STATE OF JHARKHAND Vs. INDIAN BUILDERS JAMSHEDPUR

JUDGEMENT

(1.) In view of our opinion that Bharat Drilling and Foundation Treatment Pvt. Ltd. v. State of Jharkhand and Ors (2009) 16 SCC 705. is not an authority for the proposition that an excepted clause or a prohibited claim in a contract applies only to the employer and not to the Arbitral Tribunal, for the reasons to follow, in order to obviate uncertainty and for clear declaration of law, we are referring Bharat Drilling (supra) to a larger bench for reconsideration and authoritative decision. The context in which we have referred the matter to a larger bench is as follows.

(2.) State of Jharkhand is in appeal against the judgment of the High Court of Jharkhand allowing Sec. 37[In Arbitration Appeal No. 17 of 2007 dtd. 11/5/2012.] appeal under Arbitration and Conciliation Act, 1996[Hereinafter referred to as the'Act']. The appeal was filed by the respondent-claimant against the judgment of the Civil Court[Sub-Judge-1, Jamshedpur in Misc. Arbitration Case No. 01/2004 dtd. 19/4/2007] setting aside the arbitral award allowing the objections filed by State under Sec. 34. By its award dtd. 19/4/2007, the Arbitral Tribunal allowed certain claims but the Civil Court set aside the claims 3, 4 and 6 on the ground that they were specifically prohibited under the contract between the parties.

(3.) Mr. Rajiv Shankar Dwivedi, learned counsel appearing for the State of Jharkhand has made a short submission that the High Court committed a serious error in allowing the appeal on the ground that the issue arising for consideration is covered by decision of this Court in Bharat Drilling (supra). Mr. Dwivedi has expressed a serious concern that the decision in Bharat Drilling (supra) is being applied, regularly and wrongly, to interpret prohibitory claim clauses in all Government contracts. He would therefore submit that even if the Court may not interfere in the facts of this case, there is a compelling necessity to clarify the position of law. On the other hand, Mr. Manoj C. Mishra, learned counsel appearing for the respondent, supported the decision of the High Court.