- (1.) CIVIL Revision No. 206 of 1993 is directed against the order dated 12-1-1993 passed by the VIth Additional District Judge, Gorakhpur allowing the plaintiffs application (Paper No. 64C) and directing the arbitrators to grant interim award of rupees 2 Lakhs in Original Suit No. 215 of 1991. CIVIL Revision No. 292 of 1993 is directed against the order dated 3-4-1993 passed by the VIth Additional District Judge, Gorakhpur allowing the plaintiff's application (Paper No. 85C) and confirming the interim award and making the same rule of the court in Original Suit No. 215 of 1991. Both these revisions which arise out of the same proceedings have been connected and are being heard and decided together.
(2.) BRIEF facts of the case so far as relevant for purposes of the present revision, are that Om Construction and Supply Co. (hereinafter referred to as the plaintiff-opposite party) by means of two agreements dated 13-2-1989 and 10-11-1989 entered into a building contract with the defendant-applicant. The said agreements had an arbitration clause. Due to certain reasons which are not important for purposes of the present revisions, the contract could not be completed and a dispute arose between the parties regarding measurement of the work and payment to be made to the plaintiff-opposite party. Invoking the arbitration clause the plaintiff-opposite party filed Suit No. 215 of 1991 in the court of Civil Judge, Gorakhpur under Section 20 of the Arbitration Act for referring the dispute for arbitration in respect of the claim of the plaintiff-opposite party. The suit was contested by the defendant-applicant by filing a written statement. Vide the order dated 21-2-1992 the court below directed the parties to submit their lists of arbitrators and out of the respective lists submitted by the parties appointed one Shri Judgal Kishore Verma, retired Deputy Chief Engineer, N.E. Railway, Gorakhpur and Shri B. Ram, F. A. and C. A.O. (E and B), N. E. Railway, Gorakhpur as arbitrators. The former was appointed out of the list submitted by the plaintiff-opposite party and the latter out of the list submitted by the defendant-applicant. The court further directed the arbitrators to decide the dispute within three months from the date of receipt of information. According to the defendant-applicant, the arbitrators entered into reference on 30-4-1992 on which date they had their first meeting. Subsequently one of the arbitrators, namely Shri B. Ram was transferred to New Delhi and the award could not be made within the time granted by the court. The plaintiff as well as the other arbitrator, Shri J.K. Verma, filed applications before the court below for appointing another arbitrator in place of Shri B. Ram whereas Shri B. Ram filed an application for extending the time for the submission of the award till April, 1993. In the meantime, the plaintiff-opposite party filed an application (paper No. 64C) for a direction to the arbitrators to make an interim award of Rs. 2,38,000/-. The defendant-applicant filed objections to the said application, inter alia, on the ground that no interim award could be made in favour of the plaintiff-opposite party as the defendant-applicant had a cross claim against the plaintiff-opposite party for a sum of Rs. Seven Lacs and odd on account of loss suffered by the defendant-applicant. By the impugned order dated 12-1-1993 the court below directed the arbitrators to make an interim award of Rs. Two lacs in favour of the plaintiff-opposite party. It is this order which has been challenged by the defendant-applicant by means of revision No. 206 of 1993 before this Court. It appears that on the basis of the said order dated 12-11-1993 passed by the court below, the arbitrator Shri J.K. Verma, nominated by the plaintiff-opposite party, on 31-3-1993 submitted an interim awards of Rs. Two lacs in favour of the plaintiff-opposite party. The court below thereafter vide the order dated 3-4-1993 made the interim award a rule of the court. It is this order dated 3-4-1993 which has been challenged by the defendant-applicant in revision No. 292 of 1993. I have heard Shri V.K. Goel, learned counsel appearing for the defendant-applicant and Shri H.S. Tripathi, learned counsel appearing for the plaintiff opposite party. I have also perused the record of the aforesaid two revisions and with the consent of learned counsel for the parties the revisions are being finally decided together at the admission stage itself.
(3.) THE main submission of Shri Goel, learned counsel for the applicant in Civil Revision No. 206 of 1993 is that the civil court by giving a direction to the arbitrators to make an interim award and that too for a specific sum has acted with manifest illegality and in excess of its jurisdiction. Secondly, it has been submitted that the court below has acted illegally in giving directions in the operative portion of the order dated 12-1-1993 that the award may be given by any of the arbitrators who is found working. Such a direction cannot be given. Besides, such an interim award given by one of the arbitrators would be illegal and invalid. On the other hand, it has been contended by Shri Tripathi on behalf of the plaintiff-opposite party that the revision against an interlocutory order passed by the court below directing the arbitrators to give an interim award did not amount to a case decided and, therefore, the revision before this Court was not maintainable. Secondly, it has been contended that the defendant-applicant has already filed an application on 9-4-1993 for setting aside the interim award and as it has already claimed the said relief before the court below, this court should not exercise its revisional jurisdiction in favour of the defendant-applicant. Thirdly, it has been contended that under Section 37 of the Arbitration Act, the arbitrators have been empowered to give interim awards and the civil court before which the suit was pending, could give directions to the arbitrators including a direction to give interim award. Besides, it was apparent from the order that the interim award was not final and it was to be adjusted in the final award to be given by the arbitrators. It has further been contended that the claim of the plaintiff against the defendant was over rupees Seven lacs whereas the interim award which was directed to be given by the court below was only for rupees Two lacs. Besides, admittedly the plaintiff had given a security to the defendant of rupees Two lacs in pursuance of the two agreements and, therefore, also in equity the plaintiff was entitled to the refund of the said amount and the discretionary order passed by the court below should not be interfered with by this Court. It has also been contended that the award being only interim it does not become invalid if it has been signed by one of the especially in view of the fact that the arbitrators nominated by the defendant, namely Shri B. Ram had been transferred and the interim award on the stamp paper which was sent to Shri B. Ram had not been signed by him though the papers had been received by his clerk one Shri Ghanshyam, who had been receiving the papers earlier as well. In a situation in which one of the arbitrators has refused to sign the interim award does not become illegal or invalid. It has also been seriously contended that under Section 41 of the Arbitration Act the court has every power to pass any such orders in the interest of justice and the Second Schedule to the Act was not exhaustive. THE court can pass interim injunctions in proceedings before the arbitrators and an interim award was also in the nature of an injunction made to secure payment of money in favour of one of the parties. As such also the impugned order does not suffer from any illegality. So far as the first submission made by the plaintiff-opposite party is concerned, I am unable to agree with the submission that the impugned order passed by the court below does not amount to a case decided. It will be noticed from the impugned order that the court below had directed the arbitrators to pass an interim award of rupees Two lacs and one of the arbitrators, namely Shri J. K. Verma, passed an interim award of rupees Two lacs in terms of the said order. Such an order, in my opinion, cannot be termed to be an interlocutory order. Besides, interim award is also an award and the very fact that the court has made the same a rule of the court, would further show that the order was final in nature.;