HIMALAYA CONSTRUCTION Vs. EXECUTIVE ENGINEER

JUDGEMENT

(1.) An arbitrator entering upon a reference under an arbitration agreement by virtue of his holding an office in connection with the affairs of the State of Jammu and Kashmir cannot make an award when he ceased to hold the office on account of his having demitted the office having retired from service is the main argument put across by the learned Addl. Advocate General who is appearing for the State functionaries. The other questions which have arisen are whether an award could be given vis-a-vis a matter regarding which any of the parties approached a civil Court would have failed on account of bar limitation. Misconduct has also been attributed to the arbitrator. The basis for this is that the arbitrator did not permit the appellants to have the assistance of a legal practitioner. In addition to the jurisdictional points referred to above argument vis-a-vis rate of interest which could be awarded when proceedings are taken under the Arbitration Act is also being adverted to by both the sides.

(2.) For the decision of the above questions, the factual foundation laid by both the sides be noticed.Himalayan Construction Company (hereinafter referred to as the respondent Construction Company) expressed its willingness to carry on some civil constructions works regarding which earlier an offer was made by the State authorities. An agreement was entered into. This happened in the year 1973. The work was completed in the year 1976. As per the respondent Construction Company, the State Authorities did not make payment in terms of the agreement. Differences and disputes having arisen, an application seeking appointment of an arbitrator was filed in this Court. This was so filed under Section 20 of the Arbitration Act. This Application being Arbitration Application No. 118/83 came to be decided on 14th of November 1984. The concluding part of the order passed by this Court reads as under :"In accordance with Clause 31 of the agreement read with Clause 20 of the conditions any dispute between the contractor and the Executive Engineer, respondent No. 1, shall have to be referred to the arbitration of Chief Engineer, Irrigation and Flood Control Department, Jammu. The dispute between the parties is, therefore, required to be referred to the named arbitrator for adjudication to whom the dispute between the parties is referred with a direction to adjudicate upon the same and submit his award within the statutory period of four months. The respondent shall submit the original agreement executed between the parties before the arbitrator."

(3.) In pursuance of the aforementioned order passed by this Court one Sh. D.K. Nargotra, the then Chief Engineer, Rawi Tawi Irrigation Complex, Jammu entered upon the reference. He submitted his award. An application was preferred in this Court for making the award a Rule of the Court. This application was contested by the appellant State authorities. The matter was placed before a learned Single Judge of this Court. Two issues came to be framed. These are as under :(i) Whether the arbitrator has misconducted himself and the proceedings if so, with what effect? OPR(ii) Whether the petitioners are entitled to interest at the rate of 24% from the date of completion of work? OPP