UNION OF INDIA Vs. SAMARENDRA NATH MUKHARJEE

JUDGEMENT

(1.) The appellant being Eastern Railway entrusted a job to the respondent under a contract. Disputes arose by and between the parties on payment of bill. Railway claims that all dues were paid off and the respondent duly issued no claim certificate by accepting payment in full and final settlement of his claim. The respondent insisted on its claim made subsequent to the receipt of payment under the final bill. The respondent demanded arbitration in accordance with the arbitration clause. The authority refused, as, according to them, there could be no dispute between the parties after settlement of the final bill. The respondent approached the Court of law under Section 20 of the Arbitration Act, 1940 inter alia praying for filing of the arbitration agreement in Court and appointment of an arbitrator in terms of the agreement. The learned single Judge, vide judgment and order dated July 19, 1996, finally disposed of Special Suit no.10 of 1996 by appointing Shri Gopal Chakrabarty (since deceased), an advocate of this Court as arbitrator. On perusal of the judgment and order of His Lordship, appearing at page 203-204, we find that only plea taken by the Railway Administration before His Lordship was that the claim was barred by limitation in view of the effect that the same was made through letter dated September 6, 1991 and subsequent letters dated January 17, 1994 and November 6, 1995. Such plea was disputed by the learned advocate appearing for the claimant. The learned Judge observed that the claim was not barred by limitation in view of the provisions of Section 37(3) of the said Act of 1940. His Lordship further observed that whether no claim certificate and/or the endorsement in the final bill made by the claimant was voluntary or under compulsion, was itself a dispute and as such was referable to arbitration. Railway preferred appeal that was dismissed.

(2.) The Railway Administration accepted the judgment and order of the learned single Judge so affirmed by the Division Bench and submitted to the jurisdiction of the arbitrator by filing pleadings. The arbitrator, however, could not conclude the proceeding as he unfortunately passed away before the proceedings could be concluded and award could be published. The claimant approached the learned single Judge for change of personnel on the ground that despite 186 meetings held by the arbitrator, proceeding could not be concluded because of the dilatory tactics on the part of the Railways. They also contended that the arbitrator was ailing and it was not possible for him to continue. At that juncture, the Railways, for the first time, took the plea that there could be no arbitration at all in view of clear provision under the contract stipulated in Clause 63(3)(a)(III) that in case of dispute the matter would be referred to arbitration of a gazetted Railway Officer and, in case, it was not possible for any reason there would be no arbitration at all. In the mean time the learned arbitrator died. His Lordship observed that in view of death of the learned arbitrator another arbitrator should be appointed. His Lordship appointed Shri Dilip Kumar Basu, a former member of Higher Judicial Services to act as arbitrator. His Lordship observed, "I find no legal impediment in appointing the arbitrator other than the persons named in the list of gazetted Railway Officers." The appellant, this time, did not prefer any appeal and submitted to the jurisdiction of the new arbitrator who ultimately published the award.

(3.) The arbitrator allowed the claim of the claimant in part to the extent of Rs.6,97,102.25/-. The arbitrator also awarded cost of Rs.3,21,600/- and directed payment of interest at the rate of 18 per cent per annum on the principal sum of Rs.6,97,102.25/- from the date of entering upon reference by the previous arbitrator till the date of payment.