M.M.Dutt, J. - (1.) THIS Rule is at the instance of the petitioner Crompton Greaves Limited and it is directed against order No. 23 dated Sept. 22, 1977 of the learned Subordinate Judge, Burdwan. By the said order, the learned Subordinate Judge allowed the application of the opposite party Hindustan Steel Limited under Section 33 of the Arbitration Act, 1940.
(2.) IT appears that on Dec. 23, 1965 the petitioner and the opposite party entered into a contract for the erection of the power distribution system and putting them into commission on the "turn-key" basis to be executed by the petitioner, the contractor. After the "turn-key" job was completed and the power distribution equipment was put into commission, the petitioner found some surplus cables lying in its custody which were not incorporated in the said "turn-key", job. The petitioner claimed that the said surplus cables belonged to it while the opposite party claimed title and ownership to the same. So a dispute arose between the parties as to the ownership of the surplus cables. The contract dated Dec. 23, 1965 contained an arbitration clause and the dispute between the parties over the ownership of the surplus cables was referred to the arbitration of two Arbitrators one nominated by the petitioner and the other by the opposite party. After the Arbitrators had entered on the reference, the petitioner filed a statement of facts and the opposite party filed a Counter state of facts. The Arbitrators raised as many as 8 issues of which issues 4 and 5 are as follows : "4 (a). Is the statement of quantities of surplus cables and their values made in Schedule "A" to the Statement of Facts correct ? (b) Is the claimant liable to render any account of cables imported or to deliver surplus cables, to the respondent as alleged in para 10 of the Counter State of Facts or at all ? (c) To whom the surplus cables belonged after completion of the entire construction works ? 5 (a). If the property in the surplus cables had vested in the respondent, is the respondent liable to pay to the claimant the value thereof either under the terms of the contract or under the provision of Section 70 of the Indian Contract Act? (b) Is the Claimant entitled to be reimbursed the expenses incurred in connection with the storage, insurance etc. of and in respect of the surplus cables ? (c) Is the Respondent entitled to claim a set-off as alleged in Para. 18 (b) of the Counter State of Facts?" While the arbitration proceeding was going on, an agreement dated May 14, 1973, was entered into by and between the parties whereby various other disputes between them were settled. Clause 2 of the said agreement is as follows : "That the issue regarding the ownership of surplus cables already referred to Arbitration by both the parties under the terms and conditions of the subject contract shall be kept outside the scope of this agreement." Before the said agreement dated May 14, 1973, the petitioner examined one witness in the arbitration proceeding. The evidence of the second witness of the petitioner, who was examined after the said agreement dated May 14. 1973, was cancelled by consent of parties. Thereafter on Feb. 20, 1975, the opposite party made an application before the Arbitrators praying for the following orders : "(a) An order be made recording that all the disputes which are subject-matter of the present proceedings other than the dispute relating to the ownership or title of the cables in question have been adjusted by lawful agreement or compromise. (b) All the issues raised by the learned Arbitrators which do not relate to the question of ownership or title of the cables be expunged or deleted. (c) Directions be given on the claimant not to adduce or lead any evidence relating to the question other than the question of ownership or title of the cables. (d) Such further or other direction or directions be given and/or orders be made as may seem fit and proper to the learned Arbitrators." IT was contended in the said application that after the reference to arbitration was made, all outstanding issues between the parties relating to or arising out of the contract dated Dec. 23, 1965 were settled by the said agreement dated May 14, 1973 excepting the issue relating to the title or ownership of the cables in question. IT was submitted by the opposite party that the learned Arbitrators should delete or expunge all the issues raised by the parties which do not relate to the question of ownership of or title to the cables in question. The Arbitrators, after considering the submissions made on behalf of both the parties, inter alia passed the following orders : "It was shown to us that the parties had acted on the footing of the agreement dated 14-5-73. In view of this there seems to be no justification for taking up for decision by us any issue except issues 4 and 5 mentioned above. We have heard the submissions made by the learned counsel on behalf of the parties and considered the decisions cited by them. We make an order in terms of prayers (a), (b) and (c) of the respondent's petition verified on its behalf on 20-2-75, but in the circumstances of the case we make no order as to the costs on the respondent's application. We direct that the Arbitration will go on its scope being limited, however, to Reference No. 2 and Reference No. 3 as mentioned in the Statement of Facts and to issues (4) and (5) settled as stated above."
(3.) THE opposite party was not satisfied with the said order of the Arbitrators and filed an application under Section 33 of the Arbitration Act before the learned Subordinate Judge, praying for an order deciding the effect of the arbitration agreement dated 23-12-1965 read with the subsequent agreement dated 14-5-1973. It was contended in the said application that the order of the Arbitrators dated Oct. 1, 1975 was bad and invalid in so far as the same purported to direct that the arbitration would go on in respect of issues 4 and 5, and that the last portion of the said order was contradictory to the earlier portion. THE said application was opposed by the petitioner. It was contended by the petitioner that the application was not maintainable unless the award had been filed in Court. Further, it was contended that the decision of the Arbitrators that the Arbitration will proceed in respect of issues 4 and 5 was in accordance with the agreement dated May 14, 1973.;