DIPAK MISRA, J. ( 1 ) WARRANTABLENESS of the order dated 25. 3. 1995 passed by the learned Civil Judge (Senior Division), bhubaneswar in Misc: Case No. 108/93 allowing the application filed under Section 33 of the Arbitration Act, 1940, by the opposite party No. 1 herein is called in question by the present revisionist invoking the revisional jurisdiction of the Court under Section 115 of the Code of Civil Procedure. ( 2 ) THE petitioner-company had entered into an agreement with the opposite party undertaking to execute the work. "civil and misc. Works-Di-waste Water Collection System. Road Bridge-II Culverts, Micro Levelling, lining SW, Drains etc. for Alumina Plant at damanjodi, District-Koraput, Orissa" and the same was valued at Rs. 1,36,34,708. 07. As per the terms and conditions of the contracts, the Contractor was required to complete the work within a stipulated time. The contract was terminated by the opposite party No. 1 (hereinafter referred to as "the owner") on 17. 4. 1986. On receipt of the order of termination, the petitioner informed the owner on 24. 4. 1986 that the termination was illegal and unjustified and would lodge claim for losses and damage suffered by it. On 15. 5. 1986, the claim was lodged with the owner and it called upon to meet its liability and make payment or to resort to the. arbitration clause, i. e. Clause-87 of the Agreement. ( 3 ) THE Chairman-cum-Managing Director of the owner, resorting to Clause-87 of the agreement appointed opposite party No. 2 as the sole Arbitrator who entered into the reference on 15. 2. 1987. The relevant portion of the order of reference is produced hereunder. "in respect of the alleged disputes between M/s. Punj Sons (Pvt.) Ltd. , (contractor) and M/s. National aluminium company Limited arising out of contract for civil and miscellaneous works for Part-B Waste Water Collection System, road Phase-II, Culverts, Micro levelling etc. for Alumina Plant at damanjodi of NALCO, I, the Chairman-cum-managing Director of National aluminium Company Ltd. , in exercise of the powers of appointing authority as per the terms of the contract, do hereby appoint you as the Sole Arbitrator for adjudicating upon the alleged disputes xxx" ( 4 ) BEFORE the learned Arbitrator, the petitioner herein filed its statement of claim raising as many as 19 items of claims on different heads.
The owner filed the counter statement denying its liability and simultaneously filed a counter claim against the claimant therein. In the counter claim, 5 items of claim along with interest were advanced and it was indicated that the counter claims emanated from the same dispute. This counter claim was filed on 5. 7. 1987. On 30:8. 1987, the petitioner filed an application praying for striking down thte claim filed by the owner on various grounds. ( 5 ) THE learned Arbitrator took up the matter and relying on the ratio of Uttam chand Saligram v. Mohammed Jaw mamooji; Mathura Das v. Kushiram ; B. B. 'rum Mfg. Co. v. Corporation ; Dillip construction Co. v. Hindustan Steel Limited , and State of Orissa v. B. C. Pasayat , expressed that the counter claim has to be looked into by the following parameters :-" (1) There must be difference or dispute between the parties before reference can be made to arbitration; (2) Any reference of a dispute or difference coming into existence during the arbitration proceeding will not within the jurisdiction of the arbitration to decide in the pending reference: (3) Dispute or difference arises when one party asserts a right and the other repudiates the same; (4) A repudiation by the other party may be either express or implied or may be by words or conduct. " ( 6 ) AFTER referring to the aforesaid touch stone, the learned Arbitrator referred to Clause-87 of the Agreement and opined that two important conditions precedent have been imposed before the Arbitrator gets jurisdiction to adjudicate any claim. The two conditions as discerned by the Arbitrator are :- (i) there should be dispute or difference between the parties when it is referred to arbitration; and (ii) the party referring to the dispute must first give written notice of it to the other party. On scrutiny of the facts of the case, the learned Arbitrator has taken the view that the reference made to him on 10. 12. 1986 related and referred to the disputes or differences lodged only by the claimant-petitioner on 15. 5. 1986: and as admitted, no previous written notice had been given by the owner to the appointing authority for reference of any counter claim.
