Dr. Vineet Kothari, J. - (1.) THE present Misc. Appeal has been filed by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 ('for short the Act of 1996') against the order dated 26.03.2015 passed by the Additional District Judge No. 3, Udaipur in Civil Misc. Case No. 16/2012 (CM) (RSMML Vs. M/s. Chetak Travel Agency) by which order, the learned Additional District Judge has rejected the application of the appellant -RSMML filed under Section 34 of the Act of 1996 seeking the setting aside of the Arbitral Award dated 31.12.2009 passed by Hon'ble Mis. Justice Kanta Bhatnagar (former Chief Justice of the Hon'ble Madras High Court and former Judge of this Court).
(2.) THE Rajasthan State Mines & Minerals Limited (for short 'RSMML'), a Government of Rajasthan enterprises, has filed the present Misc. Appeal under Section 37 of the Act of 1996 aggrieved by the order dated 26.03.2015 whereby, their application under Section 34 of the Act of 1996 was rejected by the learned Additional District Judge No. 3, Udaipur with the following observations: - The Award in question was passed by the Hon'ble Justice Miss Kanta Bhatnagar, J. (as Her Lordships then was having adorned the office of the Chief Justice of Hon'ble Madras High and a former Judge of this Court) on 31st December, 2009, while deciding the claim on merits about the claim of amount of the claimant M/s. Chetak Travel Agency for the transport services already provided by it to the appellant - RSMML on account of dispute between the parties against premature termination of contract of travel agency. The learned Arbitrator observing the following findings about the issue No. 5 raised before her by the appellant RSMML in the following manner: - "Issue No. 5 being a legal issue, relating to the principle of Res Judicata, was taken as a preliminary issue. Arguments on that issue were heard and vide order dated 18/7/2009 that issue was decided in favour of the respondents and against the claimants. Before dealing with the rival contentions of the learned counsel for the parties, a point raised by Shri Bhandari at the commencement of his reply to the arguments advanced by Shri Gupta requires discussion. Shri Bhandari contended that the principle of Res Judicata is attracted in the matter and the claimant having not raised the question of various claims in the Civil Court is now barred by virtue of Order 2, Rule 2 of the Civil Procedure Code. To substantiate his contention, Shri Bhandari placed reliance on the principle enunciated in the case of K.V. George - Appellant Vs. Secretary to the Government, Water & Power Department, Trivendrum and another - Respondents, (Reported in : AIR 1990 Supreme Court, Page 53). In that decision, in view of the facts and circumstances of the case, their Lordships were pleased to hold that all the issues out of the termination of contract could have been raised in the first claim petition before the Arbitrator by the appellant and this having not been done, the second claim petition before the Arbitrator for remaining dispute was clearly barred under Order 2 Rule 2 of the Civil Procedure Code. It was also held that the principle of Res Judicata and constructive Res Judicata is applicable in Arbitration proceedings. There is no dispute on the point about the applicability of the principle of Res Judicata and constructive Res Judicata being applicable in Arbitration proceedings. However, what requires consideration is whether in the facts and circumstances of the case in hand, this provision of law is applicable or not. The suit before the Civil Court was for injunction and redressal of other grievances could not have been prayed therein. In view of the order passed by the Hon'ble High Court much discussion is not required on the points. His Lordship has observed that the applicant is entitled to certain amounts which include the amount of Security Deposit and amount of extra work done by it and amount of extra work done by it and illegal deduction of the bills and loss of business are the issues which can well be determined by the arbitrator after taking into consideration that, the issue which has been decided by the trial court in the suit filed by the applicant is binding and is Res Judicata on the question of termination of the contract. It is the order of reference which gives jurisdiction to the Arbitral Tribunal. The Arbitral Tribunal can not go contrary to or beyond what has been directed in the order of reference. Shri Bhandari submitted that the order passed by the Hon'ble High Court is an administrative order and Arbitral Tribunal is not bound by that administrative order. The argument is not at all palatable. The order of reference cannot be taken to be administrative order because it was passed under Section 10 & 11 of the Act. As such, the principle of Res Judicata or constructive Res Judicata is not attracted for certain relief claimed by the claimants as mentioned in the order of reference."
(3.) THE earlier suit was filed for injunction only by the claimant - M/s. Chetak Travel Agency, who sought the relief against the premature termination of the Transport Agreement which suit was dismissed by the learned Trial Court on 05.02.2007 and thereafter, the dispute about certain claims were sought to be taken for arbitration and while deciding the application filed by the claimant -M/s. Chetak Travelling Agency under Section 10 & 11 of the Act of 1996 for appointment of Arbitrator [S.B. Civil Misc. (Arbitration) Application No. 70/2007], a coordinate Bench of this Court has dealt with precisely this contention raised by the appellant -RSMML in the following manner: - "The learned counsel for the respondents vehemently submitted that when the issue has been decided once for all finally by the civil court, after the full trial of the suit and it has been held that the contract in question has not been terminated illegally by the respondents, then the applicant's prayer for adjudication of dispute by the arbitrator cannot be granted because of the reason that the finding given by the civil court between the parties is res judicata for all purposes and even the arbitrator cannot re -try the issue already decided. It is submitted that if the termination of the contract was lawful then there cannot arise any question of loss to the applicant -firm nor it can be argued that because of termination of contract, the applicant suffered loss and is entitled to recover the losses from the respondents. I considered the submissions of the learned counsel for the parties and perused the facts of the case. So far as the contract in question is concerned, there is no dispute. Its termination before the period is also not in dispute. The civil court has dismissed the suit for injunction of the applicant wherein above referred issues were there but so far as claim of the applicant that yet the applicant is entitled to certain amounts which include the amount of security deposit and amount of extra work done by it and illegal deduction of the bills and loss of business are the issues which can well be determined by the arbitrator after taking into consideration that the issue which has been decided by the trial court in the suit filed by the applicant is binding and is res judicate on the question of termination of the contract. Even if the contract is terminated lawfully or the work comes to an end then also if any claim of the party to the contract remains due in other, he can certainly seek adjudication for that claim. The question whether in the facts and circumstances and in view of the decision given by the civil court, the security amount could have been forfeited and the applicant could have been denied the amounts claimed on various accounts referred above, alone can be decided by the arbitrator. Since there is arbitration agreement and dispute has been raised and the arbitrator has not been appointed by the respondents inspite of the notice by the applicant, therefore, the dispute is referred to the arbitrator. Hon'ble Miss Justice Kanta Bhatnagar is appointed arbitrator to adjudicate the dispute. Looking to the fact that the applicant has already filed the suit and his suit has been dismissed by the trial court, therefore, it will be appropriate to direct the applicant to initially pay the fees of the arbitrator which is fixed Rs. 50,000/ - tentatively and the final fees may be determined by the arbitrator herself while deciding the arbitral proceedings and the arbitrator may also pass the order for sharing of the fees by the respondents if needed. The office expenses of Rs. 15,000/ - shall also be paid by the applicant. The application is allowed accordingly. A copy of this order be sent forthwith to the learned arbitrator. Sd/ -(PRAKASH TATIA), J.";