{"id":267544,"date":"2008-04-01T00:00:00","date_gmt":"2008-03-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/mahipatlal-patel-vs-chief-engineer-anr-on-1-april-2008"},"modified":"2015-03-05T01:55:30","modified_gmt":"2015-03-04T20:25:30","slug":"mahipatlal-patel-vs-chief-engineer-anr-on-1-april-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/mahipatlal-patel-vs-chief-engineer-anr-on-1-april-2008","title":{"rendered":"Mahipatlal Patel vs Chief Engineer &amp; Anr on 1 April, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Mahipatlal Patel vs Chief Engineer &amp; Anr on 1 April, 2008<\/div>\n<div class=\"doc_bench\">Bench: Tarun Chatterjee, Harjit Singh Bedi<\/div>\n<pre id=\"pre_1\">           CASE NO.:\nAppeal (civil)  2350 of 2008\n\nPETITIONER:\nMahipatlal Patel\n\nRESPONDENT:\nChief Engineer &amp; Anr\n\nDATE OF JUDGMENT: 01\/04\/2008\n\nBENCH:\nTARUN CHATTERJEE &amp; HARJIT SINGH BEDI\n\nJUDGMENT:\n<\/pre>\n<p id=\"p_1\">J U D G M E N T<br \/>\nNON-REPORTABLE<\/p>\n<p> CIVIL APPEAL NO 2350 OF 2008.\n<\/p>\n<p id=\"p_1\">(Arising out of SLP ( C) No.8500 of 2006)<\/p>\n<p id=\"p_2\">1.\tLeave granted.\n<\/p>\n<p id=\"p_3\">2.\tThis appeal is directed against an order passed by the<br \/>\nChief Justice of the High Court of Orissa at Cuttack dated 20th<br \/>\nof May, 2005 on an application under <a href=\"\/doc\/596725\/\" id=\"a_1\">Section 11<\/a> of the<br \/>\nArbitration and <a href=\"\/doc\/1306164\/\" id=\"a_1\">Conciliation Act<\/a>, 1996 (in short &#8216;the Act&#8217;) for<br \/>\nappointment of an arbitrator and for referring the dispute<br \/>\nbetween the parties to him for adjudication. By the impugned<br \/>\norder, the Chief Justice of the High Court on consideration of<br \/>\nClause 50 of the agreement entered into by the parties which<br \/>\nprovides for arbitration and in view of <a href=\"\/doc\/1052228\/\" id=\"a_2\">Section 85<\/a> of the Act,<br \/>\nheld that no appointment could be made under <a href=\"\/doc\/596725\/\" id=\"a_3\">Section 11<\/a> of<br \/>\nthe Act and further held that the appellant in terms of Clause<br \/>\n50 of the agreement had to approach the arbitration tribunal<br \/>\nand, accordingly, the application for appointment of arbitrator<br \/>\nwas rejected. Feeling aggrieved, the appellant has come up by<br \/>\nway of a special leave petition which on grant of leave was<br \/>\nheard in the presence of the learned counsel for the parties.\n<\/p>\n<p id=\"p_4\">3.\tThe core question involved in this appeal relates to the<br \/>\ninterpretation of <a href=\"\/doc\/1052228\/\" id=\"a_4\">Section 85<\/a> of the Act. In order to appreciate<br \/>\nthe question, it is appropriate to refer to <a href=\"\/doc\/1052228\/\" id=\"a_5\">Section 85<\/a> of the Act<br \/>\nwhich runs as under :-\n<\/p>\n<p id=\"p_5\">&#8220;85. Repeal and saving  The Arbitration (Protocol<br \/>\nand Convention) Act, 1937 (6 of 1937), the<br \/>\n<a href=\"\/doc\/1052228\/\" id=\"a_6\">Arbitration Act<\/a>, 1940 (10 of 1940) and the Foreign<br \/>\nAwards (Recognition and <a href=\"\/doc\/631834\/\" id=\"a_7\">Enforcement) Act<\/a>, 1961<br \/>\n(45 of 1961) are hereby repealed.\n<\/p>\n<p id=\"p_6\">(2) Notwithstanding such repeal. <\/p>\n<p id=\"p_7\">(a)\tthe provisions of the said enactments shall<br \/>\napply in relation to arbitral proceedings which<br \/>\ncommenced before this Act came into force<br \/>\nunless otherwise agreed by the parties but this<br \/>\nAct shall apply in relation to arbitral<br \/>\nproceedings which commenced on or after this<br \/>\nAct comes into force;\n<\/p>\n<p id=\"p_8\">(b)\tall rules made and notifications published,<br \/>\nunder the said enactments shall, to the extent<br \/>\nto which they are not repugnant to this Act, be<br \/>\ndeemed respectively to have been made or<br \/>\nissued under this Act.&#8221;\n<\/p>\n<p id=\"p_9\">4.\tThe High Court, by the impugned order, while<br \/>\ninterpreting <a href=\"\/doc\/1052228\/\" id=\"a_8\">Section 85<\/a> of the Act has given a construction to<br \/>\nthe language of <a href=\"\/doc\/1052228\/\" id=\"a_9\">Section 85<\/a> of the Act and held that the<br \/>\nprovisions of the repealed Act 1940 in the present case would<br \/>\napply. Before we proceed further, we may consider the<br \/>\narbitration clause as entered into by the parties in the<br \/>\nagreement. Clause 50 of the agreement contains provisions for<br \/>\narbitration which provides, inter alia, that except as otherwise<br \/>\nprovided in the contract, all questions and disputes relating to<br \/>\nthe meaning of the specifications, designs, drawings and<br \/>\ninstructions mentioned therein before and as to the quality of<br \/>\nthe workmanship or materials used in the work or as to any<br \/>\nother question, claim, right, matter or thing whatsoever in any<br \/>\nway arising out of or relating to the contract, designs,<br \/>\ndrawings, specifications, estimates, instructions, orders of<br \/>\nthese conditions concerning the work or the execution or<br \/>\nfailure to execute the same with or arising during the progress<br \/>\nof the work after completion of or abandonment thereof shall<br \/>\nbe referred to the arbitration by the Arbitration Tribunal<br \/>\nconstituted by the State Government which shall consist of<br \/>\nthree members of whom one shall be chosen from among the<br \/>\nofficers belonging to Orissa Superior Judicial Service (Sr.