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2005 Supreme(Gau) 240
IN THE HIGH COURT OF GAUHATI
D. BISWAS AND AFTAB H. SAIKIA, JJ.
Dey and Co. – Appellant
Vs.
Union of India (UOI) and Ors. – Respondent
R.F.A Nos. 32, 33 and 34 of 2002
Decided On: 18.03.2005
Advocate Appeared
For Appellant/Petitioner/Plaintiff: C.R. Dey, B.C. Das, G.P. Bhowmick, A. Bhattacharjee, N. Basar and G. Saikia, Advs.
For Respondents/Defendant: S. Sarma, Adv.
The main legal point established is that the commencement of arbitral proceedings determines whether the disputes are governed by the provisions of the old Act or the new Act.
Headnote:
Arbitration - Jurisdiction - Interpretation of Arbitration and Conciliation Act, 1996
Fact of the Case:
The appellant filed suits seeking reference of disputes to an arbitrator as per the General Terms and Conditions of Contract. The suits were dismissed by the Civil Judge, stating that they should have been filed under the provisions of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
The Court found that the arbitral proceedings commenced in 1995, before the new Act came into force in 1996. Therefore, the disputes were subject to the provisions of the old Act, and the applications filed by the appellant under section 20 of the old Act should not have been dismissed for want of jurisdiction.
Issues: The main issue was whether the suits should have been filed under the provisions of the new Act or the old Act, and whether the arbitral proceedings were governed by the new Act or the old Act.
Ratio Decidendi: The Court interpreted the provisions of the Arbitration and Conciliation Act, 1996, specifically sections 21 and 85, to determine the commencement of arbitral proceedings and the applicability of the old Act to disputes raised before the new Act came into force.
Final Decision: The appeals were allowed, the impugned judgment and decree were set aside, and the matter was remitted back to the Civil Judge to proceed with the adjudication under the old Act.
D. Biswas, C.J. (Acting)
1. By this common judgment we propose to dispose of R.F.A. Nos. 32, 33 and 34 of 2002 preferred by M/s. Dey & Co. challenging the legality and validity of the order dated 24.12.2001 passed by the learned Civil Judge (Sr. Divn.) No. 1, Silchar in Title Suit Nos. 14, 15 and 16 of 1996 respectively.
2. All the three suits were filed by the appellant praying for an order of reference of the disputes relating to execution of R.C.C. construction entered into between the appellant and the respondent Railways to the arbitrator as provided by the General Terms and Conditions of Contract.
3. It is submitted that the contract was completed on different dates during the period 1990 to 1993. The final bill for payment was not prepared and no payment was made despite repeated requests by the appellant-Company. Having no other alternative, the appellant issued notice invoking the arbitral clause [Clause 63(1) of the General Terms and Conditions of Contract) on 22.7.1995 which was duly received by the Railways.
4. The learned Civil Judge dismissed the suits rejecting the appellant's prayer for referring the disputes to arbitrator on the ground that the suits ought to have been filed under the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "new Act") and not under section 20 of the Arbitration Act, 1940 (for short "the old Act"). According to the learned Civil Judge, the Arbitration and Conciliation Ordinance was promulgated and brought into force with effect from 16.1.1996 for the first time. The second Ordinance was promulgated and brought into force with effect from 25.1.1996. The third Ordinance was promulgated and brought into force with retrospective effect from 25.1.1996. The three Ordinances promulgated from time to time could not be ratified and replaced and eventually, the new Act was enacted and brought into force with effect from 25.1.1996. The suits were filed on 14.2.1996, i.e., after 25.1.1996 when the new Act was brought into force and this led the learned Civil Judge to come to the conclusion that the suits having been filed after 25.1.1996, ought to have been filed under the provisions of the new Act of 1996 and not under Section 20 of the old Act.
5. From the factual matrix recapitulated above, it would appear that the suits undisputedly were filed after the new Act came into force. But this does not mean that the arbitral proceedings will have to be governed by the provisions of the new Act. It is the date of commencement of the arbitral proceedings which will be determinative of the issue as to whether a particular dispute has to be dealt with by the arbitrator under the provisions of the old Act or that of the new Act.
6. Section 21 of the new Act provides that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for referring the dispute to arbitration is received by the respondent. In the instant case, the request for referring the arbitration was communicated to the Railway authorities on 22.7.1995 which was duly received by them. Receipt of the request made by the appellant-company for appointment of arbitrator has not been denied by the Railway authority. Therefore, in terms of the provisions of section 21 of the new Act, it has to be held that the proceedings in the cases at hand commenced in the year 1995. The provisions of the new Act came into force with effect from 25.1.1996. Therefore, the disputes, raised by the appellant in all the three suits would for all purposes be governed by the provisions of the old Act and not by the new Act.
7. Section 85(2) of the new Act saves the arbitral proceedings which commenced prior to coming into force of the new Act. Therefore, going by the provisions of Sections 21 and 85 of the new Act, we have no doubt left in our mind that in the cases at hand all the disputes raised by the appellant-company are subject to the provis
