TATIA, J. - (1.)IN view of the fact that the facts are not in dispute and only point of law is involved, facts in short will serve the purpose.
(2.)THE works contract was awarded to the respondent-Company by the Department of Mahi Bajaj Sagar Project, Banswara, a wing of the irrigation Department of the State of Rajasthan. Because of some dispute the contractor submitted two separate petitions under Section 20 of the Arbitration Act, 1940 (for short `the Act of 1940') on 16. 12. 1989 and 14. 3. 1990 before the court of District Judge. By the order of the court, arbitrator was appointed and the learned arbitrator passed the two separate awards on 12. 3. 1997. THE said awards were submitted by the learned arbitrator before the court of learned District Judge, Banswara on 13. 3. 1997. THE learned District Judge issued notices to the contractor as well as to the State. THE notices were served upon the State on 29. 3. 1997. THE contractor submitted an application under Section 17 of the Act of 1940 and prayed that the award be made rule of the court, whereas the State submitted objections under Section 30 and 33 of the Act of 1940 with application under Section 5 of the Limitation Act. in reply to the contractor's application under Section 17 of the Act of 1940 as well as in the application under Section 5 Limitation Act, the State submitted that proceedings of arbitration completed under the Act of 1940 but since the award was passed after coming into force of the Arbitration and Conciliation Act, 1996 (for short`the Act of 1996'), therefore, the proceedings after the award are governed by the Act of 1996 and in view of the fact that under the Act of 1996, objection can be filed within period of 90 days instead of within 30 days as provided under the Act of 1940, therefore, the State's objection against the award is within period of limitation. THE State also pleaded that in case the court reaches to the conclusion that the proceedings will be governed by the Act of 1940 then the delay in filing the objection may be condoned. THE trial court vide order dated 31. 7. 1997, proceeded to decide the State's applications the trial court observed in its order dated 31. 7. 1997 that it is not in dispute that the arbitration proceedings were completed and the award was passed under the old Act, therefore, amended Arbitration Act (New Act) will not apply. After recording this position, the trial Court in its order dated 31. 7. 1997 held that State has filed the objection petition after expiry of the limitation for filing the objection petition under the old Act of 1940 and the State failed to disclose sufficient cause for not filing the objection within limitation, therefore, delay in filing the objection cannot be condoned. THE trial Court, therefore, dismissed the State's application under Section 5 Limitation Act vide order dated 31. 7. 1997.
Against this order of rejection of the application under Section 5 Limitation Act,the State preferred two separate appeals in both the matters which were registered as S. B. Civil Misc. Appeals No. 597/97 and 598/97. Both these appeals were allowed by the order of this Court dated 30. 7. 2002 and this Court condoned the delay in filing the objection petition by the State. The matter was remanded back to the learned District Judge.

In the backdrop of these facts, the matters came up for consideration on merits before the learned District Judge. The learned District Judge again rejected the State's objections against the award by two separate impugned order dated 23. 2. 2005. This time the learned court below reconsidered the issue of applicability of Act of 1940 and Act of 1996 and took a view just contrary to the view taken while deciding application u/s. 5 Limitation Act and held that in view of the clause (23) (3) of the contract, the provisions of the Act of 1996 will govern the proceedings and the matter would not be governed by the Act of 1940. The trail Court observed that the specific condition No. 23 (3) in contract is an agreement of the parties that the parties shall be governed by the enactment which may be in force subsequent to their entering into the agreement and that agreement may be in supersession of the Act of 1940. The learned trial Court also considered various judgments of the Hon'ble Supreme Court including the judgment delivered in the case of Thyseen vs. Steel Authority of India (AIR 1999 SC 3923 ). The trial Court held that the present proceeding shall be governed by the Act of 1996 and the State failed to prove any ground under any clause of the Section 34 on the basis of which the award can be set aside. Therefore, the court below dismissed the objection petitions filed by the State-appellant by order dated 23. 3. 2005. Hence these two appeals.

The question involved in these appeals is whether the Court below was right in holding that the arbitration proceedings before the court below are governed by the Act of 1996 and not by the Act of 1940.

