Capital Const. Co. vs National Agri. Coop. Marketing ...
2000 Latest Caselaw 626 Del

ORDER

Vikramajit Sen, J.

1. This petition under Section 20 of the Arbitration Act, 1940 has been filed in July, 1998. The facts leading to its filing are that on 19.11.1983 the parties entered into an Agreement for the construction of multistoreyed office building (Civil & Sanitary Works) for NAFED at 1, Siddhartha Enclave, New Delhi. On 23.7.1990, even before the final bill was prepared, the Petitioner invoked the Arbitration Agreement as contained in Clause 57 of the General Conditions of Contract and requested Respondent No. 2 to appoint an Arbitrator. Eventually, on 4.10.1990, after some reminders, Respondent No. 2 appointed Dr. S. P. Seth, Additional Managing Director of Respondent No. 1 as the Sole Arbitrator. Since the Award was not made and published within the statutory period, OMP 35 of 1992 under Section 28 of the Arbitration Act was filed on 11.3.1992 praying for the enlargement of the time for making and publishing the Award. This Petition was disposed of by Orders dated 12.11.1992 passed by Arun Kumar, J., who was pleased to extend the time for making the Award by another period of four months. On 31.7.1993 the Petitioner filed an OMP 109 of 1993 under Sections 5, 7, 9 and 12 of the Arbitration Act, 1940 for the revocation of the authority of the Sole Arbitrator Dr. S. P. Seth. This Petition was founded on the alleged biased attitude manifested by Dr. S. P. Seth in the course of the adjudication of the disputes. On 10.8.1993 Mohd. Shamim, J. in Proceedings in I. A.7008/93 in the aforementioned OMP 109/93 restrained the Sole Arbitrator Dr. S. P. Seth from proceeding further with the Arbitration. Shortly thereafter Respondent No. 1 filed OMP 114 of 1994 under Section 28 of the Arbitration Act, 1940 for enlarging the time for making and publishing the Award. On 23.11.1994 OMP 114 of 1994 was dismissed for non-prosecution. On 29.1.1996 the Sole Arbitrator Dr. S. P. Seth is stated to have been transferred, and had vacated his office as an Additional Managing Director. The Petitioner's case is that because of this development OMP 109 of 1993 filed by the Petitioner for the revocation of the authority of the Sole Arbitrator Dr. S. P. Seth had been rendered infructuous and was, therefore, not prosecuted. It was dismissed in default on 29.1.1996. On 22.9.1997 the Petitioner requested Respondent No. 2, Chairman of Respondent. No. 1, to supply the vacancy and appoint another person as the Arbitrator in place of Dr. S. P. Seth. Reminder was sent on 25.10.1997, which was also ignored. The present petition was thereafter filed on 21.7.1998.

2. Learned counsel for the Petitioner has relied on a decision rendered in G. Ramachandra Reddy and Co. Vs. Chief Engineer, Madras Zone, Military Engineering Service, , in which it is held that the Court has power to appoint an Arbitrator, and must endeavour to do so, if the notice for this purpose having been served, had been ignored by the opposite party. Reference was also drawn to the case of Ved Prakash Mithal Vs. The Union of India and others, , a decision of the Full Bench of this Court. This decision also took the view that on the refusal or neglect to appoint an arbitrator, on an application under Section 20, the Court had ample power to step in and make the appointment.

3. The petition is being resisted by Respondents on a number of counts, (a) that the petition was not maintainable under the Arbitration Act, 1940 and (b) that it was barred by limitation as well as res judicata. It was contended that the petition was filed in 1998 well after the coming into effect of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'new Act') which also prescribes the use of a particular format for pleadings of the nature of the present petition. The Court is invariably some reluctant and hesitant in accepting objections of a punctilious nature, relating to procedural infractions. Procedure is the handmaid and not the mistress of law. However, in the present case this petition has been filed sufficiently subsequent to the coming into effect of the 'new Act' and the obvious question that would arise is why recourse was not taken to the 'new Act'. The power to make an appointment, analogous to that under Section 20 of the erstwhile Act is also to be found in the 'new Act' viz. Section 11. Obviously this was not the reason why the petition was filed under the old Act.

4. Learned counsel for the Petitioner has relied heavily on the decision of the Apex Court in M/s. Shetty's Constructions Co. Pvt. Ltd. Ltd. Vs. M/s. Konkan Railway Construction and another, . A legal Conundrum had arisen in that case and the view taken by the Hon'ble Supreme Court was that in the absence of a specific agreement to the contrary, Section 21 of the new Act envisage that the old Act would continue in applicability if the date on which the request for referring the disputes for Arbitration had been received prior to the coming into effect of the new Act. Learned counsel for the Petitioner has submitted that the proceed-

ings had commenced on 23.7.1990 and despite repeated forays to the High Court, had not come to a culmination. It was in this context that the learned counsel for the Respondent had vehemently argued the operation of bar of res judicata. Reference was made to the dismissal in default of the petition for revoking of the authority of the Sole Arbitrator Dr. S. P. Seth. Learned counsel for the Petitioner had contended, on the contrary, that the petition had itself been rendered infructuous because of the transfer of the Sole Arbitrator Dr. S. P. Seth.

5. In my view it is not necessary to enter into the legal nodus of whether res judicata applies or not. If the earlier proceedings were still continuing, and the Petitioner was entitled to the relief claimed therein, the genesis of the disputes would relate back to the initial request for the appointment of an Arbitrator, i.e. 23.7.1990. A petition under Section 20 filed in 1998 would, therefore, be hopelessly barred by time. Even if the present petition is predicated on the petition for revocation of the authority of Sole Arbitrator, Dr. S. P. Seth, assuming the correctness of the learned counsels submission that the dismissal would not operate as res judicata since this petition had rendered infructuous, the present petition would still be hopelessly barred by limitation.

6. It appears that the cause of action for the present petition would commence on 22.9.1997 when the Petitioner made a request to Respondent No. 2 to fill in vacancy created by the transfer and vacation of office by Dr. S. P. Seth. If this is taken into reckoning, the event transpired after the coming into force of the new Act. The Petitioner would, therefore, not be entitled or justified in invoking the provision of Section 20 of the old Act. It is possible that the petitioner was well aware of the possibility of the dismissal for non-prosecution of OMP 114 of 1994 coming in the way of a fresh appointment of an Arbitrator. This hurdle would be in the limelight if the petition was to be brought under the new Act. No final adjudication on this question is called for in these proceedings.

7. In this analysis, if the old Act is sought to be invoked, it must perforce be on the basis of the notice dated 23.7.1990. The petition is then barred by limitation. In the alternative, if the notice dated 22.9.97 taken into contemplation, only the new Act applies. The Petition is not maintainable and is dismissed. In the circumstances of the case there shall be no order as to costs.