DURGA DEVI CHHAPOLIA Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS is an application under Section 11 read with Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator and for referring the dispute between the parties to the Arbitrator for adjudication thereof.

(2.) CASE of the petitioners in brief is that petitioner No. 1 is wife of late Gangaram Chhapolia. Rest of the petitioners are children of Late Gangaram Chhapolia. It is the further case of the petitioners that said late Gangaram Chhapolia entered into an agreement with the opp. party for executing the work "C and FDR to Kaushalyaganga Fish Farm - Part A" vide Agreement No. 6/F2 of 1969 -70. Thereafter he duly executed the said work. Further, after completion of the said work a dispute arose between the opposite party and the said late Gangaram Chhapolia and accordingly said late Gangaram Chhapolia invoked the arbitration Clause 23 of the Agreement and required the dispute to be referred to the Arbitration Tribunal in terms of the said arbitration clause. Accordingly the dispute between the parties was referred to the Arbitration Tribunal which was constituted under the Arbitration Act, 1940 as amended by the Orissa Legislature. Before the said Arbitration Tribunal the parties including the said late Gangaram Chhapolia filed their respective statements. But as the said late Gangaram Chhapolia fell ill on the first date of hearing before the Tribunal, he could not attend the proceeding and hence could not participate in the hearing and for this reason an application was filed on his behalf for time, but the same was disallowed and the Tribunal on the very same day passed a nil award rejecting the claim of the contractor, namely, said late Gangaram Chhapolia. Thereafter late Gangaram Chhapolia approached the civil Court in Misc. Case No. 41/1991 under Sections 30 and 33 of the Arbitration Act, 1940. The case was ultimately heard by the Second Addl. Civil Judge (Senior Division), Cuttack for disposal. The learned Civil Judge (Senior Division), Cuttack by his order dated 27.3.2004 set aside the award mainly on the ground that the said late Gangaram Chhapolia was not afforded reasonable opportunity before the Tribunal to prove his claim. As the nil award passed by the Arbitration Tribunal was set aside by the learned Civil Judge (Senior Division), Cuttack, he should have ordinarily remanded back the case to the Tribunal for fresh adjudication. But as the learned Civil Judge (Senior division) did not expressly remand the case for fresh adjudication, the petitioners being legal heirs of late Gangaram Chhapolia have now approached this Court in this application under Section 11 of the new Arbitration Act for appointment of an Arbitrator and for referring the dispute between them to the said Arbitrator for adjudication.

(3.) I am sorry to mention that the aforesaid contention of the petitioners cannot be accepted. Section 85 of the new Act reads as under : "85. Repeal and savings - (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed. (2) Notwithstanding such repeal, - (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act." Therefore, form Sub -section (2) of Section 85 it is manifest that notwithstanding repeal of the old Law, provisions of the old Law are applicable in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed to by the parties. The new Act will apply in relation to arbitral proceedings commenced on or after the date on which the new Act came into force. The new Act came into force in 1996. Admittedly the proceeding was commenced long before the new Act came into force. Therefore, the proceeding once commenced under the old Law and not otherwise agreed to by the parties to the agreement, the old Law will continue to apply. The arbitration proceeding was commenced under the old Law. The learned 2nd Addl. Civil Judge (Senior Division) clearly set aside the nil award passed by the Arbitration Tribunal in the arbitration proceeding mainly on the ground of violation of principles of natural justice. It, therefore, implies that the parties must approach the Tribunal again to settle the dispute afresh in compliance with the principles of natural justice. Petitioners have no remedy under the new Law in the aforesaid circumstances.