UNION OF INDIA Vs. TIRTHARAM OBEROI

JUDGEMENT

(1.) THE Union of India and the Chief Engineer, Military Engineering Service, Siliguri Zone, Sevoke Road, Salugara, Siliguri have preferred this appeal challenging a common order passed by the District Judge, East and North Sikkim in Title Suit (Arbn.) No.03/2004, allowing a petition under Section 30 of the Indian Arbitration Act, 1940 (in short, the Act) filed by the respondent, the contractor for setting aside the award and dismissing a petition under Section 14 of the Act filed by the appellants the principals praying that the Award of the Arbitrator dated 29.12.2001 be made a rule of the Court.

(2.) ON reading through the impugned order, it is seen that even though several grounds were taken by the respondent/ contractor against the award of the Arbitrator which was substantially against them, the ld. District Judge in the impugned order set aside the award and remitted the matter back to the competent authority to appoint Arbitrator in terms of the Arbitration Clause applicable in the case on the reason that the Arbitrator exceeded the limits of the reference given to him by the Court. At paragraph 29 of the impugned order, the ld. District Judge has quoted the reference order dated 09.11.1995 and I re-quote the same as follows: -

(3.) LEARNED senior counsel for the appellants would submit that the respondents on entering appearance before the Arbitrator and on noticing the various claims, which had been raised by the appellants before the Arbitrator, filed an interlocutory application on 10.05.2001, wherein he contended that six number of claims which the appellant-Union of India raised before the competent authority and the Arbitrator cannot be adjudicated by the Arbitrator as they are outside the scope of the reference given by the Court to the Arbitrator in its order dated 09.11.1995 and he prayed that the issue as to whether the Arbitrator is entitled to adjudicate on the claims raised by the Government which will be outside the jurisdiction of the Arbitrator be raised as a preliminary issue. Mr. Karma Thinlay submitted that the Arbitrator vide his order dated 01.06.2001 passed a detailed order on that application deciding that he had the jurisdiction to go into the claims raised by the appellants also. According to the learned senior counsel, thereafter (though the filing of the application was professed to be without prejudice to the contention of the contractor) i.e. after the verdict was given by the Arbitrator, the contractor participated in the proceedings of the Arbitrator and only when he finds that the award has gone against him as he chosen to challenge the award before the Court. This vital aspect of the matter was brought to the notice of the ld. District Judge, who unfortunately did not pay serious attention to the same. In the teeth of the above order passed by the Arbitrator deciding on his own jurisdiction to adjudicate on the claims of the principals also, it was not proper on the part of the Court below to set aside the award/order solely on the ground that the Arbitrator exceeded his jurisdiction.