Eastern Coal Fields Ltd. v. Ober Construction Enterprises Pvt. Ltd.
2009-12-18
JYOTIRMAY BHATTACHARYA
body2009
DigiLaw.ai
Judgment :- (1.) This application under Article 227 of the Constitution of India is directed against an order being No.47 dated 20th September, 2008 passed by the learned Civil Judge (Senior Division), Asansol in Title Suit No.11 of 2002 whereby it was held that an award which was passed by following the provision contained in Arbitration Act of 1940 (old Act) can be enforced by following the provision of the Arbitration and Conciliation Act, 1996 (new Act), in the facts of the instant case because of the peculiar nature of the arbitration agreement contained in Clause 9 thereof between the parties. The petitioner is aggrieved by the said order. Hence, the instant revisional application was filed by the petitioner before this Court. Heard Mr. Basu, leaned Counsel, appearing for the petitioner and Mr. Talukdar, learned Counsel, appearing for the opposite party herein. Considered the materials on record including the order impugned. (2.) Let me now consider as to whether the learned Trial Judge was justified in passing the impugned order in the facts of the instant case. For proper appreciation of the matter in issue, some relevant facts are required to be taken note of. Those facts are as follows :- Admittedly, the dispute between the parties is covered by an agreement dated 21st September, 1987 which contained an arbitration clause which runs as follows :-"Clause 9 : All disputes or differences whatsoever arising between the parties out of or relating to the construction meaning and operation of effect of this contract or breach thereof shall be settled by sole arbitrator appointed by the CMD of ECL and the award of arbitration shall be final and binding on the parties concerned. The arbitration may from time to time with the consent of the parties enlarge the time for making and publishing the award. In all cases where the amount of the claim in dispute is Rs.50,000/- and above, the arbitration shall given reasons for the award.
The arbitration may from time to time with the consent of the parties enlarge the time for making and publishing the award. In all cases where the amount of the claim in dispute is Rs.50,000/- and above, the arbitration shall given reasons for the award. The arbitration proceeding shall be in accordance with the Arbitration Act, 1940 or any statutory modification or reenactment thereof and the Rules made thereunder and the time being in force shall apply to the arbitration proceeding under this clause." (3.) For resolving a dispute between the parties through arbitration, a reference was made by the opposite party herein to the Chairman-cum-Managing Director of the petitioner herein, by invoking the aforesaid arbitration clause on 14th February, 1994. The said Chairman-cum-Managing Director, by his letter dated 30th June, 1994 referred the said dispute to the then Chief Engineer (Civil) ECL as the sole arbitrator. The said sole arbitrator entered into a reference on 29th July, 1994 and ultimately an award was published by the learned Arbitrator on 20th November, 2001. By the said award the petitioner herein was directed to pay a sum of Rs.67,58,032/-to the opposite party towards full and final settlement of all claims including interest @15% P.A. The petitioner was further directed to pay a further sum of RTs.33,37,300/- from the date of signing of the award till payment, in the event the payment of the awarded amount is not made to the opposite party within 90 days from the date of signing of the award. Subsequently an application was filed by the opposite party under Section 14 of the old Act inter alia praying for issuance of direction upon the Chairman-cum-Managing Director of the petitioner herein to submit the said award published on 20th November, 2001 along with the connected documents of the arbitration proceeding before the learned Trial Court without any further delay for enabling the learned Trial Court to make the said award a rule of Court. On the basis of the said application, a proceeding was initiated which was registered as Title Suit No.11 of 2002. (4.) The petitioner is contesting the said proceeding by filing written statement therein.
