State Bank of Bikaner & Jaipur v. Gehlot and Associates
1997-08-04
SHIV KUMAR SHARMA
body1997
DigiLaw.ai
JUDGMENT 1. :- Calling in question the orders dated May 10, 1995 and April 23, 1997 of the learned District Judge Jaipur City, the petitioners has preferred instant revisions. As both the petitions relate to appointment of Arbitrator they are proposed to be disposed of by a common order. 2. The pleadings of the parties reveal following genealogy and facts (i) The petitioner (for short the Bank) and the non-petitioner (for short the Architects) entered into an agreement on March 25, 1989 whereby the Architects were appointed by the Bank for the construction of buildings for staff quarters at Jaisalmer. The Bank vide its letter dated October 16, 1990 informed the Architects that construction work allotted to them stood withdrawn. The Architects moved an application for appointment of Arbitrator before the learned District Judge Jaipur City with reference to clause 8 of the agreement for settling the disputes in respect of fee and compensation. The Bank contested the application and pleaded that before the work could be started the appointment of Architects was withdrawn. As the matter was covered under clause 3(d) of the agreement and it was not arbitral under clause 8, which specifically provided that the decision of Bank shall be final and binding and would not be referred to arbitration. Learned District Judge after interpreting clauses 3(d) and 8 of the agreement directed by its order dated May 10, 1995 that the Bank shall suggest the names of three persons retired from the rank not below Superintending Engineer or District Judge within two weeks to the Architects who shall give consent to any one amongst them within two weeks from the receipt of the names. Thereafter the persons in whose favour the consent has been expressed, shall be appointed by the Bank as arbitrator within two weeks from the receipt of consent and refer the disputes to him who shall give his award within four months from entering into the reference. (ii) Against this order dated May 10, 1995 that the Revision No. 923 of 1995 was filed by the Bank on July 10, 1995 before the Court. A close look at the order sheets of the file shows that it was on December 4, 1996 that the submission in the matter were made. The Bank did not file any stay application alongwith the revision.
A close look at the order sheets of the file shows that it was on December 4, 1996 that the submission in the matter were made. The Bank did not file any stay application alongwith the revision. (iii) The Architects in the meanwhile moved another application before the learned District Judge under Section 20 of the Arbitration Act 1940 (for short the Act) stating therein that as the Bank did not comply the earlier order dated May 10, 1995 therefore appointment of independent arbitrator was necessary. The application was contested by the Bank. (iv) Learned District Judge vide its order dated April 23, 1997, allowed the application of the Architects and appointed Shri Pyare Mohan Bagarhatta (District Judge Retired) as the sole Arbitrator, who was directed to give award within four months from the date of receipt of the order. The Bank has questioned this order in revision No. 899/1997. 3. Main argument of Mr. Paras Kuhad, learned counsel appearing for the Bank is that the matter was fully covered under clause 3(d) of the agreement and it was not arbitral. The learned District Judge did not make a distinction between the matters which are referable and the matters which cannot be adjudicated by the Arbitrator. Claims of the Architects can be divided into two parts (i) claim regarding fee and (ii) claim regarding damages. Claim of fee is covered within the exception clause and the claim of damages being part of tort does not arise out of the agreement therefore the arbitrator has no jurisdiction. Reliance was placed on Kharadah Co. Ltd. vs. Raymon & Co. (India) ( AIR 1962 Supreme Court 1810) , The Chief Administrator Dandakaranya Project vs. P.C. Corporation ( AIR 1975 Madhya Pradesh 152) , M/s. Prabartak Commercial Corporation Ltd. vs. The Chief Administrator ( AIR 1991 Supreme Court 957) , State of Orissa vs. Damodar Das ( 1996(2) SCC 216 ) , State of Bihar vs. Rama Bhushan (AIR 1964 Patna 326) , M/s. Dhanraj Mal vs. M/s Shamji Kalidas ( AIR 1961 Supreme Court 1285) . 4. Supporting the orders of learned District Judge, Mr. Sanghi, learned counsel of the Architects drew my attention towards the agreement and various documents. 5. I have given my anxious consideration to the rival contentions and carefully perused the impugned orders, documents and authorities cited before me. 6.
4. Supporting the orders of learned District Judge, Mr. Sanghi, learned counsel of the Architects drew my attention towards the agreement and various documents. 5. I have given my anxious consideration to the rival contentions and carefully perused the impugned orders, documents and authorities cited before me. 6. The core question that springing for consideration is as to whether this court can examine the correctness of finding that certain claims were outside the purview and scope of arbitration agreement ? 7. The Division Bench of Assam and Nagaland High Court in R.D. Gupta vs. The Union of India (AIR 1970 Assam and Nagaland 35) had occasion to consider the aforesaid question and it was observed that the powers of the High Court under section 115 Civil Procedure Code are limited. The High Court while examining its jurisdiction under the said section cannot correct errors of fact, however gross they may be or even errors of law. It can only do so when such errors have relation to the jurisdiction of the court. The Division Bench further observed that the High Court in revision cannot examine correctness of finding that certain claims were outside purview and scope of agreement. 8. In the case on hand the learned District Judge vide order dated May 10, 1995 examined the applicability of clause 3(d) and clause 8 of the arbitration agreement and issued directions that the Bank shall suggest the names of three persons retired from the rank not below Superintending Engineer or District Judge within two weeks to the architects who shall give consent to any one amongst them within two weeks form the receipt of the names. Thereupon the person in whose favour the consent has been expressed shall' be appointed by the Bank as arbitrator within two weeks from the receipt of consent and refer the disputes to him who shall give his award within four months from entering into the reference. Though the Bank assailed the said order by filing the revision but did not file any stay application and the said order of the learned District Judge was not stayed. The Bank also has not filed any application before the learned District Judge for extending time prescribed in its order. Thereafter on an application filed under Section 20 of the Act by the Architects, retired District Judge was appointed as arbitrator.
The Bank also has not filed any application before the learned District Judge for extending time prescribed in its order. Thereafter on an application filed under Section 20 of the Act by the Architects, retired District Judge was appointed as arbitrator. Be that as it may, the learned District Judge after making the appreciation of clause 3(d) and clause 8 of the agreement observed that the claims were arbitral and it is not for this court in exercise of powers under section 115 Civil Procedure Code to examine the correctness of the finding that the claims of the Architects were outside the purview and scope of the arbitration agreement. Subscribing the view expressed by the Division Bench of the Assam and Nagaland High Court in R.D. Gupta vs. The Union of India (supra) I hold that this court under Section 115 Civil Procedure Code cannot interpret the clauses of arbitration agreement. 9. The authorities cited at Bar are only in relation to interpretation of arbitration agreement and it is not necessary to examine these authorities at this juncture. 10. I am of the considered view that the learned District Judge has not committed any error relating to the jurisdiction of the court and if orders are allowed to stand, failure of justice would not be occasioned. 11. Consequently I dismiss both the revision petitions. The impugned orders of the court below stand confirmed. Costs easy.Revisions Dismissed. *******