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TMI Blog2009 (11) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... scinded the said contract on 21.04.1993 on the ground that the petitioner was not proceeding with the work with due diligence. On such rescission, the petitioner by his letter dated 23.07.1994 raised seven claims totally amounting to ₹ 6,61,000/- plus interest at 21% from 21.04.1994. By the said letter the petitioner called upon the Executive Engineer to pay all the amounts within 15 days of the said claim and that on his failure to do so, the disputes or the differences will be considered to have arisen between the parties. By his letter dated 10.08.1994, the Executive Engineer disputed the claim made by the petitioner. The Superintending Engineer in turn, by his letter dated 05.09.1994 claimed compensation of ₹ 2,04,929.30 from the petitioner allegedly under Clause 2 of the said contract. The petitioner by his letter of the next date i.e. 06.09.1994 called upon the Executive Engineer to appoint a suitable person to be the Sole Arbitrator within a period of 15 days, from the date of receipt of the said letter to refer the matter for adjudication and settlement of the disputes and differences that have arisen between the parties. The said letter of the petitioner was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not satisfied fully, the petitioner applied to the Ratnagiri Court to transfer the decree to the Panaji Court, so that the balance of the amount could be recovered by the petitioner by following the procedure as laid down under Order 21 of the Civil Procedure Code by attachment and sale of the Immovable properties of the Assistant Engineer, Postal Civil Sub division, Porvorim. The Ratnagiri Court passed an order on 25.07.2000 transferring the decree to the Panaji Court for execution. The petitioner thereafter, filed an application on 17.10.2000 being Special Execution Application No. 36/2000/B in Panaji Court for execution of the remaining part of the decree. The respondents herein filed reply on 10.07.2001 objecting to the Execution Application. The principle ground on which the execution was objected to by the respondents was that the appointment of the Arbitrator by the Ratnagiri Court was without jurisdiction in terms of the new Act and therefore, the decree passed by the Ratnagiri Court making the award of the Arbitrator the rule of the Court was a nullity. 4. The said Execution Application came up for consideration before the Executing Court. The Executing Court proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Old Act which has already been repealed and in view of the agreement between the parties, the proceedings ought to have continued under the new Act, in view of Clause 25 and therefore, the award and the decree passed are a nullity and cannot be enforced. 7. I have heard the learned Counsel for the parties. Shri Ramani for the petitioner and Shri Ferreira, learned Assistant Solicitor General for the respondent No. 1. 8. On behalf of the petitioner, it was submitted by learned Counsel Shri Ramani that the issue as to when the Arbitration proceedings are said to have commenced and if commenced under the old Act, whether they could be continued under the old Act, even if after the new Act, has come into force is no more res integra and is covered by the judgment of the Apex Court reported in 2004 (7) Supreme Court Cases 288} in the matter of Milkfood Ltd. v. GMC Ice Cream (P) Ltd. It is further submitted by the learned Counsel Shri Ramani that the judgment in Thyssen Stahlunion's case (supra) has been considered by the Apex Court in the case of Milkfood Ltd. The learned Counsel submitted that though there was a dissenting note by one of the learned Judges who constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration thereafter commenced. The appellant Milkfood Ltd. having found that the learned Arbitrators were proceeding under the 1996 Act filed an application seeking directions and clarifications raising a contention that the provisions of 1940 Act were applicable. The matter was heard by the learned Arbitrators and by order dated 06.04.1998, the majority of the Arbitrators held that 1996 Act would apply as the consent order dated 06.05.1997 passed by the High Court was the beginning of the arbitral proceedings. However, one of the Arbitrators dissented from the same who held that according to him arbitration proceedings commenced from 14.09.1995 when the notice was given by Milkfood Ltd. appointing Shri Agarwal as its nominee. The said decision of the said majority of the Arbitrators was challenged by the appellant Milk food before a learned Single Judge of the Delhi High Court. The learned Single Judge held that the notice dated 14.09.1995 cannot be construed as a notice calling upon to commence arbitration proceedings and that logically it has to be concluded that arbitration proceedings begin when the disputes are referred for arbitration on 06.05.1997. The parties would therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision for the purpose of the said Act but the same must be given its full effect having regard to the fact that the repeal and saving clause is also contained therein. Section 21 of the Act must, therefore, be construed having regard to Section 85(2)(a) of the 1996 Act as once it is so construed, indisputably the service of notice and/or issuance of request for appointment of an arbitrator in terms of the arbitration agreement must be held to be determinative of the commencement of the arbitral proceeding. The Apex Court thereafter considering the judgment in Thyssen Stahlunion's case (supra) held that Thyssen itself is an authority for the proposition that in relation to a domestic arbitration proceeding, commencement thereof shall coincide with service of request/notice of appointment of Arbitrator. The Apex Court thereafter on consideration of the statutory provisions and the decisions which were cited before it has concluded in paragraph 72 as under: Keeping in view the fact that in all the decisions, referred to herein before, this Court has applied the meaning given to the expression commencement of the arbitral proceeding as contained in Section 21 of the 1996 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e old Act are therefore, null and void, in the teeth of the judgment of the Apex Court in Milkfood's case (supra) is unsustainable. The said notice dated 06.09.1994 had been given by the petitioner much prior to coming into force of the 1996 Act and therefore as held by the Apex Court, the said date would be the date which will have to be held as the date for the purpose of commencement of the arbitration proceedings. In the said circumstances, the declaration of the award by the Arbitrators, and making the said award a decree of the Court cannot be said to be illegal as held by the Executing Court and therefore the decree passed is valid and enforceable. 16. Another aspect that requires to be considered is that the respondent herein had withdrawn its application objecting to the appointment of the Arbitrator and had therefore submitted to the jurisdiction of the said Arbitrator and thereafter participated in the proceedings before the said Arbitrator. It would also be pertinent to note that the decree substantially has been satisfied as the petitioner was allowed to withdraw the amount of ₹ 13,80,038/-, which was deposited by the respondent in the Executing Court. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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