M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENT BOARD & ANR. versus K.P. DWIVEDI on 3 December 2021

[2021] 11 S.C.R. 1083

M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENTBOARD & ANR.

v.

K.P. DWIVEDI

(Civil Appeal No. 6768 of 2021)

DECEMBER 03, 2021

[M. R. SHAH AND B.V. NAGARATHNA, JJ.]

Madhya Pradesh Madhyastham Adhikaran, 1983 – ss. 7 and19 – Reference Petition and Revision Petition – Contract forconstruction of houses was executed between appellants andrespondents – Dispute arose between the parties as regard toextension of time for completion of work – Appellant rescinded thecontract – Respondent filed writ petition before the High Court –The High Court by order dated with consensus of both the partiesappointed an arbitrator i.e. Housing Commissioner – The Arbitratorpassed an award dated 07.11.2008 rejecting the claim of therespondent and granted relief to the appellant – Instead ofchallenging the said award u/s. 34 of the Arbitration andConciliation Act, 1996, the respondent filed fresh reference petitionbefore M.P. Arbitration Tribunal u/s. 7 of the 1983 Act – M.P.Arbitration Tribunal by order dated 27.02.2017 dismissed the claimof the respondent as not maintainable since the claim was alreadydecided by the Arbitrator and the award had achieved finality –Respondent then filed Arbitration Revision Petition before the HighCourt u/s. 19 of the 1983 Act, which was allowed by the High Courtand Tribunal was directed to decide the reference/claim inaccordance with law – On appeal, held: The order passed by theHigh Court referring dispute to the Arbitrator was a consent order– The respondent-contractor participated in the arbitrationproceedings by submitting claim is binding on the parties by ‘issueestoppel’ – The award passed by the Arbitrator was not challengedand it has attained finality – As per s.19 of the 1983 Act, revisionapplication is maintainable only against the award passed by theArbitral Tribunal – In the instant case, the Arbitral Tribunal hadnot passed any award – Even the High Court had not set aside theaward passed by the arbitrator – Technically, award passed by thearbitrator stands – It is binding between the parties – Thus, the

A

B

CDEF

GH

Aimpugned judgment and order passed by the High Court in theArbitration Revision petition is quashed and order passed by theArbitral Tribunal dated 27.02.2017 is restored.

Allowing the appeals, the Court

Conclusion

HELD: 1. The case of the respondent – contractor that theBearlier order passed by the High Court dated 20.08.2008 passedin Writ Petition No.9131 of 2008, referring the dispute betweenthe parties for adjudication to the Arbitrator – HousingCommissioner and thereafter the award declared by the Arbitrator– Housing Commissioner dated 07.11.2008 are non-est and voidCand therefore, it was open for the contractor to file a freshreference petition before the Arbitral Tribunal under Section 7of the 1983 Act, cannot be accepted for the following reasons: (i)It was the respondent – contractor who approached the HighCourt by filing Writ Petition No.9131 of 2008 submitting that hehas invoked the arbitration clause; (ii) The order passed by theDHigh Court dated 20.08.2008 passed in Writ Petition No.9131 of2008 referring the dispute between the parties to the Arbitrator– Housing Commissioner was a consent order; (iii) Thereafterthe respondent – contractor submitted the claims before thelearned Arbitrator – Housing Commissioner; (iv) The learnedEArbitrator – Housing Commissioner passed an award which hasattained the finality; (v) That the review petition filed by thecontractor for clarification of the order dated 20.08.2008 passedin Writ Petition No.9131 of 2008 to clarify the aforesaid order tothe extent that it did not take away the right of the contractor tofile the reference petition before the Arbitral Tribunal under theF1983 Act came to be rejected and the same also attained finality;(vi) The claims submitted before the Arbitrator – HousingCommissioner; before the High Court in Writ Petition No.9131of 2008; and the claim submitted in Reference Petition beforethe Arbitral Tribunal under the 1983 Act are the same withoutGany change; (vii) In the subsequent reference petition before theArbitral Tribunal under the 1983 Act there was no reference tothe earlier order passed by the High Court in Writ PetitionNo.9131 of 2008 referring the dispute between the parties foradjudication to Arbitrator – Housing Commissioner and the award H

passed by the Arbitrator – Housing Commissioner. Thus, therewas a suppression on the part of the respondent – contractor;(viii) The order passed by the High Court dated 20.08.2008 passedin Writ Petition No.9131 of 2008 referring the dispute betweenthe parties for adjudication to the Arbitrator – HousingCommissioner as such was a consent order and thereafter thecontractor participated in the arbitration proceedings before theArbitrator – Housing Commissioner by submitting the claim isbinding between the parties on the ground of ‘issue estoppel’.[Para 14][1101-G-H; 1102-A-H; 1103-A]

2. Apart from the fact that the award declared by theArbitrator – Housing Commissioner was not challenged by therespondent – contractor, even, so long as the said award is notchallenged before the higher forum the same is binding betweenthe parties. Even the award or a nullity order has to be challengedbefore the appropriate forum/higher forum. In the present caseit cannot be said that there was a total lack of jurisdiction of theArbitrator – Housing Commissioner in passing the award as itwas the High Court who passed the order with consent referringthe dispute between the parties for the adjudication to theArbitrator – Housing Commissioner. Therefore, unless and untilit was challenged by the contractor before the higher forum, therespondent – contractor cannot be permitted to ignore and/or toavoid the award passed by the Arbitrator – HousingCommissioner dated 07.11.2008. [Para 16][1103-C-E]

3. Even otherwise, it is required to be noted that what wasfiled before the High Court was the revision application filed bythe contractor under Section 19 of the 1983 Act rejecting thereference petition as not maintainable. Therefore, as per Section19 of the 1983 Act, Revision Application to the High Court shallbe maintainable only against the award passed by the ArbitralTribunal. Therefore, prima facie it appears that as such the orderpassed by the Arbitral Tribunal rejecting the reference petitionwas not maintainable as by order dated 27.02.2017, no award waspassed by the Tribunal. However, as no such objection was raisedbefore the High Court and no submission has been made by theparties, we rest the matter there. [Para 17][1103-E-F; 1104-E-G]