12. 1986 related and referred to the disputes or differences lodged only by the claimant-petitioner on 15. 5. 1986: and as admitted, no previous written notice had been given by the owner to the appointing authority for reference of any counter claim. Though it was contended before the Arbitrator that the rescission or termination of contract is a matter to be determined by the Arbitrator and, therefore, all disputes between parties are covered, the said submission was repelled by him on the ground that he had no jurisdiction to arbitrate, as the differences or disputes raised in the counter claim had not existed at the time of reference made to him and further no notice in regard to the said disputes was given to the claimant prior to the reference, and such non-service of notice contravened Clause- 87 of the Agreement thereby making the counter claim non-arbitrable. The learned Arbitrator also observed that the counter claim required to be adjudicated upon by the same Arbitrator along with the claim, but under the circumstances, he had no jurisdiction to adjudicate. He gave a suggesting note indicating that it was open to the owner to make a reference of the disputes involved in the counter claim, if the claimant gave his consent for such adjudication. On that promise, he passed the order on 14. 5. 1988 ignoring the counter claim filed by the owner. ( 7 ) THE proceeding continued before the arbitrator. On 5. 7. 1992, the owner filed an application for determination/adjudication of the counter claims in the self-same arbitration proceeding. Before the learned Arbitrator, reliance was placed on the decision rendered in the case of K. V. George v. The Secretary to Gout. , Water and Power Dept. , Trivandrum and Anr, wherein the apex Court has laid down that the claim and counter claim must always be decided together. The ratio of the decision in C. L. Misra v. Nehru Bhavan trust and Ors. 7, was also pressed into service. ( 8 ) THE learned Arbitrator distinguished the two decisions on the ground that from the facts of the aforesaid decisions, it was not clear whether the counter claims in those cases were in order or not.
The ratio of the decision in C. L. Misra v. Nehru Bhavan trust and Ors. 7, was also pressed into service. ( 8 ) THE learned Arbitrator distinguished the two decisions on the ground that from the facts of the aforesaid decisions, it was not clear whether the counter claims in those cases were in order or not. He also referred to his earlier order and came to hold that as he had ignored the counter claim by his previous order, the same was not permissible to be re-agitated inter-parties even if there had been a change of law. He was of the view that in the self-same decision, the apex Court has laid down that the principles of res judicata are applicable to arbitration proceedings, and the matter having been decided at an earlier stage, the earlier order would operate as res judicata. On behalf of the owner, the decision rendered in Mathura Prasad Sarjgo Jaiswal and Ors. v. Dossibai N. B. Jeejeebhoy, was relied upon. The same was distinguished on. the ground that he had the jurisdiction to examine whether the counter claims were admissible in the facts and circumstances of the case and, therefore, the principle that a finding which relates to the question of jurisdiction, doctrine of res judicata would have no application, was not attracted to the proceeding before him. On so holding he concluded that the owner was not entitled in law to get the counter claims adjudicated in the said arbitration proceeding. ( 9 ) BEING dissatisfied, the owner filed an application before the Civil Judge (S. D.) bhubaneswar, under Sections 33 and 41 of the Arbitration Act read with Section 1. 51 of the Code of Civil Procedure with the following prayer.-". . . . . . The Honourable Court be pleased to issue notice to the parties and after hearing the parties pass appropriate direction, order determining the scope, effect and ambit of the contract between the parties declaring that the counter claims of the petitioner are maintainable before the opposite party no. 2 and therefore, should be adjudicated. . . . " ( 10 ) IN the body of the petition, Clause 87 of the Agreement was reproduced and in paragraph 23, it was pleaded with regard to the nature of reference and the interpretation of Clause- 87.
