CONSTRUCTION AND CARHER COMPANY Vs. STATE OF BIHAR

JUDGEMENT

(1.) THIS appeal has been preferred under Section 39 of the Arbitration Act (the Act) against the judgment and decree dated 22.12.1986 passed by Shri Ram Nath, Subordinate Judge, Palamau at Daltonganj, in Title Suit No. 1 of 1983.

(2.) THE appellant was a contractor and his tender was accepted by the State Government regarding some construction works. Under the contract, the work could not be completed in time due to laches on the part of the officials of the State Government and the appellant claimed Rs. 27,34,412.05 Paise but the said claim had been rejected by the authorities of the State Government as per the agreement arrived at regarding the contract works. There was an arbitration clause wherein a named arbitrator was there wherein all differences were required to be referred to but as the claim of the appellant when denied and the matter has not been referred to the named arbitrator, then the appellants as a petitioner filed a petition under Section 20 of the Act for referring the dispute to the named arbitrator. The petition was filed on 3.1.1983 on the basis of which T.S. No.1 of 1983 was registered and on notice being issued the State of Bihar appeared through Government Pleader, Palamau at Daltonganj and filed objection on 19.7.1983. After hearing the parties, the dispute was referred vide order dated 2.8.1983 to the named arbitrator Shri R. Pandey, the Superintending Engineer, Minor Irrigation Circle, Palamau at Daltonganj. Before the arbitrator, both the parties filed claims and counter -claims and then the award was made rejecting the claims made by the petitioner -appellant except a lump sum amount of Rs. 50,000/ - to be awarded in favour of the appellant. The said award was filed before the court on 10.11.1984 for making the rule of the court. The appellant again filed objection under Section 30 of the Act on 29.11.1984 raising various objections including misconduct of the arbitrator. After hearing both the parties, vide order dated 10.12.1984, the objection was allowed and the award of the arbitrator was set aside. Then curiously enough, the appellant filed a petition on 15.12.1984 requesting the court i.e. the Subordinate Judge, Palamau at Daltonganj at whose jurisdiction the matter falls to act as an arbitrator. That petition was placed for objection from the side of the State Government. More unfortunate the case is that the Government Pleader, Palamau also by a written petition agreed that the court should act as an arbitrator and then the court proceeded as an arbitrator, took down the evidence of the parties and relying on the documents filed, a decree has been passed by the impugned judgment to the extent of Rs. 1,50,000/ -. As the court has acted as an arbitrator, he mentioned in the last line of the impugned judgment that the award of Rs. 1,50,000/ - is passed against the State Government and in favour of the appellant -plaintiff. Now against the said judgment and decree, the present appeal has been filed.

(3.) AT the very outset, objection has been raised by the learned Advocate General that tile appeal is not maintainable but he did not construe the legal aspect of the matter but argued in a different line regarding the maintainability of the appeal. On the face of it, it appears that the appellant had wrongly filed an application before the court below for acting as an arbitrator and more wrongly, the same had been accepted by the Government Pleader Palamau at Daltonganj for and on behalf of the State Government. On factual aspect, there might have been a good case for and on behalf of the appellant, as it appears in the written argument, the Government Pleader, Palamau had stated that the department was ready to accept the claim of the appellant to the extent of Rs. 3,00,000/ - (Rupees three lacs) but still then the learned Subordinate Judge did not agree so, but whether such admission is there or not, I am not concerned of it. The procedure adopted by the learned Subordinate Judge, Palamau at Daltonganj, is wrong. Even if a written petition has been filed by a party and conceded to by its adverse party then also the court is duty bound to see whether he has any option or jurisdiction to act as the arbitrator or not. In pending case of partition etc., there might be scope of court acting as conciliator or arbitrator but when a petition under Section 20 of the Act was filed for referring adjudication to the arbitrator as per the agreement clause then there was no other alternative but to refer the matter to the arbitrator and when the award has been filed and objection has been raised and if it was found that the award is not legal one and objections raised under Section 30 of the Act have got much force, then the award might be set aside. After setting aside the award also, courses are open for the court to proceed as per the different provision of the Act when the petition under Section 20 of the Act was in resin of the court at that stage also. But without adopting such procedure as contemplated under the Act, the learned court below has accepted and proceeded with unknown procedure in law.