EASTERN COALFIELDS LTD. versus SANJAY TRANSPORT AGENCY & ANR.

Citation: [2009] 9 S.C.R. 690 · Decided: 06-05-2009 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Disposed off
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Judgment (excerpt)

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(2009) 9 S.C.R. 690 
EASTERN COALFIELDS LTD. 
v. 
SANJAY TRANSPORT AGENCY & ANR. 
(Civil Appeal No. 753 of 2007) 
MAY 6, 2009 
[DR. MUKUNDAKAM SHARMA AND DR. B.S. 
CHAUHAN, JJ.] 
Arbitration and Conciliation Act, 1996: 
s. 11 (6) - Appointment of arbitrator- HELD: The relevant 
clause :in the agreement between the parties related to 
disputes between Public Sector Enterprises inter se and 
Public Sector Enterprises and Government Departments, and 
has no application in the instant case wherein one party is a 
private party- Appointment made by the High Court set aside 
- Claimant would be at liberty to approach the civil court -
Limitation Act, 1963 - s. 14 - Interpretation of Statutes. 
Interpretation of Statutes: 
Interpretation of provision of a statute - Relevance of. 
section heading/marginal note -
HELD: The rule of 
interpretation that section heading or marginal note can be 
relied upon to clear any doubt or ambiguity while interpreting 
any statutory provision can be applied to understand clauses 
of arbitration agreement also which is in the realm of 
commercial contract. 
An excavation contract was entered into between the 
appellant (employer), a Public Sector Undertaking, and 
the respondent-contractor, a private party. When dispute 
arose between the parties, the contractor filed an 
application u/s 11 (6) of the Arbitration and conciliation 
Act, 1996 before the High Court, which appointed an 
arbitrator. Aggrieved, the employer filed the appeal. 
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EASTERN COALFIELDS LTD. v. SANJAY TRANSPORT 691 
AGENCY 
... 
Disposing of the appeal, the Court 
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HELD: 1.1. Clause 14 of the agreement relying 
whereupon the respondents filed the application u/s 11 (6) 
of the Arbitration and conciliation Actl 1996, relates to 
disputes of commercial nature between Public Sector B 
Enterprises inter se and between Public Sector 
Enterprises and Government Departments. The said 
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clause will have no application to an agreement which is 
entered into between the appellant and the respondent, 
one of whom is a private party. Since the arbitration c 
clause of the agreement is not applicable to the case in 
hand, therefore, the appointment of the arbitrator by the 
High Court exercising jurisdiction u/s 11 (6) of the Act was 
improper. [Para 4] [693-G-H; 694-A-B] 
·1.2. It is well settled rule of interpretation that the D 
section heading or marginal note can be relied upon to 
clear any doubt or ambiguity in the interpretation of any 
provision and to discern the legislative intent. The· said 
interpretation can well be applied to understand and 
construct the various clauses of an arbitration agreement 
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also, which is in the realm of commercial contract. While 
interpreting so, the Court may depend not only· on the 
text but context as well in order to fully comprehend the 
meaning of the clause of the contract. [Para 5] [694-C-E] 
1.3. The order of the High Court is set aside. It would 
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be open to the respondents, to approach the civil court 
for adjudication of the disputes and for this purpose they 
would be entitled to the benefit of s. 14 of the limitation 
Act, 1963. [Para 6] [694-F-G] 
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CIVIL APPELLATE JURISDICATION : Civil Appeal No. 
753 of 2007. 
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From the Judgment & Order dated 19.01.2006 of the High 
Court of Calcutta in A.P. No. 8 of 2003. 
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EASTERN COALFIELDS LTD. v. SANJAY TRANSPORT 693 
._, 
AGENCY [DR. MUKUNDAKAM SHARMA, J.] 
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regard to the commercial disputes between the Public Sector A 
Enterprises inter se and Public Sector Enterprises and 
Government Departments." It reads as follows: 
"ARBITRATION WITH REGARD TO THE COMMERCIAL 
DISPUTES BETWEEN THE PUBLIC SECTOR 
ENTERPRISES INTER SE AND BETWEEN THE PUBLIC 
B 
SECTOR 
ENTERPRISES AND 
GOVERNMENT 
DEPARTMENTS." 
"In the event of any dispute of difference relating to the 
interpretation and application of the provisions of the C 
commercial terms of the contract such dispute or difference 
shall be referred by either party to the arbitration, to one of 
the arbitrators in the Department of Public Enterprises, to 
be nominated by the Secretary to the Government of India 
incharge of the BUREAU OF PUBLIC ENTERPRISES. 
The Arbitration Act, 1940 shall not be applicable to the D 
arbitration under this clause. The award of the arbitrator 
shall be binding upon the parties to the dispute, provided 
however, any party aggrieved by such award, may make 
further reference for setting as
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