2 and therefore, should be adjudicated. . . . " ( 10 ) IN the body of the petition, Clause 87 of the Agreement was reproduced and in paragraph 23, it was pleaded with regard to the nature of reference and the interpretation of Clause- 87. In paragraph- 24, it has been stated as follows :-"though this case has been filed not for the purpose of avoiding the arbitration, but for the purpose of declaration that the arbitration clause between the parties is not to be interpreted narrowly or too strictly, but is to be interpreted in a manner so as to give a finality to the proceeding. " the prayer of the owner was resisted by the present petitioner before the court below. The learned Civil Judge (Senior Division) came to hold that the learned Arbitrator was quite right in rejecting the counter claim in his order dated 14. 5. 1988, but in the changed cir-custances and in the setting of change of law, the relief sought for by the owner was riot barred by the principles of res judicata and accordingly, direction should be given to the learned Arbitrator to decide the counter claim of the owner. This order is called in question by the present revisionist. ( 11 ) ). Shrib. M. Patnaik, the learned senior counsel appearing for the petitioner assailing the impugned order raises the follwing contentions :- (a) The Learned Civil Judge has committed gross illegality by holding that in the changed circumstances of the law it was obligatory on the part of the Arbitrator to decide thecounter claim though such a conclusion is not permissible according to the acceptable parameters of law; (b) Once the Civil Judge (Senior division) held that the Arbitrator was justified in rejecting the counter claim in his order dated 14. 5. 1988, as a logical corollary, he should have stated that the said order operated as res judicata at the subsequent stage in the same proceeding and did not call for any interference in an application under Section 33 of the Arbitration Act and by not so holding, the court below thus failed to appreciate the ratio of the decision in the case of K. V. George (supra) and therefore, his order becomes absolutely vulnerable; (c) the order dated 14. 5.
5. 1988 had become final and the same was not available to be questioned by the owner after a long lapse of time because the same is not only barred by limitation, but is liable to be defeated on the ground of acquiescence, waiver and laches; (d) the Arbitrator is the final Judge of facts and law which arise in an arbitration proceeding before him and the same are not liable to be questioned in a court of law in a proceeding of this nature; (e) even assuming that the proceeding is maintainable, the condition precedent as envisaged/enjoined under Clause-87 of the Agreement having not been satisfied and the disputes so far as related to the counter claims, being not in existence at the time of reference, the same were not available to be entertained by the arbitrator. (f) 'prior notice of disputes or differences having not been given to the appointing authority, the order of appointment of the arbitrator has to be construed in a restricted sense confining to the adjudication only in respect of the claims of the petitioner and cannot be expanded to engulf the disputes or claims of the owner making it an open reference. ( 12 ) ). Controverting the submission of Sri patnaik, Shri Indrajit Mohanty, the learned counsel for opposite party No. 1. submits that the first order passed by the learned Arbitrator would not operate as res judicata as it relates to his jurisdiction and a finding with regard to jurisdiction cannot operate as res judicata. He has strenuously urged that the application in the year 1992 was in effect for recall/ review/reconsideration of earlier order whereby the learned Arbitrator had ignored the counter claims, but not an independent application the submission of Shri Mohanty is that once it is construed that the application was for recall or reconsideration, the question of res judicata does not arise. He has also canvassed that the question of limitation does not arise, as the Court in a proceeding under section 33 of the Arbitration Act can determine the effect and scope of the arbitration clause at any time. The learned counsel has taken pains to submit that the finding of the learned Arbitrator with regard to satisfaction of precondition is not justified and the learned arbitrator has misconstrued and mis-interpreted the real nature and tenor of the arbitration clause.
