RESHMA CONSTRUCTIONS Vs. STATE OF GOA

JUDGEMENT

(1.) THE question which arises for determination in the present petition is about the applicability of the Arbitration and Conciliation Act, 1996 (hereinafter called as "the new Act") to the arbitration proceedings commenced under the Arbitration Act, 1940 (hereinafter called as "the old Act") and which were pending for disposal at the time when the new Act came into force.

(2.) THE facts, in brief relevant for the decision are that the petitioner was awarded with the work of Construction of Canal Head Regulator of Chapoli Minor Irrigation Tank at Canacona and the agreement between the parties in respect thereof provided that in case of dispute between the parties, the same to be settled by way of arbitration. It is the case of the petitioner that the respondent failed to settle the dues which were claimed by the petitioner by its letter dated 15-8-93 and, therefore, the petitioner invoked the arbitration clause in the said agreement by a letter dated 8-2-94 and since the Chief Engineer, Irrigation Department, Government of Goa failed to appoint an arbitrator within the prescribed time, the petitioner filed an application under section 20 of the old Act in the Court of Civil Judge, Senior Division at Margao, which was registered as Special Civil Suit No. 174/94. The trial Court in the said civil suit appointed a retired Executive Engineer by name Shri H. R. Anand as the sole arbitrator to decide the dispute between the parties and the said arbitrator gave his award on 30-7-1996. Meanwhile, the new Act came into force with effect from 25-1-96. The arbitrator filed his award in the trial Court in terms of the provisions contained in section 14 of the old Act and the respondent herein filed its objections to the said award on 7-9-1996. The respondent further filed an application on 20-10-96 challenging the very appointment of the arbitrator by the trial Court on the ground that the arbitrator ought to have been appointed by the personal designata and not by the Court. While the said proceedings were pending before the trial Court, the petitioner herein on 20-12-96 filed an application for dismissal of the entire proceedings before the trial Court on the ground that in view of section 85 of the new Act, read with Clause 25 of the said agreement between the parties, the provisions of the new Act are applicable to the proceedings and, therefore, in terms of section 26 of the new Act, the award of the arbitrator is itself enforceable as if it is a decree of the Civil Court. The said application was objected to by the respondent herein. The trial Court by impugned order dated 2-8-97, dismissed the said application of the petitioner holding that section 85 of the new Act provides that the proceedings commenced under the old Act before coming into force of the new Act would be governed by the old Act, unless the parties enter into an agreement to the contrary, after the new Act comes into force.

(3.) THE section 85 of the new Act reads thus :-85. Repeal and saving.-