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2007 Supreme(All) 2849
[2007(10) ADJ 536 (DB)]
ALLAHABAD HIGH COURT
BEFORE : AMITAVA LALA AND SHISHIR KUMAR, JJ.
MORADABAD DEVELOPMENT AUTHORITY ....Appellants
Versus
M/s. V.R. CONSTRUCTIONS AND ENGINEERING CO. ....Respondent
(First Appeal From Order Nos. 653, 683-685, 695-700 and 975 of 2007, decided on 23rd November, 2007)
Counsel :
Ravi Kiran Jain, Anil Sharma, P.K. Singh and Ravi Agarwal for the Appellants; Navin Sinha and Pankaj Bhatia for the Respondents.
Headnote:Arbitration and Conciliation Act, 1996—Sections 34, 33, 37(1)(b), 7, 16, 4, 5 and 8—Limitation Act, 1963—Articles 137, 113, 55—Application filed by appellant-Authority for setting aside arbitral award—District Judge by impugned orders, refused to set aside arbitral award—Case was that construction work of houses and colonies was not done by respondent to satisfaction of Authority (appellant)—Civil suit filed by respondent—Application for appointment of Arbitrator was dismissed by Civil Judge—In revision in High Court by consent of parties, Arbitrator was appointed, who passed impugned award—Held, arbitration agreement was independent to original agreement—Arbitration clause in new Act of 1996, constitutes an agreement by itself—Now at belated stage, appellant cannot turn out and say that they were not bound by arbitration agreement under which Arbitrator was appointed to resolve disputes—Further, date of acceptance of proposal for arbitration falls within period of 3 years from date of measurement, and not from date of final bill, which has been placed later on—Therefore, point of limitation cannot be sustained—Moreover, merely direction of Arbitrator for payment of damages, loss of profits, overhead expenses, etc. out of work already done under contract, was not against public policy—Thus, no interference with impugned award of Arbitrator, which was affirmed by D.J.. [Paras 2 to 6, 17, 18, 20, 21, 29, 33, 35 and 36]
Hon’ble Amitava Lala, J.—Since all the aforesaid first appeals from order are connected and have been heard analogously, the same are being decided by this common judgement and order having binding effect upon all the aforesaid appeals. The First Appeal From Order No. 653 of 2007, which has been dealt with herein, will be considered as leading case.
2. This appeal is arising out of the judgment and order dated 29th January, 2007 passed by the District Judge, Moradabad in an application under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act) filed by the appellant for setting aside the arbitral award dated 21st December, 2004, arising out of the dispute between the parties herein.
3. From the orders passed under Section 34 of the Act, appeal lies in the Court under Section 37 of the Act provided such order falls under the category of orders specified thereunder. The order impugned has been passed refusing to set aside the arbitral award, therefore, it falls within the category of such orders and as such, we find that the same is appealable under Section 37 (1)(b) of the Act.
4. The fact in brief is that the appellant wanted to construct houses and develop colonies in the city of Moradabad, Uttar Pradesh. It had to construct 24 meters wide road at Ram Ganga Vihar Phase II, Moradabad and in that respect the offer of the respondent was accepted and the agreement was duly executed between themselves. According to the appellant, the work was not done by the respondent to their satisfaction. Therefore, the dispute arose.
5. The respondent filed civil suit, being O.S. No. 305 of 1998 in the Court of Civil Judge (Senior Division), Moradabad. In the suit, the appellant filed an application under Sections 5 and 8 of the Act for the purpose of resolving the dispute with the intervention of the Arbitrator. Such application was dismissed. The appellant made revisional application before the High Court whereunder the proceeding in the suit was stayed. The respondent requested the appellant to resolve the dispute through the Arbitrator during the pendency of the suit, when the appellant gave its consent by forwarding a list of Arbitrators. The respondent gave his consent to the name of one such person, named in the list. Therefore, by consent of the parties, such person was appointed as sole Arbitrator for the purpose of resolving the dispute between the parties.
6. Parties have submitted to the jurisdiction of the Arbitrator. All the points as raised by the parties had been considered by the Arbitrator followed by the impugned award.
7. According to the appellant, the award passed by the learned Arbitrator is illegal, unjustified and against the principles of natural justice. He had no jurisdiction to entertain the claim of the respondent. He had to peruse only the file relating to the blacklisting of the respondent but he has acted beyond his jurisdiction. The aforesaid suit filed by the respondent was dismissed for non-prosecution and the decree passed therein would operate as res judicata. The impugned award is illegal on account of dismissal of the suit and in the eye of law there is no force in the impugned award. He had committed misconduct by illegally entertaining the claim of the respondent and passing the award thereon. He had also committed illegality by appointing the Commissioner for collection of evidence. The report of the Commissioner is unfair, incomplete and based on hearsay evidence. He had given undue weight to the evidence collected by the Commissioner. Learned Arbitrator has accepted the money claim of the respondent, which was time barred. The award is without reasons. He had concluded the proceedings with undue haste and without properly considering the dispute in correct perspective. Therefore, the award is against the public policy and as such is liable to be set aside. Further, according to the appellant, in view of a Government Order dated 9th March, 1972, as amended on 30th March, 19
