Delhi High Court
Delhi Development Authority vs Sh. S. Kumar on 29 July, 2008
Author: A.K.Sikri
Reportable
IN THE HIGH COURT OF DELHI AT NEW DELHI
+FAO (OS) No.367/2003
Date of Decision: 29.07.2008
#Delhi Development Authority ....Appellant
! Through: Ms.Anusuya Salwan
with Ms.Monika Sharma
Versus
$Sh. S. Kumar .....Respondents
^ Through Mr.D. Moitra with
Mr.S.K. Jain
CORAM :-
*THE HON'BLE MR.JUSTICE A.K.SIKRI
THE HON'BLE MR. JUSTICE MANMOHAN SINGH
1.Whether Reporters of Local papers may be allowed to
see the Judgment?
2.To be referred to the Reporter or not?
3.Whether the judgment should be reported in the Digest?
A.K. SIKRI, J.
:
1. The question as to whether provisions of the Arbitration Act, 1940
(hereinafter referred to as the 'Old Act') or that of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the 'New Act') are
applicable to the arbitration proceedings in question between the parties
from which award dated 13.7.1998 emanated.
2. We may have to take note of certain dates for answering this question. The
respondent herein was awarded the contract by the appellant-DDA vide
agreement No.14/EE/SED-11/DDA/88-89. Certain disputes arose between
the parties. The respondent invoked the arbitration clause and requested
the Engineer Member, DDA to appoint the arbitrator vide letter dated
30.10.1992. Since no arbitrator was appointed, the respondent filed Suit
No.1744/94, which was a petition under Section 20 of the old Act. In that
suit, order dated 18.1.1996 was passed by this Court directing the Engineer
Member to appoint an arbitrator. As the DDA failed to take action, the
respondent filed IA in the said suit seeking appointment of an independent
arbitrator in which orders dated 8.8.1996 were passed by this Court
appointing Sh. N. Veerabandhu as the sole arbitrator. The arbitrator entered
upon reference on 15.9.1996. He made and published the award on
13.7.1998. This award was filed in this Court whereupon notice was issued
to the parties of the filing of the award by the Court. This notice issued
under the old Act was received by the DDA on 17.8.1998 After receiving
this notice the DDA filed objections to this award under Section 30 and 33 of
the old Act challenging that award. Since there was delay in filing the
objection, along with the objection, application for condonation of delay was
also filed.
3. The respondent herein raised a preliminary submission to the effect that the
objections under Section 30/33 of the old Act were not applicable as the
award was governed by the new Act. The learned Single Judge vide orders
dated 14.8.2003 accepted this submission of the respondent holding that
the new Act was applicable as the award is dated 13.7.1998 and it was
rendered after the new Act came into force. The learned Single Judge,
therefore, treated the objections as deemed filed under Section 34 of the
new Act. However, on the ground that there was delay of 233 days and
there was no power under the new Act to condone the delay of this
magnitude the objections (treating the same as petition under Section 34 of
the new Act) are dismissed as time-barred. The dates and events
enumerated above would clearly indicate that when the arbitration was
invoked by the respondent giving notice dated 30.10.1992, old Act was in
force. Even the petition for appointment of arbitrator was filed under the
old Act, i.e., under Section 20 of the Arbitration Act. This suit was disposed
of on 18.1.1996 by this Court directing the Engineer Member, DDA to
appoint an arbitrator. It is after the disposal of this suit that the new Act
came into force with effect from 25.1.1996. In these circumstances, it goes
without saying that the proceedings, which were conducted by the
arbitrator, would be governed under the old Act. Though initially there was
confusion as to whether the date on which arbitration is invoked or the date
when the award is rendered would be determinative of the factor as to
which Act is applicable, the position in this respect is now finally put at rest
by the Supreme Court. It is now categorically decided that unless the parties
specifically agreed, in terms of Section 85(2)(a) of the new Act that the
proceedings be governed by the new Act, old Act would continue to apply in
respect of the arbitration proceedings which were initiated when old Act
was in force. In Milkfood Ltd. v. M/s. GMC Ice Cream (P) Ltd., 2004 (4) SCALE
291, the Supreme Court laid down the principle that service of a notice for
appointment of an arbitrator would be the relevant date for the purpose of
commencement of the arbitral proceedings. In the present case, as pointed
out above, the notice for appointment of arbitrator was given on 30.10.1992
and therefore, arbitration proceedings deemed to have been commenced
on that date and indubitably, it is the old Act which was in operation at that
time. This legal position is also contained in the following judgments:-
1. Shetty Construction Co. v. Konkan Railway, (1998) 5 SCC 599
2. State of West Bengal v. Amritlal Chatterjee, (2003) 10 SCC
3. N.S. Nayak v. State of Goa, (2003) 6 SCC 56
4. This Court has reiterated and followed the same view in the following cases:-
1. Ashi (P) Ltd. v. Union of India, 2002 VII AD (Delhi) 655
2. Jupitor Chit Fund (P) Ltd. v. Shiv Narain Mehra and Ors.,
(2002) 3 SCC 364
3. Continental Construction Ltd. v. Chief Engineer, 2002 III AD
(Delhi) 277.