On the basis of the said application, a proceeding was initiated which was registered as Title Suit No.11 of 2002. (4.) The petitioner is contesting the said proceeding by filing written statement therein. Subsequently the opposite party, on or about 6th January, 2003 filed an application for amending its pleadings under Section 14 of the said Act for introducing the following prayer therein :- "An order directing the award dated 20th November, 2001 be executed and/or enforced under Section 33 of the Act of 1996 in the same manner as if it was a decree of the learned Court." (5.) The opposite partys such prayer for amendment was allowed by the learned Trial Judge on contest. Being aggrieved by the said order, a revisional application was filed by the petitioner before this Court. The said revisional application which was registered as C.O. No.695 of 2003 was ultimately rejected by a learned Single Judge of this Honble Court by holding inter alia that in the given facts and circumstances, prayer for amendment has been rightly allowed by the learned Trial Judge. The petitioner was aggrieved by the said order. Hence, they preferred a Special Leave Petition before the Honble Supreme Court. The said Special Leave Petition which was registered as SLP (Civil) No.8342 of 2004 was dismissed without interfering with the order of the revisional Court with the following rider :- "We, however, clarify that the Court, will first decide whether 1940 Act applies or 1996 Act applies. The Court will also decide whether the 4 respondent (herein) can be allowed to change his stand having filed an application under the 1940 Act." Pursuant to the direction passed by the Honble Supreme Court as above, the learned Trial Judge considered the question as to whether implementation of the award passed on 20th November, 2001 can be made by following the provision of the new Act in the facts of the instant case. The learned Trial Judge, ultimately by referring to Clause 9 of the said agreement as referred to above, held that implementation of the said award can be made under the provision of the new Act. The petitioner is aggrieved by the said order. Hence, the instant revisional application has been filed before this Court. 5.
The learned Trial Judge, ultimately by referring to Clause 9 of the said agreement as referred to above, held that implementation of the said award can be made under the provision of the new Act. The petitioner is aggrieved by the said order. Hence, the instant revisional application has been filed before this Court. 5. After careful consideration of the contentions of the respective parties, this Court holds that the question as to whether the provision contained in the new Act can be followed for implementation of the award passed under the old Act in this set of facts or not, is no longer a res integra in view of the decision of the Honble Supreme Court in the case of Thyssen Stanhlunion Dhdh Vs-Steel Authority of India Ltd. reported in 1999(9) SCC page 344. The answer to the said question can be traced out from Section 85 of the new Act. In fact, three appeals wherein interpretation of the provision of Section 85 of the Arbitration and Conciliation Act, 1996 was at issue, were taken up for consideration by the Honble Supreme Court and all the three appeals were ultimately decided by a common judgment and/or order passed by the Honble Supreme Court. Out of the said three appeals, this Court wants to refer to the case of Rani Constructions Pvt. Ltd. as the fact of the said case is exactly identical with the facts of the instant case. In case of Rani Constructions Pvt. Ltd. a reference was made to the sole arbitrator on 4th December, 1993 for resolving a dispute between Rani Constructions Pvt. Ltd. and Himachal Pradesh State Electricity Board by following an arbitration agreement executed between the said parties. The said arbitration was concluded as per the provision of the old Act of 1940 and the award was published on 23rd February, 1996 when the new Act had come into force. Incidentally it may be mentioned that the new Act came into force on 25th January, 1996. (6.) An identical question was raised in the said case as to whether the said award can be implemented by following the provisions contained in the new Act or not.
Incidentally it may be mentioned that the new Act came into force on 25th January, 1996. (6.) An identical question was raised in the said case as to whether the said award can be implemented by following the provisions contained in the new Act or not. The Honble Supreme Court ultimately held by interpreting the provision of Section 85 of the new Act that implementation of the said award is possible by following the provisions of the new Act because of the peculiar nature of agreement entered into between the parties. Since application of the new Act in case of implementation of the award passed under the old Act depends upon the nature of the agreement between the parties, this Court feels that the relevant part of the agreement of Rani Constructions, is required to be narrated herein for ascertaining as to whether the provision contained in the said agreement is similar to the arbitration clause contained in the agreement between the parties in the present case. Accordingly, Clause 25 of the agreement entered between the parties in case of Rani Constructions Pvt. Ltd. is set forth hereunder :- "Subject to the provisions of the contract to the contrary as aforesaid, the provisions of the India Arbitration Act, 1940 or any statutory modification or reenactment thereof and the Rules made thereunder and for the time being in force, shall apply to all arbitration proceedings under this clause." (7.) Thus, if the arbitration clause contained in the agreement in the case of Rani Constructions Pvt. Ltd. is read minutely with the arbitration clause contained in the agreement executed between the parties in the instant case, no one can find out any material difference between the said two agreements.
