M.P HOUSING AND INFRASTRUCTURE DEVELOPMENT BOARD vs. K.P. DWIVEDI

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6768 of 2021 M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENT  BOARD & ANR. .. Appellants Versus K.P. DWIVEDI .. Respondent WITH CIVIL APPEAL NO.6769 Of 2021 M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENT  BOARD & ANR. .. Appellants Versus K.P. DWIVEDI .. Respondent WITH CIVIL APPEAL NO.6770 OF 2021 M.P. HOUSING AND INFRASTRUCTURE DEVELOPMENT  BOARD & ANR. .. Appellants Versus Signature Not Verified Digitally signed by DEEPAK SINGH Date: 2021.12.03 15:43:55 IST Reason: K.P. DWIVEDI .. Respondent 2 J U D G M E N T M. R. Shah, J. 1. Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment   and   order   dated   08.05.2018   passed   by   the   High Court of Madhya Pradesh in Arbitration Revision Nos.11, 12 & 13 of 2017 by which the High Court has quashed and set aside the orders passed by the Madhya Pradesh Arbitration Tribunal, Bhopal and has directed the said Tribunal to decide the respective references on merits, Madhya Pradesh Housing and   Infrastructure   Development   Board   and   another   have preferred the present appeals. 2. As common question of law and facts arise in these group of   appeals,   all   these   appeals   are   decided   and   disposed   of together by this common judgment and order.   For the sake of convenience Civil Appeal No.6768 of 2021 arising out of Special Leave Petition No.32557 of 2018 arising out of the impugned judgment and order passed by the High Court   of   Madhya   Pradesh   in   Arbitration   Revision   No.13   of 3 2017 is treated and considered as the lead matter and the facts in the said appeal are narrated which in nutshell are as under: 2.1 Appellants floated a tender for construction of houses at Riviera   Town,   Near   MANIT   Square,   Bhopal.     Contract   was awarded   to   the   respondent   herein.     An   agreement   dated 15.07.2005   was   executed   between   the   appellants   and   the respondent.  In the year 2008, the disputes arose between the parties.     According   to   the   appellants,   the   respondent   was supposed to complete the work within 18 months.  However, despite granting repeated extensions, the contractor failed to complete the work, on account of which, appellants rescinded the contract by invoking clause 3 of the contract agreement. Aggrieved   by   the   order   dated   30.06.2008,   rescinding   the contract, the respondent ­ contractor by invoking clause 29 of the   contract   agreement   filed   a   claim   petition   along   with granting extension of time upto 31.03.2009 before the Deputy Housing Commissioner, Bhopal.  The respondent ­ contractor also   filed   a   writ   petition   before   the   High   Court   seeking 4 direction to permit him to complete the work.  High Court vide Order dated 20.08.2008 disposed of the said petition on a joint consensus of the parties that the dispute shall be decided by the   arbitrator   i.e.,   Housing   Commissioner,   M.P.   Housing Board   within   the   stipulated   period.     The   respondent   ­ contractor thereafter filed a modified claim before the Office of the   Housing   Commissioner   along   with   prayer   for   grant   of extension   of   time.     Thus,   the   respondent   ­   contractor participated in the arbitration proceedings before the Housing Commissioner,   M.P.   Housing   Board.     That   the   learned Arbitrator passed an award on 07.11.2008 rejecting the claim of   the   respondent   ­  contractor   and   granting   some   relief  in favour of the appellants. Instead of challenging the said award by way of an application under Section 34 of the Arbitration and   Conciliation   Act,   1996   (hereinafter   referred   to   as ‘Arbitration Act, 1996’), the respondent filed a fresh Reference Petition before the Madhya Pradesh Arbitration Tribunal under Section 7 of the   Madhya  Pradesh Madhyastham Adhikaran, Vindhyachal,   Bhopal,   (hereinafter   referred   to   as   ‘the   1983 5 Act’).  The appellants filed their written statements on various grounds along with preliminary objections including that the dispute has already been decided by the Arbitrator vide award dated   07.11.2008   which   was   duly   constituted   by   the   High Court   and   therefore,   the   fresh   claim   petition   for   the   same claim before the M.P. Arbitration Tribunal, Bhopal was not maintainable.  It was also submitted that the award passed by the Arbitrator had already achieved finality and therefore, the dispute   for   the   said   claim   cannot   be   entertained   by   the Tribunal   subsequently.     Vide   order   dated   27.02.2017   the learned M.P. Arbitration Tribunal, Bhopal dismissed the said claim/reference as not maintainable since claim made by the respondent   had   already   been   decided   by   the   Arbitrator appointed by the High Court and the award passed by the learned Arbitrator had achieved finality and so the dispute for the   said   claim   could   not   be   entertained   by   the   learned Tribunal subsequently. 3. Having realized that the earlier order dated 20.08.2008 passed in W.P. No.9131 of 2008 by which the dispute was 6 referred for arbitration to the Housing Commissioner would come   in   his   way,   as   an   afterthought,   the   respondent   ­ contractor filed a review petition in the month of May, 2017 seeking clarification of the order dated 20.08.2008 passed in W.P.   No.9131   of   2008   to   the   extent   that   by   directing   the adjudication of the dispute by the Housing Commissioner, it did not take away the jurisdiction of learned Arbitral Tribunal constituted under the 1983 Act.  It appears that in the mean time the full Bench of the High Court of Madhya Pradesh vide judgment   and   order   dated   05.05.2017   held   that   if   an agreement falls within the definition of ‘works contract’ then the   dispute   arising   from   such   an   agreement   shall   be adjudicated by the Tribunal under the 1983 Act. The review application was opposed by the appellants.  