DURGA CHARAN RAUTRAY versus STATE OF ORISSA & ANR.

Citation: [2011] 13 S.C.R. 16 · Decided: 01-11-2011 · Supreme Court of India · Bench: RAJENDRA MAL LODHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2011] 13 (ADDL.) S.C.R. 16 
DURGA CHARAN RAUTRAY 
v. 
STATE OF ORISSA & ANR. 
(Civil Appeal No. 1735 of 2006) 
NOVEMBER 1, 2011 
[R. M. LODHA AND JAGDISH SINGH KHEHAR, JJ.] 
Arbitration Act, 1940 -
Contractual agreement -
Disputes/claims raised by contractor-appellant - After receipt 
C of payment on preparation of the final bill, without raising 
objection - Redressal by way of arbitration - High Court 
holding that the appellant having received payment after 
preparation of final bill without raising objections, could not 
have initiated arbitral proceedings -
On appeal, held: 
o Appellant despite having received payment after preparation 
of final bill without raising objections, could seek redressal of 
his disputes by way of arbitration in terms of the contractual 
agreement - He could still raise his unsatisfied claims before 
an arbitrator - Order referring the dispute raised by the 
E appellant to the arbitral tribunal, having attained finality, the 
respondents were precluded from asserting that the claims 
raised by the appellant could not be adjudicated upon by way 
of arbitration -
Order passed by the High Court was 
contradictory in terms - Once the High Court concluded that 
F the Miscellaneous Case filed by the respondents raising 
objections was barred by limitation, it was not open to the High 
Court to consider one of the objections raised by the 
respondents and to uphold the same, so as to disentitle the 
appellant from reaping the fruits of the arbitral award - Thus, 
order passed by the High Court is set aside and that of the 
G civil judge making arbitral award rule of the court, is upheld. 
Appellant was entrusted with a construction work by 
respondent-State. Dispute arose between the parties and 
were referred to an arbitral tribunal. The arbitral tribunal 
H 
16 
DURGA CHARAN RAUTRAY v. STATE OF ORISSA & 17 
ANR. 
passed an award in favour of the appellant. The appellant A 
filed an application to make the arbitral award, rule of the 
court. The respondents filed objections under Sections 
30 and 33 of the Arbitration Act, 1940 by filing 
Miscellaneous Case. The Civil Judge dismissed the 
Miscellaneous Case on the ground of limitation. The 
B 
award was made rule of the court. Aggrieved, the 
respondents filed an appeal before the High Court under 
Section 39 of the Arbitration Act, 1940. The High Court 
upheld the order of the Civil Judge on the issue of 
limitation, however, held that the appellant could not c 
obtain the benefits of the award rendered by the Arbitral 
Tribunal in his favour since the appellant had received 
payments on the preparation of final bill without raising 
objections. Therefore, the appellant filed the instant 
appeal. 
D 
Allowing the appeal, the Court 
HELD: 1.1 A perusal of clause 23 of the contractual 
agreement leaves no room for any doubt that the 
appellant could claim arbitration on account of disputes 
E 
arising from the contract "except where otherwise 
provided". Clause 23 includes within the purview of 
arbitration, disputes whether arising during the progress 
of the work or after the completion or abandonment 
thereof. There is no restraint whatsoever expressed in 
F 
clause 23, which would deprive the appellant from 
seeking redressal by way of arbitration, merely because 
he had received payments after the preparation of the 
final bill, without raising any objections. Accordingly, 
even after the receipt of payment on the preparation of G 
the final bill, it was open to the appellant to seek redressal 
of his disputes.by way of arbitration, even though he had 
not raised any objections. [Para 8] [23-G-H; 24-A-C] 
Bharat Coking Goa Ltd. v. Annapurna Construction 
H 
18 
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R. 
A (2003) 8 sec 154: 2003 (3) Suppl. SCR 122 - relied on. 
1.2 Despite receipt of payment on the preparation of 
the final bill, it was still open to the appellant to raise his 
unsatisfied claims before an arbitrator, under the contract 
B agreement. It was no longer open to the respondents to 
contest the claim of the appellant on the instant issue 
after the appellant had obtained the court order dated 
15.05.1981 which referred the disputes raised by the 
appellant to an arbitral tribunal. The court order dated 
c 15.05.1981 referring the disputes raised by the appellant 
to arbitration, attained finality inasmuch as the same 
remained uncontested at the hands of the respondents. 
The respondents were, thereafter precluded

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