Civil Appeals Nos. 104-105 of 1978. Before the Supreme Court it was contended that the refer-ence to arbitration was premature, but the plea was, however, not entertained and the Supreme Court confirmed the appointment of the arbitrator. The arbitration proceedings thereafter made some headway before the arbitrator.

3. The petitioners have alleged that the claim of the opposite party was considerably inflated by way of filing additional claims before the arbitrator. During the pendency of the proceedings before the arbitrator, the petitioners moved the arbitrator for stating a special case for the opinion of the court on thequestion of his jurisdiction and obtain a clarification as to whether the applications in Original Suits Nos. 36 and 37 of 1974 were disposed of under Section 8 or un-der Section 20 of the Arbitration Act. They further alleged that the arbitrator misconducted himself and the proceeding by making some observations regarding the claim of the opposite party. The second point, however, has not been pressed and has been given a go-by. Mr. S. C. Roy, the learned counsel for the petitioners, has candidly stated so. The arbitrator having refused to state a special case for the opinion of the court, the two applications were filed before the learned Subordinate Judge, Balasore, under Sections 5, 11 and 33 of the Indian Arbitration Act for removal of the arbitrator. The said applications were numbered as Miscellaneous Cases Nos. 135 and 136 of 1980.

4. The points raised in the court below and in these revisions are identical and so, are disposed of by this common judgment. Mr. S. C. Roy, learned counsel for the petitioners, has urged that the applications were under Section 20 of the Arbitration Act and inasmuch as the disputes have not been referred to the arbitrator, the proceedings before the arbitrator were void. He has further urged that the arbitrator, having regard to the question of jurisdiction raised before him, should have stated a special case for the opinion of the court and his refusal amounted to misconduct and warranted his removal. He has further urged that having regard to the claims and the additional claims, the arbitrator should have specified and categorised the disputes so as to enable the petitioners to meet the case of the opposite party. He has urged that categorisation was necessary to enable the petitioners to contend that certain of the items were beyond the jurisdiction of the arbitrator and thus, not arbitrable. He has further submitted that if the applications were under Section 8, the disputes should be specified and particularised by the arbitrator. If on the other hand the applications were under Section 20, the court should have framed the disputes and referred the same to the arbitrator. His submission in sum and substance has been that the petitioners were entitled to know the case they were to meet and that could be possible only by specifying or categorising the disputes.

5. No doubt, the original applications were filed under Sections 8 and 20 of the Arbitration Act. The judgment of the learned Subordinate Judge in Original Suits Nos. 36 and 37 of 1974 and the judgment of this Court in Miscellaneous Appeals Nos. 9 and 10 of 1977 and the Judgment of the Supreme Court in Civil Appeals Nos. 104-105 of 1978 also go to show that.

However, the portion extracted from the judgment of this Court in Miscellaneous Appeals Nos. 9 and 10 of 1977 would go to indicate that the disposal was under Section 8(2) of the Arbitration Act It was not contended otherwise before the Supreme Court.

6. The next question is if the arbitrator misconducted himself in refusing to state a special case for the opinion of the court. Recently I had occasion to consider this question in Civil Revision No. 187 of 1982 and I have held there:

'The arbitrator is under no obligation to state a case. It is discretionary.'

The provision contained in Section 13(b) is an enabling one conferring certain powers on the arbitrator. He cannot be compelled to exercise those powers.

'It is not misconduct for an arbitrator or umpire to refuse to state a special case upon a question of law arising in course of a reference' (see Russel on Arbitration, 19th Edn. 473).

Similar view has been taken in the case of Sewdutrai Narasaria v. Tata Sons Ltd. (AIR 1921 Cal 576). Greaves, J. held:--

'The power to state a special case is merely permissive and enabling and not compulsory and the umpire is not bound to state a special case at the request of a party to the submission.'

I am in respectful agreement with the aforesaid view. The second ground of attack, therefore, fails.

7. The rest of the submissions of the learned counsel for the petitioners related to categorisation or particularisation or specification of the disputes, Mr. P Palit, learned counsel for the opposite party, repelled the submissions of Mr Roy stating that the arbitrator is the best judge of the procedure he has to adopt and follow. The law does not enjoin particularisation or specification of disputes and the submission of the counsel for the petitioners amounted to framing of issues in an arbitration proceeding which is not countenanced in law. In support of his contention, he relied upon a decision of the Calcutta High Court in Arbn. Jupiter General Insce. Co. Ltd. v. Corporation of Calcutta (AIR 1956 Cal 470). P. B. Mukherji, J. held as follows:--

'It cannot be said that the provision of the Civil P. C. regarding the formal framing of issues or their formal determination separately is a procedure at all enjoined as compulsory in an arbitration proceeding,'

8. With great respect to the learned Judge, I enter my dissent and I am of the humble opinion that specification of the controversies, particularisation of the disputes or points of difference are a part of the arbitral process. I have so held in the case of State of Orissa v. Gangaram Chhapolia (Civil Revn. No. 258 of 1982) : (reported in AIR 1982 Orissa 277) judgment wherein is being delivered today. This point, however, has not been urged before the trial Judge. So, this will not be a ground for sustaining an application for removal of the arbitrator. It is, however, open to the petitioners to raise the question before the arbitrator and require him to specify the disputes, the controversies, the points of difference and answer the same in the award.

9. In the result, the orders passed by the learned Subordinate Judge are sustained and the revisions lacking merit, are dismissed. In the circumstances, there would be no order as to costs.


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