AB

C

D

E

F

G

H

A4. Even otherwise it is required to be noted that whilepassing the impugned judgment and order, the High Court hasnot set aside the award passed by the Arbitrator - HousingCommissioner dated 07.11.2008. Therefore, technically speakingthe award passed by the Arbitrator – Housing Commissioner dated07.11.2008 stands even today. It is binding between the parties.BSo long as the award passed by the Arbitrator – HousingCommissioner dated 07.11.2008 stands, there cannot be anysubsequent fresh proceeding with respect to the same claimswhich were considered and adjudicated by the Arbitrator –Housing Commissioner while passing the award dated 07.11.2008.CSo long as the said award stands it is binding between the parties.[Para 18][1104-G-H; 1105-A-B]

5. Even otherwise it is required to be noted that noobjection was raised by the respondent – contractor before theArbitrator – Housing Commissioner on the jurisdiction of theDHousing Commissioner to act as an Arbitrator. On the contrary,the order passed by the High Court referring the dispute betweenthe parties for adjudication to the Arbitrator – HousingCommissioner was a consent order and the respondent contractorconceded to and accepted the said order and submitted his claimbefore the Arbitrator – Housing Commissioner. The Arbitrator –EHousing Commissioner also passed an award on the said claim.Therefore, as no objections were raised by the respondent –contractor at the appropriate stage, the award cannot be annulledsubsequently. At the cost of repetition, it is observed that at nopoint of time the respondent – contractor had challenged the awardFpassed by the Arbitrator - Housing Commissioner and even nocourt has set aside the award declared by the Arbitrator – HousingCommissioner dated 07.11.2008 and the same has attained finality.Therefore, the same is binding between the parties. Hence, thesubsequent fresh reference petition before the Arbitral Tribunal under the 1983 Act for the very same claims which were raisedGbefore the Arbitrator – Housing Commissioner would not bemaintainable at all. This Court agrees with the view taken by theArbitral Tribunal. [Para 19][1105-B-F]

H

M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENTBOARD v. K.P. DWIVEDI

Madhya Pradesh Rural Road Development Authorityand Another vs. L.G. Chaudhary Engineers andContractors, (2018) 10 SCC 826 : 2018 (5) SCALE103; Hope Plantations Ltd. vs Taluk Land Board,Peermade and Another, (1999) 5 SCC 590 : [1998] 2Suppl. SCR 514; Bhanu Kumar Jain vs Archana Kumarand Another, (2005)1 SCC 787 : [2004] 6 Suppl. SCR1104; Pushpa Devi Bhagat (D) Th. LR. Sadhna Rai(Smt.) vs. Rajinder Singh & Ors., (2006) 5 SCC 566 :[2006] 3 Suppl. SCR 370; Rafique Bibi (Dead) By Lrs.vs. Sayed Waliuddin (Dead) by LRs and others, (2004)1 SCC 287 : [2003] 3 Suppl. SCR 100; M.P.RoadDevelopment Authority and Anr. vs. L.G. ChaudharyEngineers & Contractors reported in (2012) 3 SCC 495: [ 2012] 2 SCR 162; M.P. Rural Road DevelopmentAuthority and Anr. vs. L.G. Chaudhary Engineers &Contractors reported in (2018) 10 SCC 826: 2018 (5 )SCALE 103; Viva Highways Ltd. vs. MP Rural RoadDevelopment Corporation Ltd. I.A.No.14 of 2017decided by the Full Bench of Madhya Pradesh HighCourt; M/s Essel Infra Projects Ltd. vs. The State ofMP in Civil Appeal No.4250 of 2018 decided by theSupreme Court of India; Hindustan Zinc Ltd. vs. AjmerVidyut Vitran Nigam Ltd., (2019) 17 SCC 82: [2019]15 SCR 113 – referred to.

A

B

C

D

E

F

G

ACIVIL APPELLATE JURISDICTION: Civil Appeal No.6768 of2021.

From the Judgment and Order dated 08.05.2018 of the High Courtof Madhya Pradesh, Main Seat Jabalpur in Arbitration Revision No.13of 2017.B

With

Civil Appeal Nos. 6769 and 6770 of 2021.

Bharat Singh, AAG, Arjun Garg, Ms. Sagun Srivastava, Advs. forthe Appellants.CKavin Gulati, Sr. Adv., Anuj Tyagi, Ms. Maitry Kakade, Advs. forthe Respondent.

The Judgment of the Court was delivered by

M. R. SHAH, J.

D

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 08.05.2018 passed by the High Court of Madhya Pradeshin Arbitration Revision Nos.11, 12 & 13 of 2017 by which the HighCourt has quashed and set aside the orders passed by the MadhyaPradesh Arbitration Tribunal, Bhopal and has directed the said TribunalEto decide the respective references on merits, Madhya Pradesh Housingand Infrastructure Development Board and another have preferred thepresent appeals.

2. As common question of law and facts arise in these group ofappeals, all these appeals are decided and disposed of together by thisFcommon judgment and order.

