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1990 Supreme(HP) 131
High Court Of Himachal Pradesh
D.P.SOOD
WALAIT RAM GUPTA - Appellant
Versus
H.P.STATE ELECTRICITY BOARD - Respondent
Civil Suit No. 65 of 1989
Decided On : 12/05/1990
For the appellant(s)/petitioner(s):Shri J. S. Bhogal, Advocate. For the respondent(s): :Shri Bhupinder Gupta, Advocate.
The provisions of Order 2 Rule 2 CPC and the principle of constructive res judicata are attracted to proceedings before the Arbitrators under the Arbitration Act.
Headnote:
ARBITRATION - ORDER 2 RULE 2 CPC - RES JUDICATA - APPLICABILITY - ARBITRATION PROCEEDINGS - DISPUTES ARISING FROM SAME CAUSE OF ACTION - REFERENCE TO ARBITRATION - SUCCESSIVE ARBITRATIONS - LEGALITY - INTERPRETATION OF ARBITRATION CLAUSE - ENLARGEMENT OF ARBITRATOR'S POWERS - INACTION OF APPOINTING AUTHORITY - EFFECT - LIMITATION - APPLICABILITY.
Fact of the Case:
Plaintiff, a construction contractor, entered into an agreement with the defendant for the construction of an office building. During the progress of the work, additional work was assigned to the plaintiff due to changes in design. The plaintiff completed the work in April 1985 and the final bill was paid in October 1986, which the plaintiff accepted under protest. The plaintiff had earlier moved an application under section 20 of the Arbitration Act for referring the dispute to arbitration, which was withdrawn. Subsequently, the plaintiff filed another application under section 20 of the Arbitration Act seeking direction to the defendants for filing Agreement No. II of 1982-83 and for reference of disputes to arbitration.
Finding of the Court:
The court held that the provisions of Order 2 Rule 2 CPC and the principle of constructive res judicata are attracted to proceedings before the Arbitrators under the Arbitration Act. The court further held that the plaintiff was entitled to more than one relief in respect of the different cause of action which had arisen from one transaction. The court also held that the plaintiff was not estopped from raising the disputes and that Order 2 Rule 2 or section 11 of the Code of Civil Procedure were not attracted to the facts and circumstances of the case.
Issues: 1. Whether the provisions of Order 2 Rule 2 CPC and the principle of constructive res judicata are attracted to proceedings before the Arbitrators under the Arbitration Act? 2. Whether the plaintiff was entitled to more than one relief in respect of the different cause of action which had arisen from one transaction? 3. Whether the plaintiff was estopped from raising the disputes? 4. Whether Order 2 Rule 2 or section 11 of the Code of Civil Procedure were attracted to the facts and circumstances of the case?
Ratio Decidendi: 1. The court held that the provisions of Order 2 Rule 2 CPC and the principle of constructive res judicata are attracted to proceedings before the Arbitrators under the Arbitration Act. The court reasoned that the purpose of arbitration proceedings is speedy disposal of disputes by a person of the choice of parties and that Order 2 Rule 2 is a rule of completest wisdom aimed at preventing multiplicity of proceedings. 2. The court held that the plaintiff was entitled to more than one relief in respect of the different cause of action which had arisen from one transaction. The court reasoned that the plaintiff had specifically raised the disputes with respect to the aforesaid items but the Arbitrator had confined himself only to a single claim and left the items of the disputes now sought to be referred to the arbitration by stating that he had no jurisdiction. 3. The court held that the plaintiff was not estopped from raising the disputes. The court reasoned that the plaintiff had specifically raised the disputes with respect to the aforesaid items but the Arbitrator had confined himself only to a single claim and left the items of the disputes now sought to be referred to the arbitration by stating that he had no jurisdiction. 4. The court held that Order 2 Rule 2 or section 11 of the Code of Civil Procedure were not attracted to the facts and circumstances of the case. The court reasoned that the plaintiff had specifically raised the disputes with respect to the aforesaid items but the Arbitrator had confined himself only to a single claim and left the items of the disputes now sought to be referred to the arbitration by stating that he had no jurisdiction.
Final Decision: The court allowed the application and directed the Chief Engineer (P) H. P. S. E. B., Shimla to refer the disputes as per items a to f narrated above for the adjudication by appointing an Arbitrator pursuant to Clause-25 of the Arbitration Agreement entered into between the parties.
D.P. Sood, J—"In case different disputes in different applications are found to have arisen from the same cause of action, is it open to a party to raise such different disputes in different applications to Court for reference and to have different and successive arbitrations is the short but nevertheless an interesting question which has fallen for determination of his Court.
2. The plaintiff is a Construction Contractor. He was entrusted with the work of construction of the office building (Block-II) Vidyut Bhawan, H. P , S E. B., Sbimla-4 pursuant to an agreement entered into between the parties to the instant Its. The work order was given on September 18,1982. It is pertinent to detail that the construction work under the agreement was of the value of Rs 30,54,644 only. However, during the progress of the work due to some change in the design and inclusion of the substituted items under the provision of Clause-12 and 12-A of the aforesaid agreement, additional work was assigned to the plaintiff and thus the total work under the contract executed by the contractor became of the value of Rs. 64,68,815 only The plaintiff completed the entire work in April, 1985. However, the final bill was paid to him in October, h8/ which he accepted under protest by putting a note on the said bill as :— "Payment received under protest on account of deduction of 9.1i% on over ail and recovery of binding wire, putty and empty cement bags". Before the final payment so made, the plaintiff had also moved a similar application under section 20 of the Arbitration Act for referring the dispute for the appointment of an arbitrator before the Senior Sub- Judge, Shimla which was withdrawn and thus followed by an application to the Chairman, H. P., S. E. B. for the said purpose but acted upon by the Chief Engineer concerned pursuant to the arbitration clause who appointed initially Shri R K Sharma, Superintending Engineer as an arbitrator but on having shown his unwillingness to act as such, directed the appointment of Shri O. C Kaushal, Director (Designs) of the rank of the uperintending Engineer as a sole arbitrator for settling the dispute in between the parties vide his order dated August 1, 1988. According to the petitioner, since the final bill did not represent the true and correct payment, the same was accepted by the applicant under protest. The plaintiff-petitioner had claimed rights and raised dispute before the Appointing Authority i e. Chief Engineer concerned by moving an application specifically raising the dispute to the following effect only :— (i) Whether claimant is entitled to recover a sum of Rs. 2,14,000.00 from the respondent on account of excess deduction of rebate & 9 11%. If so, to what extent? (ii) Refund of Rs. 80,000 (Rupees eighty thousands only) security which has been adjusted towards the recovery of rebate by the respondent-Executive Engineer (iii) Interest @ Rs. 18% on the above amounts.
3. The parties submitted their claims and counter-claims before the arbitrator. The plaintiff in his claim sought relief with respect to seven items claiming an amount of Rs. 18,60,421.48 paise whereupon the arbitrator asked the plaintiff that reference had been made to him with respect to only one item out of the aforesaid seven different claims and consequently he directed the plaintiff to get his powers enlarged for the purpose of settling the other disputed items. The Appointing Authority appears to have taken no action. Both parties continued participating in the proceedings whereupon the arbitrator adjudicated upon the aforesaid single item and made his award on May 17, 1989 which was ultimately made a Rule of the Court vide order dated September 13, 1989 of this Court,
4. On July U, 1989 the present application under section 20 of Arbitration Act, 1940 registered as Civil Suit No. 65 of 1989 was filed by the plaintiff seeking direction to the defendants for filing Agreement No. II of 1982-83 and for reference of disputes t