In fact, the arbitration clause contained in the agreement between the parties herein is almost identical with the arbitration clause contained in the agreement in the case of Rani Constructions Pvt. Ltd. Thus, when the Honble Supreme Court held by interpreting the provision of Section 85 of the new Act that implementation of the award passed under the old Act is possible by following the new Act, in a case where the parties have agreed to apply the new enactment in the arbitration proceeding initiated under the old enactment, this Court does not find any justification to interfere with the impugned order wherein it was held that implementation of the arbitration award dated 20th November, 2001 is possible by following the provision of the new Act because the parties herein have also agreed in Clause 9 of the said agreement that the arbitration proceeding shall be in accordance with the Arbitration Act, 1940 or any statutory modification or reenactment thereof and the Rules made thereunder. (8.) The relevant portion of the judgment in the case of Rani Constructions Pvt. Ltd. wherein Section 85(2)(a) of the new Act was considered by the Honble Supreme Court, is set out hereunder :- "23. Section 85(2)(a) of the new Act is in two limbs : (1) provisions of the old Act shall apply in relation to arbitral proceedings which commenced before the new Act came into force unless otherwise agreed by the parties, and (2) the new Act shall apply in relation to arbitral proceedings which commenced on or after the new Act came into force. The first limb can further be bifurcated into two : (a) provisions of the old Act shall apply in relation to arbitral proceedings commenced before the new Act came into force, and (b) the old Act will not apply in such cases where the parties agree that it will not apply in relation to arbitral proceedings which commenced before the new Act came into force.
The expression "in relation to" is of the widest import as held by various decisions of the Court in Doypack Systems (P) Ltd., Mansukhlal Dhanraj Jain, Dhanrajamal Gobindram and Navin Chemicals Ltd. This expression "in relation to" has to be given full effect to, particularly when read in conjunction with the words "the provisions" of the old Act, that would mean that the old Act will apply to the whole gambit of arbitration culminating in the enforcement of the award. If it was not so, only the word "to" could have sufficed and when the legislature has used the expression "in relation to", a proper meaning has to be given. This expression does not admit of restrictive meaning. The first limb of Section 85(2)(a) is not a limited saving clause. It saves not only the proceedings pending at the time of commencement of the new Act but also the provisions of the old Act for enforcement of the award under that Act." (9.) In fact, an identical view has also been taken by different High Courts in identical situations by following the aforesaid pronouncement of the Honble Supreme Court. The following are those case which may be referred to hereunder :- 1. In the case of Sukumar Chand Jain Vs Delhi Development Authority and Anr. reported in 2003(1) Arb. LR, 174 (Delhi). 2. In the case of National Hydro electronic Power Corporation Ltd. Faridabad, Haryana Vs- M/s. Asian Techs Rani Constructions Joint Venture, Cochin, Kerala and Ors. reported in AIR 2003 Uttaranchal 1. Considering the facts and circumstances as aforesaid and the judicial pronouncement of different High Courts as well as of the Honble Supreme Court, this Court does not find any justification to interfere with the impugned order which, in my view, is in conformity with the decisions of the Honble Supreme Court as well as of the different High Courts as recorded above. Before concluding, this Court wants to keep it on record that Mr. Basu, learned Counsel for the petitioner submitted that the facts in the present case is not identical with the facts in the Rani Constructions. Mr.
Before concluding, this Court wants to keep it on record that Mr. Basu, learned Counsel for the petitioner submitted that the facts in the present case is not identical with the facts in the Rani Constructions. Mr. Basu pointed out that in case of Rani Constructions implementation of the award was sought for within the period of limitation, but in the present case implementation of the award was sought for at a point of time when the execution of the said award became barred by limitation as per Article 119(a) of the Limitation Act. Accordingly, Mr. Basu submitted that since the facts in both the aforesaid cases are not identical, the principles laid down in Rani Constructions cannot be applied in the instant case. This Court does not find any substance in such submission of Mr. Basu as the question of limitation has nothing to do with the present issue relating to applicability of the new Act in case of implementation of the award passed under the old Act. (10.) This Court, thus, holds that the present problem can be solved by applying the principles laid down by the Honble Supreme Court in Rani Constructions notwithstanding the differences in the facts of these two cases. However, it is made clear that since limitation is not the present issue before this Court, the said issue is left out of the consideration of this Court presently. This Court, thus, concludes by holding that interference with the impugned order is not necessary in the facts of the instant case. The revisional application, thus, stands rejected. Urgent xerox certified copy of this order, if applied for, be given to the parties, as expeditiously as possible.