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2012 DIGILAW 523 (RAJ)

State of Rajasthan Through Additional Chief Engineer, Irrigation Division Kota (Rajasthan) v. Om Metals and Minerals Ltd.

2012-02-27

BELA M.TRIVEDI

body2012
JUDGMENT 1. - The present appeal has been filed by the appellants-non-applicants under Section 37 of the Arbitration and Conciliation Act 1996 (hereinafter referred to as the said Act)against the order dated 15.2.2008 passed by the District Judge , Jhalawar(hereinafter referred to as the lower court) in Civil Misc. Case No. 108/2006, whereby the lower court has allowed the objection application filed by the respondent-applicant under Section 34 of the said Act and set-aside the Award dated 17.1.2006 passed by the Standing Empowered Committee of the appellants. 2. The short facts, giving rise to the present appeal are that the respondent-applicant had raised certain disputes with regard to the contractual work awarded to him in relation to the contract agreement No. 05/96-97. As per clause 23 of said agreement, any question, difference or objection which may arise in connection with the contractual agreement had to be referred for decision of the empowered standing committee consisting following members- (i) Administrative Secretary concerned. (ii) Finance Secretary or his nominee not below the rank of Deputy Secretary. (iii) Law Secretary or his nominee not below the rank of Joint L.R. (iv) Chief Engineer Cum Addl. Secretary of the concerned Department. (v) Chief Engineer concerned(Member Secretary). 3. It appears that the said composition of standing committee was amended by the appellants vide order dated 13.8.2002 as under:- " 04 flpkabZ foHkkx] jktLFkku ljdkj dh vksj ls fnukad 13-08-2002 dks vkns'k tkjh dj vuqcU/k dh 'krZ la[;k 23 esa ls'kks/ku fd;k x;k rFkk LFkk;h lfefr esa fuEufyf[kr inf/kdkfj;ksa dk ukekadu lfefr fd;k x;k%& ( , ) eq[; 'kklu lfpo@'kklu lfpo] flapkbZ ( v/;{k ) ( ch ) foRr lykgdkj] flapkbZ foHkkx ( lnL; ) ( lh ) la;qDr fof/k ijke'khZ& III fof/k foHkkx ( lnL; ) ( Mh ) eq[; vfHk;ark ,oa vfrfjDr 'kklu lfpo] flapkbZ foHkkx ( lnL; ) ( bZ ) eq[; vfHk;qUrk@vfrfjDr eq[; vfHk;Urk] flapkbZ laca/kh ( lnL; lfpo ) " 4. It further appears that the appellants referred the dispute to the standing committee constituted under clause 23 of the agreement and the said committee vide the Award dated 17.1.2006, rejected the claims of the respondent. Being aggrieved by the said order, the respondent-applicant submitted an application under Section 34 of the said Act, for setting-aside the said Award. The lower Court vide order dated 15.2.2008 allowed the said application and set-aside the award made by the standing committee. Being aggrieved by the said order, the respondent-applicant submitted an application under Section 34 of the said Act, for setting-aside the said Award. The lower Court vide order dated 15.2.2008 allowed the said application and set-aside the award made by the standing committee. Being aggrieved by the said order the appellants have preferred the present appeal. 5. It has been sought to be submitted by learned counsel for the appellants that after setting-aside the award in question the lower court should have remanded the matter to the standing committee as per clause 23 of the agreement. He further submitted that the members of the standing committee were nominated as per clause 23 only as the Dy. Secretary(Finance) was of the same rank as the Financial Adviser and as such there was no illegality in the constitution of the committee. He further submitted that the claims of the respondent were barred by limitation and not maintainable in the eye of law. Lastly, he submitted that since the respondent has already applied under Section 11 of the said Act, the appellants be permitted to raise all the issues as may be legally permissible in the said application for the appointment of arbitrator. 6. As against that learned counsel for the respondent Mr. Mittal has submitted that the committee constituted for deciding the disputes was not constituted as per clause-23 of the agreement and, therefore, the lower court has rightly set-aside the award made by such an illegally constituted committee. He further submitted that the respondent having already invoked clause 23 for referring the dispute as per the terms of the agreement and the lower court having set-aside the award made by the said illegally constituted committee, the only course open for him was to approach the designated court for the appointment of the arbitrator under Section 11 of the said Act. 7. In the instant case, the issue raised by the appellants moves in a very narrow compass. It is not disputed that the disputes were pertaining to the contractual work to be done as per the agreement of 1996-97. It is also not disputed that the respondent had requested to refer the disputes to the standing committee under Clause 23 of the said agreement in the year 2004. It is not disputed that the disputes were pertaining to the contractual work to be done as per the agreement of 1996-97. It is also not disputed that the respondent had requested to refer the disputes to the standing committee under Clause 23 of the said agreement in the year 2004. It is also not disputed that there was change in the composition of the committee, specified in clause 23 of the agreement, as per the order dated 13.8.2002 of the appellants. Under the circumstances, the question to be considered by the court is as to whether the committee constituted as per clause 23, which stood amended on 13.8.2002, could have decided the disputes raised by the respondent. The learned counsel for the appellants stated that earlier, one of the members of the said committees was Finance Secretary or his nominee not below the rank of Dy. Secretary and after the amendment Financial Adviser was substituted. According to him the rank of Dy. Secretary and that of Financial Adviser was the same and as such there was no illegality if the Dy. Secretary was nominated as one of the members of the standing committee. In the opinion of this Court, there is no substance in the said submission of learned counsel for the appellants, for the simple reason that if the rank of the Dy. Secretary and that of Financial Adviser was the same, there was no necessity to change the designation from Dy. Secy. to Financial Adviser in the said Committee. Once the designations of the members were specified in the clause 23, the appellants were expected to nominate only such officers as specified under the said clause. If that is not done, any award passed by the committee not constituted as per clause 23, was liable to be set-aside under Section 34(2)(v) of the said Act. The lower court having rightly considered the said provision has set-aside the award made by the committee which was not constituted as per clause 23 of the agreement. Under the circumstances, there is no illegality in the impugned order passed by the lower court. 8. Since the application being arbitration application No. 21/2001, for appointment of arbitrator under Section 11 of the said Act is pending before the designated court, this court is not expected to go into the issue as to whether such an application u/Section 11 was maintainable or not. 8. Since the application being arbitration application No. 21/2001, for appointment of arbitrator under Section 11 of the said Act is pending before the designated court, this court is not expected to go into the issue as to whether such an application u/Section 11 was maintainable or not. It is needless to say that both the parties may raise all the legal contentions as may be permissible in the said application. 9. In the aforesaid premises, there being no substance in the present appeal, the appeal deserves to be dismissed and is accordingly dismissed.Appeal dismissed. *******