{"id":221772,"date":"2001-02-13T00:00:00","date_gmt":"2001-02-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/star-construction-transport-co-vs-the-india-cements-limited-on-13-february-2001"},"modified":"2016-03-24T22:10:04","modified_gmt":"2016-03-24T16:40:04","slug":"star-construction-transport-co-vs-the-india-cements-limited-on-13-february-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/star-construction-transport-co-vs-the-india-cements-limited-on-13-february-2001","title":{"rendered":"Star Construction &amp; Transport Co. &#8230; vs The India Cements Limited on 13 February, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Star Construction &amp; Transport Co. &#8230; vs The India Cements Limited on 13 February, 2001<\/div>\n<div class=\"doc_author\">Author: R Babu<\/div>\n<div class=\"doc_bench\">Bench: K.G.Balakrishna, S.R.Babu<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 9420-9423  of  1995\n\n\n\nPETITIONER:\nSTAR CONSTRUCTION &amp; TRANSPORT CO.  &amp; ORS.\n\n\tVs.\n\nRESPONDENT:\nTHE INDIA CEMENTS LIMITED\n\nDATE OF JUDGMENT:\t13\/02\/2001\n\nBENCH:\nK.G.Balakrishna, S.R.Babu\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>RAJENDRA BABU, J.  :\n<\/p>\n<p>L&#8230;..I&#8230;&#8230;&#8230;T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T..J<\/p>\n<p>      In  respect of a dispute arising out of a money  claim<br \/>\nmade  by  the appellants against respondent the\t matter\t was<br \/>\nreferred  to arbitration.  The reference was entered into in<br \/>\nJanuary\t 1983.\t The  arbitrators published their  award  on<br \/>\n15.2.1986  which,  after setting out certain  matters  which<br \/>\nwere preliminary in nature, inter alia, stated as under :-\n<\/p>\n<p>      We  J.C.\t Shah  and P.S.\t  Subramaniam,\tArbitrators<br \/>\nappointed  by the parties do hereby award and order that the<br \/>\nCompany\t (Indian  Cements Ltd.) do pay to Star\tConstruction<br \/>\nand  Transport Company Rs.  65,00,000 (in words Rupees Sixty<br \/>\nFive Lacs) in full and final settlement of the claim of Star<br \/>\nConstruction and Transport Company with interest at the rate<br \/>\nof  9(nine) per cent per annum from the date hereof;  and we<br \/>\nfurther\t award and declare that all the disputes referred to<br \/>\nby the parties under the claim made by the Star Construction<br \/>\nand  Transport Company and denied by the Indian Cements Ltd.<br \/>\nare  finally  disposed of by this Award and that no part  of<br \/>\nthe  claim  remains undetermined;  and we further award\t and<br \/>\norder  that  each party to bear its respective cost  of\t and<br \/>\nincidental to the arbitration proceeding including its share<br \/>\nof the amount of remuneration paid by it to the Arbitrators.\n<\/p>\n<p>      Made  this  15th day of February, 1986 at\t Bombay,  in<br \/>\ntoken\twhereof\t the  Arbitrators   have  subscribed   their<br \/>\nsignatures which are duly attested.\n<\/p>\n<p>      The award was filed in court on 15.4.1986 in O.P.\t No.<br \/>\n174 of 1986 under Section 14(2) of the Arbitration Act, 1940<br \/>\n(hereinafter referred to as the Act).  A decree was passed<br \/>\nin  terms  of  the  award under Section 17(1)  of  the\tAct.<br \/>\nThereafter, the respondent by its letter dated 8.8.1986 paid<br \/>\na  sum\tof Rs.\t49 lacs while withholding a sum of  Rs.\t  16<br \/>\nlacs  which  is stated to be money claims due to it in\tSuit<br \/>\nNo.   C.S.  246 of 1984 and C.S.  315 of 1984, although this<br \/>\nwas  disputed  by  the\tappellants  in\ttheir  letter  dated<br \/>\n5.8.1986.   It was stated therein that a Reconciliation\t of<br \/>\nAccount\t had  been furnished to the arbitrators showing\t an<br \/>\namount\tof about Rs.  16 lacs claimed to be due from them in<br \/>\nrespect\t of  which they had instituted the said\t two  suits.