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CASE NO.: Appeal (civil)  4576 of 2007

PETITIONER: Utkal Galvanizers Ltd

RESPONDENT: Orissa Hydro Power Corpn. Ltd. & Ors

DATE OF JUDGMENT: 28/09/2007

BENCH: TARUN CHATTERJEE & DALVEER BHANDARI

JUDGMENT: JUDGMENT

CIVIL APPEAL NO 4576 OF 2007 (Arising out of SLP)No.4653 of 2006)

TARUN CHATTERJEE, J.

1.     Leave granted.

2.      This appeal is directed against the judgment and order dated  29th April, 2005 of the High Court of Orissa at Cuttack in MJC  No.121 of 2002 by which the High Court had refused the prayer of the  appellant for appointment of an arbitrator under Section 11 of the  Arbitration and Conciliation Act, 1996 (in short ’the Act’). This Court on 5th of January, 2007 made the following  directions : " Counsel for the petitioner submits that the  petitioner is not averse to an arbitrator being appointed  who may adjudicate the disputes between the parties.  Counsel for the respondents also is not against the  appointment of an arbitrator to resolve the disputes  between the parties, but he submits that the petitioner  may move the State of Orissa which shall refer the matter  to arbitration by the Arbitration Tribunal, Bhubaneshwar  in accordance with clause 3.39(f) of the General  Conditions of Contract. Mr.M.L.Verma, Senior Advocate  appearing on behalf of the petitioner submits that the  Arbitration Tribunal contemplated by the aforesaid  clause does not in fact exist and, therefore, there is no  question of asking the State Government for a reference  to the said tribunal. He also submits that in view of the  provisions of the Arbitration and Conciliation Act, 1996,  a later Act, where there is no provision similar to Section  41-A under the Arbitration Act, 1940, there may be some  doubt as to whether the tribunal continues to exist in the  absence of any similar amendment to the 1996 Act. He,  however, submits that if clause 3.39 (f) is applicable, the  petitioner is willing to make the security deposit required  to be made under the said clause.  

With a view to resolve the dispute effectively, we  consider it necessary to implead State of Orissa as a  party respondent. On an oral prayer made on behalf of  the petitioner, State of Orissa, through its Chief  Secretary is impleaded as party respondent. Let notice  issue to the State of Orissa so that in its presence the  question may be considered. Notice be made returnable  within three weeks. Dasti Service, in addition, is

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permitted."     

From a perusal of the order of this Court, it would be evident  that the appellant was agreeable to resolve the dispute between the  parties and refer the disputes to arbitration by Arbitration Tribunal,  Bhubaneshwar, Orissa in accordance with Clause 3.39 (f) of the  General Conditions of Contract. However, it appears from the said  order of this Court that there was some dispute as to whether the  Arbitration Tribunal, Bhubaneshwar, Orissa is existent or was existent  or not. It is also evident from the aforesaid order of this Court that the  appellant was willing to make the security deposit required to be made  under Clause 3.39 (f), if           Clause 3.39 (f) was applicable.  Accordingly, notice was issued by this Court which would be evident  from the aforesaid order, to the State of Orissa after making the State  of Orissa as a party respondent as this Court was of the view that the  dispute between the parties may be considered in the presence of the  State of Orissa. Learned counsel appearing for the respondent has not raised  any objection if the matter is referred to Arbitration Tribunal, Orissa  for adjudication. The only submission made on behalf of the  respondent was that no reference could be made invoking arbitration  unless the appellant furnished a security deposit of a sum determined  according to the table given in Clause 3.39 (f) of the Contract and the  sum so deposited shall, on the termination of the arbitration  proceeding, be adjusted against the cost, if any, awarded by the  arbitration tribunal against the party and the balance remaining after  such adjustment or in the absence of any such cost being awarded the  whole of the sum shall be refunded to him within one month from the  date of the award. Learned counsel for the appellant also agreed to the  deposit of security amount in compliance with     Clause 3.39 (f) of  the Contract.  Such being the position and in view of the stand taken by the  parties before us and considering the fact that Arbitration Tribunal,  Orissa is in existence and is ready to decide the matter, if referred to  them, we dispose of the appeal in the following manner :- (1)     The appellant is directed to furnish the security deposit of  a sum determined according to the table given in Clause 3.39  (f) of the Contract within a period of two months from the date  of communication of this order to the respondent. (2)     If the amount to be determined is furnished as security  deposit within the time specified herein above, the dispute  between the parties shall be referred to the Arbitration Tribunal,  Orissa for adjudication two weeks from the date of such  deposit. (3)     The Arbitration Tribunal, Orissa shall enter the reference  and pass its award within a period of three months from the  date of entering into the reference. It is needless to say that the Arbitration Tribunal shall permit  the parties to adduce evidence in support of their respective claims  and after hearing them the award shall be passed by the Arbitration  Tribunal, Bhubaneshwar, Orissa. The appeal is disposed of in the manner indicated above. There  will be no order as to costs.