SALUJA CONSTRUCTION COMPANY versus NORTHERN COALFIELDS LIMITED

Citation: [2021] 7 S.C.R. 1111 · Decided: 25-11-2021 · Supreme Court of India · Bench: M.R. SHAH, SANJIV KHANNA · Disposal: Case Partly allowed

Judgment (excerpt)

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SALUJA CONSTRUCTION COMPANY
v.
NORTHERN COALFIELDS LIMITED
(Civil Appeal No. 7041 of 2021)
NOVEMBER  25, 2021
[M. R. SHAH AND SANJIV KHANNA, JJ.]
Arbitration – High Court in appeal set aside award passed
by the Arbitrator – Propriety – Held: On facts, the Arbitrator was
required to adjudicate and decide dispute between the parties with
respect to one Project (Bina Project) only – However, the Arbitrator
passed an award not only with respect to the dispute relating to
Bina Project but also with respect to other projects – Therefore, the
High Court rightly held that the arbitrator while decreeing the award
exceeded his jurisdiction in passing award in respect of four
contracts – However, at the same time, the High Court at least ought
to have confirmed the claim/amount awarded by the Arbitrator with
respect to Bina Project – Order of High Court accordingly modified
to that extent – Arbitration and Conciliation Act, 1996 – ss. 2(a), 8,
20 and 37.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7041
of 2021.
From the Judgment and Order dated 02.01.2018 of the High Court
of Madhya Pradesh at Jabalpur in A.A. No. 30 of 2012.
Pijush K. Roy, Mrs. Kakali Roy, Rajan K. Chourasia, Advs. for
the Appellant.
Vikas Singh, Sr. Adv., Ashwani Kumar Dubey, Pankaj Sharma,
Kshitij Mudgal, Ms. Deepika Kalia, Satvik Mishra, Kapish Seth, Ashwini
Kr. Upadhyay, Advs. for the Respondent.
The following Order of the Court was passed :
O R D E R
Leave granted
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 02.01.2018 passed by the High Court of Madhya Pradesh
[2021] 7 S.C.R. 1111
1111
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SUPREME COURT REPORTS
[2021] 7 S.C.R.
at Jabalpur in A.A. No. 30 of 2012, by which the High Court has allowed
the said appeal filed under Section 37 of the Arbitration and Conciliation
Act, 1996 (Arbitration Act) and has quashed and set aside the award
passed by the learned Arbitrator, the original claimant has preferred the
present appeal.
2. That the appellant herein was awarded the contract for
construction of 100 Nos. B-Type Quarters at Bina (hereinafter referred
to as the Bina project). An agreement was entered into between the
parties on 11.01.1986. A dispute arose between the parties with respect
to the Bina project. The contractor issued a notice under Clause 9 of the
agreement to appoint an arbitrator in respect of Bina Project only. The
respondent rejected the claim of the contractor. The appellant raised a
Bill of Rs.2,23,215/- and then filed an application under Section 8/20 of
the Arbitration Act for filing of agreement and appointment of arbitrator.
Thus it appears that the dispute at the relevant time was only with respect
to the work relating to the Bina Project. However, before the learned
Arbitrator, the claim was raised with respect to the other projects and in
relation to the sister concerns regarding ‘Amlohri Project’ and ‘Jhingurda
Project’. The learned Arbitrator passed an award with respect to the
dispute relating to other agreements/contracts even in relation to sister
concerns over and above the dispute with respect to the Bina Project.
The appeal under Section 34 of the Arbitration Act against the judgment
and award passed by the learned Arbitrator came to be dismissed against
which the respondent preferred an appeal under Section 37 before the
High Court. It was submitted that the learned Arbitrator appointed only
for the contract relating to Bina Project and the agreement relating to
the Bina Project was filed before the learned Arbitrator. It was submitted
that as per Section 2(a), 8 and 20 of the Arbitration Act, the mandatory
requirement was to decide the dispute in relation to a written agreement
which was filed before the arbitrator. Therefore, it was submitted that
the learned Arbitrator has travelled beyond in passing the award in respect
of four contracts. The High Court in the impugned judgment and order
has accepted the submissions on behalf of the respondent and has quashed
and set aside the award passed by the learned Arbitrator.
3. Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the contractor has preferred the
present appeal.
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4. We have heard Shri Pijush K. Roy, learned counsel appearing
on behalf of the appellant and Shri Vikas Singh, learned senior counsel
appearing on behalf of the respondent.
5. We have gone through the judgment and order passed by the
High Court. It is to be n

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