For the sake of convenience Civil Appeal No.6768 of 2021 arisingout of Special Leave Petition No.32557 of 2018 arising out of the impugnedjudgment and order passed by the High Court of Madhya Pradesh inArbitration Revision No.13 of 2017 is treated and considered as the leadGmatter and the facts in the said appeal are narrated which in nutshell areas under:

2.1 Appellants floated a tender for construction of houses at RivieraTown, Near MANIT Square, Bhopal. Contract was awarded to therespondent herein. An agreement dated 15.07.2005 was executedHbetween the appellants and the respondent. In the year 2008, the disputes

arose between the parties. According to the appellants, the respondentwas supposed to complete the work within 18 months. However, despitegranting repeated extensions, the contractor failed to complete the work,on account of which, appellants rescinded the contract by invoking clause3 of the contract agreement. Aggrieved by the order dated 30.06.2008,rescinding the contract, the respondent - contractor by invoking clause29 of the contract agreement filed a claim petition along with grantingextension of time upto 31.03.2009 before the Deputy HousingCommissioner, Bhopal. The respondent - contractor also filed a writpetition before the High Court seeking direction to permit him to completethe work. High Court vide Order dated 20.08.2008 disposed of the saidpetition on a joint consensus of the parties that the dispute shall be decidedby the arbitrator i.e., Housing Commissioner, M.P. Housing Board withinthe stipulated period. The respondent - contractor thereafter filed amodified claim before the Office of the Housing Commissioner alongwith prayer for grant of extension of time. Thus, the respondent -contractor participated in the arbitration proceedings before the HousingCommissioner, M.P. Housing Board. That the learned Arbitrator passedan award on 07.11.2008 rejecting the claim of the respondent - contractorand granting some relief in favour of the appellants. Instead of challengingthe said award by way of an application under Section 34 of the Arbitrationand Conciliation Act, 1996 (hereinafter referred to as ‘Arbitration Act,1996’), the respondent filed a fresh Reference Petition before the MadhyaPradesh Arbitration Tribunal under Section 7 of the Madhya PradeshMadhyastham Adhikaran, Vindhyachal, Bhopal, (hereinafter referred toas ‘the 1983 Act’). The appellants filed their written statements on variousgrounds along with preliminary objections including that the dispute hasalready been decided by the Arbitrator vide award dated 07.11.2008which was duly constituted by the High Court and therefore, the freshclaim petition for the same claim before the M.P. Arbitration Tribunal,Bhopal was not maintainable. It was also submitted that the award passedby the Arbitrator had already achieved finality and therefore, the disputefor the said claim cannot be entertained by the Tribunal subsequently.Vide order dated 27.02.2017 the learned M.P. Arbitration Tribunal, Bhopaldismissed the said claim/reference as not maintainable since claim madeby the respondent had already been decided by the Arbitrator appointedby the High Court and the award passed by the learned Arbitrator hadachieved finality and so the dispute for the said claim could not beentertained by the learned Tribunal subsequently.

AB

C

D

E

F

G

H

AB

C

D

E

F

G

H

A3. Having realized that the earlier order dated 20.08.2008 passedin W.P. No.9131 of 2008 by which the dispute was referred for arbitrationto the Housing Commissioner would come in his way, as an afterthought,the respondent - contractor filed a review petition in the month of May,2017 seeking clarification of the order dated 20.08.2008 passed in W.P.No.9131 of 2008 to the extent that by directing the adjudication of theBdispute by the Housing Commissioner, it did not take away the jurisdictionof learned Arbitral Tribunal constituted under the 1983 Act. It appearsthat in the mean time the full Bench of the High Court of Madhya Pradeshvide judgment and order dated 05.05.2017 held that if an agreement fallswithin the definition of ‘works contract’ then the dispute arising fromCsuch an agreement shall be adjudicated by the Tribunal under the 1983Act. The review application was opposed by the appellants. Vide orderdated 07.09.2017, the High Court dismissed the review petition byobserving that the case did not fall within the review jurisdiction of theCourt under Order 47 Rule 1, CPC.D3.1 That after the dismissal of the review petition, the respondent- contractor filed the present Arbitration Revision Petition before theHigh Court under Section 19 of the 1983 Act challenging the order passedby the learned Tribunal dated 27.02.2017 dismissing the claim/referenceas not maintainable. By the impugned judgment and order the High Courthas allowed the said revision and has quashed and set aside the orderEpassed by the learned Tribunal dated 27.02.2017 and has directed thelearned Arbitral Tribunal constituted under the 1983 Act to decide thereference/claim on merits and in accordance with law.

4. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, M.P. Housing and InfrastructureFDevelopment Board has preferred the present appeal.

5. Shri Bharat Singh, learned AAG has appeared for the appellantsand Shri Kavin Gulati, learned Senior Advocate has appeared for therespondent - contractor in the respective appeals.

G6. Shri Bharat Singh, learned counsel appearing on behalf of theappellants has vehemently submitted that the impugned judgment andorder passed by the High Court quashing and setting aside the orderpassed by the learned Arbitral Tribunal dated 27.02.2017 by which thelearned Arbitral Tribunal dismissed the reference/claim petition filed bythe respondent - contractor as not maintainable, in view of the earlierHaward passed by the learned Arbitrator and directing the learned Arbitral Tribunal to entertain the claim reference and to decide the same onmerits is unsustainable in law as well as on facts.

6.1 It is urged by learned counsel appearing on behalf of theappellants that the High Court while passing the impugned judgment andorder has not at all appreciated and considered the fact that earlier thedispute between the parties was referred to the Arbitrator- HousingCommissioner by the High Court and that too in the petition filed by therespondent - contractor himself. It is submitted that the High Court hasnot at all appreciated the fact that as such the learned Arbitrator appointedpursuant to the order passed by the High Court had passed an awardwhich had attained finality inasmuch as the said award had not beenchallenged by the respondent – contractor by way of appeal under Section34 of the Arbitration Act, 1996.

6.2 It is contended that the learned Arbitrator had passed an awardand the only remedy available to the respondent - contractor was tochallenge the same by way of an appeal under Section 34 of the ArbitrationAct, 1996, which remedy the respondent - contractor had failed to avail.It is submitted that instead he filed a fresh claim petition before thelearned Arbitral Tribunal constituted under the 1983 Act which as suchand as rightly observed by the Arbitral Tribunal was not maintainable.

6.3 It is further submitted that the order passed by the High Courtreferring the dispute between the parties to the Arbitrator - HousingCommissioner was a consent order and the same was as per the relevantarbitration clause in the agreement entered into between the parties.