Vide order dated 07.09.2017, the High Court dismissed the review petition by observing   that   the   case   did   not   fall   within   the   review jurisdiction of the Court under Order 47 Rule 1, CPC. 3.1 That   after   the   dismissal   of   the   review   petition,   the respondent ­ contractor filed the present Arbitration Revision 7 Petition before the High Court under Section 19 of the 1983 Act challenging the order passed by the learned Tribunal dated 27.02.2017   dismissing   the   claim/reference   as   not maintainable.  By the impugned judgment and order the High Court has allowed the said revision and has quashed and set aside   the   order   passed   by   the   learned   Tribunal   dated 27.02.2017   and   has   directed   the   learned   Arbitral   Tribunal constituted under the 1983 Act to decide the reference/claim on merits and in accordance with law. 4. Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment and order passed by the High Court, M.P. Housing and   Infrastructure   Development   Board   has   preferred   the present appeal.  5. Shri Bharat Singh, learned AAG has appeared for the appellants and Shri Kavin Gulati, learned Senior Advocate has appeared   for   the   respondent   ­   contractor   in   the   respective appeals. 8 6. Shri Bharat Singh, learned counsel appearing on behalf of the appellants has vehemently submitted that the impugned judgment and order passed by the High Court quashing and setting aside the order passed by the learned Arbitral Tribunal dated   27.02.2017   by   which   the   learned   Arbitral   Tribunal dismissed the reference/claim petition filed by the respondent ­ contractor as not maintainable, in view of the earlier award passed  by   the  learned  Arbitrator  and  directing   the   learned Arbitral Tribunal to entertain the claim reference and to decide the same on merits is unsustainable in law as well as on facts. 6.1 It is urged by learned counsel appearing on behalf of the appellants that the High Court while passing the impugned judgment and order has not at all appreciated and considered the   fact   that   earlier   the   dispute   between   the   parties   was referred to the Arbitrator­ Housing Commissioner by the High Court and that too in the petition filed by the respondent ­ contractor himself.   It is submitted that the High Court has not   at   all   appreciated   the   fact   that   as   such   the   learned Arbitrator appointed pursuant to the order passed by the High 9 Court   had   passed   an   award   which   had   attained   finality inasmuch as the said award had not been challenged by the respondent – contractor by way of appeal under Section 34 of the Arbitration Act, 1996. 6.2 It is contended that the learned Arbitrator had passed an award   and   the   only   remedy   available   to   the   respondent   ­ contractor was to challenge the same by way of an appeal under Section 34 of the Arbitration Act, 1996, which remedy the respondent ­ contractor had failed to avail.  It is submitted that instead he filed a fresh claim petition before the learned Arbitral Tribunal constituted under the 1983 Act which as such and as rightly observed by the Arbitral Tribunal was not maintainable.   6.3 It is further submitted that the order passed by the High Court   referring   the   dispute   between   the   parties   to   the Arbitrator ­ Housing Commissioner was a consent order and the same was as per the relevant arbitration clause in the agreement entered into between the parties. 10 6.4 It is  further  urged  that  even subsequent to  the  order passed by the Arbitral Tribunal dated 27.02.2017, with a mala fide intention as an afterthought, the respondent ­ contractor filed a review application before the High Court challenging the consent order dated 20.08.2008 i.e., after a period of 9 years of the order and the said review petition had also came to be dismissed   by   the   High   Court.     It   is   submitted   that   even dismissal of the review petition had also attained the finality and   the   same   was   not   carried   further.     It   is   urged   that therefore, it was not open for the respondent – contractor to file a fresh claim petition for the same claim which was made before   the   learned   Arbitrator   ­   Housing   Commissioner constituted pursuant the order passed by the High Court. 6.5 It is submitted that in the case of  Madhya Pradesh Rural Road   Development   Authority   and   Another   vs.   L.G. Chaudhary Engineers and Contractors , (2018) 10 SCC 826, relating to the issue of jurisdiction of the M.P. Tribunal, this Hon’ble Court has categorically held that if no objection to the jurisdiction of the arbitration was taken at the relevant stage, 11 that award cannot be annulled only on that ground.   It is urged that in the present case no such objection was raised by the respondent ­ contractor at the relevant stage.  It is urged that   in   fact,   the   entire   proceedings   before   the   Arbitrator   ­ Housing Commissioner was at the behest of the respondent ­ contractor, as it was he who filed the writ petition culminating in the consent order appointing an arbitrator, and then filed a claim. 6.6 It is contended that even a fresh reference petition by the respondent ­ contractor is also not maintainable in view of the principle   of   Issue   Estoppel.     Reliance   is   placed   on   the decisions of this Court in   Hope Plantations Ltd. vs Taluk (1999) 5 SCC 590 and Land Board, Peermade and Another,  Bhanu Kumar Jain vs Archana Kumar and Another , (2005) 1 SCC 787. 6.7 It is further contended that the claim of the respondent ­ contractor that the judgment passed by the High Court in the year 2008 was contrary to law and cannot confer jurisdiction 12 on the arbitrator is misconceived and erroneous for the reason that the order was passed with consent and even if the order is wrong, it will continue to bind the parties until and unless it is set aside by a competent court.   Reliance is placed on the decisions of this Court in the case of  Pushpa Devi Bhagat (D)

