Jharkhand High Court

M/S A.B. Singh vs Central Coalfields Limited on 11 May, 2023

                                               1


                  IN THE HIGH COURT OF JHARKHAND AT RANCHI


                                   Arbitration Appeal No. 5 of 2017

               M/s A.B. Singh, through its Partner Mr. Rishi Raj Singh, Son of Late
               Jai Narayan Singh, Resident House No 293E2 Lake Avenue, Kanke
               Road, P.O. Ranchi University, P.S. Gonda Thana, Dist- Ranchi
               Jharkhand.                                   ...     ...     Appellant
                                        Versus
               Central Coalfields Limited, a subsidiary of Coal India limited a
               Government of India Public Sector Unit, through its Chairman-cum-
               Managing Director having its Head office at Darbhanga House, Ranchi,
               P.O. Kutchery, P.S. Kotwali, Dist: - Ranchi Jharkhand
                                                     ...         ...      Respondent
                                        ---

CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

---

               For the Petitioner       : Mr. Deepak Sinha, Advocate
               For the Respondent       : Mr. A.K. Das, Advocate
                                        : Ms. Swati Shalini, Advocate
               For the Appellant        : Mr. Atanu Banerjee, Advocate
               For the Respondent       : Mr. A.K. Das, Advocate
                                        ---
06/11.05.2023        Heard the learned counsel for the parties.

2. Arbitration Appeal No.5 of 2017 has been filed for the following relief:

"That the appellant herein prays for setting aside the final order dated 12.04.2017 passed in Miscellaneous (Arbitration) Case No. 02 of 2010 by Sri Rakesh Kumar the learned Sub-Judge-I, (Civil Judge) Senior Division, Bermo at Tenughat, whereby and where under in the said case instituted on an application made under Section 34(2) of the Arbitration and Conciliation Act, 1996 by the Central Coalfields Limited (Present respondent) for setting aside the award made by learned Sole Arbitrator dated 23.12.2006, the said Arbitration Award passed by the learned Sole Arbitrator on 23.12.2006 has been set aside ."

Submissions on behalf of the Appellant

3. Learned counsel for the appellant has submitted that the impugned order has been passed on the point of jurisdiction of the learned arbitrator and while passing the impugned order, the learned court below has not even referred to the findings of the learned arbitrator to hold that the findings of the learned arbitrator was hit by any of the permissible grounds for interference under Section 34 of the Arbitration and Conciliation Act of 1996 (hereinafter referred to as the Act of 1996).

4. The learned counsel submits that the order passed by this Court under Section 11(6) has interpreted the provision of clause 95 of the arbitration agreement. The learned counsel has also submitted that the impugned order is not in consonance with the provisions of Section 34(2) of the Act.

5. The learned counsel has also referred to Section 4 of the Arbitration and Conciliation Act, 1996 to submit that the respondent having not raised certain points regarding the jurisdiction at the relevant point of time has waived his right to raise such points at a later stage. The learned counsel has submitted that provision of Section 4 is to be read with Section 16 of the Act, 1996.

6. The learned counsel has also submitted that the impugned the arbitral award has been set aside by recording that although the High Court had appointed Director (Technical) Project and Planning Division, CCL Ranchi, as the Arbitrator, but the Director (Technical) operation CCL appointed another person namely, R.D. Roy, Former CMD as Arbitrator by issuing a letter to adjudicate the dispute between the parties and such appointment was in violation of the order dated 04.11.2003 passed by the High Court. Learned court below has recorded that such appointment of arbitrator was in violation of Clause 95 of contract agreement read with order passed under Section 11(6) of the Arbitration and Conciliation Act, 1996.

7. The learned counsel has relied upon the judgments passed by the Hon'ble Supreme Court reported in (2020) 18 SCC 277 (Quippo Construction Equipment Limtied vs. Janardan Nirman Private Limited) and (2014) 11 SCC 366 (Supra) paragraph 16 to 19.

Arguments of the Respondent

8. Learned counsel for the respondent-CCL submitted that the learned court below has rightly set-aside the arbitral award on the point of jurisdiction of the learned Arbitrator. He submitted that the Hon'ble the Chief Justice, in A.A. No.25/03 alongwith A.A. No.26, 27 and 28/03 appointed Director (Technical) Project and Planning Division, CCL, Darbhanga House, Ranchi as Arbitrator. But the Director (Technical) Operation, CCL vide his letter appointed another Arbitrator i.e. Sri R.D. Roy, former CMD of WCL as the Sole Arbitrator to adjudicate the

dispute between the parties. Such appointment was in violation of the order of the Hon'ble High Court appointing the arbitrator.