<br \/>\nThe   respondent  contended  that   the\t issues\t before\t the<br \/>\narbitrators  by way of several claims recorded in the  award<br \/>\nwhich  the arbitrators had settled did not take into account<br \/>\nmoneys\treceived  by the appellants from it as\tadvance\t and<br \/>\nmoneys paid by them on their behalf and which stand to their<br \/>\ncredit\tand accordingly credit should be given thereto.\t  In<br \/>\nthe  two  pending suits applications were filed under  Order<br \/>\nXXIII,\tRule 3 of the Code of Civil Procedure to record\t the<br \/>\nsatisfaction  of  the suit claim and dismiss the  suit\twith<br \/>\nother  incidental reliefs.  The learned single Judge of\t the<br \/>\nHigh  Court who was dealing with the suits passed a judgment<br \/>\non  17.4.1989  allowing the applications by holding that  it<br \/>\nwas  at the instance of the respondent that the claim in the<br \/>\nsuit  was brought in before the arbitrators on 8.2.1986\t and<br \/>\nelected to claim this set off immediately under the award to<br \/>\nbe  pronounced which was not opposed by the appellants\tand,<br \/>\ntherefore, under these circumstances, instead of an award of<br \/>\nRs.   81 lacs, an award of Rs.\t65 lacs was made.  On appeal<br \/>\nthe  Division Bench of the High Court reversed the  judgment<br \/>\nof  the\t learned Single Judge by holding that whether  there<br \/>\nwas  a settlement or not between the parties is a matter  to<br \/>\nbe decided as an issue in the suit and that the award per se<br \/>\ncannot\tbe considered as having resulted in a settlement  of<br \/>\nsuit claims.\n<\/p>\n<p>      The  principal  objection\t raised\t on  behalf  of\t the<br \/>\nrespondent  is\tthat the two applications filed under  Order<br \/>\nXXIII  Rue  3 C.P.C.  could not be maintained.\tIt was\talso<br \/>\ndisputed  that\tthe amounts claimed in the suits related  to<br \/>\nthe  agreement\tdated  27.7.1979 which was not\tthe  subject<br \/>\nmatter\tof  arbitration.  It was contended that the  subject<br \/>\nmatter\tof  the\t suits could not be the\t subject  matter  of<br \/>\narbitration  without  further  submission   by\tthe  parties<br \/>\nrequesting  the\t arbitrators to include the said matter\t and<br \/>\nfactually  there was no such submission.  The learned single<br \/>\nJudge  considered the case on the original statements  filed<br \/>\nby the respondent before the arbitrators.  The claim in suit<br \/>\nC.S.   No.   315  of 1984 was for recovery of a sum  of\t Rs.<br \/>\n19,75,821.60 together with interest on Rs.  14,55,625.08 and<br \/>\nthe  costs.   The claim in the plaint comprised of a sum  of<br \/>\nRs.   9,20,452.17 being the difference between the value  of<br \/>\nthe  assets taken over by the respondent and the amount\t was<br \/>\nstated to be due from the appellants to the respondent which<br \/>\nformed\tthe subject matter of the agreement dated  27.7.1979<br \/>\nand  a sum of Rs.  5,35,172.91 was said to be the  liability<br \/>\nof  the appellants on account of accrued and unavailed leave<br \/>\nof  the workmen employed by the appellants.  Other suit C.S.<br \/>\nNo.   246  of  1984 was filed for recovery of a sum  of\t Rs.<br \/>\n1,53,812.50  with interest at 12% per annum from the date of<br \/>\nplaint\tand for costs.\tThe claim of the respondent is\tthat<br \/>\nthis  amount represented the motor vehicles tax demanded  by<br \/>\nR.T.O.\t Salem\tfor the period from 1.4.1974  to  31.3.1982.<br \/>\nAccording  to the respondent, the amount was payable by\t the<br \/>\nappellants and the respondent was obliged to pay it when the<br \/>\npermits\t for  the  vehicles were transferred to it.   It  is<br \/>\nafter  the decree in terms of the award was passed that\t the<br \/>\nappellants   wrote  a  letter  to  the\trespondent   without<br \/>\nprejudice  referring to reconciliation statement of  account<br \/>\nfiled  by  the respondent before the arbitrators showing  an<br \/>\namount of Rs.  16 lacs claimed to be due from the appellants<br \/>\nand  proposing\tthat the respondent should pay a sum of\t Rs.