SALUJA CONSTRUCTION COMPANY vs. NORTHERN COALFIELDS LIMITED

Case Type: Civil Appeal

Date of Judgment: 25-11-2021

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1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION   CIVIL APPEAL NO.    7041 OF 2021 (Arising out of SLP (C) No. 10859 of 2018) Saluja Construction Company         ..Appellant(S) VERSUS Northern Coalfields Limited     ..Respondent(S) O R D E R   Leave granted  1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 02.01.2018 passed by the High Court of Madhya Pradesh at Jabalpur in A.A. No. 30 of 2012, by which the High Court has allowed the said appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) and has quashed and set aside the award passed by the learned Arbitrator, Signature Not Verified Digitally signed by R Natarajan Date: 2021.11.30 16:23:39 IST Reason: the original claimant has preferred the present appeal.  2. That   the   appellant   herein   was   awarded   the   contract   for 2 construction of   100   Nos.   B­Type   Quarters  at  Bina (hereinafter referred to as the Bina project). An agreement was entered into between the parties on 11.01.1986. A dispute arose between the parties with respect to the Bina project. The contractor issued a notice under Clause 9 of the agreement to appoint an arbitrator in respect of Bina Project only. The respondent rejected the claim of the contractor. The appellant raised a Bill of Rs.2,23,215/­ and then filed an application under Section 8/20 of the Arbitration Act for   filing   of   agreement   and   appointment   of   arbitrator.   Thus   it appears   that   the   dispute   at   the   relevant   time   was   only   with respect to the work relating to the Bina Project. However, before the learned Arbitrator, the claim was raised with respect to the other  projects and  in relation  to  the sister concerns  regarding ‘Amlohri Project’ and ‘Jhingurda Project’. The learned Arbitrator passed an award with respect to the dispute relating to other agreements/contracts even in relation to sister concerns over and above the dispute with respect to the Bina Project. The appeal under Section 34 of the Arbitration Act against the judgment and award   passed   by   the   learned   Arbitrator   came   to   be   dismissed against which the respondent preferred an appeal under Section 37   before   the   High   Court.   It   was   submitted   that   the   learned 3 Arbitrator appointed only for the contract relating to Bina Project and the agreement relating to the Bina Project was filed before the learned Arbitrator. It was submitted that as per Section 2(a), 8 and 20 of the Arbitration Act, the mandatory requirement was to decide the dispute in relation to a written agreement which was filed before the arbitrator. Therefore, it was submitted that the learned Arbitrator has travelled beyond in passing the award in respect   of   four   contracts.   The   High   Court   in   the   impugned judgment and order has accepted the submissions on behalf of the respondent and has quashed and set aside the award passed by the learned Arbitrator.  3. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the contractor has preferred the present appeal. 4. We have heard Shri Pijush K. Roy, learned counsel appearing on behalf   of   the   appellant   and   Shri   Vikas   Singh,   learned   senior counsel appearing on behalf of the respondent.  5. We have gone through the judgment and order passed by the High Court. It is to be noted that the application under Section 8/20 of the   Arbitration   Act   was   filed   by   the   appellant   –   Saluja Construction Company – a partnership firm, with respect to the contract for construction of 100 Nos. B­Type Quarters at Bina 4 Project only. The agreement between the appellant and respondent with   respect   to   the   Bina   Project   was   produced   in   application under   8/20   of   the   Arbitration   act.   Therefore,   the   learned Arbitrator   was   required   to   adjudicate   and   decide   the   dispute between   the   parties   with   respect   to   the   Bina   Project   only. However,   learned   Arbitrator   passed   an   award   not   only   with respect   to   the   dispute   relating   to   Bina   Project   but   also   with respect to the other projects that too not only with the appellant but with the sister concerns. Therefore, the High Court has rightly observed and held that the arbitrator while decreeing the award exceeded in his jurisdiction in passing the award in respect of 4 contracts/contracts. Therefore, as such the High Court is right in quashing   and   setting   aside   the   award   passed   by   the   learned Arbitrator  with respect to the  dues/claims with respect  to the contracts other than the Bina Project and the contracts with other projects/contractors may be by sister concerns. 6. However, at the same time, learned counsel appearing on behalf of the appellant is right in making the submissions that the High Court at least ought to have confirmed the claim/amount awarded by the learned Arbitrator with respect to the Bina Project. It is submitted that the High Court has set aside the entire award 5 passed by the learned Arbitrator including the award with respect to the Bina Project. Therefore, to that extent the present appeal is required to be allowed in part and the judgment and order passed by the High Court is required to be modified to the extent setting aside the award passed by the learned Arbitrator with respect to the claims with respect to other projects/other contracts other than Bina Project. 7. In view of the above, the present appeal is allowed in part. The impugned   judgment   and   order   passed   by   the   High   Court   is modified   to   the   extent   quashing   and   setting   aside   the   entire judgment   and   award   passed   by   the   learned   Arbitrator.   The judgment and award passed by the learned Arbitrator except the claims with respect to the Bina Project was required to be quashed and set aside and is accordingly quashed and set aside. Meaning thereby, award passed by the learned Arbitrator with respect to the   Bina   Project   i.e.   Rs.5,99,158/­   is   hereby   confirmed.   The impugned judgment and order passed by the High Court quashing and setting aside the award passed by the learned Arbitrator with respect to the projects other than Bina Project is rightly set aside by   the   High   Court.   We   confirm   the   same.   It   is   reported   that pursuant   to   the   earlier   order   passed   by   the   High   Court,   the 6 respondent  has  deposited 50% of  the  amount awarded by the learned Arbitrator. Therefore, whatever the amount deposited in excess of Rs.5,99,158/­ with interest @ 8% per annum from the date of the award passed by the learned Arbitrator till the amount was deposited pursuant to the interim order passed by the High Court, shall be returned by the appellant to the respondent, if any excess amount is deposited and withdrawn by the appellant. The present appeal is allowed to the aforesaid extent. In the facts and circumstances of the case there shall be no order as to costs.        …………………………………J.          (M. R. SHAH) …………………………………J.         (SANJIV KHANNA)        New Delhi,  November  25, 2021 7 ITEM NO.3 COURT NO.13 SECTION IV-C S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Special Leave Petition (C) No(s). 10859/2018 SALUJA CONSTRUCTION COMPANY Petitioner(s) VERSUS NORTHERN COALFIELDS LIMITED Respondent(s) Date : 25-11-2021 This matter was called on for hearing today. CORAM : HON'BLE MR. JUSTICE M.R. SHAH HON'BLE MR. JUSTICE SANJIV KHANNA For Petitioner(s) Mr. Pijush K. Roy, Adv. Mrs. Kakali Roy, Adv. Mr. Rajan K. Chourasia, AOR For Respondent(s) Mr. Vikas Singh, Sr. Adv. Mr. Ashwani Kumar Dubey, AOR Mr. Pankaj Sharma, Adv. Mr. Kshitij Mudgal, Adv. Ms. Deepika Kalia, Adv. Mr. Satvik Mishra, Adv. Mr. Kapish Seth, Adv. Mr. Ashwini Kr. Upadhyay, Adv. UPON hearing the counsel the Court made the following O R D E R Leave granted. The present appeal is allowed to the extent as indicated in the signed order. Pending applications, if any, stand disposed of. (R. NATARAJAN) (NISHA TRIPATHI) ASTT. REGISTRAR-cum-PS BRANCH OFFICER (Signed order is placed on the file)