Full Judgment Text
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CASE NO.:
Appeal (civil) 640 of 1998
PETITIONER:
STATE OF MAHARASHTRA
RESPONDENT:
S.D. SHINDE AND CO.
DATE OF JUDGMENT: 17/09/2003
BENCH:
V.N. KHARE CJ & S.B. SINHA
JUDGMENT:
JUDGMENT
2003 Supp(3) SCR 891
The following Order of the Court was delivered :
The appellant and the respondent entered into an agreement under which the
respondent undertook to construct certain project. The appellant herein
from time to time issued work orders which the respondent alleges to have
completed. It appears that certain disputes arose between the appellant and
the respondent as a result of which the respondent filed a petition under
Section 20 of the Arbitration Act, 1940 (hereinafter referred to as "the
Act") for appointment of an arbitrator. An arbitrator was appointed who
gave an award. Subsequently, the arbitrator filed an interim award before
the Civil Judge (Sr. Division) for being made rule of the court. After the
notices were issued, the respondent filed an application for making the
said interim award a rule of court. An interim order was passed whereby the
appellant was directed to pay the final bill to the respondent in relation
whereof an application was filed by the respondent purported to be under
Section 18 of the Act. Civil Suit No. 44/1995 was finally decided, whereby
the award dated 21.1.1995 was set aside and the matter was remitted back
for fresh arbitration and the sole arbitrator was directed to reconsider
the matter. The said directions are as under :
"The plaintiff petitioner, has already observed, wants a decree in the
terms of modified Award in the sense that whatever has been awarded to him
under doubt retained in addition to awarding his claim to loss of profit on
illegal termination of the contract and has claim to waiver of interest
while the Defendant, Respondent wants it to be either set aside or
remitted. The discussion in the foregoing and my various findings already
recorded lead me to conclude that the award, at this state, does not
deserve either confirmation or modification at my hands. On the other hand,
it also does not deserve setting aside once for all. On the other hand, it
deserves to be set aside for remittance back to the Arbitrator for going
into the entire Arbitration proceedings afresh, on the basis of points of
dispute already referred to him by the learned Civil Judge who appointed
him under Order dated 25th May, 1993, giving full opportunity to both the
parties to lead oral and documentary evidence, if they so desire, and to
ensure that all the material documents are brought before him under his
instructions. Hence, issue No. 10 is answered accordingly."
The respondent herein filed a revision application before the Aurangabad
Bench of the Bombay High Court. By reason of the impugned order, a learned
Judge relying on and on the basis of preparation of the final bill by the
Executive Engineer directed the appellant herein to pay a sum of Rs.
26,62,856 together with interest accrued thereon on bank guarantee being
furnished by the respondent herein. The material portion of the order of
the High Court is as under :
"....It appears that at the instance of the application of the respondents
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the learned trial Judge has set aside the interim award and remanded the
matter back to the sole arbitrator, for fresh hearing. The respondent has
already deposited Rs. 26,62,856 in Sangli Urban Bank Branch at Beed, in
response to the interim order passed by the learned Civil Judge. The
Government by its letter dt. 21st of Oct., 1995, has accorded its approval
for payment of Rs. 27,76,604 to the present petitioner. The Executive
Engineer’s reply to the notice issued by the Civil Judge is at Page No. 116
of the paper book and the letter of the Government is at page no. 124. If
these two documents are taken into account, the present petitioner is
definitely entitled to get the amount already deposited in the Sangli Urban
Bank’s Branch at Beed. The matter is very old and as per the interim order
passed earlier, the Government has deposited the amount to be paid to the
petitioner. The Government has already given approval for payment as
reflected in the letter of the Government dt. 21st of Oct. 1995."
The award had already been set aside by the Civil Judge. No award therefore
was in existence which was capable of execution. Unless and until the order
of the Civil Judge was set aside and the award was directed to be made a
rule of court, no decree in terms thereof would have been drawn up. The
execution case would have been maintainable only after preparation of the
decree in terms of the award after the same is made a rule of court. In the
absence of any award therefore in our opinion the High Court had no
jurisdiction to pass the impugned order. In any event, in the name of an
interim order, the High Court could not have passed the impugned order the
effect of which will be that not only the order of the Civil Judge is set
aside, the decree also would stand executed. Such an order at the interim
stage is not contemplated in law.
Under such circumstances, the impugned order deserves to be set aside. We
accordingly, set aside the order under challenge and send the matter back
to the High Court for decision of the civil revision on merits. The bank
guarantee furnished by the respondent shall be renewed for a period till
the revision is decided by the High Court.
The appeal is allowed. There shall be no order as to costs.