Orissa High Court
Mahanadi Coalfields Ltd. And vs Sri Ram Construction on 27 September, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.1 of 2006
(Through hybrid mode)
Mahanadi Coalfields Ltd. and .... Appellants
another
Mr.Sanjit Mohanty, Senior Advocate
Mr. Sudarsan Nanda, Advocate
Mr. A. Mohanty, Advocate
-versus-
Sri Ram Construction .... Respondent
Mr. D. Panda, Advocate
Mr. Sudipto Panda, Advocate
Mr. J.P. Behera, Advocate
CORAM: JUSTICE ARINDAM SINHA
ORDER
27.09.2022
Order No.
17. 1. Mr. Mohanty, learned senior advocate appears on
behalf of appellants. He submits, impugned is judgment dated
24th September, 2005 of the Court below in rejecting his
client's challenge to award dated 31st March, 2004.
2. He submits, there was executed agreement dated 22nd
December, 1997 between respondent and his client, wherein his
client was employer and respondent was contractor. The
agreement was for construction of 336 'A' type quarters at
Lingraj Township of Talcher Area. The contract was valued at
// 2 //
Rs.7,13,43,281.28 in the agreement subject to any other sum
that may be arrived at under specifications clause. On notice of
respondent, arbitration clause in the notice inviting tender,
made part of the agreement, was scored out. Parties were
aware, therefore, the award of work under the agreement did
not contain arbitration agreement/clause.
3. On the contractor having procured materials, said to be
for purpose of constructing under the agreement, it applied for
advance to his client. His client agreed to advance Rs.70 lakhs
under independent agreement dated 9th February, 1998. The
agreement for extending advance contained arbitration clause.
4. He hands up a compilation of documents, statement of
facts and claims and the award. He furnishes copies to Court, to
be obtained by respondent since, respondent is represented by
Mr. Panda, online. Respondent is at liberty to obtain copies of
the documents handed up to Court today or by tomorrow.
5. Respondent alleged disputes had arisen. By letter dated
1st November, 1999 respondent gave notice for invocation of
arbitration agreement in agreement dated 9th February, 1998.
There was clear and unambiguous admission in said letter that
arbitration clause-14, in the tender made part of agreement
dated 22nd December, 1997, was deleted.
// 3 //
6. Mr. Mohanty submits, the law regarding appointment
of arbitrator under section 11 in Arbitration and Conciliation
Act, 1996 was, at that time, a request to be made to the Chief
Justice and the appointment an administrative act. Respondent
requested the Chief Justice and, without direction for issuance
of notice there was order dated 16th May, 2001 appointing
arbitrator.
7. On learning of appointment of arbitrator, appellants
applied for review. By order dated 30th August, 2001 the review
application was rejected. His client then by letter dated 31st
July, 2001 questioned jurisdiction of the arbitrator on ground
that claims were made in respect of agreement dated 22nd
December, 1997, which did not have arbitration clause.
8. He refers to the award to demonstrate from paragraph-8
therein, the point was taken. The arbitrator illegally found that
agreement dated 22nd December, 1997 (Ext.6 in the reference)
forms part of agreement dated 9th February, 1998 (Ext.18 in the
reference). The arbitrator went on to award Rs.3,93,72,100/-
and directed payment of interest at 17% per annum till date of
payment. Mr. Mohanty refers to the statement of claim, page-
17, in which is the schedule of the claims. He submits, each and
every claim was made under agreement dated 22nd December,
// 4 //
1997.
9. Mr. Panda prays for adjournment on not having earlier
received copies of the documents handed up.
10. List on 18th October, 2022.
(Arindam Sinha)
Judge
Sks