9. On the merits of the case, the learned counsel for the respondent has submitted that the point of jurisdiction was raised before the learned Arbitrator by stating that the arbitration proceeding is not maintainable and is liable to be dismissed. He has also submitted that the said point was elaborated by the respondent before the learned Arbitrator in the oral arguments which has been recorded by the learned Arbitrator, but the learned Arbitrator has not considered the fact that the learned Arbitrator had no jurisdiction to act as an arbitrator in the case.

10. The learned counsel has further submitted that a plea was also raised before the learned Arbitrator that there was no work order issued to the appellant for the period in dispute and there was no agreement much less any arbitration agreement for the period involved in the present case. Further, the learned counsel submits that clause 95 of the terms and conditions of the agreement, which was relied upon by the learned counsel for the appellant, was also not an arbitration clause. This aspect of the matter has also not been considered by the learned Arbitrator.

11. The learned counsel submits that since the jurisdictional issue was involved, the learned court below has rightly held that the learned Arbitrator had no jurisdiction to enter into the reference.

12. The learned counsel has relied upon the judgment passed by the Hon'ble Supreme Court in the case reported in 2022 SCC Online SC 960 (Mahanadi Coalfields Ltd. and Another vs. IVRCL AMR Joint Venture) and has referred to paragraph 9 thereof to submit that the Hon'ble Supreme Court has elaborately dealt with the basic ingredients which are required to be present in an arbitration clause. The learned counsel submits that the Hon'ble Supreme Court has also held that mere use of the word "arbitration" or non-use of the word "arbitration" may not be material. It is the intention of the parties which is to be seen while interpreting the arbitrating clause. The learned counsel has placed clause 95 of the arbitration agreement and has submitted that the said clause cannot be termed as an arbitration clause at all.

13. The learned counsel appearing on behalf of the respondent has submitted that the learned arbitrator has wrongly exercised his jurisdiction, neither he was properly appointed, nor he had the jurisdiction to adjudicate the dispute in terms of clause 95 of the

Agreement which was not an arbitration clause at all. The learned counsel for the respondent has referred to the judgment passed by the Hon'ble Supreme Court reported in (2011) 7 SCC 406 para 22 and 25. He has also referred to the judgment passed by the Hon'ble Supreme Court reported in 2022 SCC Online SC 960 para 15 onwards in support of his arguments.

Findings of this Court

14. From perusal of the records of Arbitration Appeal No. 05/2017, this Court finds that following grounds were taken:-

"(a) The award given by the ld. Arbitrator is illegal, misconceived and against the weight of material available on record.

(b) The ld. Arbitrator should have ruled out on his jurisdiction to decide the claim as there was no work order nor there was any agreement for the transportation of coal.

(c) The ld. Arbitrator has failed to take into consideration the established law that Arbitrator is creature of contract and he has to abide by the terms of the contract. In the present Arbitration proceeding there was no agreement and even then the ld. Arbitrator in spite of the objection raised by the petitioner proceeded with Arbitration proceeding and award interest for the alleged delayed payment.

(d) The ld. Arbitrator has failed to take into consideration that O.P. was proposed to transport coal for 2 months but continued his transportation work nor sue-moto on his sweet will for a year. As a result of which approval was taken from the higher authority and the payment was made, therefore, the O.P. was not entitled to interest for his own fault.

(e) The ld. Arbitrator has failed to take into consideration that interest is awarded by the Arbitrator on the amount awarded by him and not for the claim of interest alone.

(f) The Ld. Arbitrator should not have awarded interest in absence of an Agreement.