The learned counsel has taken pains to submit that the finding of the learned Arbitrator with regard to satisfaction of precondition is not justified and the learned arbitrator has misconstrued and mis-interpreted the real nature and tenor of the arbitration clause. It is further submitted by him that the scope and effect of the arbitration clause which clothes the Arbitrator with jurisdiction to decide the matter may be decided by the Arbitrator to decide his own jurisdiction, but such decision or adjudication is not final and the Court in exercise of its jurisdiction under Section 33 of the Arbitration Act can rectify the mistake committed by the arbitrator. Finality to the order of the arbitrator in this regard cannot be given as every jurisdictional fact is subject to question before the competent court of law. He fairly concedes that the order passed by the learned civil Judge (Senior Division) is a cryptic one and the emphasis given on change of law is misconceived, but his conclusion and directions contained in the order are correct. The last limb of submission of Sri Mohanty is that as substantial justice has been done by the order of the Civil Judge, this Court in exercise of its jurisdiction under Section 115 of the code of Civil Procedure should be slow to interfere. ( 13 ) TO appreciate the rival submissions, it is appropriate to reproduce the relevant portion of Clause -87 -:-"all disputes or differences whatsoever which shall at any time arise between the parties hereto touching or concerning the works or the execution or maintenance thereof of the contract or the rights touching or concerning the works or the execution or maintenance thereof of this contract, or the construction, meaning, operation or effect thereof, or to the rights or liabilities of the parties or arising out of or in relation thereto, whether during or after comple-tion of the contract or whether before or after determination, for closure or breach of the contract (other than those in respect of which the decision of any person is by the contract expressed to be final and binding) shall after written notice by either party to the contract to the other to them and to the appointing authority hereinafter mentioned, be referred for adjudication to a sole arbitrator to be.
appointed as hereinafter provided : from the aforesaid Clause in the agreement, it is quite clear that there must be existence of disputes or differences between the parties and any party who wants to refer the disputes for adjudication should serve a, written notice to the other party and to the appointing authority. ( 14 ) ). Relying on these two conditions the learned Arbitrator held that there was no service of notice and the disputes and differences did not exist before the date of reference as there had been no repudiation of the same by the claimant-petitioner. In his second order, the learned Arbitrator came to hold that his earlier order would operate as res judicata and the grievance cannot be reagitated. It is necessary to mention here that on behalf of the owner reliance was placed on mathura Prasad's case (supra), but the same was distinguished. It is worthwhile to quote the relevant portion from the order passed by the learned Arbitrator :-"7. Assuming for the sake of argument that the Supreme Court decision has laid down such a broad proposition, mr. Rath is still faced with the difficulty that the present contention is barred by the principles of res judicata. Righly or wrongly, I had ignored the counterclaims in my previous order. The same cannot be re-agitated inter-parties even if the Supreme Court had taken a view differently on the question of law. In para-17 of the aforesaid Supreme Court decision, it was clearly laid down that the principles of res judicata are applicable to arbitration proceedings. Mr. Rath placed reliance on AIR 1971 SC 2355 (Mathura Prasad Baring Jaiswal and Ors. v. Dossinni N. B. Josjeobhey)in support of the contention that where it relates to the question of jurisdiction, the principles of res judicata have no application. If an authority passed an order in a matter in which it has no jurisdiction, c'ertainly such an error will not stand on the way for taking a different view by the principles of res judicata. This is not the position here. I had jurisdiction to examine whether the counter-claims were admissible in the facts and circumstances of this case. On discussion of facts and the law, I held that the counter-claims must be ignored. Such ah order cannot be reopened in a subsequent proceeding inter-parties even if the earlier decision might have been wrong.
