Mahanadi Coalfields Ltd. And Another vs Sri Ram Construction

Arindam Sinha, J

Mr. Mohanty, learned senior advocate appears on behalf of appellants. He submits, impugned is judgment dated 24th  September, 2005 of the Court below in rejecting his client’s challenge to award dated 31st March, 2004.

He submits, there was executed agreement dated 22nd December, 1997 between respondent and his client, wherein his client was employer and respondent was contractor. The agreement was for construction of 336 ‘A’ type quarters at Lingraj Township of Talcher Area. The contract was valued at Rs.7,13,43,281.28 in the agreement subject to any other sum that may be arrived at under specifications clause. On notice of respondent, arbitration clause in the notice inviting tender, made part of the agreement, was scored out. Parties were aware, therefore, the award of work under the agreement did not contain arbitration agreement/clause.

On the contractor having procured materials, said to be for purpose of constructing under the agreement, it applied for advance to his client. His client agreed to advance Rs.70 lakhs under independent agreement dated 9th February, 1998. The agreement for extending advance contained arbitration clause.

He hands up a compilation of documents, statement of facts and claims and the award. He furnishes copies to Court, to be obtained by respondent since, respondent is represented by Mr. Panda, online. Respondent is at liberty to obtain copies of the documents handed up to Court today or by tomorrow.

Respondent alleged disputes had arisen. By letter dated 1st November, 1999 respondent gave notice for invocation of arbitration agreement in agreement dated 9th February, 1998. There was clear and unambiguous admission in said letter that arbitration clause-14, in the tender made part of agreement dated 22nd December, 1997, was deleted.

Mr. Mohanty submits, the law regarding appointment of arbitrator under section 11 in Arbitration and Conciliation Act, 1996 was, at that time, a request to be made to the Chief Justice and the appointment an administrative act. Respondent requested the Chief Justice and, without direction for issuance of notice there was order dated 16th May, 2001 appointing arbitrator.

On learning of appointment of arbitrator, appellants applied for review. By order dated 30th August, 2001 the review application was rejected. His client then by letter dated 31st  July, 2001 questioned jurisdiction of the arbitrator on ground that claims were made in respect of agreement dated 22nd December, 1997, which did not have arbitration clause.

He refers to the award to demonstrate from paragraph-8 therein, the point was taken. The arbitrator illegally found that agreement dated 22nd December, 1997 (Ext.6 in the reference) forms part of agreement dated 9th February, 1998 (Ext.18 in the reference). The arbitrator went on to award Rs.3,93,72,100/-and directed payment of interest at 17% per annum till date of payment. Mr. Mohanty refers to the statement of claim, page-17, in which is the schedule of the claims. He submits, each and every claim was made under agreement dated 22nd December, 1997.

Mr. Panda prays for adjournment on not having earlier received copies of the documents handed up.

List on 18th October, 2022.

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