Utkal
Galvanizers Ltd Vs. Orissa Hydro Power Corpn. Ltd. & Ors [2007] Insc 995 (28 September 2007)
Tarun
Chatterjee & Dalveer Bhandari
CIVIL
APPEAL NO 4576 OF 2007 (Arising out of SLP)No.4653 of 2006) TARUN CHATTERJEE,
J.
1.
Leave granted.
2.
This appeal is directed against the judgment and order dated 29th April, 2005
of the High Court of Orissa at Cuttack in MJC No.121 of 2002 by which the High
Court had refused the prayer of the appellant for appointment of an arbitrator
under Section 11 of the Arbitration and Conciliation Act, 1996 (in short 'the
Act').
This
Court on 5th of January, 2007 made the following directions :
"Counsel
for the petitioner submits that the petitioner is not averse to an arbitrator
being appointed who may adjudicate the disputes between the parties.
Counsel
for the respondents also is not against the appointment of an arbitrator to
resolve the disputes between the parties, but he submits that the petitioner
may move the State of Orissa which shall refer the matter to
arbitration by the Arbitration Tribunal, Bhubaneshwar in accordance with clause
3.39(f) of the General Conditions of Contract. Mr.M.L.Verma, Senior Advocate
appearing on behalf of the petitioner submits that the Arbitration Tribunal
contemplated by the aforesaid clause does not in fact exist and, therefore,
there is no question of asking the State Government for a reference to the said
tribunal. He also submits that in view of the provisions of the Arbitration and
Conciliation Act, 1996, a later Act, where there is no provision similar to
Section 41-A under the Arbitration Act, 1940, there may be some doubt as to
whether the tribunal continues to exist in the absence of any similar amendment
to the 1996 Act. He, however, submits that if clause 3.39 (f) is applicable,
the petitioner is willing to make the security deposit required to be made
under the said clause.
With a
view to resolve the dispute effectively, we consider it necessary to implead
State of Orissa as a party respondent. On an oral
prayer made on behalf of the petitioner, State of Orissa, through its Chief Secretary is impleaded
as party respondent. Let notice issue to the State of Orissa so that in its presence the
question may be considered. Notice be made returnable within three weeks. Dasti
Service, in addition, is permitted."
From a
perusal of the order of this Court, it would be evident that the appellant was
agreeable to resolve the dispute between the parties and refer the disputes to
arbitration by Arbitration Tribunal, Bhubaneshwar, Orissa in accordance with
Clause 3.39 (f) of the General Conditions of Contract. However, it appears from
the said order of this Court that there was some dispute as to whether the
Arbitration Tribunal, Bhubaneshwar, Orissa is existent or was existent or not.
It is also evident from the aforesaid order of this Court that the appellant
was willing to make the security deposit required to be made under Clause 3.39
(f), if Clause 3.39 (f) was applicable.
Accordingly,
notice was issued by this Court which would be evident from the aforesaid
order, to the State of Orissa after making the State of Orissa as a party respondent as this Court
was of the view that the dispute between the parties may be considered in the
presence of the State of Orissa.
Learned
counsel appearing for the respondent has not raised any objection if the matter
is referred to Arbitration Tribunal, Orissa for adjudication. The only
submission made on behalf of the respondent was that no reference could be made
invoking arbitration unless the appellant furnished a security deposit of a sum
determined according to the table given in Clause 3.39 (f) of the Contract and
the sum so deposited shall, on the termination of the arbitration proceeding,
be adjusted against the cost, if any, awarded by the arbitration tribunal
against the party and the balance remaining after such adjustment or in the
absence of any such cost being awarded the whole of the sum shall be refunded
to him within one month from the date of the award. Learned counsel for the
appellant also agreed to the deposit of security amount in compliance with
Clause 3.39 (f) of the Contract.
Such
being the position and in view of the stand taken by the parties before us and
considering the fact that Arbitration Tribunal, Orissa is in existence and is
ready to decide the matter, if referred to them, we dispose of the appeal in
the following manner :-
(1)
The appellant is directed to furnish the security deposit of a sum determined
according to the table given in Clause 3.39 (f) of the Contract within a period
of two months from the date of communication of this order to the respondent.
(2) If
the amount to be determined is furnished as security deposit within the time
specified herein above, the dispute between the parties shall be referred to
the Arbitration Tribunal, Orissa for adjudication two weeks from the date of
such deposit.
(3)
The Arbitration Tribunal, Orissa shall enter the reference and pass its award
within a period of three months from the date of entering into the reference.
It is
needless to say that the Arbitration Tribunal shall permit the parties to
adduce evidence in support of their respective claims and after hearing them
the award shall be passed by the Arbitration Tribunal, Bhubaneshwar, Orissa.
The
appeal is disposed of in the manner indicated above. There will be no order as
to costs.
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