DELHI DEVELOPMENT AUTHORITY Vs. S KUMAR

JUDGEMENT

(1.) THE question as to whether provisions of the Arbitration Act, 1940 (hereinafter referred to as the 'old Act') or that of the Arbitration and conciliation Act, 1996 (hereinafter referred to as the 'new Act') are applicable to the arbitration proceedings in question between the parties from which award dated 13. 7. 1998 emanated.

(2.) WE may have to take note of certain dates for answering this question. The respondent herein was awarded the contract by the appellant-DDA vide agreement, No. 14/ee/sed-11/dda/88-89. Certain disputes arose between the parties. The respondent invoked the arbitration clause and requested the Engineer Member, DDA to appoint the arbitrator vide letter dated 30. 10. 1992. Since no arbitrator was appointed, the respondent filed Suit No. 1744/94, which was a petition under Section 20 of the old Act. In that suit, order dated 18. 1. 1996 was passed by this Court directing the Engineer member to appoint an arbitrator. As the DDA failed to take action, the respondent filed IA in the said suit seeking appointment of an independent arbitrator in which orders dated 8. 8. 1996 were passed by this Court appointing Sh. N. Veerabandhu as the sole arbitrator. The arbitrator entered upon reference on 15. 9. 1996. He made and published the award on 13. 7. 1998. This award was filed in this Court whereupon notice was issued to the parties of the filing of the award by the Court. This notice issued under the old Act was received by the DDA on 17. 8. 1998 After receiving this notice the DDA filed objections to this award under Section 30 and 33 of the old act challenging that award. Since there was delay in filing the objection, along with the objection, application for condonation of delay was also filed.

(3.) THE respondent herein raised a preliminary submission to the effect that the objections under Section 30/33 of the old Act were not applicable as the award was governed by the new Act. The learned Single Judge vide orders dated 14. 8. 2003 accepted this submission of the respondent holding that the new Act was applicable as the award is dated 13. 7. 1998 and it was rendered after the new Act came into force. The learned Single Judge, therefore, treated the objections as deemed filed under Section 34 of the new act. However, on the ground that there was delay of 233 days and there was no power under the new Act to condone the delay of this magnitude the objections (treating the same as petition under Section 34 of the new Act)are dismissed as time-barred. The dates and events enumerated above would clearly indicate that when the arbitration was invoked by the respondent giving notice dated 30. 10. 1992, old Act was in force. Even the petition for appointment of arbitrator was filed under the old Act, i. e. , under section 20 of the Arbitration Act. This suit was disposed of on 18. 1. 1996 by this Court directing the Engineer Member, DDA to appoint an arbitrator. It is after the disposal of this suit that the new Act came into force with effect from 25. 1. 1996. In these circumstances, it goes without saying that the proceedings, which were conducted by the arbitrator, would be governed under the old Act. Though initially there was confusion as to whether the date on which arbitration is invoked or the date when the award is rendered would be determinative of the factor as to which Act is applicable, the position in this respect is now finally put at rest by the Supreme Court. It is now categorically decided that unless the parties specifically agreed, in terms of Section 85 (2) (a) of the new Act that the proceedings be governed by the new Act, old Act would continue to apply in respect of the arbitration proceedings which were initiated when old Act was in force. In Milkfood ltd. v. M/s. GMC Ice Cream (P) Ltd. , 2004 (4) SCALE 291, the Supreme court laid down the principle that service of a notice for appointment of an arbitrator would be the relevant date for the purpose of commencement of the arbitral proceedings. In the present case, as pointed out above, the notice for appointment of arbitrator was given on 30,10. 1992 and therefore, arbitration proceedings deemed to have been commenced on that date and indubitably, it is the old Act which was in operation at that time. This legal position is also contained in the following judgments:-1. Shctty Construction Co. v. Konkan Railway, (1998) 5 SCC 599 2. State of West Bengal v. Amritlal Chatterjee, (2003) 10 SCC 572 3. N. S. Nayak v. State of Goa, (2003) 6 SCC 56