<br \/>\n49  lacs being approximately the amount decreed in O.P.\t No.<br \/>\n174  of 1986 less the amount claimed by the respondent.\t The<br \/>\nappellants  also  undertook that on such payment being\tmade<br \/>\nthey  would not execute the decree till these two suits\t are<br \/>\ndisposed  of or the matter is settled in a manner acceptable<br \/>\nto  both  parties.   This  proposal   was  accepted  by\t the<br \/>\nrespondent  without prejudice and along with a letter  dated<br \/>\n8.8.1986 a cheque of Rs.  49 lacs was sent by the respondent<br \/>\nto the appellants.  In that letter it was made clear that in<br \/>\nrespect\t of amounts settled by the arbitrators the claims in<br \/>\nthe two suits were not included in the settlement arrived at<br \/>\nby  the arbitrators.  The appellants suggested that both the<br \/>\nparties or their advocates should obtain clarifications from<br \/>\nthe arbitrators as to whether or not the amount shown by the<br \/>\nrespondent  as due to it in the statement of  reconciliation<br \/>\nof  accounts filed before the arbitrators had been  adjusted<br \/>\nby  them  in  awarding\tthe  sum of  Rs.   65  lacs  to\t the<br \/>\nappellants.   The respondent did not agree to the suggestion<br \/>\nas  in\tits  opinion there was no scope\t for  obtaining\t any<br \/>\nclarification from the arbitrators as there was no ambiguity<br \/>\nwith  regard  to  the issue before them.  The stand  of\t the<br \/>\nrespondent  is clear that the arbitration did not pertain to<br \/>\nthe  agreement dated 27.7.1979 but only the matters  arising<br \/>\nunder  the agreement dated 20.8.1974.  An affidavit of\tShri<br \/>\nP.S.   Subramaniam  Iyer,  one of the  arbitrators  and\t two<br \/>\ndocuments  were\t filed\twhich  are   zerox  copies  of\t the<br \/>\nstatements filed by the respondent before the arbitrators on<br \/>\n8.2.1986.   As\tthe  original statements  filed\t before\t the<br \/>\narbitrators  were  also produced in the suit with all  other<br \/>\nrecords of the arbitrators, the learned single Judge did not<br \/>\nrely upon the affidavit of Shri P.S.  Subramaniam Iyer as he<br \/>\nhad  not  been examined before the court and he ignored\t the<br \/>\nsame.\tHowever, the learned Judge proceeded to consider the<br \/>\ncase  on  the basis of the original statements filed by\t the<br \/>\nrespondent  before the arbitrators which have been  produced<br \/>\nin  the court along with O.P.  No.  174 of 1986 and a letter<br \/>\ndated  1.2.1986 written by Shri S.  Padmanabhan, who was one<br \/>\nof the advocates appearing for the respondent, to the effect<br \/>\nthat  the respondent had worked out loss at Rs.\t 72.51\tlacs<br \/>\nsubject to adjustment of amounts payable and receivable.  It<br \/>\nwas  also  stated  that items marked 9B to 9E could  not  be<br \/>\naccepted  in working out the basis for any compromise.\t The<br \/>\nlearned\t  Judge\t proceeded  to\t analyse  the  statement  of<br \/>\nreconciliation\tof account which referred specifically to  a<br \/>\nsum  of Rs.  9,20,452.17 which is one of the amounts claimed<br \/>\nin  suit C.S.  No.  315 of 1984 and the other amount claimed<br \/>\nfor leave wages as Rs.\t5,35,000\/- which are set out in para<br \/>\n6  of the plaint in C.S.  No.  315 of 1984.  With  reference<br \/>\nto  the claim in C.S.  246 of 1984 the amount was split into<br \/>\ntwo  paras  in\tthe statement.\tA sum of Rs.   30,000\/-\t was<br \/>\nshown  as  paid to R.T.O.  towards differential tax and\t the<br \/>\nbalance\t of  Rs.  1,53,812.50 was shown as a separate  entry<br \/>\ntax  arrears  in  respect of vehicles taken  over  from\t the<br \/>\nappellants  paid on 28.6.1982.\tThus, the learned Judge came<br \/>\nto  the conclusion that the amount claimed in the two  suits<br \/>\nfound  place in the statement of reconciliation of  account.