INDIAN RARE EARTHS LIMITED Vs. UNIQUE BUILDERS LIMITED

JUDGEMENT

(1.) THIS appeal has been filed under Section 39(1)(vi) of the Arbitration Act, 1940 (hereinafter referred to as "the Act") challenging the order dated 29.4.2002 passed by the learned First Additional Civil Judge (Senior Division), Cuttack in Misc. Case No.78 of 2000 dismissing the application filed by the appellants for setting aside the award.

(2.) THE facts leading to initiation of these two cases are that M/s. Unique Builders Limited (hereinafter referred to as "the claimant -respondent") was engaged by Indian Rare Earths Limited (hereinafter referred to as "the appellants") for execution of certain work on the basis of an agreement entered into between both of them. The agreement contained an arbitration clause and the said clause provides that in case of a dispute between the parties, the same shall be referred to arbitration. The case of the claimant -respondent is that after executing the agreement it executed the work to the best of its capability, but a dispute arose with regard to certain items of works done by/projected to be done by the claimant -respondent. The matter was brought to the notice of the appellants vide letter dated 19.7.1982. There being no response form the side of the respondent, a reminder was also sent and again there was no response. The claimant having no other way, wrote a letter on the 20th of November, 1982 reiterating the stand taken by it and raised a dispute for reference to arbitration. In view of the dispute which remained unsettled, the claimant could not continue the work any further and decided to invoke the arbitration clause for settlement of its claims and filed a petition under Section 8 of the Act in the Court of the Subordinate Judge, Cuttack vide Misc. Case No.117 of 1983. The learned Subordinate Judge referred the matter to Justice B.K. Ray (Retd.) for adjudication of the dispute in the year 1992. Subsequently, the reference was recalled on the allegation made by the appellants that Justice B. K. Ray (Retd.) was related to the claimant and ultimately, Justice K. P. Mohapatra (Retd.) was appointed as the arbitrator by order dated 10.5.1994. Form the impugned order, though it appears that both the Retired Judges were appointed on consent of the parties, it was seriously disputed by the learned counsel for the appellants. However, after appointment of Justice K.P.Mohapatra (Retd.) as the arbitrator, he entered into the reference and after hearing the parties, passed and award of Rs.19,55,368/ - with pendente lite interest at the rate of 15 per cent per annum form the date of institution of the suit till the date of the award and the appellants were directed to pay the said amount to the claimant -respondent within sixty days form the date of the award. The award was signed on 19.12.1996 and copies thereof were sent to the parties. The award was also submitted before the learned Subordinate Judge, Cuttack to make it the rule of the Court. After receipt of the award form the arbitrator, the learned Subordinate Judge registered the same as T.S. No.574 of 1996 and issued notice to the parties inviting objections. After hearing the parties, the learned Subordinate Judge in the impugned order made the award rule of the Court but did not pass any order with regard to future interest. Challenging the said award, this appeal has been filed and against the order not granting future interest, the claimant -respondent has filed C.R.P. No.42 of 2002. Since both the cases arise out of the same award, they were clubbed and heard together and are disposed of by this common judgment.

(3.) SHRI S. P. Mishra, learned counsel appearing for the claimant -respondent, on the other hand, submitted that Justice B. K. (Retd.) had been appointed as an arbitrator on the consent of the appellants, but later on, on the objection raised on the ground that the said arbitrator is related to the claimant, the order was recalled and after appointment of two more arbitrators, ultimately Justice K. P. Mohapatra (Retd.) was appointed as the arbitrator on consent of the parties.