This is not the position here. I had jurisdiction to examine whether the counter-claims were admissible in the facts and circumstances of this case. On discussion of facts and the law, I held that the counter-claims must be ignored. Such ah order cannot be reopened in a subsequent proceeding inter-parties even if the earlier decision might have been wrong. " the emphasis laid in the aforesaid part is with regard to the jurisdiction of the Arbitrator to examine whether the counter claims were admissible or not on the facts and circumstances of the case. While determining the admissbility of the counter claims, the learned arbitrator has interpreted Clause-87 of tha agreement. By interpreting the aforesaid Clause and further interpreting the order of reference, he has held, that the counter claims were not arbitrable and he had no jurisdiction to decide. It is pertinent to mention here that the learned Arbitrator had in the earlier order clearly held that he had no jurisdiction. It is quite clear that for arriving at this conclusion, he had interpreted Clause-87, though he has divided it ino two parts, namely service of notice, and existence of disputes, but the analysis of the order clearly shows that the entire finding is dependent on the interpretation which he had done. On arriving at this finding, he has held that he has no jurisdiction and the claims are to be ignored. To cross this hurdle, the owner had relied on the decision air 1973 SC 1 . 135, but the same was distinguished on the ground that Arbitrator having jurisdiction had decided the matter. ( 15 ) ). Now the question which falls for consideration is whether the Arbitrator while assuming his jurisdiction for refusing to exercise jurisdiction can be regarded as the final authority. It is well settled that any authority before exercising its jurisdiction can look into the essential jurisdictional facts but the arbitrator's finding with regard to his jurisdiction which he arrives at by interpreting the arbitration clause cannot be regarded as final. ( 16 ) ). I may pause here for a while to look at a different concept while sometimes makes an order passed by the Arbitrator absolutely final and not questionable in a court of law even if it touches the jurisdiction.
( 16 ) ). I may pause here for a while to look at a different concept while sometimes makes an order passed by the Arbitrator absolutely final and not questionable in a court of law even if it touches the jurisdiction. A question of law erroneously decided by the Arbitrator cannot be interfered with by the Court while exercising jurisdiction under section 30 or 33 of the Arbitration Act. Those circumstances are different and the condition precedent for that is different. In this regard, I may refer to the decision in M/s. Tarapore and Co. v. Cochin shipyard Ltd. , Cochin and Anr, wherein, the apex Court held thus :-". . . . . . It cannot be disputed that even the question of jurisdiction of an arbitrator can be the subject matter of a specific reference. If the parties agree to refer the specific question whether the dispute raised is covered by the arbitration agreement, it becomes a specific question of law even if it involves the jurisdiction of the arbitrator and if it is so, a decision of the arbitrator on specific question referred to him for decision even if it appears to be erroneous to the Court is binding on the parties. . . . . . . . " again in the said decision, their lordships expressed as follows :-". . . . . . . . that common law courts were very reluctant to part with its jurisdiction has hardly any relevance where a specific question of law including the one touching the jurisdiction of the arbitrator is referred to the arbitrator for his decision. Even if the decision of the arbitrator does not accord with the view of the court, the award cannot be set aside on the sole ground that there is an error of law apparent on the face of it. " in this connection, it is profitable to refer to the judgment of the Supreme Court in the case of Renusagar Power Co. Ltd. v. General electric Co. and Anr, wherein paragraph 25 of the judgment, the following conclusions were culled.
" in this connection, it is profitable to refer to the judgment of the Supreme Court in the case of Renusagar Power Co. Ltd. v. General electric Co. and Anr, wherein paragraph 25 of the judgment, the following conclusions were culled. To quote : "four propositions emerge very clearly from the authorities discussed above : (1) Whether a given dispute inclusive of the Arbitrator's jurisdiction comes within the scope or purview of an arbitration clause or not primarily depends upon the terms of the clause itself; it is a question of what the parties intend to provide and what language they employ. (2) Expressions such as 'arising out of or 'in respect of or 'in connection with' or 'in relation to' or 'in consequence of or 'concerning' or 'relating to' the contract are of the wides amplitude and content and include even questions as to the existence, validity and effect (scope) of the arbitration agreement. (3) Ordinarily as a rule an arbitrator cannot clothe himself with power to decide the questions of his own jurisdiction (and it will be for the court to decide those questions)but there is nothing to prevent the parties from investing him with power to decide those questions, as for instance, by a collateral orseparate agreement which will be effective and operative. (4) If, however, the arbitration clause, so widely worded as to include within its scope questions of its existence, validity and effect (scope), is contained in the underlying commercial contract then decided cases have made a distinction between questions as to the existence and or validity of the agreement on the one hand and its effect (scope)on the other and have held that in the case of former those questions cannot be decided by the arbitrator, as by sheer logic the arbitration clause must fall along with underlying commercial contract which is either non-existent or illegal while in the case of the latter it will ordinarily be for the arbitrator to decide the effect or scope of the arbitration agreement, i. e. to decide the issue of arbitrability of the claims preferred before him. " from the aforesaid it becomes crystal clear that unless specifically conferred or invested with the power to decide his own jurisdiction, it is for the Court to decide, and this aspect is also inferable from the language used in the arbitration clause.
