Jagdish Chander Gupta vs MD, JKPCC Ltd and Others

Sunil Hali, Judge

Some work relating to shuttering of blocks at Police Training College, Udhampur, was allotted to the petitioner-claimant. As dispute arose

between the parties due to non completion of the work and resultant non release of the amount payable to the complainant, which as per him was

due to non release of the shuttering by the respondents, an arbitration application bearing No.5/95 came to be filed by the claimant in this court, for

referring the dispute to an independent arbitrator. The said petition was directed to be transferred to the court of learned District Judge,

Udhampur, for disposal, who vide order dt. 31st of May'97, taking note of the fact that the agreement/allotment order itself specifies and names

the arbitrator, rejected the application of the claimant and referred the matter to the Managing Director J&K Projects Construction Corporation

Ltd, Srinagar, for deciding the matter and publishing the award within four months from the date he receives the order of reference.

Against the aforementioned order, a revision petition was filed by the claimant, which was allowed and one Sh B.D. Nayyar, retired District &

Sessions Judge was appointed as the arbitrator but he could not complete the proceedings and in his place a new arbitrator was appointed by this

court, who has passed the award dt. 12th of Feb'08, and submitted the same to this court for making it rule of the court. It is this award which is

subject matter of challenge in the present arbitration application u/s 34 of the Jammu and Kashmir Arbitration & Conciliation Act, 1997 (here-in-

after called the Act of 1997).

Learned counsel for the respondent-J&K Project Construction Corporation (here-in-after referred to as the Corporation), submitted that the

learned arbitrator while passing the impugned award has not considered the objections filed by the Corporation and the evidence led by it in

support of the objections to the claim filed by the claimant. It is stated that the rates approved by the Corporation for the works to be done by the

claimant were not taken into consideration and assessed the loss alleged to be incurred by him on day to day basis which is not in accordance with

the norms laid down by the Corporation in this regard. It is stated that even the interest component which has been allowed, is on the higher side. It

is contended that loss, if any, suffered by the claimant was not due to the fault of the Corporation but it was the claimant who failed to collect its

material from the site. It is further contended that the learned arbitrator has taken into consideration the alleged verbal order for allotment of work

for Block-E, Lower subordinate quarters, PTC, Udhampur, whereas, infact, there was no sanction/confirmation for the said work by the

competent authority, and as such, the loss assessed and the claim allowed in respect of the said work, is not in accordance with the law.

The claimant has filed objections as also rejoinder to the application filed by the Corporation. A preliminary objection has been taken to the

effect that the proceedings in the present case have been initiated by the learned Arbitrator in terms of the provisions of The Jammu & Kashmir

Arbitration Act, 2002 (here-in-after referred to as the Old Act), and not under the Act of 1997. It is stated that the application, if any, could be

filed by the Corporation invoking the provisions of Old Act within a period of one month. It is thus stated that the application having neither been

filed under the provisions of Old Act nor the same having been filed within the stipulated period aforementioned, is liable to be dismissed.

It is further contended that the notice of filing of the award was received by the Corporation on 10th of April'08, whereafter an application was

moved for issuance of certified copy of the award on 6th of May'08, which was received by them' on 15th of May'08. It is stated that the present

application has been filed on 10th of July'08, and there is no explanation to that effect as to why there was delay in filing the said application. It is

thus submitted that the application of the Corporation for setting aside of the award, may be dismissed.

The award in this case was filed in the court by the arbitrator and notice was issued to the parties on 24th of March'08. After receipt of the

notice, respondent Objectors and the claimant appeared in the court on 28th of April'08. On receipt of the notice, an application was filed by the

respondent u/s 34 of the Act of 1997, on 10th of July'08, seeking setting aside of the award. The claimant filed objections to the said application

on 24th of Sept'08.

A preliminary objection, as indicated above, has been taken by the claimant that the award could be questioned under the Old Act as the

arbitral proceedings were initiated in the year 1995.

The contention of the learned counsel for the respondent-objector is that the reference to the arbitrator has been made after coming into force

the Act of 1997, as such, the provisions of the said Act would apply in the present case.

I have heard learned counsel for the parties and perused the record.

In order to understand the controversy raised in this petition, the expression ""initiation of arbitration proceedings"" is required to be interpreted.

Section 21 of the Act of 1997, lays down as to when the arbitral proceedings are said to be initiated. In terms of clause (a) of the said Section, the

proceedings shall commence on the date a request is made for referring the matter to the arbitrator.

Under the Old Act, the arbitration proceedings may be initiated with the intervention of the court or without intervention. When the

proceedings are initiated without the intervention of the court, Section 8 of Chapter II would apply.

In the present case, it is not in dispute that the proceedings were initiated under the Old Act and the matter was referred to the arbitrator u/s 20

of the said Act. Section 68 of the Act of 1997 is a repealing Section. It contemplates that after coming into force of the said Act, the proceedings

initiated shall be governed under the provisions of this Act only. However, an exception has been provided that, in case, the arbitral proceedings

have been initiated prior to the coming into force of the Act, these shall be governed by the old Act unless parties by an agreement intend to

proceed under the new Act. This agreement between the parties would relate to the proceedings before the arbitrator alone and not before the

court. The expression ""arbitral proceedings"" has been interpreted by the Apex Court in the case reported as N.S. Nayak and Sons, Heera

Constructions and Rani Constructions Pvt. Ltd. Vs. State of Goa and Another, , and also by me in the case of Union of India and ors v. Engineers

Builders, AA 8/2008, decided on 7th of Dec'09. At page 8 of the judgment, following observations were made:

The principles enunciated on the subject show as to when a right accrues to a party under the repealed Act. It is not necessary that for the right to

accrue legal proceedings must be pending when the new Act comes into force. To have the award enforced when arbitral proceedings

commenced under the old Act under that very Act is certainly a right which has accrued. Consequences for the party against whom award is given

after arbitral proceedings have been held under the old Act though given after the new Act came into force, would be quite grave if it is debarred

from challenging the award under the provisions of the old Act.

This in essence is the object and purpose of saving clause in the repeal provision of 1997. The saving provisions under new Act preserve the

existing right accrued under old Act unless language of the Act clearly indicates to the contrary. The parties, however, can agree to the applicability

of the Act of 1997 even before the Act of 1997 came into force while the Act of 2002 was still in force.

In the present case, as already stated above, the arbitral proceedings were initiated under the Old Act. The award was filed in this court and

notices were issued to the parties on 24th of March'08, for filing objections. The objectors filed petition u/s 34 of the new Act on 10th of July'08.

Objections to the said petition were also filed. The petition u/s 34 of the Act, was filed under a wrong impression that the award was required to

be enforced by taking recourse to the provisions of the Act of 1997. As already mentioned here-in-above, the proceedings were required to be

initiated under the old Act, which requires filing of the award by the arbitrator through intervention of the court or on an application moved by

either of the parties'. After filing of the award, a notice u/s 14(2) of the Act is required to be served upon the parties and the party aggrieved of the

award is required to file the objections within a period of 30 days, which admittedly has not been done in the present case. The objections have

been filed beyond the period of limitation i.e. on 10th of July'08, as such, the same could not have been entertained by the court.

For the reasons mentioned above, the application filed by the respondents is dismissed being time barred. Award is made rule of the court.

Decree be prepared accordingly.