EVERST RAILWAY CONSTRUCTION [PVT.] LTD. v. UNION OF INDIA

CORAM : MR.JUSTICE C.K.BUCH Date of decision: 05/07/2002 ORAL JUDGEMENT (cid:9)Heard learned counsel for petitioner Mr. Nakrani and Mr. MG Nagarkar for the respondent. (cid:9)This petition is moved under sec. 11 of the Arbitration and Conciliation Act, 1996 praying that the Arbitrator of the choice of this court be appointed to resolve the disputes and differences between the parties referred to by the petitioner mainly in para-5 of the petition and the statutory notice served to the otherside Annexure-A to this petition. (cid:9)Learned counsel for the parties have agreed that the point of jurisdiction involved in this matter be heard first and if it is decided in favour of the petitioner, than the rest of the points can be heard on merits. (cid:9)As per the settled legal proposition when the issue of jurisdiction and/or maintenability of a proceeding has been raised by the otherside, it can be heard as preliminary issue/point. (cid:9)Having considered the rival contentions of the learned counsel for the parties and it is submitted that the dispute and differences referred to by the petitioner in the legal notice served to the otherside is already under reference before the City Civil Court, Ahmedabad. Para-7 of this petition runs as under: "The petitioner further respectfully submits that due to this disputes and differences, the petitioner has already issued legal notice under clause of the Condition of the Contract Agreement on 16.9.1991. A copy of the notice dated

16.9.1991 is annexed herewith and marked as Annexure-A. Inspuite of this notice neither the respondent has appointed the arbitrator nor they have paid the said amount. The petitioner further submits that there is an Arbitration clause number 3 of contract agreement. A copy of arbitration clause 3 of the contract agreement is annexed herewith and marked as Annexure-B." (cid:9)In para-9 of the petition, the petitioner has fairly submitted that because of non-payment of legitimate dues claimed under final bill, the petitioner was constrained to approach the City Civil Court Ahmedabad by way of filing Civil Suit No. 2304 of 1992 for the appointment of Arbitrator under sec. 20 of the Arbitration Act, 1940 (i.e. Old Act). (cid:9)Mr MG Nagarkar by placing reliance on the decision of the Apex Court reported in 1998(2) Arb.LR p. 314 in the case of Shetty's Constructions Co. Pvt. Ltd. vs. Konkan Railway Construction and another, has submitted that this fresh proceeding under new act would not be maintainable. In the cited decision the Apex Court after referring sec. 21 and 85(2)(a) of New Act i.e. 1996 Act has held that "demand for referring disputes if made prior to coming into force new act of 1996, the suit would govern by the old Act. Factual matrix and the ratio is reflected in para-4 of the judgment, the court observed that:- "A mere look to sub-section(2)(a) of Section 85 shows that dispite the repeal of Arbitration Act, 1940, the provisions of the said enactment shall be applicable in relation to arbitration proceedings which have commenced prior to the coming into force of the new Act. The new Act came into force on 26.1.1996. The question therefore, arises whether on that date the arbitration proceedings in the present four suits had commenced or nor. For resolving this controversy we may turn to section 21 of the new Act which lays down that unless otherwise agreed to between the parties, the arbitration suit in respect of arbitration dispute commenced on the date on which the request for referring the dispute for arbitration is received by the respondents. Therefore, it must be foundout whether the requests by the petitioner for referring the disputes for arbitration were moved for consideration of the respondents on and after