4. DDA v. Bhai Sardar Singh, 115 (2004) DLT 415 (DB).
5. It is not necessary to even discuss the aforesaid cases in detail inasmuch as
the learned counsel for the respondent could not dispute the aforesaid legal
position and was candid in conceding the same. However, he still ventured
to resist the present appeal by raising the following arguments:-
I. The respondents had filed Execution Petition no.274/1998
in which orders dated 4.4.2003 were passed categorically
observing that the new Act was applicable and thus,
objections filed under Section 33 of the old Act would be
deemed to have been filed under Section 34 of the new Act.
He submitted that no challenge was laid to the said order
and therefore, it was not open to the appellant to now
challenge the order dated 14.8.2003 which reiterated the
same view.
II. There was no provision under which the appeal was
maintainable against order dated 14.8.2003.
III. The appellant had not come to this Court with clean hands.
IV. The appellant had amended the appeal which was not
permissible inasmuch as, issue of applicability of the old Act
was raised for the first time in the appeal.
6. We do not find any merit in any of the aforesaid contentions. In so far as the
first argument is concerned, as per the respondents own showing order
dated 4.4.2003 is passed in execution petition. In that order, no doubt,
some observations are made that new Act is applicable and therefore,
objection shall be treated as having been filed under Section 34 of the new
Act, the order further proceeds to state that since there is an application for
condonation of delay, that application is to be taken up for consideration
and the matter was simply adjourned for that purpose for 27.5.2003. This
would not prejudice the appellant or preclude the appellant from
challenging the impugned order which is filed in the application/objections
filed by the appellant under Section 30/33 of the Arbitration Act. In fact, it is
by order dated 14.8.2003 passed in the said objections filed in CS(OS)
No.1581/1998 that objections are dismissed for the first time as time-barred
after applying the provisions of the new Act. The proper and conclusive
determination of the issue is by the orders dated 14.8.2003 only which gave
cause of action to the appellant to challenge the said order.
7. In so far as the second contention is concerned, it is based on the plea that
appeal is not provided against the orders passed under Section 34 of the
new Act. Not only this contention is misconceived, even otherwise such a
contention is not available to the respondent. It amounts to begging the
question itself. The contention proceeds on the basis that new Act is
applicable whereas this itself is the bone of contention as to whether it is the
new Act or the old Act which is applicable. Once it is held that old Act is
applicable, provision of appeal under the old Act would be available to the
appellant. Third objection is noted to be rejected. The allegation that the
appellant did not come to the court with clean hands is again on the premise
that the appellant had agreed that the proceedings be governed by the new
Act. However, nothing could be shown in this behalf by the respondent.
8. In so far as the last contention is concerned, again the same is meritless. It is
not in dispute that the appellant had made an application for amendment of
the appeal, which was allowed by this Court vide orders dated 26.10.2004.
Thus, it is the amended appeal which has now to be considered as order
allowing the amendment has become final as the respondent did not
challenge that order.
9. In any case, we are of the view that the question as to whether the
provisions of the new Act or the old Act are applicable is a legal question and
there is no estoppels against law. Therefore, ignoring the aforesaid technical
objections, it is necessary for the court to determine this question so that
proceedings are conducted after applying the provisions of relevant law.
Once it is not in dispute that provisions of old Act are applicable, the obvious
consequence would be that the learned Single Judge could not have
dismissed the objections after treating the same as petition under Section 34
of the new Act and holding that it is time-barred. This order, which is
contrary to law, affects the rights of the appellant prejudicially and
therefore, the appellant has right to maintain this appeal and seek redressal
of the grievance. We, therefore, allow this appeal and set aside the
impugned judgment dated 14.8.2003 of the learned Single Judge. As a
consequence, we restore both the applications (objections of the DDA under
Section 30/33 of the Arbitration Act as well as application for condonation of
delay). The learned Single Judge shall deal with these applications on merits.
Parties shall appear before the learned Single Judge on 16.10.2008.
(A.K. SIKRI)
JUDGE
July 29, 2008 (MANMOHAN SINGH)
hp. JUDGE