287 (paras 7 and 8).

above decisions, it is prayed to allow the present appeals and set aside the impugned judgment and orders passed by the High Court.

Gulati,   learned   Senior   Advocate   appearing   on   behalf   of respondent – contractor.  It is submitted that the 1983 Act is a Special Act providing for statutory and compulsory arbitration under the said Act for disputes pertaining to ‘works contract’. 13 It is submitted that Section 7 of the Act provides that either party   to   a   ‘works   contract’….   shall   irrespective   of   the   fact whether the agreement contains an arbitration clause or not, refer in writing the dispute to the Tribunal.   It is contended that the term ‘dispute’ is defined in Section 2(d) to mean a claim having a value of Rs.50,000/­ or more.  It is contended that   therefore   the   claims   above   Rs.50,000/­   are   to   be compulsorily brought before the Tribunal constituted under Section 3 of the 1983 Act.

dispute can be referred to the Arbitration Tribunal unless the dispute is first referred for decision of the final authority under the   scope   of   the   term   ‘works   contract’.     It   is   only   once   a decision is made or if the authority fails to make a decision can a claim be preferred before the Tribunal.

as the State of M.P. is concerned, and therefore it will prevail over the provisions of the Arbitration Act, 1996.   Reliance is

14 Road Development Authority and Anr. vs. L.G. Chaudhary

Authority   and   Anr.   vs.   L.G.   Chaudhary   Engineers   &

Highways   Ltd.   vs.   MP   Rural   Road   Development

matters.   It is submitted that the said judgment has been

2018.

clause contained in Clause 29 of the Agreement contemplates a two­stage adjudication.  At the first stage a reference has to be   made   to   the   Deputy   Housing   Commissioner   for   his decision.  If the amount is above Rs.25,000/­ then the papers 15 have to be placed before the Housing Commissioner.   This constitutes the first stage. The second stage then contemplates that, if the parties are aggrieved by the decision of the Deputy Housing Commissioner, then the dispute will be referred to the Additional Housing Commissioner subject to the jurisdiction and limitations in accordance with the provisions of the 1983 Act.   It is submitted that even the Additional Commissioner can   only   deal   with   the   disputes   which   are   only   below Rs.50,000/­  as   disputes   above   that   amount   are   statutorily referable to the arbitration by the learned Tribunal as is clear from Sections 3, 7, 2(d) and 7B of the 1983 Act.

