Ashok Kumar vs D.D.A.
2010 Latest Caselaw 262 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

+        FAO(OS) 268/2009

         ASHOK KUMAR                                       ..... Appellant
                                Through Mr. R.K. Gupta, Adv.
                       versus

         D.D.A.                                           ..... Respondent
                                Through Mr. Bhupesh Narula, Adv.

         CORAM:
         HON'BLE THE CHIEF JUSTICE
         HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

                  ORDER

% 19.01.2010

DB-1 could not assemble on 18th January, 2010, therefore the matter is taken up

today.

2. This appeal under Section 37 of the Arbitration Act, 1996 has been preferred with

respect to the order dated 19th May, 2009 of the learned single Judge holding the petition

filed by the respondent DDA under Section 14(2) of the Arbitration Act, 1940 to be

maintainable and negating the contention of the appellant of the arbitration between the

parties being governed b the Arbitration Act, 1996. The facts which emerged are that the

arbitrator to adjudicate the disputes between the parties was appointed as per the

agreement between the parties as far back as on 23rd May, 1991. The said arbitrator

resigned. The respondent - DDA, as per the agreement, was to appoint the substitute but

did not appoint the substitute arbitrator. Suit no. 523A of 1997 under the provisions of

the 1940 Act was filed by the appellant with the prayer for appointment of the arbitrator

owing to the failure of the respondent - DDA to supply the vacancy. The said suit was

disposed of vide order dated 26th May, 1998 granting two weeks more time to respondent

- DDA to appoint an arbitrator and further holding that upon the failure of the respondent

- DDA to so appoint the arbitrator, Hon'ble Mr. Justice J.D. Jain (Retd.) of this court

would stand appointed as the arbitrator to decide the disputes.

3. Notwithstanding the aforesaid order, the appellant filed arbitration application

250/2002 before this court stated to be under Section 11(6) of the 1996 Act. The same

was disposed of vide order dated 26th February, 2003 on intimation of Justice J.D. Jain

having already been appointed as the arbitrator.

4. It appears that Justice J.D. Jain also recused himself or resigned. OMP No.

264/2006 stated to be under the 1996 Act was preferred by the appellant in this regard.

The same came up before this court on 17th July, 2006 when it was informed by the

counsel for the respondent - DDA that the respondent - DDA had appointed Mr. S.S.

Jain as the arbitrator. In view of the said statement the said OMP also was disposed of.

Mr. S.S. Jain has published an award dated 20th December, 2007 and with respect

whereto petition under Section 14(2) of the 1940 Act was preferred by the respondent -

DDA and from the order wherein this appeal has arisen. It was the plea of the appellant

before the learned single Judge that the application under Section 14(2) of the 1940 Act

was not maintainable because the arbitrator was appointed after coming into force of the

1996 Act and the previous arbitrator appointed by the DDA was later on changed under

the provisions of the new Act. The learned single Judge held that since the arbitration

process had started before coming into force into 1996 Act, the provisions of the old Act

will apply. Aggrieved therefrom this appeal has been preferred.

5. It is stated in the memo of appeal that the respondent DDA did not prefer any

objections to the award within the time allowed u/s 34(3) of the 1996 Act; that the

appellant applied for execution of the award as a decree and thereafter the application u/s

14(2) was filed.

6. The counsel for the appellant has vehemently relied upon the order dated 17th

July, 2006 (supra) in OMP No. 264/2006 to contend that the appointment of the arbitrator

who has published the award, is under the 1996 Act and hence the provisions of the 1940

Act would not apply. We do not agree. No powers were exercised by this Court under

the 1996 Act in the said OMP also. The said OMP was disposed of on intimation of the

respondent - DDA having appointed a substitute arbitrator. Similarly though arbitration

application no. 250/2002 under Section 11(6) of the 1996 Act is stated to have been

preferred by the appellant but no power under Section 11(6) also was exercised by the

designate of the Chief Justice. The said application was also disposed of owing to the

appointment of Justice J.D. Jain as arbitrator in Suit No. 523A of 1997 (supra).

7. Suit no. 523A of 1997 was admittedly filed by the appellant and after the coming

into force of the 1996 Act and under the provisions of the 1940 Act. It is also not in

dispute that the arbitration has been pending since 1990 / 1991. In view of the dicta in

Milkfood Ltd. vs. G.M.C. Ice Cream Pvt. Ltd., (2004) 7 SCC 288, it is no longer res

integra that where arbitration commences prior to coming into force of 1996 Act, the

1940 Act will apply.

8. The counsel for the appellant faced with the aforesaid relied upon Section 85(2)

of the Arbitration Act, 1996 to contend that the parties in the present case had agreed to

arbitration under the 1996 Act. However, he is unable to show any agreement in this

regard. The only contention is that the arbitrator has proceeded as if under the 1996 Act.

Reliance in this regard is placed on the arbitrator having exercised powers under Section

33(3) of the 1996 Act for correction of typographical / clerical error in the award. The

said power was admittedly exercised suo moto. The exercise of the power by the

arbitrator under the 1996 Act cannot tantamount to an agreement by the respondent -

DDA for arbitration under the 1996 Act. The counsel for the appellant contends that

admittedly payments were also made by the respondent - DDA. The same also does not

change the position. Merely because payment of the admitted amount has been made

would not tantamount to admission by the appointment of all parts of the award. Even

otherwise there is no agreement recorded even in the arbitration award of the parties

agreeing to arbitration under the 1996 Act though in page 7 thereof, reference is made to

the 1996 Act. However that is not in the context of any agreement. The words "unless

otherwise agreed by the parties" in Section 85(2)(a) would apply only when an

"agreement" with all the ingredients required thereof under the Contract Act is show.

The Supreme Court in Vaishakhi Ram vs. Sanjeev Kumar Bhatiani, AIR 2008 SC

1585 has held that to constitute waiver of benefit conferred by provisions of an Act,

conscious relinquishment of such benefit must be proved. Similarly this court in Boota

Kam vs. Balmukand, 7(1971) DLT 299 has held that until and unless it is clearly proved

that the person having the ought conclusively decided to forego it or to take advantage of

it; waiver is not to be inferred; waiver is a deliberate and conscious act. The same

principles will apply here also. One cannot loose sight of the fact that respondent is a

statutory body governed by its rules and regulations. There is nothing to show that it

agreed to the application of the 1996 Act, to the arbitration proceedings otherwise in law,

covered by the 1940 Act.

9. Having found no merit in any of the contentions of the counsel for the appellant,

the appeal is dismissed. No orders as to costs.

CHIEF JUSTICE

RAJIV SAHAI ENDLAW, J JANUARY 19, 2010 dk