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Rajasthan High Court · body

2015 DIGILAW 1556 (RAJ)

Eastern Engineering Enterprises v. Rajasthan State Mines & Minerals Ltd.

2015-08-20

VINEET KOTHARI

body2015
ORDER : 1. The present appeal is directed against the impugned order dated 21.04.1994 passed by the learned District Judge, Udaipur in Civil Misc. (Arbitration) Case No.34/92 – M/s. Eastern Engineering Enterprises (E.E.E., 'for short') Vs. Rajasthan State Mines & Minerals Ltd. (R.S.M.M.L., 'for short') & Ors., passed on an application under Section 33 of the Old Arbitration Act, 1940. 2. The dispute between the parties arose on account of an Agreement between them for doing certain excavation works in the mines owned by R.S.M.M.L., and earlier an arbitral award was passed, on the dispute arising by the Arbitrator appointed as per clause 73 of the Agreement on 18.02.1986, and that matter reached upto the Hon'ble Supreme Court, which was decided vide Rajasthan State Mines & Minerals Ltd. Vs. Eastern Engineering Enterprises & Anr., (1999) 9 SCC 283 , where ultimately, the arbitration award dated 18.02.1986 in favour of E.E.E. Company was set aside. 3. In those proceedings before the learned Arbitrator, the R.S.M.M.L. did not admittedly, make any counter-claim for the claim of interest on the advances of money made by them to the Company-E.E.E. for undertaking the excavation work. Subsequently however, the R.S.M.M.L. again sought to raise this dispute about the payment of interest on the advances made by it and sought to raise the said dispute before the learned Arbitrator, to be appointed as per clause 73 of the Agreement between the parties. 4. Thereafter, an order dated 30.05.1992 was passed by the Managing Director, R.S.M.M.L., appointing Shri P.K. Bhatia, Chief of Mines, Hindustan Zinc Limited as the Sole Arbitrator. The said appointment of the Arbitrator and entering upon the reference of the dispute about payment of interest on the advances made by R.S.M.M.L. to E.E.E., was challenged by the Company-E.E.E. before the learned court below. The said appointment of the Arbitrator and entering upon the reference of the dispute about payment of interest on the advances made by R.S.M.M.L. to E.E.E., was challenged by the Company-E.E.E. before the learned court below. However, their application was rejected by the learned District Judge, Udaipur, with the following observations:- ^^mi;qZDr foospu ds vk/kkj ij tks jsQjsla foi{kh la-2 us vius i= fnukad 30-5-1992 ds }kjk foi{kh la-3 dks ,sxzhesUV fnukad 14-5-81 dh DykWt 73 ds rgr fookfnr C;kt dh jkf’k 1]73]13]267 :i;k 35 iSlk ds lEcU/k esa fd;k x;k gS] mls izzkFkhZ bl izkFkZuk i= ds tfj;s mi;qDr dkj.kksa ds dkj.k xSj dkuwuh ?kksf”kr djkus dk vf/kdkjh ugha gS vkSj bl dkj.k izkFkhZ dk ;g izzzkFkZuk i= [kkfjt fd;s tkus ;ksX; gSA nwljs ‘kCnksa es ekurs gq, fd %& 1- ,sxzhesaV fnukad 14-05-1981 mi;qDr jsQjsal ds vFkkZr~ fnukad 30-5-1992 dks bUVjsLV ds lEca/k esa QksLkZ es FkkA 2- ;g fd ,sxzhesaV fnukad 14-05-1981 ds vkchVªs’ku DykWt 73 Hkh mDr jsQjsUl ds fnu QksLkZ esa FkhA 3- ;g fd mi;qDr ifjfLFkfr;ksa es jsQjsal tks foi{kh la-2 vius i= fnukad 30-05-1992 ds }kjk foi{kh la-3 dks ,sxzhesaV fnukad 14-05-1981 dh DykWt 73 ds rgr fookfnr C;kt dh jkf’k 1]73]13]267 :Ik;k 35 iSlk ds lEca/k esa fd;k x;k gS] og lgh gSA 4- ;g fd ,slh lwjr esa izkFkhZ dh nj[okLr vaarxZr /kkjk 33 ,DV] 1940 ds }kjk rFkkdfFkr jsQjsal fnukad 30-5-1992 dks xSj dkuwuh ?kksf”kr ugh djk ldrkA izkFkhZ dh ekStwnk nj[okLr vraxZr /kkjk 33 ,DV] 1940 [kkfjt fd;s tkus ;ksX; gSA mi;qDr dkj.kksa ds dkj.k izkFkhZ dk ;g izkFkZuk i= varxZr /kkjk 33 ,DV] 1940 [kkfjt fd;k tkrk gSA Sd/- ¼lquhy dqekj xxZ½ ftyk U;k;k/kh’k] mn;iqj^^s 5. While admitting the present appeal on 15.07.1994, a coordinate Bench of this Court stayed the further proceedings pending before the learned Arbitrator-respondent No.3, which order was confirmed on 10.04.2000. 6. Learned counsel for the appellant-E.E.E., Mr. While admitting the present appeal on 15.07.1994, a coordinate Bench of this Court stayed the further proceedings pending before the learned Arbitrator-respondent No.3, which order was confirmed on 10.04.2000. 