<br \/>\nBranch), one from Engineers in the active service of<br \/>\nGovernment not below the rank of a Superintending Engineer<br \/>\nand the remaining member shall be chosen from officers<br \/>\nbelonging to the Orissa Finance Service not below the rank of<br \/>\nClass-I officer.\n<\/p>\n<p id=\"p_10\">5.\tIt was held by the High Court in the impugned order that<br \/>\nin view of clause 50 of the agreement, it was only the<br \/>\narbitration tribunal before which the disputes and differences<br \/>\ncould be referred and, therefore, no appointment could be<br \/>\nmade under <a href=\"\/doc\/596725\/\" id=\"a_10\">Section 11<\/a> of the Act. The High Court in the<br \/>\nimpugned order while rejecting the application for appointment<br \/>\nof an arbitration under <a href=\"\/doc\/596725\/\" id=\"a_11\">Section 11<\/a> of the Act further held that<br \/>\nthe arbitration clause 50 clearly provides that if the contractor<br \/>\ndid not make any payment for arbitration in respect of any<br \/>\nclaim in writing within 90 days after receiving intimation from<br \/>\nthe Government that the bill was ready for payment, that claim<br \/>\nof the contractor shall be deemed to have been waived and<br \/>\nabsolutely barred and the government shall be discharged and<br \/>\nreleased of all the liability under the contract in respect of<br \/>\nsuch claim.\n<\/p>\n<p id=\"p_11\">6.\tHaving heard the learned counsel for the parties and<br \/>\nafter considering the impugned order rejecting the application<br \/>\nfor appointment of arbitrator and the provisions under <a href=\"\/doc\/1052228\/\" id=\"a_12\">Section<br \/>\n85<\/a> of the Act and Clause 50 of the agreement in detail, we are<br \/>\nof the view that the order of the High Court is not sustainable<br \/>\nin law. An order of the Orissa High Court on the question of<br \/>\nexistence of an arbitration tribunal was brought to our notice<br \/>\nby the learned counsel for the parties from which it clearly<br \/>\nappears that the arbitration tribunal created under the<br \/>\n<a href=\"\/doc\/1052228\/\" id=\"a_13\">Arbitration Act<\/a>, 1940 does not exist for deciding the disputes<br \/>\nwhich had arisen out of an agreement entered into after the<br \/>\n<a href=\"\/doc\/1052228\/\" id=\"a_14\">Arbitration Act<\/a>, 1940 was repealed. Accordingly, it has been<br \/>\nheld that the arbitration tribunal set up by the <a href=\"\/doc\/1052228\/\" id=\"a_15\">Arbitration Act<\/a>,<br \/>\n1940 does not exist as on date and the present dispute<br \/>\nbetween the parties cannot be referred to the said tribunal<br \/>\nwhich is not in existence in the eyes of law. It has also been<br \/>\naccepted by the learned counsel for the parties that against<br \/>\nthis order of the High Court, no appeal was filed or steps taken<br \/>\nby either of the parties, that is to say, that it has now been<br \/>\naccepted that there is no existence of any arbitration tribunal.<br \/>\nOn the basis of the aforesaid judgment of the Chief Justice of<br \/>\nthe High Court, it has been accepted that no arbitration<br \/>\ntribunal is in existence. Therefore, without going into the<br \/>\nmerits and in view of the aforesaid decision of the Orissa High<br \/>\nCourt, we are of the view that in the absence of existence of<br \/>\nany arbitration tribunal, it is only the High Court to exercise its<br \/>\npower under <a href=\"\/doc\/596725\/\" id=\"a_16\">Section 11<\/a> of the Act to appoint an arbitrator to<br \/>\ngo into the disputes and differences between the parties.<br \/>\nAccordingly, we set aside the order of the High Court.   We now<br \/>\nrequest the High Court to decide the application under <a href=\"\/doc\/596725\/\" id=\"a_17\">Section<br \/>\n11<\/a> of the Act on merits.  It is expected that the said application<br \/>\nshall be decided and dispose of within three months from the<br \/>\ndate of supply of a copy of this order to it.  This appeal is thus<br \/>\nallowed to the extent indicated above.  There will be no order as<br \/>\nto costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Mahipatlal Patel vs Chief Engineer &amp; Anr on 1 April, 2008 Bench: Tarun Chatterjee, Harjit Singh Bedi CASE NO.: Appeal (civil) 2350 of 2008 PETITIONER: Mahipatlal Patel RESPONDENT: Chief Engineer &amp; Anr DATE OF JUDGMENT: 01\/04\/2008 BENCH: TARUN CHATTERJEE &amp; HARJIT SINGH BEDI JUDGMENT: J U D G M E N [&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-267544","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mahipatlal Patel vs Chief Engineer &amp; 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