question   was   terminated   on   30.06.2008   and   a   claim   was preferred   before   the   Deputy   Housing   Commissioner   on 11.07.2008.     Since   the   contract   was   terminated   and   the appellants herein were inviting fresh tenders and also seizing the machinery and material of the respondent ­ contractor, a Writ Petition was filed bearing no.9131 of 2008 before the High Court   to   expedite   the   conclusion   of   the   first   stage   of 16 adjudication, under the threat of imminent monetary losses. It is submitted that the Hon’ble High Court by its order dated 20.08.2008 after recording the submissions of the respondent – contractor directed the Housing Commissioner to decide the dispute within the period stipulated in the agreement.   It is submitted  that as  there  was  delay  by the   Deputy  Housing Commissioner in taking the decision, a direction was to the Housing Commissioner to decide the issue, as the amount in dispute was more than Rs.25,000/­ and it is only the Housing Commissioner who could take a decision as per Clause 29 of the Contract.  Liberty was also granted by the High Court to both parties to seek a redressal of their grievances against the final outcome by approaching the court of law.  It is submitted that thus it can be seen that the direction of the Hon’ble High Court was consistent with Clause 29 as this represented a decision which would be the first stage of resolution of dispute as   per   Clause   29.     It   is   submitted   that   the   Housing Commissioner by an order dated 07.11.2008 by an ex­parte order dismissed  the  claims of  the  respondent – contractor. 17 Immediately   thereafter,   in   line   with   Clause   29   of   the Agreement and Sections 7 and 7B of the 1983 Act, a reference was preferred by the respondent – contractor herein under the 1983 Act.   It is contended that the decision of the Housing Commissioner   dated   07.11.2008   cannot   be   said   to   be   a decision under the Arbitration Act, 1996.  It is therefore urged that the respondent was not required to file the objections under Section 34 of the Arbitration Act, 1996 as contended on behalf of the appellants. It is submitted that a reference filed by the respondent – contractor after the order of the Housing Commissioner was maintainable   only   after   the   order   of   the   Housing Commissioner dated 07.11.2008 and not before that.   It is therefore   submitted   that   the   respondent   –   contractor   has acted strictly in accordance with Sections 7 and 7B of the 1983 Act read with Clause 29 of the Contract.  

order   of   the   Housing   Commissioner   dated   07.11.2008   is considered to be under the Arbitration Act, 1996, the same 18 would be non­est as any arbitration relating to ‘works contract’ in M.P. could only be under the 1983 Act.   The fact of the respondent – contractor having consented to appear before the Housing   Commissioner   would   be   immaterial   as   the proceedings   under   the   Arbitration   Act,   1996   were   without jurisdiction   and   void   ab­initio.     Reliance   is   placed   on   the

Relying upon the above decisions it is prayed to dismiss the present appeals.

length.

consideration is, whether, in view of the award declared by the Housing   Commissioner,   M.P.   Housing   Board,   who   was appointed as an arbitrator pursuant to the order passed by the High Court in Writ Petition No.9131 of 2008, was it open for the respondent – contractor thereafter to file a reference 19 before   M.P.   Arbitration   Tribunal   with   respect   to   the   very claim/claims   which   were   the   subject   matter   of   arbitration before the Arbitrator – Housing Commissioner.  It is the case on behalf of the respondent – contractor that as the contract was a ‘works contract’ and therefore, the dispute   between   the   appellants   and   the   respondent   – contractor   could   only   be   decided   by   the   learned   Arbitral Tribunal   constituted   under   the   1983   Act,   therefore,   the Housing   Commissioner   had   no   authority   to   act   as   an arbitrator and decide the dispute between the parties and the award passed by the Arbitrator ­ Housing Commissioner can be said to be non­est and wholly without jurisdiction.

submissions made by the learned counsel of the respective parties,   first   of   all   the   reliefs   which   were   prayed   by   the respondent – contractor in Writ Petition No.9131 of 2008 and the  respective claims made by the respondent – contractor before the High Court in Writ Petition No. 9131 of 2008, before 20 the Arbitrator – Housing Commissioner and before the learned Arbitral Tribunal are required to be referred to and considered.