<br \/>\nThe  learned Judge thereafter referred to proceedings  dated<br \/>\n8.2.1986  in  which  the list of documents attached  to\t the<br \/>\noriginal   petition   submitted\t  during   the\t arbitration<br \/>\nproceedings  and the description given in the list  attached<br \/>\nto  the\t original  petition contained 21 items The  last  of<br \/>\nwhich  is  further  documents  of  claimant  and  respondent<br \/>\ncompromise  proposal  and  reconciliation   of\tAccounts  by<br \/>\nrespondent.   On this basis, the learned Judge found that it<br \/>\nwas  clear that the arbitrators have taken into account\t the<br \/>\nstatement   of\treconciliation\tof   account  filed  by\t the<br \/>\nrespondent  before  passing  the award.\t The  learned  Judge<br \/>\nproceeded  to  observe that the arbitrators would  not\thave<br \/>\ntaken  the statements on record but returned the same to the<br \/>\nrespective  parties  and proceeded without any reference  to<br \/>\nthe said statement and, therefore, the respondent was taking<br \/>\nundue advantage of the fact that the award is a non-speaking<br \/>\none.   The  learned Judge relying upon the decision of\tthis<br \/>\nCourt  in  Smt.\t Santa Sila Devi and another  v.   Dhirendra<br \/>\nNath  Sen and others, AIR 1963 SC 1677, held that the  award<br \/>\nfinally\t disposed of all the matters in difference  inasmuch<br \/>\nas  there  is an express declaration by the  arbitrators  to<br \/>\nthat  effect and no part of the claim remained undetermined.<br \/>\nThe  learned Judge also gave further findings that when\t the<br \/>\nappellants  had approached the arbitrators with a particular<br \/>\nclaim  and  the\t respondent in defence put forth  its  claim<br \/>\narising\t out of the same contract but crystalised to a large<br \/>\nextent\tby the agreement dated 27.7.1979 which, in fact, set<br \/>\noff  before  the  arbitrators  there was  no  necessity\t for<br \/>\nsubmission  of\ta fresh or independent reference, much\tless<br \/>\nthrough\t court\tand  relied upon the  following\t passage  in<br \/>\nRussell on Arbitration, 9th Edn, at pages 102 and 103 :-\n<\/p>\n<p>      It  has been often held that a submission by A and  B<br \/>\nof  the\t one  part and C of the other, of  all\tmatters\t in<br \/>\ndifference between them authorises the arbitrator to decide<br \/>\non  all matters that either of the two has against the third<br \/>\njointly\t or severally, such as an action by A alone  against<br \/>\nC,   on\t the  ground  that  the\t  words\t are  to  be   taken<br \/>\ndistributively.\t  This\tview  was adopted in  the  Court  of<br \/>\nExchequer  and\taffirmed  in   the  Exchequer  Chamber\tSix<br \/>\npartners  by two bonds submitted to arbitration all  matters<br \/>\nrelating  to  their  trade.  By the one bond three  of\tthem<br \/>\nbecame\tjointly\t and severally bound to the other  three  to<br \/>\nobey the award as to all matters between the partners or any<br \/>\nof  them.  But the second bond the latter three became bound<br \/>\nto  the\t former three in like manner.  It was held that\t the<br \/>\narbitrator  was\t authorised to award on a matter in  dispute<br \/>\nbetween\t two  co-  obligators only, on the ground  that\t the<br \/>\nreference  was\tof all matters between them or any  of\tthem<br \/>\nWinter v.  White (1819) IB &amp; B 350.\n<\/p>\n<p>      A\t reference  of\tall matters in difference  gives  an<br \/>\narbitrator  power over all matters down to the period of the<br \/>\nsubmission,   but  does\t not   except  under  very   special<br \/>\ncircumstances,\tenable him to award on future and contingent<br \/>\nclaims,\t or  to\t give damages in respect  of  money  demands<br \/>\nbecoming  due  after  the  date of  the\t submission,  though<br \/>\npursuant  to  an  agreement made previous to it,  or  indeed<br \/>\nrespecting  any\t subjects  of\tdispute\t arising  after\t the<br \/>\nreference.