SALUJA CONSTRUCTION COMPANY versus NORTHERN COALFIELDS LIMITED on 25 November 2021

O R D E R

Leave granted

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 02.01.2018 passed by the High Court of Madhya Pradesh

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Aat Jabalpur in A.A. No. 30 of 2012, by which the High Court has allowedthe said appeal filed under Section 37 of the Arbitration and ConciliationAct, 1996 (Arbitration Act) and has quashed and set aside the awardpassed by the learned Arbitrator, the original claimant has preferred thepresent appeal.B2. That the appellant herein was awarded the contract forconstruction of 100 Nos. B-Type Quarters at Bina (hereinafter referredto as the Bina project). An agreement was entered into between theparties on 11.01.1986. A dispute arose between the parties with respectto the Bina project. The contractor issued a notice under Clause 9 of theagreement to appoint an arbitrator in respect of Bina Project only. TheCrespondent rejected the claim of the contractor. The appellant raised aBill of Rs.2,23,215/- and then filed an application under Section 8/20 ofthe Arbitration Act for filing of agreement and appointment of arbitrator.Thus it appears that the dispute at the relevant time was only with respectto the work relating to the Bina Project. However, before the learnedDArbitrator, the claim was raised with respect to the other projects and inrelation to the sister concerns regarding ‘Amlohri Project’ and ‘JhingurdaProject’. The learned Arbitrator passed an award with respect to thedispute relating to other agreements/contracts even in relation to sisterconcerns over and above the dispute with respect to the Bina Project.The appeal under Section 34 of the Arbitration Act against the judgmentEand award passed by the learned Arbitrator came to be dismissed againstwhich the respondent preferred an appeal under Section 37 before theHigh Court. It was submitted that the learned Arbitrator appointed onlyfor the contract relating to Bina Project and the agreement relating tothe Bina Project was filed before the learned Arbitrator. It was submitted Fthat as per Section 2(a), 8 and 20 of the Arbitration Act, the mandatoryrequirement was to decide the dispute in relation to a written agreementwhich was filed before the arbitrator. Therefore, it was submitted thatthe learned Arbitrator has travelled beyond in passing the award in respectof four contracts. The High Court in the impugned judgment and order has accepted the submissions on behalf of the respondent and has quashedGand set aside the award passed by the learned Arbitrator.

3. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the contractor has preferred thepresent appeal.

4. We have heard Shri Pijush K. Roy, learned counsel appearingon behalf of the appellant and Shri Vikas Singh, learned senior counselappearing on behalf of the respondent.

5. We have gone through the judgment and order passed by theHigh Court. It is to be noted that the application under Section 8/20 ofthe Arbitration Act was filed by the appellant – Saluja ConstructionCompany – a partnership firm, with respect to the contract forconstruction of 100 Nos. B-Type Quarters at Bina Project only. Theagreement between the appellant and respondent with respect to theBina Project was produced in application under 8/20 of the Arbitrationact. Therefore, the learned Arbitrator was required to adjudicate anddecide the dispute between the parties with respect to the Bina Projectonly. However, learned Arbitrator passed an award not only with respectto the dispute relating to Bina Project but also with respect to the otherprojects that too not only with the appellant but with the sister concerns.Therefore, the High Court has rightly observed and held that the arbitratorwhile decreeing the award exceeded in his jurisdiction in passing theaward in respect of 4 contracts/contracts. Therefore, as such the HighCourt is right in quashing and setting aside the award passed by thelearned Arbitrator with respect to the dues/claims with respect to thecontracts other than the Bina Project and the contracts with otherprojects/contractors may be by sister concerns.

6. However, at the same time, learned counsel appearing on behalfof the appellant is right in making the submissions that the High Court atleast ought to have confirmed the claim/amount awarded by the learnedArbitrator with respect to the Bina Project. It is submitted that the HighCourt has set aside the entire award passed by the learned Arbitratorincluding the award with respect to the Bina Project. Therefore, to thatextent the present appeal is required to be allowed in part and the judgmentand order passed by the High Court is required to be modified to theextent setting aside the award passed by the learned Arbitrator withrespect to the claims with respect to other projects/other contracts otherthan Bina Project.

7. In view of the above, the present appeal is allowed in part. Theimpugned judgment and order passed by the High Court is modified tothe extent quashing and setting aside the entire judgment and awardpassed by the learned Arbitrator. The judgment and award passed bythe learned Arbitrator except the claims with respect to the Bina Project A

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Awas required to be quashed and set aside and is accordingly quashedand set aside. Meaning thereby, award passed by the learned Arbitratorwith respect to the Bina Project i.e. Rs.5,99,158/- is hereby confirmed.The impugned judgment and order passed by the High Court quashingand setting aside the award passed by the learned Arbitrator with respectto the projects other than Bina Project is rightly set aside by the HighBCourt. We confirm the same. It is reported that pursuant to the earlierorder passed by the High Court, the respondent has deposited 50% ofthe amount awarded by the learned Arbitrator. Therefore, whatever theamount deposited in excess of Rs.5,99,158/- with interest @ 8% perannum from the date of the award passed by the learned Arbitrator tillCthe amount was deposited pursuant to the interim order passed by theHigh Court, shall be returned by the appellant to the respondent, if anyexcess amount is deposited and withdrawn by the appellant. The presentappeal is allowed to the aforesaid extent. In the facts and circumstancesof the case there shall be no order as to costs.

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Bibhuti Bhushan Bose

Appeal partly allowed.

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