M/S. M.K. SHAH ENGINEERS AND CONTRACTORS versus STATE OF MADHYA PRADESH

Citation: [1999] 1 S.C.R. 419 · Decided: 05-02-1999 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Case Partly allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

# , 
MIS. M.K. SHAH ENGINEERS AND CONTRACTORS 
A 
___.. 
"f 
v. 
STATE OF MADHYA PRADESH 
FEBRUARY 5, 1999 
[SUJATA V. MANOHAR AND R.C. LAHOTI, JJ.] 
B 
.. 
Ji" 
Arbitration Act 1940 : 
Section 33-Arbitration clause in agreement prescribing decision by 
Superintending Engineer on dispute between parties as condition prece- c 
dent-Dispute arising between the parties-Reference of dispute to ar-
bitrato,..-f'reliminary objection by one party regarding maintainability of 
arbitration proceedings as condition precedent for invoking arbitration clause 
not satisfied-Party raising preliminary objection responsible for fmstration of 
condition precedent prescribed in arbitration clause-Held, preliminary objec-
tion not maintainable as no one can be pennitted to take advantage of one's D 
own wrong and it shall be deemed that the condition precedent was waived 
by the party at fault by its conduct. 
Sections 16, Jo-Non-speaking award-Objections filed-Held, it is not 
necessary that award should be a speaking award. 
E 
Interest Act, 183~S.13-Award of Interest-Pre-reference period-
Held, interest cannot be awarded in the absence of statute, contract, usage or 
custom-Post-reference period-Held, arbitrator can award interest pendente 
lite-Such award of interest pendente lite can be upheld in proceedings 
pending on 12.12.1991. 
F 
f ... 
The appellants in the two appeals were the contractors entrusted by 
the respondent-State with the construction of blocks in the Barna Main 
Dam across River Barna, a tributary of Narmada near Bhopal. The 
contract between the parties contained an arbitration clause which 
provided that all disputes were required to be referred for the decision of G 
... 
the Superintending Engineer of the Circle whose decision was agreed by 
"' 
the parties to be treated as final and if any party was aggrieved by such 
final decision, then it could demand a reference of disputes to arbitrator. 
The appellants could not complete the work assigned to them and disputes 
arose between them and the respondent-State. The contracts were ter-
H 
419 
420 
SUPREME COURT REPORTS 
(1999] 1 S.C.R. 
A . minated in between and the respondent-State ge>t the remaining parts of 
the work executed through other agencies. Both the contractors raised 
disputes before the Superintending Engineer. 
In the first appeal, the Superintending Engineer kept the disputes 
B pending for a. long tiJiie and referred all the disputes raised by the 
appellant-contractor to a sub-committee consisting of highly placed offi-
cials of the State Government. The contractor addressed a communication 
to the Chief Secretary and other concerned authorities lodging a strong 
protest against the action of the Superintending Engineer for having 
c delegated his function to the sub-committee and demanded the appoint-
ment of an arbitrator as per the arbitration clause for referring the 
disputes raised by the appellant for his decision as the Superintending 
Engineer had rendered himself incapable of taking decision under the 
contract. A list of disputes raised by the appellant was annexed with the 
D 
letter. The State Government yielded to the demand of the appellant and 
appointed a sole arbitrator for deciding the dispute between the parties. 
The arbitrator entered upon the reference. The respondent-State appeared 
before the arbitrator but raised a preliminary objection to the legality of 
the arbitration on the ground that it was not in accordance with the 
arbitration clause and the claims put forth by the appellant were not 
E arbitrable in as much as they were not preceded by a decision of the 
Superintending Engineer in accordance with the arbitration clause. 
The respondent-State filed an application under S. 33 of the Arbitra-
F 
tion Act before the Additional District Judge, Bhopal seeking an adjudica-
ti on on the preliminary objection raised by them before the arbitrator. 
During the pendency of the application, the arbitrator expired. The resp on-
dent-State got the petition under S. 33 of the Act dismissed as having been 
rendered infructuous. The appellant served a notice on the respondent for 
filling up the vacancy in the office of arbitrator. When the respondent 
G failed to comply with the notice, the appellant filed a petition under S. 8(2) 
of the Act before the Additional District Judge, Bhopat The Court allowed 
the petition and appointed an arbitrator for deciding the disputes referred 
to the previous arbitrator. The arbitra

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