State Of Chhattisgarh vs M/S. R.S. Bajwa And Company
2022 Latest Caselaw 4677 Chatt

                                   -1-




                                                                     NAFR
          HIGH COURT OF CHHATTISGARH, BILASPUR

                 Judgment Reserved on 01.07.2022

                 Judgment Delivered on 22.07.2022


                         ARBA No. 13 of 2020
1. State Of Chhattisgarh Through The Dy. Secretary, Government Of
   Chhattisgarh, Water Resources Department, Mahanadi Bhawan,
   Mantralaya, Atal Nagar , Nava Raipur Chhattisgarh...(Applicant No. 01),
   District : Raipur, Chhattisgarh
2. Superintendent Engineer Barnai Canal Division, Water Resources
   Department, Ambikapur , District Surguja Chhattisgarh...(Applicant No. 2)
3. Executive Engineer Barnai Canal Division , Water Resources Department
   Ambikapur District Surguja Chhattisgarh...(Applicant No. 03)
                                                            ---- Appellants
                                Versus
  M/s. R.S. Bajwa And Company B- 4, Minocha Compound, Bilaspur ,
  District Bilaspur Chhattisgarh..(Non Applicant), District : Bilaspur,
  Chhattisgarh
                                                          ---- Respondent



      For Appellants       :     Shri Amrito Das, Addl. Advocate General
      For Respondent       :     Shri Rajkamal Singh and Shri Suryapratap
                                 Yuddhveer Singh, Advocates


             D.B. :    Hon'ble Shri Justice P. Sam Koshy &
                       Hon'ble Shri Justice Parth Prateem Sahu

                                 CAV Judgment


   Per Parth Prateem Sahu, J.

1. Appellants-State have filed this appeal under Section 13 of the

Commercial Courts Commercial Division and Commercial Appellate

Division of High Courts Ordinance, 2015 read with Section 37 of the

Arbitration and Conciliation Act, 1996 (for short "the Act of 1996")

challenging the order dated 28.11.2019 passed by Commercial Court

(District Level), Atal Nagar, Raipur, Chhattisgarh in Arbitration MJC

No.01/2019 whereby Presiding Officer of the Commercial Court dismissed

the application under Section 34 of the Act of 1996 on merits as well as

on the ground of limitation.

2. Facts relevant for disposal of this appeal are that respondent-Contractor

was awarded with the work of construction of Dam Overflow Block No.7, 8

& 9 in the erstwhile State of Madhya Pradesh. An agreement was

executed between the erstwhile State of Madhya Pradesh and

respondent, work order was issued on 25.03.1983. Contractor was paid

an amount of Rs.2,61,22,270/- for the work performed under the

agreement and final payment was made on 12.10.1994 (as pleaded in the

appeal). Some dispute arose between the parties to agreement.

Respondent submitted an application under Clause 52 of the agreement

executed between the parties, for appointment of sole Arbitrator vide

application dated 07.01.2006. Initially, the Chief Engineer (retired) was

appointed as sole Arbitrator but later on, he was replaced by appointing

Superintending Engineer as sole Arbitrator. After conclusion of the

arbitration proceedings, sole Arbitrator passed an award on 22.08.2006 in

favour of respondent-Contractor awarding Rs.2,19,64,449/-. Award

passed by the sole Arbitrator was submitted for its execution under Order

21 Rule 11 of CPC.

3. Appellants- State filed an objection before the Executing Court under

Order 21 Rule 26 read with Section 151 of CPC pleading therein that in

view of Section 3 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam,

1983 (for short "Adhiniyam of 1983"), the award passed by sole Arbitrator

is without jurisdiction. Madhyastham Adhikaran (Arbitration Tribunal) was

constituted on 1st March 2005 whereas sole Arbitrator was appointed on

13th March 2006. The work awarded to respondent- Contractor was of the

nature of civil construction work. Cause of action arose on 20 th May 2005

whereas Arbitration Tribunal was constituted on 1st March 2005. Hence,

the Chief Engineer was not having jurisdiction to appoint sole Arbitrator.

Objection filed by the appellants was allowed on 05.05.2007 and the

application for execution filed by respondent-Contractor herein was

rejected.

4. This order of rejecting the application for execution of award passed by

sole Arbitrator was put to challenge by the respondent-Contractor by way

of filing writ petition bearing WP(C) No.3700 of 2008 seeking quashment

of the order dated 05.05.2007 by the District Judge, Ambikapur, District-

Sarguja in execution case. Writ petition filed by respondent-Contractor

came to be dismissed taking note of Section 20 of the Adhiniyam of 1983

and held that the Arbitration Tribunal was not having jurisdiction to make

an award. Respondent-Contractor aggrieved by the order passed in writ

petition filed Writ Appeal No.208 of 2008 which was allowed. The order

passed in Writ Petition by learned single Judge was set aside.