The learned counsel for the appellants vehemently submitted that it is not in dispute that the arbitration proceedings commenced before coming into force of the Act of 1996 and the award was passed after coming into force of the Act of 1996. Following the procedure as provided in the Act of 1940, the learned arbitrator submitted awards in the District Court and upon which the respondent-contractor itself submitted application under Section 17 of the Act of 1940 and prayed that the award may be made rule of the court. It was never the case of respondent - contractor that the Act of 1996 will govern the procedure, therefore, there is no need for making the award rule of the Court. The appellant-State's applications under Section 5 Limitation Act were opposed by the contractor on the ground of limitation under the Act of 1940 only and the respondent- contractor successfully got the rejection of appellant's application under Section 5 Limitation Act by taking a plea that objections filed by the appellant State are based by time as per the provisions of the Act of 1940. The District Court also after holding that proceedings are governed by the Act of 1940, rejected appellant's application under Section 5 Limitation Act and rejected the appellant's objection petition itself. Against this, the appeals were preferred by the State which were allowed by the High Court and the applications under Section 5 of the Limitation Act were allowed by the High Court and, therefore, the matter was remanded to the trial Court for deciding the case on merit. The High Court condoned the delay simply because the proceedings were under the Act of 1940. In these circumstances, by no stretch of imagination, it can be said that parties agreed for application of Act of 1996 where arbitration proceedings commenced under the Act of 1940 and award was passed under the Act of 1940 and the proceedings were initiated before the District Court under the Act of 1940 and were accepted under the Act of 1940, not only by the respondent-contractor but by the District Court itself under the provisions of the Act of 1940. Not only above but the learned District Judge, relying upon those very applications, rejected the petitioner-State's applications under Section 5 of the Limitation Act, by order dated 31. 7. 1997 after holding that the proceedings are governed by the Act of 1996 but now the same application and reply of petitioner-State have been made basis for holding that there is agreement of parties for application of the Act of 1996, hence the order is illegal and perverse.

(3.)THE learned counsel for the appellants further vehemently submitted that the appellant-State never gave its consent nor it agreed for application of the Act of 1996. THE appellant-State only submitted their contentions in the application based on legal opinion that since the award was passed after coming into force of the Act of 1996, therefore, subsequent proceedings will be governed by the Act of 1996. Since the legal position was not clear, therefore, the appellant-State very specifically pleaded that in case the court reaches to the conclusion that the Act of 1940 would govern the proceeding before the District Court then the delay in filing the objections may be condoned. THE court below itself rejected the petitioner's plea that the Act of 1996 will apply and the petitioner did not press his this plea and got the order of condonation of delay in appeal from High Court, then the trial court was wrong in observing that the petitioner agreed for application of the Act of 1996. THErefore, after the order of the District Court on application under Section 5 of the Limitation Act taking a view that proceedings will be governed by the Act of 1940 and after the decision of this Court dated 30. 7. 2002, neither the Court had jurisdiction to apply the Act of 1996 nor the respondent-contractor was justified in submitting that the provisions of the Act 1940 will not apply and the Act of 1996 will apply.
Apart from it, according to the learned counsel for the appellants, under the sub-clause (a) if sub-section (2) of Section 85 of the Act of 1996, the parties may agree for application of the Act of 1996 for arbitral proceedings, but according to the learned counsel for the appellants, that agreement of the parties can be before commencement of the arbitral proceedings. The learned counsel for the appellants also submitted that even if for application of the Act of 1996 can be, at any time, even then also agreement of parties for application of the Act of 1996 can be when arbitral proceedings are pending and consent of parties after termination of arbitral proceedings can not make the Act of 1996 applicable and as per Section 32, the arbitration proceeding terminates by when final arbitral award is made. Therefore, the alleged consent for application of the Act of 1996 which in fact is not there, is of no consequence.

Rebutting, the learned counsel for the respondent-contractor vehemently submitted that a specific condition No. 23 (3) has been incorporated in the agreement under which both the parties agreed that the dispute between the parties will be referred to the arbitrator. The parties were conscious that in future there may be statutory amendments/modifications and even there may be possibility of reenactment of law relating to arbitration and, therefore, they agreed that the matter will not only be governed by the Act of 1940 but in case law is amended or even re-enacted then the arbitral proceedings will be taken under amended law or under re-enactment. In view of this clear contract between the parties, the parties are governed by the Act which is in force at the relevant time. In this case, the award was passed after the coming into force the Act of 1996 and the parties agreement for being governed by the Act of 1996 is also the basis on which the Act of 1996 can be applied. Under the Act of 1996, for this purpose, after keeping the provision of the Act of 1940 alive, specific provision has been made in the Act of 1996 by enacting sub-clause (a) of sub-section (2) of Section 85 of the Act of 1996. The learned counsel for the respondent also submitted that the appellant-State in their application under Section 5 Limitation Act as well as in their reply to the respondent- contractor's application under Section 17 of the Act of 1940 clearly admitted that the proceedings shall be governed by the Act of 1996 and not by the Act of 1940. This was taken note of by the trial court (at page 8 of the impugned orders of the trial Court dated 23. 2. 2005) and from the conduct of the respondent also it is clear that they themselves agreed to be governed by the Act of 1996 and the trial Court recorded that both the parties are in agreement that the Act of 1996 will apply for deciding the objection of appellant against the award.