\n<\/p>\n<p>      Even  if the submission be of all differences and\t of<br \/>\nanything  in anywise relating thereto these latter words do<br \/>\nnot  extend  the power of the arbitrators to  matters  which<br \/>\nthough relating to the existing differences, arise after the<br \/>\ndate of the submission nor do they authorise the calculation<br \/>\nand awarding of interest subsequent to that date.\n<\/p>\n<p>      The  parties  may,  however, if they please  give\t the<br \/>\narbitrator  power  to determine on contingent claims, or  on<br \/>\nmatters\t in dispute or demands arising after the date of the<br \/>\nsubmission and this course has often been perused.\n<\/p>\n<p>      The learned Judge, therefore, held that it was open to<br \/>\nthe  arbitrators to arbitrate the same.\t Alternatively,\t the<br \/>\nlearned\t Judge proceeded to state that even if the reference<br \/>\nwas limited, it was open to the parties to enlarge the scope<br \/>\nthereof\t as  it\t was not a reference made by a\tcourt.\t The<br \/>\nstatements  in\twriting\t filed\tby the\tparties\t before\t the<br \/>\narbitrators  were  sufficient to serve the purpose  and\t the<br \/>\nabsence of signature of any representative of the respondent<br \/>\ndoes not at all matter.\t The learned Judge also proceeded to<br \/>\nconsider  that\tthe respondent had elected to claim set\t off<br \/>\nbefore\tthe  arbitrators and having chosen to work out\tthat<br \/>\nremedy\tit is not open to the respondent to pursue the\tsame<br \/>\nby  ignoring  the  award.  It was held that  the  respondent<br \/>\nhaving\tobtained  the benefit under the award,\tnamely,\t the<br \/>\nadjustment of the amounts due from the appellants as against<br \/>\nthe  amounts found payable to the appellants, it is not open<br \/>\nto  the respondent to challenge the validity of the award in<br \/>\nthe  proceedings,  particularly when the appellants had\t not<br \/>\nraised\tany objection to a decree being passed by the  court<br \/>\nin  terms  of  the  award.  Appeals were  filed\t before\t the<br \/>\nDivision  Bench\t of the High Court by the respondent,  which<br \/>\nwere  allowed  relegating  the\tparties to  thrash  out\t the<br \/>\nquestion  whether  there is a settlement or not between\t the<br \/>\nparties\t is  a matter to be decided as an issue in the\tsuit<br \/>\nand  that  the award per se cannot be considered  as  having<br \/>\nresulted  in a settlement of the suit claim.  These  appeals<br \/>\nare directed against that order of the Division Bench of the<br \/>\nHigh  Court.  Shri F.S.Nariman, learned senior Advocate\t for<br \/>\nthe appellants, submitted that if the conclusion is that the<br \/>\naward  has  resulted in a settlement of the suit claim,\t the<br \/>\ncourt  ought  to  have\tgiven a finding\t that  there  was  a<br \/>\nsettlement  between the parties and hence nothing remains in<br \/>\nthe suit to be decided.\t He focussed his attention mostly to<br \/>\nthe  question that the award on the face of it indicates the<br \/>\nsettlement  of the suit claim.\tTo support this proposition,<br \/>\nhe  heavily  relied upon the view expressed by\tthe  learned<br \/>\nSingle\tJudge  while disposing of the suits on the basis  of<br \/>\nthe  applications  filed  under Order XXIII, Rule 3  CPC  to<br \/>\nwhich  we have made elaborate reference.  He submitted\tthat<br \/>\nthe  fact is that the reference to the arbitration was\tmade<br \/>\nin  pursuance  of  clause  24 of the  agreement\t dated\t20th<br \/>\nAugust, 1974 as a private reference validly made without the<br \/>\nintervention  of  the court.  He submits that clause  24  is<br \/>\nvery  wide  in\tits  terms  to\tinclude\t all  questions\t  of<br \/>\ndifference whatsoever touching upon the agreement or subject<br \/>\nmatter\tthereof or arising out of or in relation thereto and<br \/>\nwhether\t as  to construction of the agreement or  otherwise.