Consequently, order passed in execution proceedings by the District

Judge was also set aside. The case was remitted back to the District

Judge with a direction to decide application for execution of the award in

accordance with law.

5. Against the order passed in writ appeal, the appellant-State filed review

application which also came to be dismissed. The order passed by the

Division Bench in Writ Appeal No.208 of 2008 was put to challenge before

Hon'ble Supreme Court in Civil Appeal No.3666-3667 of 2012 which was

allowed and the case was remitted back to Division Bench of this Court

holding that other points would require consideration by the High Court.

Division Bench of the High Court, after receiving back the case in remand,

again heard counsel for respective parties and observed that against the

order under challenge in Writ Petition (C) No.3700/2008, civil revision

would lie. Direction was issued to Registry of High Court for registering

the Writ Petition (C) No.3700 of 2008 as Civil Revision and directed

learned Single Judge to decide Civil Revision on its own merits keeping in

view the observation made by Hon'ble Supreme Court in its order dated

17.4.2012. The Civil Revision was registered bearing No.7/2013. Learned

single Judge allowed the Civil Revision, set aside the order of learned

District Judge, Sarguja and restored the execution proceedings in the file

of learned District Judge. Further direction was issued to proceed in

execution proceedings in accordance with law. The appellant-State

aggrieved by the order passed by learned single Judge in Civil Revision

again filed SLP which was registered as Civil Appeal bearing No.11383 of

2017 which was decided on 8th March 2018. Appellant-State, thereafter

taking shelter of the order passed by Hon'ble Supreme Court filed an

application under Section 34 of the Act of 1996 read with Sections 5 & 14

of the Limitation Act, 1963 before the Commercial Court at Raipur. The

Commercial Court vide order dated 28.11.2019 dismissed the application

on the ground of delay as also observing that second application under

Section 34 of the Act of 1996 after rejection of first is not maintainable. It

is this order of Commercial Court which is under challenge in this appeal.

6. Shri Amrito Das, learned Addl. Advocate General appearing for

appellants-State submits that prior to this appeal, there were multiple

proceedings initiated by both the sides pursuant to dispute arose under

work order dated 25.03.1983 and the agreement executed between the

parties. He contended that the contract awarded in favour of respondent-

Contractor is one under the works contract. If any dispute arose between

the parties under the agreement entered into between them of works

contract, it will govern with the provision of Adhiniyam 1983. Provision of

the Act of 1996 would not be made applicable to such disputes. He

submits that prior to making application for appointment of sole Arbitrator,

Arbitration Tribunal under the Adhiniyam 1983 was constituted. Hence, on

the date Chief Engineer entertained the application for appointment of

sole Arbitrator on 07.01.2006, he was not having jurisdiction to appoint

sole Arbitrator under the provision of the Act of 1996. Even if the sole

Arbitrator was appointed contrary to Adhiniyam of 1983 and award was

passed, it would be a nullity in the eyes of law. It is submitted that learned

Commercial Court has not considered the entire facts and circumstances

of the case as also the tenor of the order passed by Hon'ble Supreme

Court wherein Hon'ble Supreme Court, in very specific term, has

protected the interest of appellants, observing that the order passed by

Supreme Court will not affect the remedy available under the Act of 1996,

which enables the appellants to invoke the provision under Section 34 of

the Act of 1996. The Commercial Court misunderstood the order passed

by Hon'ble Supreme Court and dismissed the application under Sections

5 & 14 of the Limitation Act as also the application under Section 34 of the

Act of 1996. The proceedings initiated by the respondent- Contractor,

from its inception, was illegal and without jurisdiction. He submitted that

appeal be allowed and the entire proceedings and award passed by sole

Arbitrator be set aside.

7. Shri Rajkamal Singh, learned counsel appearing for respondent-

Contractor would submit that appellants-State after taking work from the

respondent-Contractor are avoiding to make actual payment. He submits

that learned Commercial Court in impugned order of rejecting application

under Section 34 of the Act of 1996 clearly recorded that appellants have

earlier filed one more application under Section 34 of the Act of 1996

which was dismissed on the ground of limitation. The said order was not

put to challenge by the appellants, but they chose to raise objection in

the execution proceedings filed by the respondent. Appellants participated

in the arbitration proceedings before the sole Arbitrator but has not raised

any objection with regard to its jurisdiction. They, for the first time, raised

objection with regard to appointment of sole Arbitrator and his jurisdiction

to pass award in the execution proceedings i.e. after passing of award.