contractor prayed for the following reliefs:  (a) “To   direct   the   Respondents   to   complete   the arbitration proceedings. (b) To   direct   the   Respondents   not   to   cancel   the agreement and be permitted the Petitioner to complete   the   work   and   quash   the   order   of tender dated 20.07.2008 (Annexure P/22) and dated 27.07.2008 Annexure P/23). (c) Set aside the order dated 30.06.2007 (Annexure P/19) passed by the Executive Engineer. (d) To direct the Respondents to pay the amount of outstanding   dues   of   Rs.   17835925.00   with interest and compensation of ten crores. (e) To   direct   the   Respondents   not   to   award   the contract to any other person and also direct the Respondents   to   decide   the   arbitration,   after affording   the   proper   opportunity   to   the Petitioner. (f) To call the relevant records (g) Any other order/ orders, directions which this Hon'ble Court deems fit and proper may kindly be also granted.” 21 11.2 That thereafter the High Court passed the following order dated 20.08.2008: “Shri Sameer Seth, Counsel for the Petitioner. Shri T.S. Ruprah, Sr. Counsel with Shri Harmeet Singh,   Counsel   for   Respondents/   M.P.   Housing Board.  Learned   counsel   for   the   Petitioner   fairly   stated that the arbitration clause in the agreement has been   invoked   by   submitting   reference   vide Annexure P20. He drew attention of this Court to the prayer for interim relief regarding restraining from inviting tender for the remaining work. He stated at Bar that no order has been passed on the prayer for interim relief.  This being so, this petition is disposed of with a joint   consensus   of   the   learned   Counsel   for   the parties in the following manner:­  (i) The arbitrator i.e. Housing Commissioner, M.P. Housing   Board   would   decide   the   dispute   in arbitration   within   the   period   stipulated   in   the agreement.  (ii) A decision on the interim prayer made on the interim page­25 of the reference (Annexure P20) would be taken within a period of one week from today.  (iii) Till then no work order be issued pursuant to the fresh tender.  (iv) Petitioner would also be at liberty to move a separate application within three days with regard to   the   relief   granted   vide   interim   order   dated 07.08.2008.   A   decision   on   such   application,   if filed, would be taken in an expeditious manner 22 preferably   within   a   week.   Interim   order   dated 07.08.2008 shall continue to operate till a decision on such interim application is taken.  Petition, accordingly stands disposed of with an observation that the aggrieved party, in case of grievance against the final outcome, shall have a right to approach the Court of law.”

submitted   the   claim   before   the   Arbitrator   –   Housing Commissioner. The Arbitrator ­ Housing Commissioner issued notice   upon   the   respondent   –   contractor.     However,   after submitting the claims, the respondent – contractor did not appear before the learned Arbitrator – Housing Commissioner and consequently on appreciation of evidence and considering the submissions made on behalf of the appellant, the learned Arbitrator – Housing Commissioner passed an award dated 07.11.2008.   Subsequently,  respondent –  contractor filed a reference   before   the   learned   Arbitral   Tribunal   constituted under   the   provisions   of   1983   Act   making   the   very   claims which   were   made   before   the   High   Court   in   Writ   Petition No.9131 of 2008 as well as made before the learned Arbitrator – Housing Commissioner.   23 At   this   stage,   it   is   required   to   be   noted   that   in   the Reference Petition there was no reference to the order passed by the High Court in Writ Petition No.9131 of 2008 referring the disputes between the parties to the Arbitrator – Housing Commissioner and thereafter submitting the claims before the Housing Commissioner and the award passed by the learned Arbitrator   –   Housing   Commissioner   dated   07.11.2008.   A detailed written statement was filed. The relevant extracts of the written statement are as under: 1. “The claim was also filed by the petitioner to the   Housing   Commissioner   of   Respondents which   was   duly   decided   complying   with   the directions of the Hon'ble High Court of M.P. 2. The   Hon'ble   High   Court   by   Order   dated 20.08.2008   in   Writ   Petition   No.   9131/2008 directed   the   Commissioner   of   M.P.   Housing Board to decide the application of interim stay filed by the Contractor before re­tendering of the works. The Directions were also issued for final hearing under clause 29 of the agreement with in the provision of agreement. The Hon'ble Commissioner   had   fully   complied   with   the directions of the Hon'ble High Court and the Contractor was duly notice but even than the Contractor did not take any pains even to see the order of Commissioner dt. 07.11.08, which was   passed   by   him   in   compliance   with   the directions of the Hon'ble High Court. 24 3. The petitioner is not entitled to claim any relief as he has not come before this Hon'ble M.P. Arbitration Tribunal with clean hands and the facts   of   paramount   importance   have   been deliberately suppressed by the petitioner in the said petition. 4. That as per the directions order by Hon. High Court,   the   matter   has   already   been   decided and award has already been passed and duly acknowledged   by   the   petitioner   hence   the petition filed before the Hon'ble MP Arbitration Tribunal   deserved   to   be   dismissed,   no   relief can be claimed. 5. That   the   petitioner   has   duly   accepted   the award as it evident from his action that he has accepted   the   payment   so   ordered   by   the Arbitrator   the   Housing   Commissioner   in   the said   award.   In   compliance   with   the   award dated 07.11.2008 passed by the Commissioner the   petitioner   has   already   received   the payment as per award as is evident from the letter dated 02.11.2009 the award so received is   Rs.   3,57,000/­   in   total   through   cheque dated 02.01.2009. 6. That   from   the   action   and   reactions   of petitioner it is evident that the petitioner has accepted   the   award   without   challenging   it before the appropriate court prior to accepting the payments awarded by the Arbitrator in the light of orders of Hon'ble High Court has been accepted and agreed by the Petitioner. Keeping in view of this legal proceedings, this petition of   the   Petitioner   does   not   even   deserves   for admission   as   the   final   adjudication   was complete by the Order of the Commissioner, M.P.   Housing   Board,   issued   under   the directions of the Hon'ble High Court.” 25