<br \/>\nWhen  the  appellants  approached  the\tarbitration  with  a<br \/>\nparticular  claim,  the\t respondent in defence\tthereto\t put<br \/>\nforward\t its  claim  arising out of the\t same  contract\t but<br \/>\ncrystallised  to  a  large  extent by  the  agreement  dated<br \/>\n27.7.1979.   The later agreement between the parties emerged<br \/>\nonly out of the earlier contract which was the foundation of<br \/>\nthe transaction between the parties.  The respondent pleaded<br \/>\nonly  a\t set off or a counter-claim before  the\t arbitrators<br \/>\nwhile  defending  the claim put forward by  the\t appellants.<br \/>\nThus  there  was no necessity for submission of a  fresh  or<br \/>\nindependent  reference\tand much less through a Court.\t The<br \/>\nfallacy in this approach is that when the reference was made<br \/>\nin  respect  of\t the disputes arising out of  the  agreement<br \/>\ndated  20.8.1974  and  those disputes had to be\t settled  no<br \/>\nclaim by way of set off or a counter-claim was raised by the<br \/>\nrespondent  herein.   It  is only at the last stage  of\t the<br \/>\nproceedings  a\treconciliation statement is stated  to\thave<br \/>\nbeen  filed  which,  it is said, has  reference\t to  certain<br \/>\nclaims\tmade in the two suits and those claims are stated to<br \/>\nhave been taken into consideration in the non-speaking award<br \/>\nin  deciding  the claims of the parties by the\tarbitrators.<br \/>\nIn  the case of a non-speaking award, trite to say that\t the<br \/>\nmental process of the arbitrators in reaching the conclusion<br \/>\ncannot\tbe  gone  into\tor  examined as\t the  same  are\t not<br \/>\ndisclosed  in the award.  Therefore, to glean into the minds<br \/>\nof  the\t arbitrators to find out whether they  included\t the<br \/>\nclaims\tstated\tto  have  been made  in\t the  reconciliation<br \/>\nstatement  is  a  very torturous process, not an  easy\tone,<br \/>\nhazarded  with too many difficulties.  To get out of such  a<br \/>\nquagmire Shri Nariman very astutely contended that there was<br \/>\na  reference  to  the documents filed in the  case  and\t the<br \/>\nreconciliation statement is one such which was also produced<br \/>\nbefore\tthe  court when the award was filed for passing\t the<br \/>\ndecree\tin terms thereof which would indicate that this\t was<br \/>\npresent\t to the minds of the arbitrators.  Whether it is  so<br \/>\nor not can only be imagined and not definitely inferred from<br \/>\nthe facts.  Therefore, this line of reasoning adopted by the<br \/>\nlearned\t Single\t Judge\tdoes  not appeal to us\tnor  are  we<br \/>\nimpressed  with the alternative view taken by him that\teven<br \/>\nassuming  that\tthe  scope  of the  original  reference\t was<br \/>\nlimited,  it  was open to both parties to enlarge  the\tsame<br \/>\nbefore\tthe arbitrators as it was not a reference made by  a<br \/>\ncourt.\t Even if it were so, there is no way of finding\t out<br \/>\nthe  rationale\ton which the arbitrators passed\t the  award.<br \/>\nThough it may have been permissible to refer such a dispute,<br \/>\nwhether\t in fact done so, is the question.  That is a matter<br \/>\nwhich  is  under serious dispute between the parties.\tShri<br \/>\nNariman pointed out the conflict in decisions in relation to<br \/>\nthe  question whether the matters in difference in a pending<br \/>\nsuit can be referred to the arbitration without the order of<br \/>\nthe  court  and when the same would result in settlement  of<br \/>\nclaim in the suit.  However, that aspect also does not arise<br \/>\nfor  consideration at this stage of the proceedings.  We may<br \/>\nalso  notice  that the learned Single Judge is of  the\tview<br \/>\nthat  the  respondent  having taken advantage of  the  award<br \/>\nwhich,\tin  fact, took note of the reconciliation  statement<br \/>\nthey  are  estopped  from  contending\tthat  there  is\t  no<br \/>\nsignificance   of  the\tsuit   claims  in  the\t arbitration<br \/>\nproceedings.   