2017 Supreme(Del) 1528
IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT, YOGESH KHANNA, JJ.
NBCC (INDIA) LTD. - Appellant
Versus
M/S. SHARMA ENTERPRISES - Respondent
FAO (OS) (COMM) 92 of 2017, EFA (OS) (COMM) 6 of 2017, CAV.420 of 2017, C.M. APPL.15886 of 2017 & 15887 of 2017
Decided On : 18-05-2017
For the Appellant :Ms. Ginny. J. Rautray and Ms. Bhawna Pal, Advocates.
For the Respondent:Ms. Anusuya Salwan, Ms. Renuka Arora and Ms. Nikita Salwan, Advocates.
Headnote:
Arbitration Act, 1940 - Section 14, 30, 33 - Award was challenged - Limitation - Claim and the counterclaims, commenced before the entry into force of the 1996 Act - Proceedings before Justice Satpal were conducted under the 1940 Act - Respondent filed under Sections 14 and 17 of the 1940 Act for filing the award in court - NBCC also challenged the said award under Sections 30 and 33 of the 1940 Act - Appellant would be barred from instituting a fresh suit under the 1996 Act, by reason of limitation - Held, arbitral proceedings are governed by the 1996 Act - Arbitral proceedings conducted and the award passed by the arbitrator would be governed by the old Act - Impugned order of single judge is set aside.
S. RAVINDRA BHAT, J.
1. The present judgment seeks to dispose of the two common appeals in FAO (OS) (COMM) 92/2017 and EFA (OS) (COMM) 6/2017. Judgment in FAO (OS) (COMM) 92/2017 was reserved by an order of this Court dated 28.04.2017. Subsequently, by consent of the parties, by an order dated 01.05.2017, this Court reserved judgment in EFA (OS) (COMM) 6/2017 along with the main appeal, i.e. FAO (OS) (COMM) 92/2017.
2. The appellant (hereinafter “NBCC”) is aggrieved by an order of the learned single judge, who held, by the impugned judgment, that its application under Section 14 of the Arbitration Act, 1940 (hereafter “the old Act”) challenging an award was not maintainable.
3. NBCC was awarded a contract for the construction of a railway station-cum-commercial complex at Vashi, Navi Mumbai, by IRCON, the principal employer. In turn, NBCC issued notice inviting tenders for the work and the respondent, Sharma Enterprises (hereinafter “Sharma”) emerged as the successful bidder. Sharma was issued a letter of intent followed by a letter of award whereby it was awarded the work of mobilizing the work site.
4. On 08.06.1992, NBCC served a notice on Sharma in terms of Clause 60.1 of the General Conditions of Contract (GCC). NBCC then issued a 48-hour notice upon Sharma for termination of the work, which was followed by a number of letters sent by it to Sharma. Finally, by its letter dated 22.09.1992, NBCC terminated the contract. Sharma filed a petition under Section 20 of the old Act seeking reference of the disputes to arbitration. In the meanwhile, the Chairman-cum-Managing Director of NBCC appointed one Mr. Daljeet Singh as sole arbitrator, referring both the claims (of Sharma) and the appellant’s counter-claims for arbitration. By an order, dated 02.12.1997, however, the High Court set aside the appointment of Mr. Daljeet Singh and Justice G.C. Jain (Retd.) was appointed as sole arbitrator in his place. The counterclaims of the Appellant were not referred to the arbitrator. Later, since Justice G.C. Jain expired, NBCC applied for appointment of an arbitrator. By order dated 09.09.1998, this court appointed Justice Satpal as the arbitrator. On appeal, by an order dated 09.07.1999, the Division Bench of the High Court set aside the order dated 02.12.1997 as well as the order of 09.09.1998. The Division Bench held that Mr. Daljeet Singh’s appointment was valid and he would proceed to adjudicate upon the claims as well as the counterclaims. Against this order, a special leave petition was preferred to the Supreme Court. The Court set aside the order of the Division Bench, by an order dated 18.10.2000. Thereafter, NBCC filed an application, dated 15.09.2001 before Justice Satpal to take on record the Appellant’s counterclaims. However, that application was dismissed on 16.03.2002. Thereafter NBCC requested its Chairman-cum-Managing Director for the appointment of an arbitrator and Sh. A.K. Gupta was appointed as the sole arbitrator -for adjudicating NBCC’s counterclaims.
5. Against this appointment, Sharma filed OMP No. 144/2003 under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) contending that the arbitrator had become de facto or de jure unable to perform his functions. NBCC in response contended that the proceedings under Sections 14 and 15 of the 1996 Act were not maintainable and any objections of Sharma could be raised before the arbitral tribunal under Section 16 of the 1996 Act. On 12.09.2005, Justice Satpal made and published an award over Sharma’s claims. Thereafter, Sharma filed C.S. (OS) 259/ 2006 under Sections 14 and 17 of the 1940 Act seeking a direction to the said arbitrator, Justice Satpal to file the award. On 13.02.2006, the High Court in CS(OS) 259/2006 directed Justice Satpal to file the arbitral award as well as the arbitration proceedings. Thereafter, the award was filed by Justice Satpal in the High Court. This award was challenged by the Appellant in CS(OS) 1420/2006 und