B N AGARWALLA Vs. STATE OF ORISSA

JUDGEMENT

(1.) Leave granted.

(2.) By the impugned judgment the High Court allowed the appeal against the judgment of the Subordinate Judge, Bhubaneswar making an award dated 26-3-1983 the rule of the Court, by which a sum of Rs.95,003/- was directed to be paid to the appellant by 24-6-1983 failing which it was to carry interest at the rent of 12 per cent, per annum from 27-3-1983 till the date of payment. On behalf of the respondent, the award was challenged on the ground that the arbitrator was incompetent to make the award in view of Section 41A(7) of the Arbitration (Orissa Amendment) Act, 1982 (Orissa Act 3 of 1983) which came into force w.e.f. 26-3-1983 and had the effect of amending the Indian Arbitration Act, 1940. Since the date of the award and the date of the enforcement of the amending Act are the same, the question is of the applicability of the said amendment. This is the only question involved for decision in this appeal by special leave.

(3.) The Arbitration (Orissa Amendment) Act, 1982 was an Act to amend the Arbitration Act, 1940 in its application to the State of Orissa. It received the assent of the President of India on 21-3-1983 and came into force on publication in the Orissa Gazette, Extraordinary, No.358 dated 26-3-1983. A new Section 41-A was inserted in the principal Act relating to constitution of and references to the Arbitration Tribunal. Sub-section (1) of Section 41-A provided that notwithstanding anything contained in the Act or any contract or any other instrument, in all cases where the State Government, a local or other authority controlled by the State Government, statutory corporation or a Government company is a party to the dispute, all references to arbitration shall be made to the Arbitration Tribunal. Sub-section (2) provided for constitution of an Arbitration Tribunal by the State Government in the manner provided therein. Sub-sections (3),(4), (5) and (6) relate to ancillary matters pertaining to constitution of the Arbitration Tribunal. Sub-section (7) relates to pending proceedings and it is the construction of this provision which is involved in this appeal. Sub-section (7) is as under:-