issues with respect to maintainability of the reference before the learned Tribunal.   The learned Arbitral Tribunal framed the following preliminary issues: “(i)   Whether   the   Petitioner   has   complied   with provisions   of   clause   29  before   approaching   this Tribunal?  (ii) Whether the Petitioner has no locus standi to file the petition when the appointed arbitrator by the Hon'ble High Court with consent passed the award dated 07.11.2008 and acted upon?”

passed   by   the   High   Court   dated   20.08.2008   referring   the disputes   between   the   parties   to   the   Arbitrator   –   Housing Commissioner; the claims made before the High Court as well as   before   the   learned   Tribunal   dismissed   the   reference   by holding that the Reference Petition is not maintainable.  While dismissing the Reference Petition as not maintainable in para 18, the learned Arbitral Tribunal observed as under: “On perusal of the order dated 20.08.2008 (Ex. D/18) passed by the Hon'ble High Court it seems that the said order was passed with the consent of both   the   parties.   The   order   indicates   that   the Housing   Commissioner   was   appointed   as 26 arbitrator   to   decide   the   dispute   between   the parties. The contention of the learned Counsel of the Petitioner that the Housing Commissioner was directed to decide the Petitioner's quantified claim by invoking clause 29 as competent authority does not appear to be acceptable because the Housing Commissioner has been designated in the order as the   Arbitrator.   Moreover,   the   Housing Commissioner   was   not   directed   to   decide   the dispute as competent authority. Apart from this, under   clause   29   there   are   only   two   competent authorities,   first,   is   Dy.   Housing   Commissioner and if he fails to decide the dispute within 60 days second   is   Additional   Housing   Commissioner. There   is   no   provision   to   decide   the   quantified rd claim by the 3   competent authority. Besides it, Hon'ble   High   Court   has   no   power   to   create/ appoint a third competent authority by invoking the power clause 29 of the agreement, but Hon'ble High Court has the power to appoint an arbitrator under Section 11 (6) of the Act, 1996. Therefore, keeping in view the aforesaid facts, it can only be inferred that the Hon'ble High Court exercising the power   vested   in   it   under   Article   227   of   the Constitution   of   India   appointed   the   Housing Commissioner as Arbitrator to decide the dispute. The   submission of the learned Counsel for the Petitioner   that   appointment   of   Arbitrator   is without   jurisdiction   and   the   said   order   dated 20.08.2008 does not have over riding effect on the provisions   of   the   Act,   1983   and   the   said   order being per incurium has no force appears to be sound but this Tribunal has no power to say that the order dated 20.08.2008 passed by the Hon'ble High   Court   in   writ   jurisdiction   is   without jurisdiction and has effect of nullity because this Tribunal is subordinate of the Hon'ble High Court which has supervisory power over it under Article 227 of Constitution of India. Moreover, the award passed by this Tribunal is challengeable before the Hon'ble High Court under Section 19 of the Act, 27 1983 by the Civil Revision. If the Petitioner was not   satisfied   with   the   order   dated   20.08.2008 passed by the Hon'ble High Court, the propriety and the legality of the said order ought to have been   challenged   by   the   Petitioner   before   the competent   forum   but   it   was   not   done   so. Moreover,   the   said   order   was   passed   with   the consent   of   both   the   parties.   In   the   said circumstances, this Tribunal is bound to accept the order passed by the Hon'ble High Court. On the basis of the aforesaid facts and circumstances of the case, it can be safely inferred that Housing Commissioner was appointed by the Hon'ble High Court to decide the dispute between the parties as the Arbitrator who decided the same vide award dated 07.11.2008. The legality and the propriety of the   said   award   could   have   been   challenged   by filing appeal under Section 34 of the Act, 1996 but the Petitioner failed to do so, consequently, the said award had achieved finality before filing the reference petition. Once the dispute between the parties had already been decided by the competent Arbitrator, the same dispute cannot be reagitated before this Tribunal by the Petitioner. the Hon'ble High Court in the case of Ditya (supra) elaborately discussing in para 12 has held that even a wrong decisions are taken which is contrary to the law is binding upon the parties unless and until it is set aside   in   the   appeal   or   by   the   other   remedy provided under the clause.”

