Dr. Vineet Kothari, J. - (1.) THE Cotton Corporation of India has filed the present appeal against the respondent -M/s. Kanda Edible Oil (P) Limited, Sriganganagar aggrieved by the order dated 07.04.2012 passed by the learned District Judge, Sriganganagar in Civil Suit No. 247/2006 "M/s. Kanda Edible Oil (Private) Limited, Sriganganagar Vs. Cotton Corporation of India & Anr." allowing the application of the present respondent -M/s. Kanda Edible Oil (P) Limited, Sriganganagar filed under Section 34 of the Arbitration and Conciliation Act, 1996 ('the Act of 1996') setting aside the Arbitration Award dated 16.07.2006 made by the Arbitrator Shri Jitendra Parashar, Advocate.
(2.) THE learned District Judge, Sriganganagar has given the following reasons for setting aside the Arbitration Award dated 16.07.2006: - The learned counsel Mr. Vijay Kumar Aggarwal and Dr. Dhankanwar Rajpurohit appearing for the appellant -Cotton Corporation of India submitted that a similar controversy has been settled by this Court in an appeal arising out of the similar nature order passed by the same learned District Judge, Sriganganagar in the case of Cotton Corporation of India Vs. Trimurti Sales Corporation and the appeal namely, S.B. Civil Misc. Appeal No. 1653/2012 "Cotton Corporation of India Vs. Trimurti Sales Corporation & Anr." was allowed by this Court on 29.07.2015 (Wednesday). The relevant portion of the observations made by this Court in the aforesaid order dated 29.07.2015 is quoted herein below for ready reference: - "4. Having heard the learned counsels for the parties, this Court is of the considered opinion that the impugned order deserves to be set aside and the matter deserves to be remanded back to the learned District Judge, Sri Ganganagar, for deciding again the application under Section 34 of the Act of 1996 on its own merits. The reasons assigned by the learned District Judge in the impugned order are not sustainable, because the arbitration reference could be made only under the Act of 1996, which was prevalent on the date of making of the arbitration reference, and reference under the Act of 1940 in clause 15 of the Agreement between the parties could not make the reference incompetent, since in the very same clause, the parties had agreed to refer the matter to arbitration. Clause 15 is also quoted below for ready reference: - "15. Arbitration: - If any dispute in relation to this agreement except quality then such dispute shall be referred to any arbitrator for arbitration. The appointment of arbitrator shall be made by the Branch Manager of the concerned branch and the award of the arbitrator shall be final and binding. In relation to the arbitrator the provision of Arbitration Act 1942/1940 will be applicable. Please return the original and other copies of the agreement along with all the conditions within two days of the receipt of the original and duplicate copy of the agreement otherwise it will be deemed that the purchaser has accepted the agreement and affirmed the same." 5. By reference to the Arbitration Act, 1940 [(sic), there was no Act of 1942 for arbitration in India, and therefore, obviously reference was only made to 1940 Act]. But since the first part of clause 15 obviously indicates the agreement between the parties for referring any dispute to the Arbitrator for arbitration, it is needless to say that the law applicable on the date of reference would apply and mere reference of 1940 Act in clause 15 will not render such mutual agreement between the parties to refer the dispute to arbitration otiose merely because later on 1996 Act came into force. Section 34(2)(ii) provides that: "34. Application for setting aside arbitral award. - (1)..... (2) An arbitral award may be set aside by the Court only if - (i)..... (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or......" 6. The present ground for setting aside the Arbitration award is not covered by these provisions as the law applicable would be 1996 Act, as per the aforesaid Hon'ble Supreme Court decision. 7. Consequently, the present appeal is allowed and setting aside the impugned order dated 07.04.2012, the learned District Judge, Sri Ganganagar is requested to decide the application under Section 34 of the Act afresh on merits, in accordance with law, after considering all the contentions raised by the parties before it. No costs. Copy of this order may be sent to the concerned parties and the court below forthwith.
(3.) THE learned counsel Mr. Vijay Kumar Aggarwal submitted that the Arbitration Clause referred above in this case as well as in the case of Trimurti Sales Corporation were similar and, therefore, the present Misc. Appeal filed by the Cotton Corporation of India deserves to be allowed and the impugned order dated 07.04.2012 which has been passed by the learned District Judge only on the ground that the Arbitration Clause No. 15 of the Agreement between the parties refer to the Arbitration Act of 1940 and despite coming into force the new Act of 1996, the Arbitral Award made under the Act of 1940 could not be set aside because of coming into force the new Act of 1996 and the provisions of the Act of 1940 have been repealed.;