" from the aforesaid it becomes crystal clear that unless specifically conferred or invested with the power to decide his own jurisdiction, it is for the Court to decide, and this aspect is also inferable from the language used in the arbitration clause. That apart, with regard to the effect and scope of the arbitration clause, the power has to be specifically conferred. ( 17 ) ). Recently, the apex Court in the case of U. P. Rajkiya Nirman Nigam Ltd. v. Indure pvt. Ltd. and Ors, held thus :-"13. The arbitrability of a claim depends on the construction of the clause in the contract. The finding of the arbitrator/arbitrators on arbitrability of the claim is not conclusive as under section 33, ultimately it is the Court that decides the controversy. It being a jurisdictional issue, the arbitrator/arbitrators cannot cloth themselves with jurisdiction to conclusively decide the issue. In 'russel on Arbitration' (19th. Edn.) at page 99 it is stated thus :-"it can hardly be within the arbitrator's jurisdiction to decide whether or not a condition precedent to his jurisdiction has been fulfilled. It has indeed several times been said bluntly that an arbitrator has no power to decide his own jurisdiction and in one has no power to decide his own jurisdiction and in one case where rules of an institution prepared to conduct arbirations gave the arbitrator such power, the court will ignore this when asked to enforce the award, and decide the question itself. However, an arbitrator is always entitled to inquire whether or not he has jurisdiction. An umpire faced with a dispute or not there was a contract from which alone his jurisdiction, if any, can arise can adopt one of a number of courses. He can refuse to deal with the matter at all and leave the parties to go to court, or he can consider the matter and if he forms the view that the contract upon which the claimant is relying and from which, if established, alone his jurisdiction can arise is in truth the contract, he can proceed accordingly. ' ( 18 ) IN 'law of Arbitration' by Justice bachawat (2nd. Edn.) at page 155 it is stated that 'the question whether matters referred to were within the ambit of clause for referred of any difference or dispute which may arise between the parties, it is for the Court to decide'.
' ( 18 ) IN 'law of Arbitration' by Justice bachawat (2nd. Edn.) at page 155 it is stated that 'the question whether matters referred to were within the ambit of clause for referred of any difference or dispute which may arise between the parties, it is for the Court to decide'. The arbitrator by a wrong decision cannot enlarge the scope of the submission. It is for the Court to decide finally the ambit of the clause in dispute or any clause or a matter or a thing contained therein or the construction thereof, we therefore hold that the arbitrators cannot cloth themselves with jurisdiction to decide conclusively the arbitrability of the dispute. It is for the Court under Section 33 or on appeal thereon to decide it finally. The appellant, therefore, is not estopped to challenge the action and to seek a declaration under Section 33. " 18. Tested by the aforesaid touchstone, in the instant case, I find that the learned arbitrator has interpreted Clause- 87 of the agreement to arrive at the conclusion that the said clause imposes two conditions precedent before the Arbitrator gets jurisdiction to adjudicate any claim. The interpretation or the construction of the said arbitration clause being a jurisdictional fact from which the arbitrator gets jurisdiction, it cannot be within the exclusive domain of the Arbitrator. The arbitrator has scanned the arbitration clause and has held that there should have been disputes or differences between the parties and there should have been a notice to the other party to the contract and to the appointing authority. As indicated earlier, the question arises whether in absence of notice, the counter-claims can be decided or not, and whether the Arbitrator can refuse on the ground of lack of jurisdiction. Reading the arbitration clause as a whole it means, for the purpose of invoking the authority of the appointing authority a notice to the other contracting party and to the appointing authority is necessary.