Again,  this  view proceeds on the  basis  of<br \/>\naward  being  made after taking note of\t the  reconciliation<br \/>\nstatement,  which  conclusion  we  have pointed\t out  to  be<br \/>\nslippery.   Hence  this\t aspect\t also does  not\t assist\t the<br \/>\nappellants.\n<\/p>\n<p>      In  this\tcase,  applications are\t filed\tunder  Order<br \/>\nXXIII,\tRule  3 CPC.  This rule is a provision for making  a<br \/>\ndecree\ton  any lawful agreement or compromise\tbetween\t the<br \/>\nparties\t during\t the pendency of the suit by which claim  is<br \/>\nsatisfied  or  adjusted.   The\t agreement,  compromise\t  or<br \/>\nsatisfaction  may relate to the whole of the suit or part of<br \/>\nthe  suit or it may also include matters beyond the  subject<br \/>\nmatter\tof the suit.  But Rule 3 clearly envisages a  decree<br \/>\nbeing  passed  in  respect of part of subject  matter  on  a<br \/>\ncompromise.   Whether  in fact there has been compromise  or<br \/>\nadjustment  of the suit claim or any part thereof is  itself<br \/>\nput  in\t dispute  in  this   case.   Unless  it\t is  clearly<br \/>\nestablished  that such accord or compromise has been entered<br \/>\ninto  between the parties, the powers under Order XXIII Rule<br \/>\n3 CPC could not be exercised.  The respondents case is that<br \/>\nthe claim made in the suit were never before the arbitrators<br \/>\nin   any  form\tand  even   the\t figures  mentioned  in\t the<br \/>\nreconciliation\tstatement  also do not pertain to  the\tsuit<br \/>\nclaim and the scope of reference to the arbitrators does not<br \/>\nenable\tthem to make an award on that aspect of the  matter.<br \/>\nThose objections have to be dealt with appropriately on full<br \/>\ntrial.\tThat is the course now adopted by the Division Bench<br \/>\nof  the\t High  Court.  Although many  other  arguments\twere<br \/>\naddressed  before  us  as to the scope\tof  the\t proceedings<br \/>\nbefore an arbitrator as to how in the course of arbitration,<br \/>\nadditional  claims  can\t be  raised   before  them  and\t  an<br \/>\nadjudication  thereof,\tif results, an award is\t binding  on<br \/>\nparties.   These aspects also do not help the appellants  in<br \/>\nany manner for we find that there must be factual foundation<br \/>\nfor  those claims and established in the course of a  trial.<br \/>\nUninfluenced  by  the  views of the Division Bench  we\thave<br \/>\nexamined  the correctness of the order of the learned Single<br \/>\nJudge  made  in\t the two suits on applications\tfiled  under<br \/>\nOrder  XXIII  Rule 3 CPC and we are clearly of\tthe  opinion<br \/>\nthat  the  order  of  the learned  Single  Judge  cannot  be<br \/>\nsustained.   The  Division Bench of the High Court  has\t not<br \/>\nshut  out  the\tcase put forth by the  appellants  but\tonly<br \/>\nrelegated the parties to work out their respective rights in<br \/>\nan  appropriate manner in the course of a suit.\t  Therefore,<br \/>\nwe  find no merit in these appeals and the same shall  stand<br \/>\ndismissed.  The parties shall bear their own costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Star Construction &amp; Transport Co. &#8230; vs The India Cements Limited on 13 February, 2001 Author: R Babu Bench: K.G.Balakrishna, S.R.Babu CASE NO.: Appeal (civil) 9420-9423 of 1995 PETITIONER: STAR CONSTRUCTION &amp; TRANSPORT CO. &amp; ORS. Vs. RESPONDENT: THE INDIA CEMENTS LIMITED DATE OF JUDGMENT: 13\/02\/2001 BENCH: K.G.Balakrishna, S.R.Babu JUDGMENT: RAJENDRA [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-221772","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Star Construction &amp; Transport Co. ... vs The India Cements Limited on 13 February, 2001 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/star-construction-transport-co-vs-the-india-cements-limited-on-13-february-2001\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Star Construction &amp; 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