- (1.) Leave granted.
(2.) The parties entered into an agreement which also contains an arbitration clause. On certain differences and disputes arising between them, a reference was made to Justice G.K. Misra, Retired Chief Justice, Orissa High Court on 10-12-1986. The Arbitrator entered upon the reference on 15-2-1987. During the pendency of the reference before the learned Arbitrator, respondent No. 1 filed a "counter claim" before him on 5-7-1987. The learned Arbitrator vide order dated 14-5-1988 held that the "counter claim" was not included in the reference, and therefore it could not be adjudicated upon in that reference. The learned Arbitrator opined that the parties could be secure a fresh reference regarding the disputes which are the subject matter of the "counter claim" and that both the original reference and the second reference could be consolidated and decided together. The "counter claim" was held to be not maintainable. Respondent No. 1 filed another application before the learned Arbitrator on 5-7-1992. Seeking adjudication of the "counter claim" once again basing its case on a judgment of this Court in K.V. George v. Secretary to Govt. Water and Power Deptt., Trivandrum, AIR 1990 SC 53, the learned Arbitrator on 10-1-1993 held that the judgment in (supra) had no application to the fact situation and even otherwise, the principles of res judicata would come in the way of respondent No. 1 in view of the earlier order dated 14-5-1988. Respondent No. 1 thereafter, filed an application under Section 33/41 of the Arbitration Act before the learned Civil Judge on 25-3-1996. The learned Civil Judge held that the "counter claim" was maintainable and that the Arbitrator should have dealt with the same in the pending reference on the ground that the whole gamut of the dispute had been referred to the Arbitrator and the "counter claim" fell within the disputed already referred and as such the Arbitrator should have dealt with the "counter claim" also. A Civil Revision filed by the appellant herein in the High Court failed. Hence this appeal by special leave.
(3.) We have heard learned counsel for the parties. It appears to us that the learned Arbitrator had, in the facts and circumstances of this case, rightly opined that whereas respondent No. 1 was not justified to raise a "counter claim" in the manner in which it was raised, but it could seek adjudication of the disputes involved in the "counter claim" by asking for a second referene and that as and when the second reference is made, both the references could be heard together. Respondent No. 1 could have sought a reference thereafter in respect of the disputes which were covered by the "counter claim" but he choose not to do so and in the bargain, almost ten years have gone by. According to Mr. Nariman, the view of the arbitrator was correct because the "counter claim" was outside the scope of the reference made on 10-12-1986.;