Reading the arbitration clause as a whole it means, for the purpose of invoking the authority of the appointing authority a notice to the other contracting party and to the appointing authority is necessary. A harmonious reading of the contract makes it crystal clear that disputes of all types can be adjudicated by the Arbitrator except what have 'been covered under the excepted clause which states that if the disputes which are to be decided by a person as authorised under the contract being final binding, those categories of disputes are not to be decided by the arbitrator as they come within the scope and ambi of excepted matters. That would depend upon the stipulations in the contract covering those types of matters. The condition precedents are mandatory which relate to the appointment of arbitrator. In fact, both parts may not be mandatory in the strict sense. For example, a party to the contract may give a notice to the appointing authority with a copy thereof to the other party to the contract. In a given situation that may be accepted as substantial compliance. In this connection, reference may be made to the case of Indian Rare Earths Ltd. and Ors. v. M/s. Unique Builders Ltd. Once the arbitrator is appointed, because of the magnitude and wide amplitude of the arbitration clause, he has the jurisdiction to decide the disputes. As 1 find, the Arbitrator has taken exception to non-service of notice and, therefore, held that the difference had not existed at the time when the reference was made. I am not able to persuade myself to accept the view of the learned Arbitrator that no dispute existed because there was no notice and no repudiation. Repudiation of a claim may not be always in express terms. It can be by express or implied conduct. The reasonings given by the learned Arbitrator on that score are not correct and they inrinsicaily and inherently touch the construction of the arbitration, clause. The arbitration clause prohibits adjudication by the Arbitrator in respect of excepted matters, but does no debar other disputes to be adjudicated. The conditions precedent which are contained in the arbitration clause relate to the pre-appointment stage.
The arbitration clause prohibits adjudication by the Arbitrator in respect of excepted matters, but does no debar other disputes to be adjudicated. The conditions precedent which are contained in the arbitration clause relate to the pre-appointment stage. From the tenor of the order passed by the learned Arbitrator, 1 am convinced that he has given undue emphasis on the notice part of it as if it is a pre-condition to decide the controversy when the whole gamut of disputes has been referred. ( 19 ) 1 may proceed to state here that in certain types of agreements arbitration is prohibited on certain conditions being not fulfilled or if there is any indication, that there would be no arbiration at all on happening of certain events. To give an example if the arbitration clause contains that in the event of appointing authority not filing up the vacancy, there shall be no arbitration at all, it can be safely concluded that the parties intended not to have arbitration. Similarly, if the arbitration clause contains that certain conditions not occuring a 'category of disputes cannot be arbitrated upon, the matter would stand on a different footing. ( 20 ) ON perusal of the order of reference it is lucidly clear that the Managing Director had appointed the learned Arbitration in respect of the alleged disputes between the parties arising out of contract. As admited before me by the learned counsel for the parties, there is no specific reference of disputes to the Arbitrator. No schedule of reference was sent. The reference is in general, relating to the disputes arising out of the agreement. True it is, at the initiative of the contractor, the arbitrator was appointed. But that does not necessarily mean that the arbitrator lacked jurisdiction to entertain any claim by the owner or to make an award in its favour. In this regard, I may profitably refer to the decision in the case of makhan Lal Lodh v. Union of india, wherein the learned Judge held as follows :-"8. '. . . . . . . . . ALL this discussion leads me to.
