Indian Airlines vs Lhody Brothers Pvt. Ltd.
1997 Latest Caselaw 171 Del

JUDGMENT

Anil Dev Singh, J.

1. This is an application under Section 20 of the Arbitration Act filed by Indian Airlines Corporation. The petitioner awarded the work of construction of 6 'A' Type, 2 'B'-Type and 2 'C' Type quarters and boundary wall etc, in Paharia Housing Scheme. Varanasi to the respondent. As per the contract between the parties, the work was to be completed within a period of 12 months to be reckoned from the 15th day after the date of acceptance of the work. Both parties agree that the stipulated date of completion worked out on the above basis, was 31st January, 1988. While the petitioner claims that the work was abandoned by the respondent by the end of September 1989, the latter denies the allegation by asserting that by the end of September 1989 the work was completed by it.

2. The respondent on an earlier occasion raised certain disputes, arising out of the above said contract, which were referred to the General Manger (Administration) of the petitioner. Now by this application under Section 20 of the Arbitration Act the petitioner seeks the reference of the claims raised in the instant application to the same Arbitrator. It may be pointed out that in the earlier application under Section 20 of the Arbitration Act filed by the respondent, the petitioner had not raised any counter claim.

3. Learned Counsel appearing for the respondent submitted that the petition under Section 20 of the Arbitration Act was barred by time. He further urged that the claims now being raised by the petitioner are barred by the principles of constructive resjudicata and under Order 2 Rule 2 CPC.

4. I have considered the submissions of learned Counsel for the respondent but retreat my inability to accept the same. It is not disputed by the respondent that the work continued upto the end of September 1989. The present application was filed by the petitioner on 26th August, 1992. Thus this application has been filed within 3 years of the completion or abandonment or work by the respondent. Therefore, the first objection of the respondent is rejected.

5. In so far as the question of the application of Order 2 Rule 2 CPC is concerned, it may be pointed out that Order 2 Rule 2 CPC specifically refers to a situation where a suit is filed and the plaintiff omits in such a suit to sue in respect of a portion of the claim. In such a case the petitioner will not be permitted to bring a suit in respect of the portion so omitted by him. Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action. In the present case the contention of the learned Counsel for the respondent is that no counter claim was raised by the petitioner in the earlier application filed by the respondent under Section 20 of the Arbitration Act and therefore, the petitioner would be barred from raising the claim in this subsequent application filed by it. It seems to me that the rule applies where the plaintiff omits to sue in respect of a part of his claim in the suit instituted by him and not to a counter-claim or a defense not set up by defendant in the written statement but raised subsequently by means of a separate suit. In such a contingency Order 2 Rule 2 does not operate. Therefore, on parity of reasoning the instant application of the petitioner will not be barred under Order 2 Rule 2 CPC. The principles of res-judicata will also not be attracted as it is not in dispute that the aforesaid arbitration proceedings are still pending. It is pointed out by the learned Counsel for the respondent that after filing of the present petition under Section 20, the Arbitrator has not proceeded with the claims of the respondent. This being the position, it is open to the petitioner to seek reference of its counter-claims to the Arbitration as none of the claims raised by the respondent have yet been tried and determined by the Arbitrator. In Delhi Development Authority and another v. M/s. Alkarma , a Division Bench of this Court held that :

Where an award has not been made, it is open to a claimant to ask for more disputes to be referred to arbitration provided the arbitration proceedings are not yet over.

6. Having regard to the above decision, the request of the petitioner has to be accepted. Learned Counsel for the respondent, however, relied upon the decision of the learned Single Judge in Delhi Development Authority v. Maj. (Retd.) I. S. Rekhi and Sons (1995(2) Arb. LR 35). In that case it was held as follows :

"To urge that principle of res judicata are applicable, he placed reliance on the decision of the Supreme Court reported in K. V. George v. Secretary to Government, Water and Power Department, Trivandrum and another. In that case the aggrieved party got his disputes referred to arbitrator. The arbitrator made the award. On objection being raised the award was remitted to the arbitrator as he had not considered the counter-claims of the department. After remittance when counter-claims were taken up by the arbitrator the appellant therein filed second claim petition before the arbitrator challenging the wrongful termination of the contract and also raised 13 items of claims therein. Arbitrator made award against the second claim petition preferred by the appellant. This was challenged by the respondent on the ground that the second claim petition before the arbitrator was barred under Order 2, Rule 2 C.P.C. and under Section 11 C.P.C. Supreme Court upheld these contentions and observed that since the contract was terminated by the respondent/department on 26th April, 1980 and as such all the issues arose out of the termination of the contract and they could have been raised in the first petition before the arbitrator, raising the remaining disputes subsequently is barred. Mr. Dalip Singh relying on these observations of the Apex Court contended that the D.D.A. ought to have filed it counter claims pertaining to termination of contract when the respondent filed his petition under Section 20 of the Arbitration Act. As per D.D.A.'s own showing in para No. 12 of this petition, the counter claims were inextricably mixed and arose out of the same cause of action/facts on the basis of which claims were filed by the respondent and defended by the D.D.A. before the learned Arbitrator. It has also been stated in this para that the D.D.A. defended the claims of the respondent before the arbitrator alleging that it was the respondent herein who committed breach of contract, did defective work and left the work incomplete, which was got executed at his risk and cost. Even the levy of compensation under Clause 2 was also argued before the arbitrator. Shri. Dalip Singh, therefore, contended that having admitted that all these facts were urged before the learned arbitrator as a defense by the D.D.A. and the matter having been adjudicated the present counter claim sought to be referred to arbitrator are clearly barred. The D.D.A. in response to the petition filed by the respondent ought to have raised all these claims. Having not done so, the present claim petition is barred under Order 2 Rule C.P.C. and also under Section 11 C.P.C."

7. It may be noted that the learned Single Judge relied upon the decision of the Supreme Court in K. V. George v. Secretary to Government, Water and Power Department Trivandrum and another . The question which fell for the determination of the Supreme Court in that case was whether the second claim petition could be filed by a petitioner who had earlier filed a petition under Section 20 of the Arbitration Act for raising further claims. This decision would not apply to a case where a petitioner had not filed many earlier petition for reference of the disputes to an Arbitrator and the disputes already raised by the respondent are still to be adjudicated. Besides, in Delhi Development Authority v. Maj. (Retd.) I. S. Rekhi and Sons (supra) the decision of the Division Bench in Delhi Development Authority v. M/s. Alkarma (supra) was not noticed.

8. In view of the foregoing discussions, the Managing Director of the petitioner Corporation is directed to refer the claims of the petitioner mentioned in para 14 of the application for arbitration to the Arbitrator already dealing with the clams of the respondent.

9. Application allowed