DINESH PRASAD Vs. STATE OF JHARKHAND

JUDGEMENT

(1.) Present petition has been preferred under Article 227 of the Constitution of India against an order passed by learned Subordinate Judge-I, Ranchi dated 8th September, 2009 in Miscellaneous Case No. 07 of 2008, whereby, an application preferred by the present petitioner (original opposite party) has been partly allowed on contest and the award dated 10th October, 2007 passed by the arbitrator, appointed between the parties by this Court, has been set aside only in respect of extra work done by the opposite party/claimant, who is the present petitioner, beyond the terms of agreement and it has been held that the present petitioner is not entitled to get the payment of such extra work of Rs. 1,50,000/- and interest thereupon. Thus partly, an award is quashed and application preferred by the State under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as the "Act, 1996") was partly allowed.

(2.) Learned Counsel appearing for the petitioner vehemently submitted that the order passed by the trial court is dehors the jurisdiction of the trial court, looking to the provisions of Section 34 to be read with Section 2(e) of the Arbitration and Conciliation Act, 1996. It is further submitted by learned Counsel for the petitioner that the arbitrator has been appointed by the order of this Court under Section 11(6) of the Act, 1996 and, therefore, as per Section 42 of the Act, 1996 only this Court has power, jurisdiction and authority to entertain application for setting aside the arbitral award under Section 34 of the Act, 1996 and not the principal Civil Court at Ranchi is having a jurisdiction. This aspect of the matter has not been properly appreciated by the trial court and, hence, the order passed by the trial court at Annexure-4 to the memo of petition, in Miscellaneous Case No. 07 of 2008, deserves to be quashed and set aside. Learned Counsel for the petitioner has relied upon a decision rendered by the Hon'ble Supreme Court Mcdermott International Inc. v. Burn Standard Co. Ltd. and Ors., 2005 10 SCC 353 and a decision rendered by this Court Ram Prasad Sharma v. Jharkhand State Housing Board and Ors., 2005 2 JCR 1. Learned Counsel for the petitioner further submitted that an arbitrator, being appointed by this Court, had passed an award on 10th October, 2007 arising out of A.A. No. 33 of 2004 involving eleven agreements. Against that award, the State Government has preferred objection under Section 34 of the Act, 1996 before learned Subordinate Judge-I, Ranchi, who has partly allowed the application, preferred by the State, and the amount of Rs. 1,50,000/- which was allowed with interest by the arbitrator has been quashed and set aside, whereas, rest of the amount awarded by the arbitrator has been confirmed and, therefore, let the respondents may be directed to make the payment of remaining amount of the arbitral award, deducting Rs. 1,50,000/- and interest thereupon, within stipulated time.

(3.) I have heard learned Counsel appearing for the respondents, who has submitted that the order passed by the trial court is in consonance with the facts and law and extra work, which was done by the petitioner (opposite party/claimant) was never agreed between the parties and, therefore, he was not entitled for Rs. 1,50,000/- and interest thereupon. This aspect of the matter has been correctly appreciated by the trial court and, therefore, to that extent, rightly arbitral award has been quashed and set aside. It is further submitted by learned Counsel for the respondents that looking to the provision of Section 2(e) of the Act, 1996, it appears that if a subject-matter of arbitral award is to be converted into a suit, then the suit will have to be filed before learned Subordinate Judge-I, Ranchi as a subject-matter involving the amount of more than Rs. 30,000/- and, therefore, the Subordinate Judge has all power, jurisdiction and authority to decide the application, preferred by the State, under Section 34 of the Act, 1996 for quashing and setting aside the arbitral award. It is also submitted by learned Counsel for the respondents that the arbitrator, appointed by the order of this Court under Section 11(6) of the Act, 1996, is an administrative order as per the decision rendered by this Court as reported in , AIR 1999 SC 3246 and, therefore, as per Section 42 of the Act, 1996, the Hon'ble Chief Justice of this Court exercising powers under Section 11 of the Act, 1996 is not a Court, as has been held in Garden Finance v. Prakash Inds LTD., 2002 AIR(Bom) 8. It is further submitted by learned Counsel for the respondents that as per the decision rendered by the Hon'ble Supreme Court National Aluminium Co. Ltd. v. Pressteel and Fabrications Pvt. Ltd. and Anr., 2005 AIR(SC) 1514, it has been held that if the subject matter of the arbitral award is to be converted into the suit and if the suit is to be filed before a principal civil Court of any place, then that Court shall have jurisdiction. Arbitrator might have been appointed by the Hon'ble High Court or by the Hon'ble Supreme Court, but, an application under Section 34 of the Act, 1996 will be filed before principal civil Court, which is having a jurisdiction upon a subject-matter of the arbitral award in stead of an arbitrator and, therefore, no error has been committed by the trial court in entertaining the application, preferred by the State under Section 34 of the Act, 1996.