K. SASIDHARAN versus KERALA STATE FILM DEVELOPMENT CORPORATION

Citation: [1994] 3 S.C.R. 82 · Decided: 17-03-1994 · Supreme Court of India · Bench: K. RAMASWAMY, N. VENKATACHALA · Disposal: Dismissed

Judgment (excerpt)

A 
K. SASIDHARAN 
v. 
KERALA STATE FILM DEVELOPMENT CORPORATION 
MARCH 17, 1994 
B 
(K. RAMASWAMY AND N. VENKATACHALA, J.J.] 
Arbitration Act, 1940: Section 20. 
Power of Court to appoint Arbitrator-Contract excluding arbitration 
C c/ause-Court-Wliether can appoint Arbitrator-Clause 73 of Madras 
Detailed standard Specification-Clause 12 of General Conditions of the 
Contract-Whether applicable. 
The appellant entered into a contract with the Respondent-Corpora-
tion for construction of a theatre. During the execution of the contract a 
D dispute arose and the appellant filed an application under Section 20 of 
the Arbitration Act, 1940 for reference to an Arbitrator which was con-
tested by the respondent on the ground that there was no arbitrable 
agreement. The Trial Court appointed an Arbitrator holding that clause 
73 of the Madras Detailed Standard Specifications (MDSS) which con-
E 
tained an arbitrable clause was applicable to the dispute. On appeal, a 
Division Bench of the High Court reversed the Trial Court's order. 
In appeal to this Court, it was contended on behalf of the appellant 
that all items of work referred to in clause 12 of the General Conditions 
of the Contract include MDSS in addenda volume. Therefore, clause 73 of 
F 
MDSS got attracted to the dispute. 
G 
Dismissing the ap1ieal, this Courts 
HELD: 1. The High Court is right in its conclusion that there is no 
arbitrable agreement for reference to the Arbitrator. Therefore, the Civil 
Court cannot exercise its power under Section 20 of the Act to appoint an 
Arbitrator. [86-B] 
2. The appellant and the respondent having specifically excluded the 
arbitration clause in the Contract, by necessary implication they excluded 
the clause 73 in MDSS. When the parties to the agreement, in terms of the 
H 
documents, have not incorporated the arbitration agreement in clause 73 
82 
) 
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• 
SASIDHARAN v. FILM DEVL. CORPN. 
83 
of MDSS, it cannot, by implication, be imported by interpretation that the A 
terms of clause 73 including arbitration cluase therein stands attracted. 
By necessary implication, it conflicts with the expressly agreed terms of 
the contract. Thereby, it is manifest that what the terms in the MDSS, 
referred to in clause 12 is only of the terms referable to the execution of 
the work, etc. and not one concerned with an agreement to refer any B 
dispute arising between the parties to an Arbitrator at a later point of time, 
or during the course of the execution of the work or after the completion 
thereof of any dispute arising between the parties in relation to the 
contract. [85-F -H; 86-A] 
3. An arbitration clause in a contract, stands apart from rest of the C 
contract; it must be construed according to its language and in the light 
of the circumstances in which it was made. [85-E] 
Russell on Arbitration, 19th Edn. p.27, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4022 of D 
1994 . 
From the Judgment and Order dated 15.12.86 of the Kerala High 
Court in M.F.A. No. 460 of 1986. ', 
G. Viswanatha Iyer, Dilip Pillai and E.M.S. Anam for the Appellant. E 
A.T.M. Sampath for the Respondent. 
The following Order of the Court was delievered : 
Leave granted. Heard both the counsel. 
F 
The appellant had cin January 27, 1982 had entered into a contract 
with the respondent to construct a theatre. He completed the work and 
handed over the same to the respondent in May. 1985. During the execu-
tion of the contract a dispute had arisen on certain items of the work which 
was sought to be decided by arbitration. The appellant, therefore, filed 0.S. G 
No. 20 of 1986 in the Court of Subordinate Judge, Trivandrum under s. 20 
of the Arbitration Act, 1940, for short 'the Act' for reference to an 
Arbitrator. The respondent contended that there is no arbitrable agree-
ment under the contract. Over-ruling the objection, the Subordinate Judge 
by his order dated June 5, 1986 held that clause 73 of the Madras Detailed H 
84 
SUPREME COURT REPORTS 
[1994] 3 S.C.R. 
A 
Standard Specifications for short MOSS would apply to the dispute which 
contains an arbitrable clasue and, therefore, by order dated 2nd July, 1986 
appointed a retired District Judge as an Arbitrator. On appeal by the 
respondent in M.F.A. No. 460 of 1986, by order dated December 15, 1986, 
the Division Bench of the Kerala High Court held that clause 73 of MDSS 
B 
is inapplicable. There is no arbitrable agreement for reference to the 
Arbitrator. Thu

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