15. The learned court below has set-aside the arbitral award by holding as follows: -

"In the present case, in the absence of any written agreement between the parties and subsequently therein any arbitration clause, the arbitrator appointed by the Hon'ble High Court vide A.A. No. 25/03 along with A.A. No. 26, 27 & 28/03 dated 04.11.03 was the Director (technical) Project and Planning Division, C.C.L. Ranchi. But, the Director (technical) Operation, C.C.L. vide his letter No. C.G.M. (T) C.C.L.'s letter appointed another Sri R. D. Rai, former C.M.D. as the sole arbitrator to adjudicate the dispute between the parties in violation of Hon'ble High Court order dated 04.11.03,

referred above in A.A. No. 25/03 along with A.A. No. 26, 27 & 28/03 dated 04.11.03. The said appointment of the sole arbitrator in terms of the C.G.M. (T) C.C.L's letter do not show that under what circumstance the arbitrator appointed by the Hon'ble High Court was substituted by another arbitrator by a letter issued by the Director (Technical) Operation, C.C.L. The arbitral award passed by the Ld. Arbitrator on 25.03.05 was in violation of the Clause 95 of the contract agreement r.w.s. 11(6) of the Arbitration and Conciliation Act, 1996. Under the aforesaid facts and circumstances, I am of the opinion that the arbitral award being in violation of the aforesaid act, is fit to be set aside and, accordingly, arbitral award passed by the arbitrator on 23.12.06 is, accordingly, set aside."

16. The learned court below was also of the view that after the arbitrator appointed by the High Court under section 11(6) did not give the award, fresh procedure for appointment of arbitrator was to be followed under section 15 of the aforesaid act of 1996.

17. This Court finds that it is not in dispute that a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 was filed before this Court for appointment of independent Arbitrator to adjudicate the dispute between the parties and the application was allowed by appointing the Director (Technical) Project and Planning Division, CCL, as Arbitrator vide High Court's order dated 04.11.2003 and the Arbitrator was directed to enter upon the reference without delay and render his award within 9 months upon entering into reference. It is important to note that even at the time of appointment of arbitrator at the stage of 11(6), the parties joined issues on the point of existence of arbitration clause and the plea of the respondent-CCL on the point of existence of arbitration agreement between the parties was rejected after interpreting clause 95 of the agreement by a speaking order and the arbitrator was appointed as per the will of the respondent CCL to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi. The operative portion of the order is quoted as under: -

"On a reading of Clause - 95 of the agreement between the parties, I find that the parties agreed that all the disputes arising out of the contract shall be referred to the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi and the decision of the Director shall be final and binding on the contractor. Therefore, this is a case where the contract itself fixed the Arbitrator as the Director Technical. Now, what the respondents have submitted is that they are willing to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi, as the Arbitrator in

terms of Clause - 95. In the light of the contractual provision, regarding arbitration, I am of the view that this is not a case where the Chief Justice should even at the first instance appoint an Arbitrator on his own. It is really a case of ensuring that the arbitration clause agreed upon between the parties is implemented in the first instance and only on the failure of the parties to do so, this court should exercise its jurisdiction under Section 11 (6) of the Act to appoint an independent Arbitrator.

Though, counsel for the petitioner sought to argue that a serving officer of the Company cannot be appointed as an Arbitrator and even a retired officer of the Company can be appointed as an Arbitrator, I am not satisfied that there is any justification to accept that argument. After all, the parties were at arm's length and they entered into the agreement and under clause - 95, named the Arbitrator to settle the dispute between the parties. I am, therefore, satisfied that it will not be improper to accept the suggestion made by the respondents and to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi as the Arbitrator in term of Clause - 95 of the Contract, to arbitrate upon all the disputes between the parties. Though, the Company has offered to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi as the Arbitrator to arbitrate upon all the disputes between the parties. I think it appropriate to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi as the Arbitrator in this proceeding itself, so that the Arbitrator can enter upon the reference at the earliest and render his Award without delay. The Arbitrator obviously has the duty to consider the claim and the counter claim of the respective parties, including the claim regarding anything that might have been done by the Company pending these proceedings.

These applications are, therefore, allowed to the extent of appointing the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi, as the Arbitrator to arbitrate upon all the disputes arising between the parties involved in these cases. The Arbitrator will enter upon the reference without delay and will render his Award, in any event, within nine months of entering upon the reference."

18. It is further not in dispute that the Director (Technical), on his appointment as Arbitrator, entered into reference, but could not make any headway. In such circumstances, Sri R.D. Roy, Former CMD (CCL) was appointed as sole arbitrator by Director (Technical) Operation, CCL vide letter dated 30.04.2005 issued by the respondent CCL themselves. The action of changing the arbitrator was taken by the respondent-CCL by citing reasons that the arbitrator appointed by the High Court could not make any head way and another arbitrator was appointed by issuing a letter of appointment. Thereafter, the parties duly participated in the arbitration proceedings before Sri R.D. Roy, Former CMD (CCL) resulting in passing of the award. The background under which Sri R.D. Roy, Former CMD (CCL) was appointed is recorded in the award itself. The fact that the learned arbitrator appointed by the High Court in the arbitration application could not make any headway, although he entered into reference, is not in dispute by either party.