6.4 It is further urged that even subsequent to the order passed bythe Arbitral Tribunal dated 27.02.2017, with a mala fide intention as anafterthought, the respondent - contractor filed a review application beforethe High Court challenging the consent order dated 20.08.2008 i.e., aftera period of 9 years of the order and the said review petition had alsocame to be dismissed by the High Court. It is submitted that evendismissal of the review petition had also attained the finality and thesame was not carried further. It is urged that therefore, it was not openfor the respondent – contractor to file a fresh claim petition for the sameclaim which was made before the learned Arbitrator - HousingCommissioner constituted pursuant the order passed by the High Court.

6.5 It is submitted that in the case of Madhya Pradesh RuralRoad Development Authority and Another vs. L.G. Chaudhary A

B

C

D

E

F

G

H

AEngineers and Contractors, (2018) 10 SCC 826, relating to the issueof jurisdiction of the M.P. Tribunal, this Hon’ble Court has categoricallyheld that if no objection to the jurisdiction of the arbitration was taken atthe relevant stage, that award cannot be annulled only on that ground. Itis urged that in the present case no such objection was raised by therespondent - contractor at the relevant stage. It is urged that in fact, theBentire proceedings before the Arbitrator - Housing Commissioner wasat the behest of the respondent - contractor, as it was he who filed thewrit petition culminating in the consent order appointing an arbitrator,and then filed a claim.

6.6 It is contended that even a fresh reference petition by theCrespondent - contractor is also not maintainable in view of the principleof Issue Estoppel. Reliance is placed on the decisions of this Court inHope Plantations Ltd. vs Taluk Land Board, Peermade andAnother, (1999) 5 SCC 590 and Bhanu Kumar Jain vs ArchanaKumar and Another, (2005) 1 SCC 787.

D6.7 It is further contended that the claim of the respondent -contractor that the judgment passed by the High Court in the year 2008was contrary to law and cannot confer jurisdiction on the arbitrator ismisconceived and erroneous for the reason that the order was passedwith consent and even if the order is wrong, it will continue to bind theEparties until and unless it is set aside by a competent court. Reliance isplaced on the decisions of this Court in the case of Pushpa Devi Bhagat(D) Th. LR. Sadhna Rai (Smt.) vs. Rajinder Singh & Ors., (2006)5 SCC 566 (para 17) and Rafique Bibi (Dead) By Lrs. vs. SayedWaliuddin (Dead) by LRs and others, (2004) 1 SCC 287 (paras 7and 8).F

7. Making the above submissions and relying upon the abovedecisions, it is prayed to allow the present appeals and set aside theimpugned judgment and orders passed by the High Court.

8. Present appeals are vehemently opposed by Shri Kavin Gulati,Glearned Senior Advocate appearing on behalf of respondent – contractor.It is submitted that the 1983 Act is a Special Act providing for statutoryand compulsory arbitration under the said Act for disputes pertaining to‘works contract’. It is submitted that Section 7 of the Act provides thateither party to a ‘works contract’…. shall irrespective of the fact whetherthe agreement contains an arbitration clause or not, refer in writing theHdispute to the Tribunal. It is contended that the term ‘dispute’ is defined in Section 2(d) to mean a claim having a value of Rs.50,000/- or more. Itis contended that therefore the claims above Rs.50,000/- are to becompulsorily brought before the Tribunal constituted under Section 3 ofthe 1983 Act.

8.1 It is urged that even as per Section 7B of the 1983 Act nodispute can be referred to the Arbitration Tribunal unless the dispute isfirst referred for decision of the final authority under the scope of theterm ‘works contract’. It is only once a decision is made or if the authorityfails to make a decision can a claim be preferred before the Tribunal.

8.2 It is submitted that the 1983 Act is a Special Act insofar as theState of M.P. is concerned, and therefore it will prevail over the provisionsof the Arbitration Act, 1996. Reliance is placed on the decision of thisCourt in the case of M.P. Rural Road Development Authority andAnr. vs. L.G. Chaudhary Engineers & Contractors reported in (2012)3 SCC 495 and the subsequent decision in M.P. Rural RoadDevelopment Authority and Anr. vs. L.G. Chaudhary Engineers& Contractors reported in (2018) 10 SCC 826.

8.3 It is submitted that the full Bench of the Madhya PradeshHigh Court has also taken the same view in the case of Viva HighwaysLtd. vs. MP Rural Road Development Corporation Ltd. in AANo. 14 of 2017 and connected matters. It is submitted that the saidjudgment has been approved by this Hon’ble Court in the case of M/sEssel Infra Projects Ltd. vs. The State of MP in Civil Appeal No.4250of 2018.

8.4 It is submitted that in the present case, arbitration clausecontained in Clause 29 of the Agreement contemplates a two-stageadjudication. At the first stage a reference has to be made to the DeputyHousing Commissioner for his decision. If the amount is above Rs.25,000/- then the papers have to be placed before the Housing Commissioner.This constitutes the first stage. The second stage then contemplatesthat, if the parties are aggrieved by the decision of the Deputy HousingCommissioner, then the dispute will be referred to the Additional HousingCommissioner subject to the jurisdiction and limitations in accordancewith the provisions of the 1983 Act. It is submitted that even the AdditionalCommissioner can only deal with the disputes which are only belowRs.50,000/- as disputes above that amount are statutorily referable tothe arbitration by the learned Tribunal as is clear from Sections 3, 7, 2(d)and 7B of the 1983 Act.

