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2001 DIGILAW 184 (PNJ)

Satish Kumar v. H. S. A. M. B.

2001-02-05

R.L.ANAND

body2001
JUDGMENT R.L. Anand, J. - This is a civil revision and has been directed against the order dated 21.8.2000 passed by Addl. District Judge, Karnal, who allowed the appeal filed by Haryana State Agricultural Marketing Board (in short Board) by setting aside the order dated 26.11.1997 passed by Civil Judge (Jr. Division), Karnal, who dismissed the objections under Sections 30/33 of the Arbitration Act (hereinafter referred to as the Act) filed by the Board and made the award rule of the Court. 2. The brief facts of the case are that Satish Kumar filed an application under Sections 14/17 of the Act for making the award dated 8.1.1997 as rule of the Court with the averments that vide letter No. EEFII-88-2493 dated 5.8.1998 work for the construction of road in sub-yard at Chichhrana was allotted to him and after completion of its construction possession of the same was handed over to the Board, but some disputes arose regarding payment. Due to that as per Clause 25 of the agreement Chief Engineer of the Board Shri D.R. Kapoor was appointed as arbitrator who gave award of Rs. 15,850/- in favour of the petitioner and the Board was supposed to make the payment within 90 days failing which the Board was liable to pay interest @ 12% per annum till payment. His application was earlier dismissed and the award was set aside by the Court of Sub Judge 1st Class, Karnal on 29.1.1994 and reference was made to the arbitrator for giving the decision afresh within four months. The arbitrator after giving proper opportunity of hearing passed fresh award on 8.1.1997 in favour of the petitioner. The petitioner made a request for making this award as rule of the Court and he also sought direction that payment be made to him along with interest @ 18% par annum. 3. Notice of the application was given to the Board which filed the objections under Section 30 read with Section 33 of the Act. It was pleaded by the Board that the arbitrator has awarded sum of Rs. 44,570/- without giving any reason. He has given pendente lite and pre-reference interest for which he was not empowered. It was also pleaded that the award has been passed after the expiry of four months. 4. It was pleaded by the Board that the arbitrator has awarded sum of Rs. 44,570/- without giving any reason. He has given pendente lite and pre-reference interest for which he was not empowered. It was also pleaded that the award has been passed after the expiry of four months. 4. A re-joinder was filed by the petitioner against the reply of the Board and from the pleadings of the parties, following issues were framed :- "1. Whether the award dated 8.1.97 is liable to be made rule of the Court on the ground as alleged in the application ? OPA 2. Whether the Court has got no jurisdiction to entertain and try the present application ? OPP 3. Whether the award dated 8.1.97 is time barred ? OPR 4. Whether the award dated 8.1.97 is liable to be set aside on the grounds mentioned in objection petition ? OPR 5. Relief." 5. The parties were given opportunity to lead evidence in support of their respective cases and on the conclusion of the proceedings, the learned Civil Judge (Jr. Division), Karnal made the award rule of the Court vide order dated 26.11.1997 for the reasons given in paras 8 onwards. 6. Aggrieved by the decision of the trial Court, the Board filed the appeal before the Addl. District Judge, Karnal, who allowed the appeal and reversed the order of the trial Court mainly on three grounds - that the arbitrator had no jurisdiction to award interest for pre-reference period; that the Court of Civil Judge (Jr. Division), Karnal had no jurisdiction to entertain the application under Section 14 read with Section 17 of the Act, and that the award dated 8.1.1997 has been passed after the expiry of 4 months. This time the contractor is not satisfied with the decision of the first appellate Court and has filed the present revision. 7. Notice of this revision petition was given to the respondent-Board, but nobody appeared on behalf of the Board and vide order dated 15.12.2000 it was proceeded ex parte. 8. This revision I am disposing of with the assistance rendered by Mr. P.S. Rana, learned counsel appearing on behalf of the petitioner. 9. The learned counsel for the petitioner submits that as per the judgment of the Honble Supreme Court reported as Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa, etc. etc. v. N.C. Budharaj (Dead) by LRs. etc. 8. This revision I am disposing of with the assistance rendered by Mr. P.S. Rana, learned counsel appearing on behalf of the petitioner. 9. The learned counsel for the petitioner submits that as per the judgment of the Honble Supreme Court reported as Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa, etc. etc. v. N.C. Budharaj (Dead) by LRs. etc. etc., JT 2000(1) SC 486, interest of pre- reference period can be granted by the arbitrator and arbitrator has the power to award interest for this period. In view of the judgment of the apex Court I hold that the arbitrator has the power to grant interest for pre-reference period. Therefore, the first reason given by the first Appellate Court is hereby reversed. 10. With regard to the second reason given by the first Appellate Court, the learned counsel for the petitioner submits that the interpretation sought to be given by the first Appellate Court is erroneous if the provisions of Section 31(4) are read between the lines. Section 31(4) of the Act provides "Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference, any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and al subsequent applications arising out of that reference, and the arbitration proceedings shall be made in that Court and in no other Court." The reading of these provisions would show that this Section talks of the territorial jurisdiction of a particular place and not the jurisdiction of a particular Presiding Officer. If earlier the applicaiton under Section 14 read with Section 17 of the ACt has been filed at Karnal, the subsequent proceedings are supposed to be filed at Karnal and not in the Court of a particular Presiding Officer. Therefore, the second reason given by the first Appellate Court is also reversed and is not approved. 11. With regard to third reason that the award has been passed beyond four months, is also not borne out from the records. Therefore, the second reason given by the first Appellate Court is also reversed and is not approved. 11. With regard to third reason that the award has been passed beyond four months, is also not borne out from the records. As per clause 3 in the first schedule of the Act the arbitrators are supposed to give their awards within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. For our purpose, we have to determine the date of entering into the reference by the arbitrator. It is the common case of the parties that the arbitrator issued the notices to the parties to appear before him on 16.8.1996 for 10.9.1996. The date of entering upon the reference would mean when the arbitrator started applying mind to the facts and circumstance of the case and when the parties appeared before him and filed their claims. The first proceedings of the arbitration in this case took place on 10.9.1996. Therefore, the arbitrator could give the award on or before 10.1.1997. In the present case the award has been passed on 8.1.1997, which is within limitation. On 16.8.1996 no steps have been taken by the arbitrator by entering into the reference. He just gave notice to the parties to appear before him. He did not apply his mind to the controversy on 16.8.1996. 12. In this view of the matter, I allow this revision, set aside the impugned order dated 21.8.2000 passed by Addl. District Judge, Karnal and restore the order passed by the trial Court and the award dated 8.1.1997 is made rule of the Court. There shall be no order as to costs. Revision allowed.