EXECUTIVE ENGINEER, PURI ROADS AND BUILDINGS DIVISION v. SRI GOKUL CHANDRA KANUNGO
1985-12-20
S.C.MOHAPATRA
body1985
DigiLaw.ai
JUDGMENT : S.C. Mohapatra, J. - State of Orissa in the Works Department. Chief Engineer, Roads and Buildings and Executive Engineer, Puri Roads and Buildings Division are the Petitioners. They assail the order of the trial court dated 2-9-1985 in this Civil Revision. The impugned order reads as follows: Advocates for both parties file haziras. Original agreement not filed by the Defendants. Direct the Respondent to file the original agreement and to appoint a Special Tribunal by 4-10-1985. 2. Opposite party being entrusted with the construction of the High Level Bridge over the river Daya on the Pipili-Jatni Road, entered into an agreement on 8-7-1969 in the F-2 agreement from which contained as arbitration clause. On rescission of the contract, penalty was imposed on the opposite party and his security deposit was forfeited by the Petitioners which was communicated to the opposite party on 9-11-1976. After issuing a notice on 6-12-1981 and making a claim on 21-12-1981 to the Executive Engineer, an application u/s 20 of the Arbitration Act, 1940 (in short 'the Act') was filed on 21-12-1981 for referring the dispute to an Arbitrator to be appointed by the Court. This application was registered as Original Suit No. 328 of 1981. 3. During pendency of the suit the Act was amended by the State Legislature by the Orissa Act 3 of 1983 inserting Section 41-A which came into operation on 26-3-1983. After the trial court decided to make a reference on 22-6-1984 the opposite party filed a petition for appointment of one of the Superintending Engineers named therein to be the Arbitrator. During pendency of this application, Section 41-A of the Act was further amended with retrospective effect from 26-3-1983 by the Orissa Act 17 of 1984 and the Court having directed the Petitioners to appoint a Special Tribunal by the impugned order, this Civil Revision has been filed. 4. Both the parties do not dispute that the Special Tribunal sought to be appointed by the impugned order is one as envisaged u/s 41-A(i) proviso of the Act.
4. Both the parties do not dispute that the Special Tribunal sought to be appointed by the impugned order is one as envisaged u/s 41-A(i) proviso of the Act. It reads as follows: 41-A. Constitution of and references to the Arbitration Tribunal (1) Notwithstanding anything contained in this Act or in any contract or any other instrument but without prejudice to the provisions contained in Section 47 in all cases where the State Government a local or other authority controlled by the State Government a statutory Corporation or a Government Company is a party to the dispute all reference to arbitration shall be made to the Arbitration Tribunal. Provided that reference to arbitration of the disputes specified in Sub-section (1) involving claims of rupees one crore or above may be made by the State Government to a Special Arbitration Tribunal comprising of one or more retired High Court Judges, as may be constituted by the State Government from time to time. xx xx xx 5. Though several questions cropped up in course of hearing, the jurisdiction of the Court to direct the Petitioners to appoint a Special Arbitration Tribunal as envisaged under the proviso to Section 41-A(1) of the Act is the only question which would be material. 6. The plain language of Section 41-A leaves no scope for an Arbitrator other than the Arbitration Tribunal to enter into reference relating to disputes where the State Government is a party to the dispute. See State of Orissa and Anr. v. Nilgiri Engineering Co-operative Societies and Anr. C.R. No. 774 of 1931, State of Orissa Vs. Rama Chandra Sahu and Another, and State of Orissa through the State of Orissa and Others Vs. Shri Bhaskar Biswal and Another. There is also no scope for a Court in Orissa to appoint an Arbitrator other than the Arbitration Tribunal in respect of such dispute. See State of Orissa Vs. Rama Chandra Sahu and Another.