A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

A8.5 It is submitted that in the present case, the contract in questionwas terminated on 30.06.2008 and a claim was preferred before theDeputy Housing Commissioner on 11.07.2008. Since the contract wasterminated and the appellants herein were inviting fresh tenders andalso seizing the machinery and material of the respondent - contractor, aWrit Petition was filed bearing no.9131 of 2008 before the High Court toBexpedite the conclusion of the first stage of adjudication, under the threatof imminent monetary losses. It is submitted that the Hon’ble High Courtby its order dated 20.08.2008 after recording the submissions of therespondent – contractor directed the Housing Commissioner to decidethe dispute within the period stipulated in the agreement. It is submittedCthat as there was delay by the Deputy Housing Commissioner in takingthe decision, a direction was to the Housing Commissioner to decide theissue, as the amount in dispute was more than Rs.25,000/- and it is onlythe Housing Commissioner who could take a decision as per Clause 29of the Contract. Liberty was also granted by the High Court to bothparties to seek a redressal of their grievances against the final outcomeDby approaching the court of law. It is submitted that thus it can be seenthat the direction of the Hon’ble High Court was consistent with Clause29 as this represented a decision which would be the first stage ofresolution of dispute as per Clause 29. It is submitted that the HousingCommissioner by an order dated 07.11.2008 by an ex-parte orderEdismissed the claims of the respondent – contractor. Immediatelythereafter, in line with Clause 29 of the Agreement and Sections 7 and7B of the 1983 Act, a reference was preferred by the respondent –contractor herein under the 1983 Act. It is contended that the decisionof the Housing Commissioner dated 07.11.2008 cannot be said to be adecision under the Arbitration Act, 1996. It is therefore urged that theFrespondent was not required to file the objections under Section 34 ofthe Arbitration Act, 1996 as contended on behalf of the appellants.

It is submitted that a reference filed by the respondent – contractorafter the order of the Housing Commissioner was maintainable onlyafter the order of the Housing Commissioner dated 07.11.2008 and notGbefore that. It is therefore submitted that the respondent – contractorhas acted strictly in accordance with Sections 7 and 7B of the 1983 Actread with Clause 29 of the Contract.

8.6 Alternatively, it is submitted assuming that even if the order ofthe Housing Commissioner dated 07.11.2008 is considered to be underHthe Arbitration Act, 1996, the same would be non-est as any arbitration relating to ‘works contract’ in M.P. could only be under the 1983 Act.The fact of the respondent – contractor having consented to appearbefore the Housing Commissioner would be immaterial as the proceedingsunder the Arbitration Act, 1996 were without jurisdiction and void ab-initio. Reliance is placed on the decision of this Court in HindustanZinc Ltd. vs. Ajmer Vidyut Vitran Nigam Ltd., (2019) 17 SCC 82.

Relying upon the above decisions it is prayed to dismiss the presentappeals.

9. Heard learned counsel for the respective parties at length.

10. The short question which is posed before this Court forconsideration is, whether, in view of the award declared by the HousingCommissioner, M.P. Housing Board, who was appointed as an arbitratorpursuant to the order passed by the High Court in Writ Petition No.9131of 2008, was it open for the respondent – contractor thereafter to file areference before M.P. Arbitration Tribunal with respect to the very claim/claims which were the subject matter of arbitration before the Arbitrator– Housing Commissioner.

It is the case on behalf of the respondent – contractor that as thecontract was a ‘works contract’ and therefore, the dispute between theappellants and the respondent – contractor could only be decided by thelearned Arbitral Tribunal constituted under the 1983 Act, therefore, theHousing Commissioner had no authority to act as an arbitrator and decidethe dispute between the parties and the award passed by the Arbitrator- Housing Commissioner can be said to be non-est and wholly withoutjurisdiction.

11. While considering the aforesaid issue and the submissions madeby the learned counsel of the respective parties, first of all the reliefswhich were prayed by the respondent – contractor in Writ PetitionNo.9131 of 2008 and the respective claims made by the respondent –contractor before the High Court in Writ Petition No. 9131 of 2008,before the Arbitrator – Housing Commissioner and before the learnedArbitral Tribunal are required to be referred to and considered.

11.1 In the Writ Petition No.9131 of 2008 the respondent –contractor prayed for the following reliefs:

(a) “To direct the Respondents to complete the arbitrationproceedings.

AB

CD

E

F

G

H

A(b)To direct the Respondents not to cancel the agreement andbe permitted the Petitioner to complete the work and quashthe order of tender dated 20.07.2008 (Annexure P/22) anddated 27.07.2008 Annexure P/23).

(c) Set aside the order dated 30.06.2007 (Annexure P/19)Bpassed by the Executive Engineer.

(d) To direct the Respondents to pay the amount of outstandingdues of Rs. 17835925.00 with interest and compensationof ten crores.

(e) To direct the Respondents not to award the contract to anyCother person and also direct the Respondents to decide thearbitration, after affording the proper opportunity to thePetitioner.

(f) To call the relevant records

(g) Any other order/ orders, directions which this Hon’ble CourtDdeems fit and proper may kindly be also granted.”

11.2 That thereafter the High Court passed the following orderdated 20.08.2008:

“Shri Sameer Seth, Counsel for the Petitioner.EShri T.S. Ruprah, Sr. Counsel with Shri Harmeet Singh, Counselfor Respondents/ M.P. Housing Board.

Learned counsel for the Petitioner fairly stated that the arbitrationclause in the agreement has been invoked by submitting referencevide Annexure P20. He drew attention of this Court to the prayerFfor interim relief regarding restraining from inviting tender for theremaining work. He stated at Bar that no order has been passedon the prayer for interim relief.

This being so, this petition is disposed of with a joint consensus ofthe learned Counsel for the parties in the following manner:- G(i) The arbitrator i.e. Housing Commissioner, M.P. Housing Boardwould decide the dispute in arbitration within the period stipulatedin the agreement.

(ii) A decision on the interim prayer made on the interim page-25of the reference (Annexure P20) would be taken within a periodHof one week from today.

(iii) Till then no work order be issued pursuant to the fresh tender.(iv) Petitioner would also be at liberty to move a separateapplication within three days with regard to the relief granted videinterim order dated 07.08.2008. A decision on such application, iffiled, would be taken in an expeditious manner preferably within aweek. Interim order dated 07.08.2008 shall continue to operatetill a decision on such interim application is taken.

