STATE OF ORISSA Vs. G C KANUNGO

JUDGEMENT

(1.) THE above 8 cases were taken up together as parties are the same and the points for consideration and decision in all these cases are similar in nature.

(2.) THE contractor Gokul Chandra Kanungo, the opposite party in all these cases, was entrusted with different items of work by the Executive Engineer, National Highway, Cuttack in the year 1963-64 by the Orissa Public Works Department under F-2 Agreements for the said purpose. On the motion of the contractor the Chief Engineer in the year 1965 appointed an arbitrator as per Clause 23 of the agreements to settle some disputes relating to claims in respect of these 8 and six other items of work. THE arbitration continued in the hands of different arbitrators, and at the instance of the contractor the arbitrator appointed by the Chief Engineer was removed by the court in 1977 and Sri B.R. Rao, retired District Judge, was appointed as arbitrator to decide those disputes between the parties in all these cases, and the arbitration proceedings are now pending before him. Just before the filing of the Section 33 petition by the State of Orissa, both the parties took part in the arbitration proceedings before the several arbitrators in all the cases, and in fact in the six other cases awards were filed by the arbitrator and those cases have already been closed. Before the arbitrator took up hearing of these 8 cases, an application under Section 33 of the Arbitration Act was filed in these cases by the Executive Engineer, National Highway, Cuttack, on behalf of the State of Orissa, for declaration that the F-2 Agreements executed between the parties are illegal, invalid, and inoperative; the arbitrator has no jurisdiction to decide the disputes referred to him; Clause 23 of the agreement is not applicable to the claims preferred by the claimant before the arbitrator.

(3.) THE State in opposing the arbitration in these cases taken recourse to Clauses 11 and 23 of the contract. In the decision reported in AIR 1971 SC 1495, the phrase 'arising out of a contract', as in Clause 23, has been given the widest connotation, and it has been decided that it covers any matter arising out of the contract. In this connection the observation of the Supreme Court in AIR 1969 SC 488 (491) may be noted:-