19. Section 14(1) (a) of the Act of 1996, interalia, provides that the mandate of the arbitrator shall terminate, if he becomes de jure or de facto unable to perform his functions or by other reasons fails to act without undue delay. Sub-section (2) of Section 14 provides that if a controversy remains concerning any of the grounds mentioned in section 14(1) (a), a party may, unless otherwise agreed by the parties, apply to the court to decide on the termination of the mandate. Section 15(2) of the aforesaid Act of 1996 provides that where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of arbitrator being replaced.

20. In the present case, admittedly, the arbitrator appointed by the High Court entered into reference, but could not make any headway in the matter. In such circumstances, his mandate stood terminated by virtue of Section 14(1) (a). This was followed by appointment of another arbitrator i.e. Sri R.D. Roy, Former CMD (CCL) by none less than the respondent-CCL themselves. None of the parties raised any objection/controversy with regard to the appointment of another arbitrator and accordingly, there was no controversy with regard to the termination of the mandate of the earlier arbitrator and appointment of new arbitrator by respondent-CCL. In such circumstances, there was no occasion for any of the party to go to the court for a decision on the termination of the mandate of the earlier arbitrator.

21. This Court also finds that the appointment of the new arbitrator by the respondent-CCL was willingly accepted by the appellant by participating in the arbitral proceedings without any objection on the mode and manner of appointment of new arbitrator and the respondent- CCL also had no occasion to have any grievance with regard to the appointment of the new arbitrator as the respondent-CCL had themselves appointed the new arbitrator for resolution of disputes between the parties which was subject matter of appointment of arbitrator in the proceedings under section 11 (6) of the Act of 1996 where the arbitrator was appointed as chosen by the respondent CCL but he could not make any headway in the matter of arbitration even after entering into reference.

22. This Court also finds that the respondent-CCL had duly participated in the arbitral proceedings and no objection with regard to mode and manner of appointment of new arbitrator was ever taken during the arbitral proceedings and no such ground was ever taken even in the petition filed under Section 34 of the aforesaid Act of 1996 and such plea was raised only during the course of arguments before the learned court which was one of the reasons for setting aside the award. The learned court below failed to consider as to whether such jurisdictional plea was ever taken before the learned arbitrator in terms of Section 16 of the Act of 1996.

23. In the judgement passed in Union of India v. Pam Development Private Limited (2014) 11 SCC 366, the objection raised later on the point of jurisdiction of the arbitrator was rejected on the ground that no such objection was taken at the appropriate stage before the learned arbitrator and it was held that such point is deemed to have been waived when the parties had fully participated in the proceedings before the arbitrator without any objection to the jurisdiction of the arbitrator. Paragraph- 16 to 19 of the aforesaid judgement are quoted as under: -

"16. As noticed above, the appellant not only filed the statement of defence but also raised a counterclaim against the respondent. Since the appellant has not raised the objection with regard to the competence/jurisdiction of the Arbitral Tribunal before the learned arbitrator, the same is deemed to have been waived in view of the provisions contained in Section 4 read with Section 16 of the Arbitration Act, 1996.

17. Section 16 of the Arbitration Act, 1996 provides that the Arbitral Tribunal may rule on its own jurisdiction. Section 16 clearly recognises the principle of kompetenz-kompetenz. Section 16(2) mandates that a plea that the Arbitral Tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence. Section 4 provides that a party who knows that any requirement under the arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay shall be deemed to have waived his right to so object.

18. In our opinion, the High Court has correctly come to the conclusion that the appellant having failed to raise the plea of jurisdiction before the Arbitral Tribunal cannot be permitted to raise for the first time in the Court. Earlier also, this Court had occasion to consider a similar objection in BSNL v. Motorola India (P) Ltd. Upon consideration of the provisions contained in Section 4 of the Arbitration Act, 1996, it has been held as follows: (SCC p. 349, para 39) "39. Pursuant to Section 4 of the Arbitration and Conciliation Act, 1996, a party which knows that a requirement under the arbitration agreement has not been complied with and still proceeds with the arbitration without raising an objection, as soon as possible, waives their right to object. The High Court had appointed an arbitrator in response to the petition filed by the appellants (sic respondent). At this point, the matter was closed

unless further objections were to be raised. If further objections were to be made after this order, they should have been made prior to the first arbitration hearing. But the appellants had not raised any such objections. The appellants therefore had clearly failed to meet the stated requirement to object to arbitration without delay. As such their right to object is deemed to be waived."