Hence, now the appellants could not raise the said objection which was

initially waived. Executing Court dismissed the execution application

which travelled to High Court and thereafter to Supreme Court. The

Supreme Court remitted back the case to High Court. High Court, after

receiving the case back in remand from Hon'ble Supreme Court has set

aside the order passed by the District Judge, Ambikapur, District-Sarguja,

holding that the executing Court has no jurisdiction to nullify the award

and allowed the Civil Revision. The order passed by learned single Judge

in Civil Revision was put to challenge before Hon'ble Supreme Court and

Hon'ble Supreme Court declined to interfere with the order passed by

learned single Judge, observing that the order passed by Hon'ble

Supreme Court will not affect the remedy of appellants under the Act of

1996, which does not mean to file again an application under Section 34

of the Act of 1996 knowing well that the first application under Section 34

of the Act of 1996 came to be dismissed much earlier in the year 2011.

Second application under the same provision and on similar facts is not

maintainable. Commercial Court discussed the entire facts and

circumstances of the case and have rightly dismissed the application

under Section 34 of the Act of 1996 to be not maintainable as also to be

barred by limitation and, therefore, it does not call for any interference.

8. We have heard learned counsel for the parties and also perused the

record of the Arbitration Appeal as also the compilation of the

applications, proceedings initiated by both the sides as also different

orders passed by the District Judge in Execution Case No.1 of 2007,

order passed by learned Single Judge in Writ Petition (C) No.3700 of

2008 challenging the rejection of execution application, order passed by

Division Bench in Writ Appeal No.208 of 2008, order passed in Review

Application No. 8 of 2011, order passed by Hon'ble Supreme Court in

Civil Appeal No.3666-3667 of 2012, order dated 18 th August 2011 passed

by District Judge, Sarguja (Ambikapur) in Civil Suit No. 12-A/2011

dismissing the application under Section 34 of the Act of 1996, order

passed in Writ Appeal No.208 of 2008 on 20.9.2012 after receiving back

the case on remand pursuant to order passed by Hon'ble Supreme Court

and order dated 12.05.2017 passed in Civil Revision No. 7 of 2013

passed in the case received on remand from coordinate Bench of this

Court wherein the Writ Petition No.3700/2008 was directed to be

converted into Civil Revision and order dated 8th March 2018 passed by

Hon'ble Supreme Court in Civil Appeal No.974 of 2012 (Madhya Pradesh

Rural Road Development Authority & Anr. Vs. M/s. L.G. Chaudhary

Engineers and Contractors) and batch of Civil Appeal including Civil

Appeal No.11383/2017 (arising from this proceeding as stated by counsel

for appellants).

9. During the Course of argument, this Court put specific query to learned

Addl. Advocate General for the State whether any objection with respect

to jurisdiction of sole Arbitrator was raised initially during arbitration

proceedings or not. He contended that the proceedings before the sole

Arbitrator was bi-parte proceedings and it is not appearing from the record

that any objection with regard to the jurisdiction of the sole Arbitrator was

raised. Perusal of the impugned order would show that learned

Commercial Court (District Level) dismissed the application under Section

34 of the Act of 1996 on two grounds, firstly on the ground that the

application to be hopelessly barred by limitation and also considered that

the appellants in the application under Section 34 of the Act of 1996 have

not specifically pleaded that earlier also appellants have filed an

application under Section 34 of the Act of 1996 which came to be

dismissed in the year 2011 i.e. 18th August 2011.

10. The second application under Section 34 of the Act of 1996 is filed under

the garb of order passed by Hon'ble Supreme Court on 8th March 2018 in

Civil Appeal No.11383/2017, which reads as under:-

"C.A. No.11383/2017:

Heard learned counsel for the parties.

We do not find any ground to interfere with the

impugned order. However, this order will not affect the

remedy of the appellants under the Arbitration and

Conciliation Act, 1996.

The appeal is disposed of in above terms."