learned Tribunal holding that the reference petition was not maintainable in view of the earlier order passed by the High Court dated 20.08.2008 passed in Writ Petition No.9131 of 2008   directing   the   adjudication   of   the   dispute   by   the 28 Arbitrator   –   Housing   Commissioner,   the   respondent   – contractor filed a review petition before the High Court, having realized that the order dated 20.08.2008 passed in the Writ Petition No.9131 of 2008 will come in his way in pursuing the reference petition before the learned Arbitral Tribunal, seeking clarification of the order passed in W.P. No.9131 of 2008 to the extent that by directing the adjudication of the dispute by the Housing Commissioner, it does not take away the jurisdiction of   the   learned   Arbitral   Tribunal   constituted   under   the   Act 1983.  The said review petition was opposed by the appellants. Vide order dated 07.09.2017 the High Court dismissed the said review petition.   Thereafter the respondent – contractor filed   the   revision   application   before   the   High   Court   under Section 19 of the 1983 Act being Arbitration Revision No.13 of 2017 challenging the order dated 27.02.2017 passed by the learned Arbitral Tribunal dismissing the reference petition as not maintainable.  By the impugned judgment and order, the High Court, relying upon the subsequent decision of the full Bench has set aside the order passed by the learned Tribunal 29 on 27.02.2017 and has directed the learned Arbitral Tribunal to decide the reference on merit.  The impugned judgment and order passed by the High Court in A.R. No.13 of 2017 is the subject matter of present appeal.

earlier   order   passed   by   the   High   Court   in   Writ   Petition No.9131 of 2008, by which the dispute between the parties was referred to the Arbitrator – Housing Commissioner was a consent order.   It was the respondent – contractor who filed the   Writ   Petition   No.9131   of   2008   submitting   that   he   has invoked the arbitration clause.   Thereafter the respondent – contractor submitted the claim before the Arbitrator – Housing Commissioner   who   passed   an   award.     The   respondent   – contractor   did   not   challenge   the   award   passed   by   the Arbitrator – Housing Commissioner and therefore, as such the award passed by the Arbitrator – Housing Commissioner dated 07.11.2008 has attained finality.   30

order passed by the High Court dated 20.08.2008 passed in Writ Petition No.9131 of 2008, referring the dispute between the   parties   for   adjudication   to   the   Arbitrator   –   Housing Commissioner   and   thereafter   the   award   declared   by   the Arbitrator – Housing Commissioner dated 07.11.2008 are non­ est and void and therefore, it was open for the contractor to file   a   fresh   reference   petition   before   the   learned   Arbitral Tribunal under Section 7 of the 1983 Act, cannot be accepted for the following reasons: (i)     It was the respondent – contractor who approached the High   Court   by   filing   Writ  Petition   No.9131   of   2008 submitting that he has invoked the arbitration clause;

20.08.2008 passed in Writ Petition No.9131 of 2008 referring   the   dispute   between   the   parties   to   the Arbitrator   –   Housing   Commissioner   was   a   consent order; 31 (iii) Thereafter the respondent – contractor submitted the claims   before   the   learned   Arbitrator   –   Housing Commissioner; (iv) The   learned   Arbitrator   –   Housing   Commissioner passed an award which has attained the finality;

clarification of the order dated 20.08.2008 passed in Writ Petition No.9131 of 2008 to clarify the aforesaid order to the extent that it did not take away the right of the contractor to file the reference petition before the learned Arbitral Tribunal under the 1983 Act came to be rejected and the same also attained finality; (vi) The claims submitted before the Arbitrator – Housing Commissioner; before the High Court in Writ Petition No.9131   of   2008;   and   the   claim   submitted   in Reference Petition before the learned Arbitral Tribunal under the 1983 Act are the same without any change; 32 (vii) In the subsequent reference petition before the learned Arbitral Tribunal under  the 1983 Act  there  was no reference to the earlier order passed by the High Court in Writ Petition No.9131 of 2008 referring the dispute between   the   parties   for   adjudication   to   Arbitrator  – Housing Commissioner and the award passed by the Arbitrator – Housing Commissioner.  Thus, there was a   suppression   on   the   part   of   the   respondent   – contractor; (viii) The order passed by the High Court dated 20.08.2008 passed in Writ Petition No.9131 of 2008 referring the dispute   between   the   parties   for   adjudication   to   the Arbitrator   –   Housing   Commissioner   as   such   was   a consent   order   and   thereafter   the   contractor participated in the arbitration proceedings before the Arbitrator – Housing Commissioner by submitting the claim is binding between the parties on the ground of ‘issue estoppel’.  33

and held that a cause of action estoppel arises where in two different   proceedings   identical   issues   are   raised,   in   which event, the latter proceedings between the same parties shall be dealt with similarly as was done in the previous proceedings. In such an event, the bar is absolute in relation to all points decided save and except allegation of fraud and collusion.