19. In our opinion, the obligations are fully applicable to the facts of this case. The appellant is deemed to have waived the right to object with regard to the lack of jurisdiction of the Arbitral Tribunal."

24. This Court is of the considered view that the aforesaid judgement passed by the Hon'ble Supreme Court fully applies in the facts and circumstances of this case so far as the point regarding mode and manner of appointment of the learned arbitrator is concerned. This is over and above the fact that it was the respondent-CCL themselves who had unilaterally appointed the learned arbitrator to which both the parties acted by participating in the arbitration proceedings.

25. Apart from the aforesaid, the learned court below has also recorded absence of any written agreement between the parties and subsequently therein any arbitration clause while setting aside the arbitral award.

26. The appellant had filed the claim. The respondent had filed the counter statement and made general submission that arbitration proceeding was not maintainable and was liable to be dismissed. It was also submitted that there was no work order nor there was any agreement for this short period from 01.03.1994 to 30.04.1994 and the claimant without any work order or agreement carried out the transportation for a period of one year i.e., from 01.03.1994 to 31.03.1995. In furtherance to the aforesaid, it was also stated by the respondent CCL that after thorough enquiries, Headquarters accorded its approval on 12.11.2003 and immediately thereafter there was payment of balance of Rs. 4,08,920.99 which was made to the claimant in December, 2003. It was the specific case of the respondent CCL that since the payment of balance amount was made within one month of obtaining competent approval, there was no delay in making payment and as such, the claim of interest was not justified. The claimant had replied to the counter statement. The oral arguments of the counsels were also recorded. The submission of the respective counsels with respect of jurisdiction regarding existence of work order /agreement has

been recorded in para (V) of the award. It was argued by the respondent CCL by way of preliminary objection that since there was no work order or agreement, the arbitrator lacked jurisdiction to arbitrate upon the dispute.

27. It has been specifically recorded in para V(2) of the award that the claimant had raised the plea of estoppel and waiver and submitted that the question of arbitrator's jurisdiction was not raised even in the counter statement of the respondent CCL and therefore could not be raised at that stage. At this stage, the counsel for the respondent CCL had requested the arbitrator to decide the question of his jurisdiction under Section 16 of the Act of 1996. This has been recorded in paragraph V (3) of the oral arguments by the counsels.

28. The arguments on merit were also recorded at the stage of analysis of submission recorded by the learned Arbitrator in para VI of the award, it has been recorded that the learned arbitrator had given his ruling that the arbitrator had full jurisdiction to arbitrate the dispute and relied upon such ruling and further elaborate his views. Paragraph VI of the award is quoted as under as follows: -

"1. At the outset of his oral submission the learned counsel for the respondent had raised the preliminary point on jurisdiction of the arbitrator. It had examined the submissions of both the parties carefully and finding ample force in submission of the learned counsel for the claimant I had given my ruling that the arbitrator had full jurisdiction to arbitrate upon the present dispute. I would like to dwell upon my ruling further and elaborate my view points.

2. Director (Technical) P & P, CCL was appointed as Sole Arbitrator on intervention of the Hon'ble High Court. If the respondent had any objection to the adjudication of the dispute through arbitration, it should have raised the issued of non- existence of work order and agreement before the Hon'ble High Court, but this was not done. Rather it was on the request of the respondent that Director (Technical) P & P was appointed as arbitrator. In this context the order of the Hon'ble High Court inter alia reads:

"In the counter affidavit, originally filed, the respondents submitted that attempts were being made to settle the dispute. Subsequently, it was submitted that the matter could not be settled and consequently the respondents are ready to appoint Director Technical, Project and Planning Division, Central Coalfields Limited, Ranchi, who had no connection with the present work, as the Arbitrator."