Petition, accordingly stands disposed of with an observationthat the aggrieved party, in case of grievance against the finaloutcome, shall have a right to approach the Court of law.”

11.3 Thereafter it was the respondent – contractor who himselfsubmitted the claim before the Arbitrator – Housing Commissioner. TheArbitrator - Housing Commissioner issued notice upon the respondent –contractor. However, after submitting the claims, the respondent –contractor did not appear before the learned Arbitrator – HousingCommissioner and consequently on appreciation of evidence andconsidering the submissions made on behalf of the appellant, the learnedArbitrator – Housing Commissioner passed an award dated 07.11.2008.Subsequently, respondent – contractor filed a reference before the learnedArbitral Tribunal constituted under the provisions of 1983 Act makingthe very claims which were made before the High Court in Writ PetitionNo.9131 of 2008 as well as made before the learned Arbitrator – HousingCommissioner.

At this stage, it is required to be noted that in the Reference Petitionthere was no reference to the order passed by the High Court in WritPetition No.9131 of 2008 referring the disputes between the parties tothe Arbitrator – Housing Commissioner and thereafter submitting theclaims before the Housing Commissioner and the award passed by thelearned Arbitrator – Housing Commissioner dated 07.11.2008. A detailedwritten statement was filed. The relevant extracts of the writtenstatement are as under:

1. “The claim was also filed by the petitioner to the HousingCommissioner of Respondents which was duly decidedcomplying with the directions of the Hon’ble High Court ofM.P.

2. The Hon’ble High Court by Order dated 20.08.2008 in WritPetition No. 9131/2008 directed the Commissioner of M.P.

A

B

C

D

E

F

G

H

AHousing Board to decide the application of interim stay filedby the Contractor before re-tendering of the works. TheDirections were also issued for final hearing under clause29 of the agreement with in the provision of agreement.The Hon’ble Commissioner had fully complied with thedirections of the Hon’ble High Court and the ContractorBwas duly notice but even than the Contractor did not takeany pains even to see the order of Commissioner dt.07.11.08, which was passed by him in compliance with thedirections of the Hon’ble High Court.

A

3. The petitioner is not entitled to claim any relief as he hasnot come before this Hon’ble M.P. Arbitration Tribunal withclean hands and the facts of paramount importance havebeen deliberately suppressed by the petitioner in the saidpetition.

C

4. That as per the directions order by Hon. High Court, theDmatter has already been decided and award has alreadybeen passed and duly acknowledged by the petitioner hencethe petition filed before the Hon’ble MP Arbitration Tribunaldeserved to be dismissed, no relief can be claimed.

5. That the petitioner has duly accepted the award as it evidentfrom his action that he has accepted the payment so orderedby the Arbitrator the Housing Commissioner in the saidaward. In compliance with the award dated 07.11.2008passed by the Commissioner the petitioner has alreadyreceived the payment as per award as is evident from theletter dated 02.11.2009 the award so received is Rs.3,57,000/- in total through cheque dated 02.01.2009.

E

F

6. That from the action and reactions of petitioner it is evidentthat the petitioner has accepted the award withoutchallenging it before the appropriate court prior to acceptingGthe payments awarded by the Arbitrator in the light of ordersof Hon’ble High Court has been accepted and agreed bythe Petitioner. Keeping in view of this legal proceedings,this petition of the Petitioner does not even deserves foradmission as the final adjudication was complete by theOrder of the Commissioner, M.P. Housing Board, issuedHunder the directions of the Hon’ble High Court.”

11.4 That the appellants filed I.A. No.1 raising preliminary issueswith respect to maintainability of the reference before the learnedTribunal. The learned Arbitral Tribunal framed the following preliminaryissues:

“(i) Whether the Petitioner has complied with provisions of clause29 before approaching this Tribunal?

(ii) Whether the Petitioner has no locus standi to file the petitionwhen the appointed arbitrator by the Hon’ble High Court withconsent passed the award dated 07.11.2008 and acted upon?”

11.5 That by a detailed order and considering the order passed bythe High Court dated 20.08.2008 referring the disputes between theparties to the Arbitrator – Housing Commissioner; the claims made beforethe High Court as well as before the learned Tribunal dismissed thereference by holding that the Reference Petition is not maintainable.While dismissing the Reference Petition as not maintainable in para 18,the learned Arbitral Tribunal observed as under:

“On perusal of the order dated 20.08.2008 (Ex. D/18) passed bythe Hon’ble High Court it seems that the said order was passedwith the consent of both the parties. The order indicates that theHousing Commissioner was appointed as arbitrator to decide thedispute between the parties. The contention of the learned Counselof the Petitioner that the Housing Commissioner was directed todecide the Petitioner’s quantified claim by invoking clause 29 ascompetent authority does not appear to be acceptable becausethe Housing Commissioner has been designated in the order asthe Arbitrator. Moreover, the Housing Commissioner was notdirected to decide the dispute as competent authority. Apart fromthis, under clause 29 there are only two competent authorities,first, is Dy. Housing Commissioner and if he fails to decide thedispute within 60 days second is Additional Housing Commissioner.There is no provision to decide the quantified claim by the 3[rd]competent authority. Besides it, Hon’ble High Court has no powerto create/ appoint a third competent authority by invoking the powerclause 29 of the agreement, but Hon’ble High Court has the powerto appoint an arbitrator under Section 11 (6) of the Act, 1996.Therefore, keeping in view the aforesaid facts, it can only beinferred that the Hon’ble High Court exercising the power vestedin it under Article 227 of the Constitution of India appointed the A