6. Learned counsel for the appellant-E.E.E., Mr. L.R. Mehta, urged that since the respondent-R.S.M.M.L. did not make any counter-claim in the earlier arbitral proceedings, which culminated in the award dated 18.02.1986, they were barred from raising such claim under Order 2 Rule 2 CPC, and also since the advances were not made to Company-E.E.E., with no specific Agreement for payment of interest thereon, no such interest was payable, and therefore, the learned Arbitrator could not enter upon such reference on these issues, and therefore, the present appeal accordingly deserves to be allowed and the impugned order passed by the learned District Judge, Udaipur dated 21.04.1994 deserves to be set aside. 7. On the other hand, Mr. Tribhuvan Gupta, learned counsel for the respondent-R.S.M.M.L., urged that the earlier award dated 18.02.1986 having been set aside by the Hon'ble Supreme Court in a case between the parties i.e. Rajasthan State Mines & Minerals Ltd. Vs. Eastern Engineering Enterprises & Anr., (1999) 9 SCC 283 , only on 20.09.1999, there was no bar on the respondent-R.S.M.M.L. to raise the claim of interest on the advances made by it to the Company during the course of execution of the contract in question and the objections sought to be raised by the appellant-Company are merely their defences to such claim made by the respondent-R.S.M.M.L., which questions can always be decided by the learned Arbitrator, and in view of the wide language of abritration clause 73 of the Agreement between the parties, which Order dated 20.08.2015 5 of 6 covers all disputes and differences arising out of, or in any way touching or concerning this contract whatsoever, except as to any matter, the decision of which is expressly vested in any authority in this contract, shall be referred to the sole arbitration of the person appointed by the Managing Director of the Company, the learned counsel for the respondent, Mr. Tribhuvan Gupta, therefore, submitted that the present dispute about interest on advances can also definitely be referred to the learned Arbitrator, in terms of Clause 73 of the Agreement, and the impugned order upholding such appointment and allowing an Arbitrator to enter upon a reference on this question, cannot be called in question by the appellant-Company. 8. Tribhuvan Gupta, therefore, submitted that the present dispute about interest on advances can also definitely be referred to the learned Arbitrator, in terms of Clause 73 of the Agreement, and the impugned order upholding such appointment and allowing an Arbitrator to enter upon a reference on this question, cannot be called in question by the appellant-Company. 8. Having heard the learned counsels for the parties, this Court is of the opinion that in view of the wide language of Clause 73 of the Agreement between the parties, there appears to be no justification for not allowing the learned Arbitrator to enter upon such reference on the dispute referred at the instance of the respondent-R.S.S.M.L. The objections sought to be raised in the present appeal before this Court, are the defences and the objections of the appellant-Company EEE, which can very well be raised before the learned Arbitrator as well, and in law, he is expected to decide these objections in accordance with law, including the question of his own jurisdiction to enter upon such reference made to him. This Court does not see any justifiable reason to quash or withhold these arbitral proceedings initiated at the instance of the respondent R.S.M.M.L., on the question of claim of interest on the advances made by it to the appellant/Company-E.E.E. Needless to say, the appellant-Company will be free to raise the objections with regard to jurisdiction of the Arbitrator as well as merits of the claim made by R.S.M.M.L. before the learned Arbitrator, and the Arbitrator may proceed to decide such dispute, in accordance with the provisions of the old Arbitration Act, 1940, which was applicable at the time of entering into the Agreement in question. 9. With these observations, the present appeal is disposed of. No costs. Copy of this order may be sent to the concerned parties as well as the learned court below forthwith.