11.For better understanding the purport of order passed by Hon'ble Supreme

Court we would like to again discuss the history of proceedings in this

appeal. Respondent- Contractor was awarded with the works contract

and an agreement to this effect was executed between the parties. The

said agreement bears the arbitration clause in Clause -52 of the

agreement. Respondent-Contractor raised dispute before the authority

and when it was not given any heed to, respondent filed an application for

appointment of sole Arbitrator. Application was allowed and the claim of

Contractor was considered by the Superintending Engineer (sole

Arbitrator) appointed by the Chief Engineer who passed the award which

was bi-parte award as stated by both the counsel. Before the sole

Arbitrator, objection of jurisdiction to entertain arbitration proceeding by

sole Arbitrator was not raised as admitted by counsel for the appellants

based on the documents available. Award passed by the sole Arbitrator

was put to execution by filing an application under Order 21 Rule 11 CPC.

In the execution proceeding, appellants raised objection which was

allowed and the application for execution was dismissed. This was put to

challenge before the High Court in Writ Petition (C) No.3700/2008 and

learned Single Judge dismissed the writ petition. The order passed in writ

petition was put to challenge in appeal before Division Bench of this Court

which was allowed. Order of Division Bench was challenged before the

Hon'ble Supreme Court. Hon'ble Supreme Court, observing that ruling

relied upon by Division Bench in case of VA Tech Escher Wyass Flovel

Flowr Ltd. Vs. Madhya Pradesh State Electricity Board and Anr (2011) 13

SC 261 has been reversed by the subsequent decision and other points

would require consideration, remitted back the matter to the High Court.

After receiving back the case on remand Division Bench of High Court

directed that writ petition be converted to Civil Revision. Accordingly, Civil

Revision was registered and came up for hearing. Learned Single Judge

allowed the revision petition taking note of the provision under Section 16

(2) of the Act of 1996 that the appellants have waived their opportunity to

plead and object, judgment passed by Hon'ble Supreme Court in the case

of M/S. MSP Infrastructure Ltd. Vs. M.P. Road Development Corp. Ltd.

decided on 05.12.2014. Order passed by learned District Judge, Sarguja

dismissing the execution application was set aside and it was directed to

proceed in the execution proceedings in accordance with law.

12. The order passed in Civil Revision was challenged before Hon'ble

Supreme Court as argued by the appellant in Civil Appeal

No.11383/2017. Hon'ble Supreme Court declined to interfere with the

order passed in Civil Revision No.7/2013. Hon'ble Supreme Court has

only observed that the order passed by the Supreme Court will not affect

the remedy of appellants under the Act of 1996.

13. Observation made by Hon'ble Supreme Court that "this order will not

affect the remedy available to the appellants herein under the Arbitration

and Conciliation Act, 1996" would definitely does not mean the remedy of

challenging the award dated 22/08/2006 passed by sole Arbitrator, under

Section 34 of the Act of 1996 again when the application under Section

34 filed by the appellant herein challenging the said award passed by the

sole Arbitrator was dismissed by the District Judge, Sarguja (Ambikapur)

much earlier on 18th August 2011 in Civil Suit No.12-A/2011. In the facts

of the case, filing of application again under Section 34 of the Act of 1996

challenging the same award passed by the sole Arbitrator on 22.08.2006

is not permissible under law. Plain reading of the observation made by

Hon'ble Supreme Court in its order dated 8th March 2018, in the opinion of

this Court, would mean further proceedings available to the appellants

pursuant to award passed by the sole Arbitrator which will be in

continuation. It does not provide availing of the same remedy which the

appellants have already availed under the Act of 1996.

14. For the foregoing discussions, submission of learned counsel for the

appellants-State that the observation made by Hon'ble Supreme Court in

order dated 8th March 2018 provides them remedy to file application

under Section 34 of the Act of 1996 is misconceived. Hence, the said

submission made by learned counsel for appellants is not sustainable

and it is repelled. As we have arrived at the conclusion that once the

application under Section 34 of the Act of 1996 challenging the arbitral

award dated 22.08.2006 passed by sole Arbitrator Mr. C.M. Malhotra

came to be dismissed vide order dated 18th August 2011 in Civil Suit No.

12-A/2011 by District Judge, Sarguja (Ambikapur), the second application

challenging the same award under the same provision i.e. under Section

34 of the Act of 1996 is not maintainable and, therefore, we are not

further dealing with the issue of limitation as projected in application

under Section 14 of the Limitation Act filed along with the application

under Section 34 of the Act of 1996.

15. For the foregoing discussions, we do not find any error in the finding

recorded by learned Commercial Court in impugned order that the

application under Section 34 of the Act of 1960 itself is not maintainable

and the said finding is affirmed.

16. Consequently, the Arbitration Appeal being devoid of any substance is

liable to be and is accordingly dismissed.

                        Sd/-                                         Sd/-/-
                  (P. Sam Koshy)                             (Parth Prateem Sahu)
          17.          Judge                                        Judge


Praveen