Although the claimant had made its submission for the appointment for an independent Arbitrator, Director (Technical)

(P & P) was appointed Arbitrator by the Hon'ble High Court. In fact once the parties agree to adjudication of a dispute by arbitration, even if there is no prior agreement for arbitration, the mutually appointed arbitrator would have full jurisdiction and the proceedings would be governed by the Arbitration and Conciliation Act, 1996. Besides this, as per Section 16(2) of the Arbitration and Conciliation Act, 1996, the issue of jurisdiction of the arbitrator shall not be raised later than the submission of the statement of the defence. In this case the issue of jurisdiction was not raised in the counter statement of the respondent. Considering all these points I reiterate my earlier ruling and do not find the submission of the learned respondent tenable."

29. The learned Arbitrator rejected the plea on the point of jurisdiction of the arbitrator, interalia, by recording that as per Section 16(2) of the Arbitration and Conciliation Act, 1996, the issue of jurisdiction of the arbitrator shall not be raised later on the submission of the defence.

30. This Court finds that the learned arbitrator had passed a well- reasoned order rejecting the plea of jurisdiction of the learned arbitrator as raised by the respondent CCL.

31. The award reflects that the respondent CCL had taken a point regarding the jurisdiction of the arbitrator to decide the claim by alleging that there was no work order nor there was any agreement for the transportation of coal. This plea was rejected by the learned arbitrator by citing reasons. The award reflects that at no point of time, any objection was taken before the learned arbitrator with regard to manner of appointment of the learned arbitrator who decided the dispute and no such ground was raised even in the petition under section 34 of the aforesaid Act of 1996. However, the learned court has set- aside the arbitral award by referring to clause 95 of the contract and held that the arbitrator was appointed in violation of the order passed by the High Court in section 11(6). The learned court below had set- aside the award on the point raised by the respondent CCL during oral arguments for which no such point was raised before the learned arbitrator nor such point was taken in the petition under section 34. This Court also finds that the learned court below has not even referred to the aforesaid findings of the learned arbitrator while setting aside the award. This Court is of the considered view that the impugned order is perverse and such exercise of power is beyond the permissible ground

of interference under Section 34 of the aforesaid Act of 1996. This Court is of the considered view that the learned court below has erred in law in setting aside the award on the point of jurisdiction of the learned arbitrator.

32. So far as the judgment relied upon by the learned counsel for the respondent reported in 2022 SCC Online SC 960 (Mahanadi Coalfields Ltd. vs M/S IVRCL AMR Joint Venture) is concerned, the same does not apply to the facts and circumstances of this case in view of the fact that the said judgment was arising out of an order passed by the concerned High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, whereby the sole arbitrator was appointed. Upon interpretation of the arbitration clause, the Hon'ble Supreme Court was of the view that the High Court proceeded on an understanding that the learned counsel for both the sides did not dispute the fact that there was a provision for appointment of arbitrator. The Hon'ble Supreme Court was of the view that the order proceeded on an understanding of counsel, which in any event cannot be regarded as a binding statement of law on the existence of arbitration agreement. The Hon'ble Supreme Court ultimately found that there was no valid arbitration agreement between the parties and therefore, order of the High Court appointing an arbitrator to resolve the dispute between the parties under Section 11(6) of 1996 Act was set-aside.

33. In the present case, the stage as well as the situation is different. The plea regarding existence of arbitration agreement is under consideration after the award has already been passed and the jurisdictional point to the extent raised before the learned arbitrator has been rejected by the learned arbitrator by citing reasons. This is over and above the fact that the arbitrator who was appointed by the High Court actually did not proceed to pass the award. Rather, another arbitrator was appointed by the respondent themselves who entered into reference and the claimant duly participated in such proceedings. Both the parties duly participated in the proceedings.

34. Similar is the position with regard to the judgment relied upon by the learned counsel for the respondent reported in (2011) 7 SCC 406 (State Of Orissa & Ors vs Bhagyadhar Dash).

35. In view of the aforesaid facts and circumstances, the aforesaid two judgments relied upon by the respondent do not apply to the facts and circumstances of this case.

Merits of the grounds raised under Section 34 of the Act of 1996

36. So far as the other grounds for setting aside the award are concerned, the learned court below has not specifically dealt with such grounds as raised in the petition under Section 34 of the aforesaid Act of 1996. No cross objection or cross appeal has been filed by CCL against the impugned order. However, the following discussion would reveal that even prima-facie, no ground for interference was made out.