Rama Chandra Sahu and Another, and State of Orissa through the State of Orissa and Others Vs. Shri Bhaskar Biswal and Another. There is also no scope for a Court in Orissa to appoint an Arbitrator other than the Arbitration Tribunal in respect of such dispute. See State of Orissa Vs. Rama Chandra Sahu and Another. Where a reference of such a dispute was pending before an Arbitrator for making the award, it automatically stands transferred to the Arbitration Tribunal on the coming into operation of Section 41-A. Where however applications whether for appointment of an Arbitrator tinder Section 8 or for reference of such a dispute to an Arbitrator u/s 20 or for revoking the authority of an Arbitrator removing him remain pending before a Court and the Court by an interim order prohibited the further proceeding before an Arbitrator, the transfer as provided u/s 41-A(7) of the Act does not become automatic. Court is to pass an order in accordance with law. See State of Orissa through the State of Orissa and Others Vs. Shri Bhaskar Biswal and Another, 7. The decision reported in State of Orissa through the State of Orissa and Others Vs. Shri Bhaskar Biswal and Another, was rendered in a Civil Revision where the appointment of an Arbitrator u/s 8 of the Act by the trial court was assailed. While vacating the order of appointment on the ground that sufficient opportunity was not given to the parties in the selection for appointment of an Arbitrator, this Court directed the trial court to dispose of the application u/s 8 of the Act in accordance with law keeping in view Section 41-A of the Act. In the decisions in Civil Revision No. 774 of 1981 decided on 19-11-1984 (supra) and in State of Orissa Vs. Rama Chandra Sahu and Another the authority of an appointed Arbitrator had been revoked u/s 5 of the Act and the Court appointed an Arbitrator in exercise of the power u/s 12(2) which were assailed. This Court construing Section 41-A directed the trial court to take appropriate steps in accordance with law to refer the dispute to the Arbitration Tribunal, Orissa for adjudication. In State of Orissa and Anr. v. Gokul Chandra Kanungo C.R. No. 720 of 1985 - D/20-12-1985, arose out of an application for removal of the Arbitration Tribunal to which the reference had been transferred u/s 41-A(7).
In State of Orissa and Anr. v. Gokul Chandra Kanungo C.R. No. 720 of 1985 - D/20-12-1985, arose out of an application for removal of the Arbitration Tribunal to which the reference had been transferred u/s 41-A(7). During pendency of the application, provisos were added to Sub-sections (1) and (7) of Section 41-A. The trial court directed the State Government for appointing a Special Arbitration Tribunal. This Court set aside the order and remitted back the matter to the trial court for consideration of the application u/s 5 of the Act pending disposal in accordance with law. Thus, under three different circumstances, this Court applied Section 41-A of the Act as stated above. 8. Section 20 provides for taking application to a Court having jurisdiction for referring the dispute to an Arbitrator without taking recourse to the provisions in Chapter II of the Act. There being no Arbitrator agreed to between the parties, Court is to appoint an Arbitrator in exercise of power u/s 20(4), Notwithstanding anything contained in Section 20(4), the reference is to be made to Arbitration Tribunal since State Government is a party to the dispute. The language of the proviso does not run contrary to this plain meaning which clearly indicates that the State Government only is to make a reference the Special Arbitration Tribunal. There is no scope for the Court to make such a reference even if a Special Arbitration Tribunal has been constituted. 9. Section 20 of the Act does not envisage the Court to direct the parties to appoint an Arbitrator where there is no agreed Arbitrator. When the Court was to appoint the Arbitrator to whom reference of the disputes was to be made by the Court and by statutory provision in Section 41-A, the scope of making the reference in such disputes was limited to Arbitration Tribunal only notwithstanding anything contained in the Act, the Court has no jurisdiction to direct the Petitioners to appoint a Special Arbitration Tribunal. 10. Tempting question was raised by Mr. R.K. Rath, the learned Counsel for the opposite party envisaging a situation where the Court finds the Arbitration Tribunal incompetent to enter into the reference. In this case hostility of one of the members of the Arbitration Tribunal has been alleged. In the absence of a finding on hostility and its effect the question raised by Mr.
R.K. Rath, the learned Counsel for the opposite party envisaging a situation where the Court finds the Arbitration Tribunal incompetent to enter into the reference. In this case hostility of one of the members of the Arbitration Tribunal has been alleged. In the absence of a finding on hostility and its effect the question raised by Mr. Rath becomes academic which I leave open to the trial court to decide on the finding arrived at. 11. In the result, the Civil Revision is allowed and the order dated 2-9-1985 passed by the learned Subordinate Judge, Bhubaneswar is set aside. Parties are directed to bear their own costs in this Civil Revision. The case is remitted back to the trial court for considering the allegations of opposite party relating to the hostility of one of the members of the Arbitration Tribunal and its effect on entering into reference or making an award. The parties shall appear before the trial court on 6-1-1986 (Monday) when the date of further proceeding in O.S. No. 328 of 1981-1 shall be fixed. Final Result : Allowed