Arbitrator – Housing Commissioner was not challenged by the respondent – contractor, even, so long as the said award is not challenged   before   the   higher   forum   the   same   is   binding between the parties.  Even the award or a nullity order has to be challenged before the appropriate forum/higher forum.  In the present case it cannot be said that there was a total lack of jurisdiction   of   the   Arbitrator   –   Housing   Commissioner   in passing the award as it was the High Court who passed the order with consent referring the dispute between the parties for the adjudication to the Arbitrator – Housing Commissioner. Therefore, unless and until it was challenged by the contractor 34 before the higher forum, the respondent – contractor cannot be permitted to ignore and/or to avoid the award passed by the Arbitrator – Housing Commissioner dated 07.11.2008.

filed before the High Court was the revision application filed by the contractor under Section 19 of the 1983 Act rejecting the reference petition as not maintainable.  Section 19 of the 1983 Act reads as under:

35

Therefore, as per Section 19 of the 1983 Act, Revision Application   to   the   High   Court   shall   be   maintainable   only against the award passed by the learned Arbitral Tribunal.

by the learned Arbitral Tribunal rejecting the reference petition 36 was not maintainable as by order dated 27.02.2017, no award was passed by the Tribunal.   However, as no such objection was raised before the High Court and no submission has been

passing the impugned judgment and order, the High Court has   not   set   aside   the   award   passed   by   the   Arbitrator   – Housing   Commissioner   dated   07.11.2008.     Therefore, technically   speaking   the   award   passed   by   the   Arbitrator   – Housing Commissioner dated   07.11.2008 stands   even today. It is binding between the parties.  So long as the award passed by the Arbitrator – Housing Commissioner dated   07.11.2008 s tands, there cannot be any subsequent fresh proceeding with respect   to   the   same   claims   which   were   considered   and adjudicated by the Arbitrator – Housing Commissioner while passing the award dated   07.11.2008.   S o long as the said award stands it is binding between the parties.

objection was raised by the respondent – contractor before the 37 Arbitrator – Housing Commissioner on the jurisdiction of the Housing   Commissioner   to   act   as   an   Arbitrator.     On   the contrary   as   observed   hereinabove   the   order   passed   by   the High   Court   referring   the   dispute   between   the   parties   for adjudication to the Arbitrator – Housing Commissioner was a consent order and the respondent ­ contractor conceded to and accepted the said order and submitted his claim before the   Arbitrator   –   Housing   Commissioner.     The   Arbitrator   – Housing   Commissioner   also   passed   an   award   on   the   said claim.     Therefore,   as   no   objections   were   raised   by   the respondent – contractor at the appropriate stage, the award cannot be annulled subsequently.  At the cost of repetition, it is   observed   that   at   no   point   of   time   the   respondent   – contractor had challenged the award passed by the Arbitrator –   Housing   Commissioner   and   as   observed   and   held hereinabove even no court has set aside the award declared by the Arbitrator – Housing Commissioner dated  07.11.2008  and the same has attained finality.  Therefore, the same is binding between the parties. Hence, the subsequent fresh reference 38 petition before the learned Arbitral Tribunal under the 1983 Act for the very same claims which were raised before the Arbitrator – Housing Commissioner would not be maintainable at all.  We agree with the view taken by the Arbitral Tribunal.

present appeals are allowed.   The impugned judgment and order   dated   08.05.2018   passed   by   the   High   Court   in   A.R. No.11, 12 & 13/2017 quashing and setting aside the order passed by the learned Arbitral Tribunal constituted under the 1983 Act dated 27.02.2017 is hereby quashed and set aside and   the   order   passed   by   the   Arbitral   Tribunal   dated 27.02.2017  stands restored.   All these appeals are allowed accordingly. In the facts and circumstances of the case, there shall be no order as to costs.  …………………………..J.     (M. R. SHAH) …………………………...J.     (B.V. NAGARATHNA) New Delhi; December 03, 2021.