B

C

D

E

F

GH

A

B

C

D

E

F

GH

AHousing Commissioner as Arbitrator to decide the dispute. Thesubmission of the learned Counsel for the Petitioner thatappointment of Arbitrator is without jurisdiction and the said orderdated 20.08.2008 does not have over riding effect on the provisionsof the Act, 1983 and the said order being per incurium has noforce appears to be sound but this Tribunal has no power to sayBthat the order dated 20.08.2008 passed by the Hon’ble High Courtin writ jurisdiction is without jurisdiction and has effect of nullitybecause this Tribunal is subordinate of the Hon’ble High Courtwhich has supervisory power over it under Article 227 ofConstitution of India. Moreover, the award passed by this TribunalCis challengeable before the Hon’ble High Court under Section 19of the Act, 1983 by the Civil Revision. If the Petitioner was notsatisfied with the order dated 20.08.2008 passed by the Hon’bleHigh Court, the propriety and the legality of the said order oughtto have been challenged by the Petitioner before the competentforum but it was not done so. Moreover, the said order was passedDwith the consent of both the parties. In the said circumstances,this Tribunal is bound to accept the order passed by the Hon’bleHigh Court. On the basis of the aforesaid facts and circumstancesof the case, it can be safely inferred that Housing Commissionerwas appointed by the Hon’ble High Court to decide the disputeEbetween the parties as the Arbitrator who decided the same videaward dated 07.11.2008. The legality and the propriety of the saidaward could have been challenged by filing appeal under Section34 of the Act, 1996 but the Petitioner failed to do so, consequently,the said award had achieved finality before filing the referencepetition. Once the dispute between the parties had already beenFdecided by the competent Arbitrator, the same dispute cannot bereagitated before this Tribunal by the Petitioner. the Hon’ble HighCourt in the case of Ditya (supra) elaborately discussing in para12 has held that even a wrong decisions are taken which is contraryto the law is binding upon the parties unless and until it is set asideGin the appeal or by the other remedy provided under the clause.”

12. After the aforesaid order dated 27.02.2017 passed by thelearned Tribunal holding that the reference petition was not maintainablein view of the earlier order passed by the High Court dated 20.08.2008passed in Writ Petition No.9131 of 2008 directing the adjudication of theHdispute by the Arbitrator – Housing Commissioner, the respondent –

contractor filed a review petition before the High Court, having realizedthat the order dated 20.08.2008 passed in the Writ Petition No.9131 of2008 will come in his way in pursuing the reference petition before thelearned Arbitral Tribunal, seeking clarification of the order passed inW.P. No.9131 of 2008 to the extent that by directing the adjudication ofthe dispute by the Housing Commissioner, it does not take away thejurisdiction of the learned Arbitral Tribunal constituted under the Act1983. The said review petition was opposed by the appellants. Videorder dated 07.09.2017 the High Court dismissed the said review petition.Thereafter the respondent – contractor filed the revision applicationbefore the High Court under Section 19 of the 1983 Act being ArbitrationRevision No.13 of 2017 challenging the order dated 27.02.2017 passedby the learned Arbitral Tribunal dismissing the reference petition as notmaintainable. By the impugned judgment and order, the High Court, relyingupon the subsequent decision of the full Bench has set aside the orderpassed by the learned Tribunal on 27.02.2017 and has directed the learnedArbitral Tribunal to decide the reference on merit. The impugned judgmentand order passed by the High Court in A.R. No.13 of 2017 is the subjectmatter of present appeal.

13. At the outset, it is required to be noted that as such the earlierorder passed by the High Court in Writ Petition No.9131 of 2008, bywhich the dispute between the parties was referred to the Arbitrator –Housing Commissioner was a consent order. It was the respondent –contractor who filed the Writ Petition No.9131 of 2008 submitting thathe has invoked the arbitration clause. Thereafter the respondent –contractor submitted the claim before the Arbitrator – HousingCommissioner who passed an award. The respondent – contractor didnot challenge the award passed by the Arbitrator – Housing Commissionerand therefore, as such the award passed by the Arbitrator – HousingCommissioner dated 07.11.2008 has attained finality.

14. The case of the respondent – contractor that the earlier orderpassed by the High Court dated 20.08.2008 passed in Writ PetitionNo.9131 of 2008, referring the dispute between the parties for adjudicationto the Arbitrator – Housing Commissioner and thereafter the awarddeclared by the Arbitrator – Housing Commissioner dated 07.11.2008are non-est and void and therefore, it was open for the contractor to filea fresh reference petition before the learned Arbitral Tribunal underSection 7 of the 1983 Act, cannot be accepted for the following reasons:

AB

C

D

E

F

G

H

1102SUPREME COURT REPORTS

A(i)It was the respondent – contractor who approached theHigh Court by filing Writ Petition No.9131 of 2008 submittingthat he has invoked the arbitration clause;

(ii) The order passed by the High Court dated 20.08.2008 passedin Writ Petition No.9131 of 2008 referring the disputeBbetween the parties to the Arbitrator – HousingCommissioner was a consent order;

(iii) Thereafter the respondent – contractor submitted the claimsbefore the learned Arbitrator – Housing Commissioner;

(iv) The learned Arbitrator – Housing Commissioner passed anCaward which has attained the finality;

(v) That the review petition filed by the contractor forclarification of the order dated 20.08.2008 passed in WritPetition No.9131 of 2008 to clarify the aforesaid order tothe extent that it did not take away the right of the contractorDto file the reference petition before the learned ArbitralTribunal under the 1983 Act came to be rejected and thesame also attained finality;

(vi) The claims submitted before the Arbitrator – HousingCommissioner; before the High Court in Writ PetitionENo.9131 of 2008; and the claim submitted in ReferencePetition before the learned Arbitral Tribunal under the 1983Act are the same without any change;

(vii) In the subsequent reference petition before the learnedArbitral Tribunal under the 1983 Act there was no referenceFto the earlier order passed by the High Court in Writ PetitionNo.9131 of 2008 referring the dispute between the partiesfor adjudication to Arbitrator – Housing Commissioner andthe award passed by the Arbitrator – Housing Commissioner.Thus, there was a suppression on the part of the respondent– contractor;G

(viii) The order passed by the High Court dated 20.08.2008 passedin Writ Petition No.9131 of 2008 referring the disputebetween the parties for adjudication to the Arbitrator –Housing Commissioner as such was a consent order andthereafter the contractor participated in the arbitrationH

proceedings before the Arbitrator – Housing Commissionerby submitting the claim is binding between the parties onthe ground of ‘issue estoppel’.

