Saluja Construction Company vs Northern Coalfields Limited

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)

ORDER

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)