In this regard, I may profitably refer to the decision in the case of makhan Lal Lodh v. Union of india, wherein the learned Judge held as follows :-"8. '. . . . . . . . . ALL this discussion leads me to. the conclusions that a reference to arbitration is primarily a bilateral affair, that one sided reference can be made only if the other party refuses to join despite notice, and that arbitrator has to gave his award on the disputes ascertained from the parties, pleadings except in the case where the proceedings are ex parte. Reference in this respect may usefully be made to AIR 1979 All 49 Jagannath Kapur v. Premier Credit and Instalment Corporation (P) Ltd. "in the said decision, after referring to the case of Mediterranean v. Fortress, expressed thus :-". . . . . On the other hand, it lends support to the view that the arbitrator can go to the bottom of the dispute between the parties and find out which way the justice of the dispute lies. . . . . " in the connection, I may refer to a decision rendered in the case of Weall v. James, wherein the defendant had made an affidavit that plaintiff had been overpaid and subsequently advanced counter claim in respect of over payment. It was held therein that an arbitrator to whom all matters in difference in the action were referred had jurisdiction to deal with the counter claim. At this juncture, 1 may refer to a Division bench decision of Calcutta High Court in the case of Union of India v. Ramesh Kumar rajgharia, wherein the learned Judges opined as follows : ". . . . . The claim to the refund of the security deposit is. thus irretrievably connected with the claim of the Union of India for the damages and/or extra expenses suffered or incurred or to be incurred by it as mentioned above. The refund of the security deposit cannot be ordered without hearing the said claimfor damages and extra expenses and the claim made by the appellant to recover such damages and extra expenses out of, inter alia the said security deposit, and deciding the said questions. . . . . .
The refund of the security deposit cannot be ordered without hearing the said claimfor damages and extra expenses and the claim made by the appellant to recover such damages and extra expenses out of, inter alia the said security deposit, and deciding the said questions. . . . . . " the purpose of the aforesaid reference is that counter claims invariably are intrinsically and irretrievably connected with the claim of the contractor and when they are inseparable and unsegregable, it cannot be brushed aside in absence of any mandatory prohibition in the agreement. ( 21 ) THE matter can be viewed from another angle. In absence of any specific reference, needless to say, the claimant can putfofth all his claims some of which may be additioa ones to the claims alredy presented. In a reference of the present nature, there can be no bar for the same. The conclusion of this analysis is that all differences and all disputes arising out of agreement are to be decided by the arbitrator. ( 22 ) THE learned counsel for the petitioner in his written notes of arguments had referred to three decisions Indian oil Corporation Ltd. v. Indian Carbon Ltd, U. P. Hotels etc. v. U. P. State Electricity Board and Puri Construction Pvt. Ltd. v. Union of india. Those decisions relate to the sphere of setting aside the award and the jurisdiction of the Court at that stage. I am constrained to say that the ratio of the aforesaid decisions has no applicability to the present case ( 23 ) THE whole scenario can be viewed from a different perspective. There is no doubt the analysis of the court below is not correct but his ultimate conclusion cannot be faulted. It is settled in law that the jurisdiction under Section 115 of the Code is discritionary. I find that substantial justice has been done by the Court below in entertaining the counter claim and directing the claim and the counter claim to be taken up together. The petitioner in the facts of the case is not entitled to vacation of the order of the court below. ( 24 ) I may further make it clear that it is open to the petitioner to refute the counter claims advanced by the opposite party on all possible grounds including the ground of limitation.
The petitioner in the facts of the case is not entitled to vacation of the order of the court below. ( 24 ) I may further make it clear that it is open to the petitioner to refute the counter claims advanced by the opposite party on all possible grounds including the ground of limitation. ( 25 ) IN the result, the Civil Revision fails and accordingly is dismissed. However, there shall be no order as to costs. Revision dismissed .