15. In the case of Bhanu Kumar Jain (supra) it is observed andheld that a cause of action estoppel arises where in two differentproceedings identical issues are raised, in which event, the latterproceedings between the same parties shall be dealt with similarly aswas done in the previous proceedings. In such an event, the bar is absolutein relation to all points decided save and except allegation of fraud andcollusion.

16. Apart from the fact that the award declared by the Arbitrator– Housing Commissioner was not challenged by the respondent –contractor, even, so long as the said award is not challenged before thehigher forum the same is binding between the parties. Even the awardor a nullity order has to be challenged before the appropriate forum/higher forum. In the present case it cannot be said that there was a totallack of jurisdiction of the Arbitrator – Housing Commissioner in passingthe award as it was the High Court who passed the order with consentreferring the dispute between the parties for the adjudication to theArbitrator – Housing Commissioner. Therefore, unless and until it waschallenged by the contractor before the higher forum, the respondent –contractor cannot be permitted to ignore and/or to avoid the award passedby the Arbitrator – Housing Commissioner dated 07.11.2008.

17. Even otherwise, it is required to be noted that what was filedbefore the High Court was the revision application filed by the contractorunder Section 19 of the 1983 Act rejecting the reference petition as notmaintainable. Section 19 of the 1983 Act reads as under:

“19. High Court’s power of revision. – The High Court may suomotu at any time or an application for revision made to it withinthree months of the award by an aggrieved party, call for therecord of any case in which an award has been made under thisAct by issuing a requisition to the Tribunal and upon receipt ofsuch requisition, the Tribunal shall send or cause to be sent to thatCourt the concerned award and record thereof; Provided that any application for revision may be admitted afterthe prescribed period of three months, if the applicant satisfiedthe High Court that he had sufficient cause for not preferring therevision with such period.

A

B

CD

E

F

G

H

AExplanation: - The fact that the applicant was misled by any order,practice or judgment or the High Court in ascertaining or computingthe prescribed period may be sufficient cause within the meaningof this sub-section.

(2) If it appears to the High Court that the Tribunal- B

(a) has exercised a jurisdiction not vested in it by law; or (b)has failed to exercise a jurisdiction so vested; or

(c) has acted in exercise of its jurisdiction illegally, or withmaterial irregularity; or (d)has misconducted itself or the proceedings; or C

(e) has made an award which is invalid or has beenimproperly procured by any party to the proceedings, the High Court may make such order in the case as it thinks fit.

(3) The High Court shall in deciding any revision under this sectionDexercise the same powers and follow the same procedure as faras may be, as it does in deciding a revision under Section 115 ofthe Code of Civil Procedure 1908 (No. 5 of 1908).

(4) The High Court shall cause a copy of its order in revision to becertified to the Tribunal.

E

Explanation. - For the purposes of this section, an award shallinclude an ‘interim’ award.”

Therefore, as per Section 19 of the 1983 Act, Revision Applicationto the High Court shall be maintainable only against the award passedby the learned Arbitral Tribunal. Therefore, prima facie it appears thatFas such the order passed by the learned Arbitral Tribunal rejecting thereference petition was not maintainable as by order dated 27.02.2017,no award was passed by the Tribunal. However, as no such objectionwas raised before the High Court and no submission has been made bythe parties, we rest the matter there.

G

G

G18. Even otherwise it is required to be noted that while passingthe impugned judgment and order, the High Court has not set aside theaward passed by the Arbitrator – Housing Commissioner dated07.11.2008. Therefore, technically speaking the award passed by theArbitrator – Housing Commissioner dated 07.11.2008 stands even today.It is binding between the parties. So long as the award passed by theH

Arbitrator – Housing Commissioner dated 07.11.2008 stands, there cannotbe any subsequent fresh proceeding with respect to the same claimswhich were considered and adjudicated by the Arbitrator – HousingCommissioner while passing the award dated 07.11.2008. So long as thesaid award stands it is binding between the parties.

19. Even otherwise it is required to be noted that no objection wasraised by the respondent – contractor before the Arbitrator – HousingCommissioner on the jurisdiction of the Housing Commissioner to act asan Arbitrator. On the contrary as observed hereinabove the order passedby the High Court referring the dispute between the parties foradjudication to the Arbitrator – Housing Commissioner was a consentorder and the respondent - contractor conceded to and accepted thesaid order and submitted his claim before the Arbitrator – HousingCommissioner. The Arbitrator – Housing Commissioner also passed anaward on the said claim. Therefore, as no objections were raised by therespondent – contractor at the appropriate stage, the award cannot beannulled subsequently. At the cost of repetition, it is observed that at nopoint of time the respondent – contractor had challenged the awardpassed by the Arbitrator – Housing Commissioner and as observed andheld hereinabove even no court has set aside the award declared by theArbitrator – Housing Commissioner dated 07.11.2008 and the same hasattained finality. Therefore, the same is binding between the parties.Hence, the subsequent fresh reference petition before the learned ArbitralTribunal under the 1983 Act for the very same claims which were raisedbefore the Arbitrator – Housing Commissioner would not be maintainableat all. We agree with the view taken by the Arbitral Tribunal.

20. In view of the above and for the reasons stated above, thepresent appeals are allowed. The impugned judgment and order dated08.05.2018 passed by the High Court in A.R. No.11, 12 & 13/2017quashing and setting aside the order passed by the learned Arbitral Tribunalconstituted under the 1983 Act dated 27.02.2017 is hereby quashed andset aside and the order passed by the Arbitral Tribunal dated 27.02.2017stands restored.

All these appeals are allowed accordingly. In the facts andcircumstances of the case, there shall be no order as to costs.

Appeals allowed.

A

BC

DE

F

G

H