Inderjit Mehta Constructions Private Ltd. vs Union of India and Others

Navita Singh, J.

This appeal is filed against the judgment passed by District Judge, Jalandhar on 19.5.2011, whereby the objection petition under Section 34 and application under Section 37 of the Arbitration and Conciliation Act (Act for short) filed by the appellant was dismissed. The back-drop of the case is that the appellant had submitted twelve claims to the appropriate authority i.e. Engineer-in-Chief, New Delhi, for appointing an Arbitrator for settling the dispute between the parties. The Appointing Authority instead of referring all the claims to the Arbitrator, namely, Mr. T.K. Saha, directed the Arbitrator to adjudicate ten claims only, the detail of which was appended with his appointment letter. Two claims, which were major ones, therefore, stood excluded from the reference to the Arbitrator on the plea that those were excepted matters. Since the Arbitrator was empowered to decide his jurisdiction under Section 16 of the Act, the appellant put up the two excluded claims before the Arbitrator but the latter declared those to be beyond jurisdiction as they were not referred to him. The said decision of the Arbitrator was challenged in the District Court, Jalandhar but the petition of the appellant was dismissed.

The appellant, therefore, filed a petition under Section 11 of the Act before this Court praying that the Appointing Authority be directed to refer the two left out claims as well, for adjudication of the Arbitrator. This court directed the respondent to refer the dispute to the Arbitrator and accordingly the claims were referred to new Arbitrator Mr. Baljit Singh. Both the parties submitted their claims. The respondent took an objection that the two claims submitted later on were beyond the jurisdiction of Arbitrator as those were excepted matters and decision in that regard is given by the Accepting Officer.

The Arbitrator passed an award, holding that the claims were not arbitrable, though inconsistent with the decision of the previous Arbitrator Mr. T.K. Shah. The Arbitrator was required to first pass an order on the objections of the appellant and if the same were rejected, then he should continue with the proceedings and make an award.

Respondent No. 1 i.e. Union of India filed a reply before the District Judge, Jalandhar that the award was passed in a legal manner and did not call for any interference. An order had already been passed by the District Judge, Jalandhar earlier on 20.8.2004 in a petition under Section 37 of the Act filed by the appellant and, therefore, no fresh award could be passed.

This court in view of clause 6-A of the contract held that there was a dispute with regard to the applicability and interpretation of the said clause and, therefore, it was for the Arbitrator to adjudicate on the dispute. A perusal of the order of this Court passed on 6.8.2007 shows that it was left on the Arbitrator to interpret and decide the applicability of clause 6-A to the claims as enumerated by the appellant. It was not made clear in the order as to whether the entire dispute would be decided afresh by the second Arbitrator or whether it would be decided again by the first Arbitrator or whether only the left out claims were to be decided.

It was argued by the counsel for the appellant that the order dated 20.8.2004 passed earlier merged in the order of this Court when the petition filed by the appellant under Section 11 of the Act was allowed.

Learned counsel appearing for the respondent, on the other hand, contended that no appeal having been filed against the order dated 20.8.2004, it had become final. While moving this Court, the appellant did not bother to disclose that an order under Section 37 of the Act had already been passed by District Judge, Jalandhar on 20.8.2004. The appellant did not come with clean hands and did not deserve any relief.

It may be pertinent to mention that initially the award was passed in 2003. An appeal under Section 37 of the Act was filed by the present appellant, which was dismissed. Thereafter, this Court directed the respondent to refer the matter to the second Arbitrator, who passed an award on 20.2.2009 against that the appellant. The appellant filed objection petition, which was decided against the appellant by the District Judge, Jalandhar and now the appeal.

It is rightly pointed out on behalf of the respondent that no appeal having been preferred against the order dated 20.8.2004, the same became final. While knocking the door of this Court, the appellant purposefully concealed the fact that such an order had been passed and moved an application under Section 11 of the Act instead of challenging the order of District Judge, Jalandhar. This Court passed an order dated 6.8.2007 directing the respondent to refer the matter for arbitration in terms of clause 6-A of the contract. How the appellant was entitled at that time to move an application under Section 11 of the Act is not explained especially by concealing the fact of passing of the previous order. The appellant was frantically trying to get the desired result.

Then second time, the result again did not favour with the appellant, who moved the District Judge, Jalandhar. It is also un-understandable as to how a petition under Section 34 of the Act and an appeal under Section 37 of the Act were jointly filed by the appellant before the court below. Learned counsel for the appellant stated that the Arbitrator could not have passed an award and the so called award of 2003 was no award in the eyes of law. If that be the case, why a petition under Section 34 and 37 of the Act was filed by the appellant, remains beyond comprehension. Unless he accepted the verdict of the Arbitrator to be an award, no objection petition could be filed under Section 34 of the Act and if it was an award, objections if any, against the said award can be and should have been, filed and section 37 of the Act did not come into play. Simply by writing that the petition was filed under Sections 34 and 37 of the Act, it would not be taken that an appeal was being filed relating to Section 16 of the Act as propounded by the appellant at the time of arguments now.

The first award which was passed in 2003 had become final after the order was passed by District Judge on 20.8.2004 as no appeal was filed by the appellant against that order. The order earlier was passed by the District Judge, Jalandhar in an appeal filed by the appellant under Section 37 of the Act against the award passed by the then Arbitrator Mr. T.K. Shah. The appeal was dismissed and the order became final as it was not challenged any further.

The appellant thus created an anomalous situation for himself and then by concealing the passing of an order in 2004 moved under Section 11 of the Act, though in the given facts and circumstances, fresh appointment of Arbitrator was not called for. The appellant should rather have challenged the order passed in the year 2004. In view of the discussion made above, the appeal is dismissed.