IN THE HIGH COURT OF ORISSA, CUTTACK
K.R. Mohapatra, J.
Orissa Small Industries Corporation Ltd - Appellant
Versus
M/s Coastal Mechanical & Engineering Industries - Respondent
Arb A No. 7 of 2012
Decided On : 24-02-2021
Arbitration Act - Appeal under Section 37 - Judgment and order assailing the Arbitration Petition filed by the appellant under Section 34 of the Arbitration Act - Summary of Acts and Sections: Arbitration and Conciliation Act, 1996 - Section 37, Section 34, Section 11(6), Section 16, Section 28(3), Section 31(3) - The court discussed the Payment Clause of the Agreement, the claim of the Contractor, and the Corporation's objections. The court also referred to the case law in Major (Retd.) Inder Singh Rekhi Vs. Delhi Development Authority, (1988) AIR SC 1007 and N.B.C.C Ltd. Vs. J.G. Engineering Pvt. Ltd., (2010) AIR SC 640 to support its decision.
Fact of the Case:
The respondent, a small scale industry, was awarded a contract by the appellant-Corporation. Disputes arose regarding non-payment, escalated labour charges, and non-issuance of Tax Deducted at Source (TDS) certificate. The matter was referred to an Arbitration Tribunal, which passed an award in favor of the Contractor. The Corporation filed an application under Section 34 of the Arbitration Act before the District Judge, which was dismissed. The Corporation appealed against this decision.
Finding of the Court:
The court found that the arbitration proceeding was maintainable despite the non-submission of the final bill by the Contractor. The court also held that the award was not passed without jurisdiction and that the Corporation was given ample opportunity of hearing before the Arbitration Tribunal. The court dismissed the appeal, stating that the impugned judgment and order as well as the award passed by the Tribunal needs no interference.
Issues: The issues included the maintainability of the arbitration proceeding, the jurisdiction of the Tribunal, and the Corporation's opportunity of hearing before the Tribunal.
Ratio Decidendi: The court held that the arbitration proceeding was maintainable despite the non-submission of the final bill by the Contractor. It also found that the award was not passed without jurisdiction and that the Corporation was given ample opportunity of hearing before the Arbitration Tribunal.
Final Decision: The appeal was dismissed, and there was no order as to costs.
JUDGMENT
K.R. Mohapatra, J. - This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, 'the Arbitration Act') has been filed assailing the judgment and order dated 21.12.2011 passed by learned District Judge, Cuttack in ARBP No.2 of 2002, whereby he dismissed the Arbitration Petition filed by the present appellant under Section 34 of the Arbitration Act and confirmed the award dated 16.06.2001 passed by learned Arbitration Tribunal, Odisha, Bhubaneswar in Arbitration Case No. AAD- 8 of 1997.
2. Short narration of facts necessary for proper adjudication of this appeal are as follows:
2.1 The respondent, which is a small scale industry (for short, 'the Contractor') was awarded with the contract for 'Structural Fabrication of C.C. Shop in SMS/inside the RSP' (Sub package No.104-3) by the appellant-Corporation (for short 'the Corporation'), which is a Government of Odisha Undertaking, registered under the Indian Companies Act, 1956, with certain terms and conditions mentioned in the work order under Ext.1. On completion of the work assigned, further work orders were issued by the Corporation in favor of the Contractor on 09.03.1994, 18.04.1994, 01.09.1994 and 12.12.1994, which were also executed by the Contractor. The Contractor raised certain disputes alleging non-payment of part of the bill amount after execution of such work, which was delayed till 03.02.1995, non-payment of escalated labour charges, nonissuance of Tax Deducted at Source (TDS) certificate in favour of the Contractor for which it had to pay the Tax again and irregular payment of running bills etc. Several other claims/disputes were also raised. The Contractor although made claim vide letter No. CME/OSIC/96 dated 06.02.1996 (Ext. 10) on the aforesaid irregularities, but its claim was refuted by the Corporation vide letter No.280/OSIC dated 24.02.1996 (Ext.11) alleging that the Contractor had not returned surplus Prime German Steel off-cuts and scrapes, for which the cost of materials was deducted from the account of the Contractor vide its reply to under Ext.12. As the dispute between the parties could not be resolved, the Contractor moved the Hon'ble the Chief Justice of High Court of Orissa in MJC No. 115 of 1997 under Section 11(6) of the Arbitration Act for appointment of an Arbitrator. Taking into consideration the letter of the Corporation dated 24th October, 1996 (Annexure-9 to the said MJC) expressing their wishes for adjudication of the dispute, if any, by learned Arbitration Tribunal, Odisha, Bhubaneswar (for short 'Tribunal'), Hon'ble the Chief Justice, by order dated 22.10.1997 referred the matter to learned Tribunal. The Contractor filed a claim of Rs.6,11,658.73 on eight heads along with interest @ 18% per annum from 16.01.1995 till payment. The details of such claim are as under:
| Claim Item No.1 Running Bill | Rs. 03.97,053.00 |
| Claim Item No.2 Escalated labour charges | Rs. 43,902.73 |
| Claim Item No.3 Income tax deduction certificate | Rs. 02,963.00 |
| Claim Item No.4 Rent paid for hiring of machineries and not issuing release order of the machineries which are lying idle | Rs. 88,800.00 |
| Claim Item No.5 Wages to worker which could not finalized the affair, though work was completed on 16.01.1995 to 03.02.1995 | Rs. 16,140.00 |
| Claim Item No.6 Keeping the office for guarding machineries for watch and ward of staff which was not released after completion of the work | Rs. 52,800.00 |
| Claim Item No.7 To meet expenditure for sending their authorized representatives to Rourkela frequently for ten times for finalization of the same. | Rs. 05,000.00 |
| Claim Item No.8 Financial loss sustained in paying the arbitrators and their counsel for referring the matter to approach the Honble Court towards payment o |
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