37. On the merits of the case, the learned Arbitrator recorded that the board of CCL had given approval for payment of Rs. 4,08,920.99 in December, 2003. The findings of the learned Arbitrator is quoted as under: -

"4. On the other hand the plea of the respondent is that against 20,000 MT of coal to be transported during the period from 01.03.1994 to 30.04.1994 the claimant transported 1,33,199.020 MT of coal during the period from March 1994 to March 1995 without any work order or agreement. The claimant was paid 90% of the total cost of transportation of Rs. 40,89,209.91 till August 1995, the balance 10% i.e., Rs. 4,08,920.99 remaining unpaid. Since the claimant transported 1,33,199.20 MT of coal against 20,000 MT and transported continued for one year from March 1994 to March 1995 against two months, approval was required to be taken by the area from CCL headquarters. There being no work order or agreement the matter had to be investigated thoroughly and after thorough investigation the matter was placed before the CCL Board which gave the approval on 24.10.2003. Immediately after CCL Board's approval payment of Rs. 4,08,920.99 was made to the claimant in December, 2003. Under such circumstances, the respondents cannot be held responsible for delayed payment of Rs. 4,08,920.99."

38. From perusal of the awarded amount, it appears that the learned Arbitrator had awarded only interest on the admitted amount of Rs. 4,08,920.99 which was already paid upon board's approval of CCL in the year 2003. Apart from the interest on the aforesaid amount, only cost of litigation to the extent of Rs. 20,000/- has been awarded. The interest has been awarded @ 14% till the date of the award for a period of 8 years. The total awarded amount is only Rs. 4,77,990.00 on account of interest and cost.

39. The awarded amount was directed to be paid within a month i.e., by 23.01.2007 failing which it was directed that the claimant would be entitled for payment of interest @ 18% as laid down in the Arbitration and Conciliation Act, 1996 from 23.01.2007 till the final payment is made or realized. The award was published on 23rd December, 2006. This Court is of the considered view that the payment of future interest is in terms of the aforesaid Act of 1996 and is a sound exercise of jurisdiction by the learned arbitrator.

40. This Court is of the considered view that the award is a well- reasoned order and none of the grounds raised by the respondent CCL on the merits of the award called for any interference in the limited jurisdiction under section 34 of the aforesaid Act of 1996. The award was set-aside by the learned court below only on the point of jurisdiction which has been dealt with in details in the aforesaid paragraphs wherein this Court has found that the order passed by the learned court below is not sustainable in the eyes of law considering the scheme of the Act of 1996 read with the discussions and findings of the learned arbitrator and also the background and the manner in which the present arbitrator was appointed.

41. This Court finds that the Award passed by the learned Arbitrator is a well speaking award on every aspect of the matter. This Court finds that the learned Arbitrator has only awarded interest on account of delay in making payment for the work done. This Court is of the considered view that there is no legal bar in making claim on account of interest alone and there is no legal bar in passing an Award on account of interest alone. The learned Arbitrator has referred to the provisions of Interest Act, 1978 to award interest to the claimant on the belated payment made by respondent-CCL as discussed in the findings recorded above. The future interest has also been awarded in accordance with law.

42. In the judgement passed by the Hon'ble Supreme Court in the case of Secretary, Irrigation Deptt., State of Orissa v. G.C. Roy (1992) 1 SCC 508, Constitution Bench of the Hon'ble Supreme Court has held as under:

"44. ... Where the agreement between the parties does not prohibit grant of interest and where a party claims interest and

that dispute (along with the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties and therefore when the parties refer all their disputes -- or refer the dispute as to interest as such -- to the arbitrator, he shall have the power to award interest. This does not mean that in every case the arbitrator should necessarily award interest pendente lite. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case, keeping the ends of justice in view."

43. The aforesaid judgment has also been considered in the judgement passed by the Hon'ble Supreme Court in the case of Assam State Electricity Board v. Buildworth Private Limited (2017) 8 SCC

44. In view of the aforesaid discussions, none of the grounds raised by the respondent -CCL under Section 34 of the aforesaid Act of 1996 as quoted above calls for any interference in the award. Further, the grounds on the merits of the matter based on appreciation of evidence and materials on record do not fall within the permissible grounds for interference in the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.

45. As a cumulative effect of the aforesaid findings, the impugned order passed by the learned court below on the point of jurisdiction is set-aside. This Court finds no merit in the grounds for setting aside the award. The award is hereby made the rule of the court. This appeal is accordingly disposed of.