OLYMPUS SUPERSTRUCTURES PVT. LTD. versus MEENA VIJAY KHETAN AND ORS.

Citation: [1999] 3 S.C.R. 490 · Decided: 11-05-1999 · Supreme Court of India · Bench: M. JAGANNADHA RAO · Disposal: Dismissed

Cited by 8 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
OLYMPUS SUPERSTRUCTURES PVT. LTD. 
v. 
MEENA VIJAY KHETAN AND ORS. 
MAY I I, I999 
B 
[M. JAGANNADHA RAO AND S.N. PHUKAN JJ.] 
Arbitration : Arbitration and Conciliation Act, 1996-Sections 5, 16 
and 34-Two sets of agreements-Main agreement for sale of flats and another 
for interior decoration, both containing separate arbitration clauses.-Main 
C agreement did not specify arbitrator while the other does-By virtue of 
clause 39 of the main agreement, "connected" matters can be referred to 
arbitraior-Held : arbitrator appointed under the main agreement has 
jurisdiction to deal with the questions relating to the interior decoration 
which is a "connected" matter-Arbitrator can grant specific relief since 
D there is no bar in the Specific Relief Act of Arbitration Act-Questions of fact 
do not fall within the purview of Section 34(2) (b) (ii)-Court cannot 
interfere under Section 34(2) (b) since the award is not in conflict with 
public policy not being induced or affected by fraud or. corruption and 
subject matter not incapable of being settled by arbitration under the law 
in force at the relevant time-Tribunal, under S 16, can decide on validity 
E of arbitration clause and entertain question of jurisdiction at any time 
during the proceedings-If jurisdiction is upheld, Tribunal will proceed to 
make the award-Arbitration clause is independent of the other term of the 
contract and any decision of the arbitral tribunal on validity of the contract 
dose not ipso facto affect the validity of the arbitration clause. 
F 
Specific Relief-Right to specific performance arises out of a contract-
Parties can agree to refer the issues relating to specific performance to 
arbitrator to shorten the litigation and he can grant such a relief-Section 
34(2) (b) (i) will not attracted ' 
G 
The appellant Company entered into an agreement with respondents 
for sale of some flats and incorporated an arbitration clause, without 
specifying the name of the arbitrator, in case of disputes. The agreement had 
a general clause by which all "connected" matters could also be referred to 
the said arbitrator. Separate agreements with separate arbitration clause, 
with named arbitrator, was also drawn up for interior decoration. In course 
H of time disputes arose and on the directions of Court, a sole arbitrator was 
490 
OLYMP. SUPERSTRUCTURES PVT. LTD.'" MV. KHETAN 
491 
appointed. Issues relating to interior decoration were also referred to the A . 
said arbitrator along with other issues relating to the main agreement. The 
arbitrator after hearing the partier .1md the evidence, passed an award granting 
relief of specific performance i• 
·pect of both the main agreement as well 
as the one relating to interior Ott., 
ation. The appellant Company did not 
raise any objection about referring matters relating to interior decoration B 
to arbitration either before the arbitrator, or later before the Single Judge, 
when they filed an application for setting aside the award. The question was 
raised for the first time before the Division Bench which rejected it. Both 
the single Judge as well as the Division Bench rejected the application of 
the appellant for setting aside the award. Hence this appeal. 
It was contended by the appellants that the arbitration was based on the 
three main agreements and therefore the arbitrator could not decide the 
disputes relating to interior decoration which formed a separate agreement; 
the agreement for interior decoration provided for named arbitrators and so 
c 
the main agreement could not supersede this provision; though the appellant 
was ex parte, the arbitrator should have asked for better proof, that the D 
arbitrator could not grant specific relief and so Section 34 (2) (b) (i) of the 
Arbitration Act was attracted; that the respondent had defaulted and 
termination of main agreement by appellant was right; that the respondents 
ought to have paid interest on the balance amount. On behalf of the 
respondents, it was pointed out that under the main agreement. It was E 
permissible to refer "connected" matters to the arbitrator ; the appellant did 
not raise any objection to the reference before the arbitrator or the Single 
Judge; and that arbitrator can grant specific relief. 
Dismissing the appeal, this Court 
HELD : 1. It is true that there are two agreements in each of the three 
appeals. One is the main agreement relating to construction of flats and the 
arbitration clause 39 is gene

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