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2021 Supreme(SC) 770

SUPREME COURT OF INDIA
(From the High Court of Madhya Pradesh Principal Seat at Jabalpur)
M.R. Shah, B.V. Nagarathna, JJ.
M.P. Housing and Infrastructure Development Board & Anr. - Appellants
Versus
K.P. Dwivedi - Respondent
Civil Appeal No. 6768 of 2021
With
M.P. Housing and Infrastructure Development Board & Anr. - Appellants
Versus
K.P. Dwivedi - Respondent
Civil Appeal No.6769 of 2021
With
M.P. Housing and Infrastructure Development Board & Anr. - Appellants
Versus
K.P. Dwivedi - Respondent
Civil Appeal No.6770 of 2021
Decided On : 03-12-2021

Advocates appeared:
For the Appellant(s) :Bharat Singh, AAG Arjun Garg, Aakash Nandolia, Sagun Srivastava, Advocates
For the Respondent(s):Anuj Tyagi, Advocate

IMPORTANT POINT
Cause of action estoppel arises where in two different proceedings identical issues are raised, in which event, latter proceedings between same parties shall be dealt with similarly as was done in previous proceedings – In such an event, bar is absolute in relation to all points decided save and except allegation of fraud and collusion.

Headnote:

Arbitration and Conciliation Act, 1996 – Section 34 – Madhya Pradesh Arbitration Tribunal Act,1983 – Sections 7, 7B and 19 – Reference to arbitration – Maintainability – Order passed by High Court passed in Writ Petition referring dispute between parties to Arbitrator-Housing Commissioner was a consent Order – Thereafter respondent-contractor submitted claims before Arbitrator-Housing Commissioner – Arbitrator-Housing Commissioner passed an award which has attained finality – Claims submitted before Arbitrator-Housing Commissioner; before High Court in Writ Petition and claim submitted in Reference Petition before Arbitral Tribunal under 1983 Act are same without any change – In subsequent reference petition before Arbitral Tribunal under 1983 Act there was no reference to earlier order passed by High Court in Writ Petition referring dispute between parties for adjudication to Arbitrator-Housing Commissioner and award passed by Arbitrator-Housing Commissioner – There was suppression on part of respondent-contractor – Cause of action estoppel arises where in two different proceedings identical issues are raised, in which event, latter proceedings between same parties shall be dealt with similarly as was done in previous proceedings – In such an event, bar is absolute in relation to all points decided save and except allegation of fraud and collusion – Apart from fact that award declared by Arbitrator-Housing Commissioner was not challenged by respondent-contractor, even, so long as said award is not challenged before higher forum same is binding between parties – Even award or a nullity order has to be challenged before appropriate forum/higher forum – In present case it cannot be said that there was a total lack of jurisdiction of Arbitrator-Housing Commissioner in passing award – Impugned judgment and order passed by High Court quashing and setting aside order passed by Arbitral Tribunal constituted under 1983 Act, quashed and set aside and order passed by Arbitral Tribunal restored. [Indian Evidence Act, 1872 – Section 115] (Paras 13 to 18)

Facts of the case:

Feeling aggrieved and dissatisfied with the impugned judgment and order dated 08.05.2018 passed by the High Court of Madhya Pradesh in Arbitration Revision Nos.11, 12 & 13 of 2017 by which the High Court has quashed and set aside the orders passed by the Madhya Pradesh Arbitration Tribunal, Bhopal and has directed the said Tribunal to decide respective references on merits, Madhya Pradesh Housing and Infrastructure Development Board and another have preferred the present appeals. Short question for consideration is, whether, in view of the award declared by Housing Commissioner, M.P. Housing Board, who was appointed as an arbitrator pursuant to the order passed by High Court in Writ Petition No.9131 of 2008, was it open for the respondent – contractor thereafter to file a reference before M.P. Arbitration Tribunal with respect to the very claim/claims which were the subject matter of arbitration before the Arbitrator – Housing Commissioner.

Findings of Court:

As no objections were raised by respondent – contractor at the appropriate stage, the award cannot be annulled subsequently. At no point of time the respondent-contractor had challenged award passed by the Arbitrator-Housing Commissioner and even no court has set aside the award declared by Arbitrator-Housing Commissioner dated 07.11.2008 and the same has attained finality.

Result : Appeals allowed.

JUDGMENT :

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 08.05.2018 passed by the High Court of Madhya Pradesh in Arbitration Revision Nos.11, 12 & 13 of 2017 by which the High Court has quashed and set aside the orders passed by the Madhya Pradesh Arbitration Tribunal, Bhopal and has directed the said Tribunal to decide the respective references on merits, Madhya Pradesh Housing and Infrastructure Development Board and another have preferred the present appeals.

2. As common question of law and facts arise in these group of appeals, all these appeals are decided and disposed of together by this common judgment and order.

For the sake of convenience Civil Appeal No.6768 of 2021 arising out of Special Leave Petition No.32557 of 2018 arising out of the impugned judgment and order passed by the High Court of Madhya Pradesh in Arbitration Revision No.13 of 2017 is treated and considered as the lead matter and the facts in the said appeal are narrated which in nutshell are as under :

2.1 Appellants floated a tender for construction of houses at Riviera Town, Near MANIT Square, Bhopal. Contract was awarded to the respondent herein. An agreement dated 15.07.2005 was executed between the appellants and the respondent. In the year 2008, the disputes arose between the parties. According to the appellants, the respondent was supposed to complete the work within 18 months. However, despite granting repeated extensions, the contractor failed to complete the work, on account of which, appellants rescinded the contract by invoking clause 3 of the contract agreement. Aggrieved by the order dated 30.06.2008, rescinding the contract, the respondent - contractor by invoking clause 29 of the contract agreement filed a claim petition along with granting extension of time upto 31.03.2009 before the Deputy Housing Commissioner, Bhopal. The respondent - contractor also filed a writ petition before the High Court seeking direction to permit him to complete the work. High Court vide Order dated 20.08.2008 disposed of the said petition on a joint consensus of the parties that the dispute shall be decided by the arbitrator i.e., Housing Commissioner, M.P. Housing Board within the stipulated period. The respondent - contractor thereafter filed a modified claim before the Office of the Housing Commissioner along with prayer for grant of extension of time. Thus, the respondent - contractor participated in the arbitration proceedings before the Housing Commissioner, M.P. Housing Board. That the learned Arbitrator passed an award on 07.11.2008 rejecting the claim of the respondent - contractor and granting some relief in favour of the appellants. Instead of challenging the said award by way of an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘Arbitration Act, 1996’), the respondent filed a fresh Reference Petition before the Madhya Pradesh Arbitration Tribunal under Section 7 of the Madhya Pradesh Madhyastham Adhikaran, Vindhyachal, Bhopal, (hereinafter referred to as ‘the 1983 Act’). The appellants filed their written statements on various grounds along with preliminary objections including that the dispute has already been decided by the Arbitrator vide award dated 07.11.2008 which was duly constituted by the High Court and therefore, the fresh claim petition for the same claim before the M.P. Arbitration Tribunal, Bhopal was not maintainable. It was also submitted that the award passed by the Arbitrator had already achieved finality and therefore, the dispute for the said claim cannot be entertained by the Tribunal subsequently. Vide order dated 27.02.2017 the learned M.P. Arbitration Tribunal, Bhopal dismissed the said claim/reference as not maintainable since claim made by the respondent had already been decided by the Arbitrator appointed by the High Court and the award passed by the learned Arbitrator had achieved finality and so the dispute for the sa

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