Ashok Kumar vs D.D.A.

DB-1 could not assemble on 18th January, 2010, therefore the matter is taken up today.

This appeal u/s 37 of the Arbitration Act, 1996 has been preferred with respect to the order dated 19th May, 2009 of the learned single Judge holding the petition filed by the respondent DDA u/s 14(2) of the Arbitration Act, 1940 to be maintainable and negating the contention of the appellant of the arbitration between the parties being governed b the Arbitration Act, 1996. The facts which emerged are that the arbitrator to adjudicate the disputes between the parties was appointed as per the agreement between the parties as far back as on 23rd May, 1991. The said arbitrator resigned. The respondent - DDA, as per the agreement, was to appoint the substitute but did not appoint the substitute arbitrator. Suit no. 523A of 1997 under the provisions of the 1940 Act was filed by the appellant with the prayer for appointment of the arbitrator owing to the failure of the respondent - DDA to supply the vacancy. The said suit was disposed of vide order dated 26th May, 1998 granting two weeks more time to respondent - DDA to appoint an arbitrator and further holding that upon the failure of the respondent - DDA to so appoint the arbitrator, Hon''ble Mr. Justice J.D. Jain (Retd.) of this court would stand appointed as the arbitrator to decide the disputes.

Notwithstanding the aforesaid order, the appellant filed arbitration application 250/2002 before this court stated to be u/s 11(6) of the 1996 Act. The same was disposed of vide order dated 26th February, 2003 on intimation of Justice J.D. Jain having already been appointed as the arbitrator.

It appears that Justice J.D. Jain also recused himself or resigned. OMP No. 264/2006 stated to be under the 1996 Act was preferred by the appellant in this regard. The same came up before this court on 17th July, 2006 when it was informed by the counsel for the respondent - DDA that the respondent - DDA had appointed Mr. S.S. Jain as the arbitrator. In view of the said statement the said OMP also was disposed of. Mr. S.S. Jain has published an award dated 20th December, 2007 and with respect whereto petition u/s 14(2) of the 1940 Act was preferred by the respondent - DDA and from the order wherein this appeal has arisen. It was the plea of the appellant before the learned single Judge that the application u/s 14(2) of the 1940 Act was not maintainable because the arbitrator was appointed after coming into force of the 1996 Act and the previous arbitrator appointed by the DDA was later on changed under the provisions of the new Act. The learned single Judge held that since the arbitration process had started before coming into force into 1996 Act, the provisions of the old Act will apply. Aggrieved therefrom this appeal has been preferred.

It is stated in the memo of appeal that the respondent DDA did not prefer any objections to the award within the time allowed u/s 34(3) of the 1996 Act; that the appellant applied for execution of the award as a decree and thereafter the application u/s 14(2) was filed.

The counsel for the appellant has vehemently relied upon the order dated 17th July, 2006 (supra) in OMP No. 264/2006 to contend that the appointment of the arbitrator who has published the award, is under the 1996 Act and hence the provisions of the 1940 Act would not apply. We do not agree. No powers were exercised by this Court under the 1996 Act in the said OMP also. The said OMP was disposed of on intimation of the respondent - DDA having appointed a substitute arbitrator. Similarly though arbitration application no. 250/2002 u/s 11(6) of the 1996 Act is stated to have been preferred by the appellant but no power u/s 11(6) also was exercised by the designate of the Chief Justice. The said application was also disposed of owing to the appointment of Justice J.D. Jain as arbitrator in Suit No. 523A of 1997 (supra).

Suit no. 523A of 1997 was admittedly filed by the appellant and after the coming into force of the 1996 Act and under the provisions of the 1940 Act. It is also not in dispute that the arbitration has been pending since 1990 / 1991. In view of the dicta in Milkfood Ltd. Vs. GMC Ice Cream (P) Ltd., , it is no longer res integra that where arbitration commences prior to coming into force of 1996 Act, the 1940 Act will apply.

The counsel for the appellant faced with the aforesaid relied upon Section 85(2) of the Arbitration Act, 1996 to contend that the parties in the present case had agreed to arbitration under the 1996 Act. However, he is unable to show any agreement in this regard. The only contention is that the arbitrator has proceeded as if under the 1996 Act. Reliance in this regard is placed on the arbitrator having exercised powers u/s 33(3) of the 1996 Act for correction of typographical / clerical error in the award. The said power was admittedly exercised suo moto. The exercise of the power by the arbitrator under the 1996 Act cannot tantamount to an agreement by the respondent - DDA for arbitration under the 1996 Act. The counsel for the appellant contends that admittedly payments were also made by the respondent - DDA. The same also does not change the position. Merely because payment of the admitted amount has been made would not tantamount to admission by the appointment of all parts of the award. Even otherwise there is no agreement recorded even in the arbitration award of the parties agreeing to arbitration under the 1996 Act though in page 7 thereof, reference is made to the 1996 Act. However that is not in the context of any agreement. The words "unless otherwise agreed by the parties" in Section 85(2)(a) would apply only when an "agreement" with all the ingredients required thereof under the Contract Act is show. The Supreme Court in Vaishakhi Ram and Others Vs. Sanjeev Kumar Bhatiani, has held that to constitute waiver of benefit conferred by provisions of an Act, conscious relinquishment of such benefit must be proved. Similarly this court in Boota Kam Vs. Balmukand, has held that until and unless it is clearly proved that the person having the ought conclusively decided to forego it or to take advantage of it; waiver is not to be inferred; waiver is a deliberate and conscious act. The same principles will apply here also. One cannot loose sight of the fact that respondent is a statutory body governed by its rules and regulations. There is nothing to show that it agreed to the application of the 1996 Act, to the arbitration proceedings otherwise in law, covered by the 1940 Act.

Having found no merit in any of the contentions of the counsel for the appellant, the appeal is dismissed. No orders as to costs.