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2013 Supreme(Kar) 709

High Court of Karnataka
ARAVIND KUMAR, J.
A.P. Thomas
Versus
The Union of India, rep. by General Manager, Ministry of Railways & Others
M.F.A. Nos. 2603 & 2605 of 2009 (AA) c/w M.F.A. No. 2604 of 2009
Decided On : 06-11-2013

Advocates Appeared:
For the Appellant:M/s. A.G. Shivanna & Associates, Advocates.
For the Respondents: R1 & R2, Abhinay for N.S. Sanjay Gowda, R3, deleted.

Headnote:ARBITRATION AND CONCILIATION ACT, 1996 - Sections 34 & 37(2): [Aravind Kumar, J] Setting aside of Award - Trial court treated the application filed under Section 34 as an appeal under Section 37(2) of the Act and proceeded to adjudicate the dispute on merits as well and after considering the rival contentions dismissed the petition filed under Section 34 of the Act - Held, Order passed by the trial court construing the application filed under Section 34 of the Act and treating it as an appeal under sub-section (2) of Section 37 and adjudicating the same on merits would bar a second appeal under sub-section (3) of Section 37. Hence, these appeals are liable to be dismissed. Perusal of the award would indicate that for non payment of successfully completed work on time, dispute has arisen between the parties. The claim statement filed by the claimant relates to execution and quality of work as also the measurement of the work. Arbitrator as well as the trial Court has rightly held that it comes squarely within the purview of clause 22.5 of GCC and stands excluded from the arbitration as provided in clause 63 of GCC. The said finding does not suffer from any infirmity. It has also been observed by the trial court that not permitting the claimant to pay arbitration fee in instalments and passing of the award on preliminary issue does not amount to misconduct. In fact Section 38 of the Act enables the Arbitrator to suspend the proceedings where a party does not pay his share of the cost. Hence, the trial Court has found that nothing wrong can be attributed to the Arbitrator for payment of his fees and arbitration costs and such insistence would not amount to misconduct by the Arbitrator in all these appeals. Appeals dismissed as not maintainable.

Judgment :

1. These appeals have been preferred by the claimant under sub-section(2) of Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘Act’ for the sake of brevity). Being aggrieved by the Judgment and decree passed by VI Additional City Civil Judge, Bangalore City in A.S.Nos.23/2004, 22/2004 and 24/2004 dated 21.11.2008 whereunder petition filed by the claimant to set aside the order/award dated 21.02.2004 passed by Sole Arbitrator ruling that Arbitral Tribunal has no jurisdiction to go into the matters and terminating the proceedings has been dismissed.

2. I have heard the arguments of Sri. A.G. Shivanna, learned counsel appearing for claimant and Sri. Abhinay, learned counsel appearing on behalf of Sri. N.S. Sanjay Gowda for Respondents 1 and 2.

3. Sri. Abhinay, learned counsel appearing on behalf of Sri. N.S. Sanjay Gowda for Respondents 1 and 2 has raised an initial objection with regard to maintainability of these appeals, contending interalia that sole Arbitrator had accepted the plea put forward by respondent regarding jurisdiction of the arbitral tribunal after examining the rival contentions and by award/order dated 21.02.2004 has ruled that the arbitral tribunal has no jurisdiction to go into the matter by terminating the proceedings against which claimant filed an application under section 34 of the Act before Civil Court which came to be examined by the jurisdictional court as an appeal under sub-section (2) of section 37 which order is now being assailed in the present appeal by invoking sub-section(2) of section 37 and contends against an order passed under sub-section (2) of section 37 by the competent court to set aside the award, there cannot be any second appeal against such order under Arbitration Act, 1996 since it does not provide for such second appeal. Hence, he prays for rejection of these appeals.

4. Per contra, Sri. A.G. Shivanna, learned counsel appearing for claimant would contend that sub-section (4) of section 16 would provide for an aggrieved party namely a party who is aggrieved by an order passed by Arbitral Tribunal under sub-section(2) or sub-section (3) of section 16 to invoke section 34 of the Act and as such the application filed by the claimant before the court of original jurisdiction i.e., City Civil Court to set aside the awards passed by arbitral tribunal by invoking section 34 was required to be treated as such and order passed by the said court rejecting the application would entitle the claimant to seek for setting aside such order under clause (b) of sub-section (1) of section 7 of the Act. Hence, he prays for rejecting the plea put forward with regard to maintainability of the present appeals and prays for examining the claim on merits.

5. In view of the rival contentions raised I am of the considered view that following points would arise for my consideration:

“(1) Whether the objection raised by respondents regarding maintainability of these appeals is to be upheld or rejected?

(2) Whether order dated 21.11.2008 passed by VI Additional City Civil Court, Bangalore rejecting the application of the claimant and affirming the Award/order dated 21.02.2004 passed by Arbitral Tribunal suffers from any infirmity calling for interference by this court?

(3) What order?”

6. In view of rival contentions raised with regard to maintainability of appeals it would be necessary to state the factual matrix leading to filing of these appeals and take note of the relevant provisions which govern the issue on hand or the provisions which have a bearing on the contentions raised and as such following provisions of the Arbitration and Conciliation Act, 1996 are extracted herein below after narrating the factual background:

I- FACTUAL BACKGROUND:

7. Facts in brief leading to filing of these appeals are as under:

Claimant is a contractor and in respect of works carried out by him of augmentation scheme namely clearing scrap and limestone’s and other debris available in the scrap






































































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