SANTRAM AND COMPANY Vs. STATE OF RAJASTHAN
LAWS(SC)-1996-11-25
SUPREME COURT OF INDIA (FROM: RAJASTHAN)
Decided on November 20,1996

SANTRAM AND COMPANY Appellant
VERSUS
STATE OF RAJASTHAN Respondents





Cited Judgements :-

PARMALI WALLACE LIMITED VS. UNION OF INDIA [LAWS(DLH)-1998-5-46] [REFERRED]
LARSEN AND TOUBRO LTD VS. NATIONAL HIGHWAYS AUTHORITY OF INDIA [LAWS(DLH)-2010-3-147] [REFERRED TO]
DEEPAK MITRA VS. DISTRICT JUDGE ALLAHABAD [LAWS(ALL)-1999-5-79] [REFERRED TO]
DEEPAK MITRA VS. DISTRICT JUDGE ALLAHABAD [LAWS(ALL)-1999-7-202] [REFERRED TO]
SHRI BAL KISHAN AGRAWAL GLASS INDUSTRIES LIMITED VS. UNION OF INDIA [LAWS(ALL)-2005-7-103] [REFERRED TO]
MEPC INDIA LIMITED VS. SUNDARAM FINANCE LIMITED [LAWS(MAD)-1998-6-21] [REFERRED TO]
PARMALI WALLACE LIMITED VS. UNION OF INDIA [LAWS(DLH)-1998-5-55] [REFERRED]
PETER JOHN URALIL VS. BABU THOMAS [LAWS(KER)-2003-9-44] [REFERRED TO]
K K BUILDERS CIVIL ENGINEERING CONTRACTORS KERALA VS. GENERAL MANAGER SOUTHERN RAILWAY CHENNAI [LAWS(MAD)-2006-6-134] [REFERRED TO]
STATE OF RAJASTHAN VS. BHARAT CONSTRUCTION CO [LAWS(RAJ)-1998-2-28] [REFERRED TO]
JOHARI FORTS and PALACES PVT LTD VS. MAHARAJA NARENDRA SINGH [LAWS(RAJ)-2001-3-30] [REFERRED TO]
SIMPLEX INFRASTRUCTURES LTD VS. NATIONAL HIGHWAYS AUTHORITY OF INDIA [LAWS(DLH)-2010-3-317] [REFERRED TO]
M.RAJKUMAR VS. SOUTHERN RAILWAY [LAWS(MAD)-2013-4-95] [REFERRED TO]
ICMC CORPORATION LIMITED VS. ELECTRONICS CORPORATION OF TAMIL NADU LIMITED (ELCOT) [LAWS(MAD)-2016-1-14] [REFERRED TO]
SUNDARAM FINANCE LIMITED VS. NEPC INDIA LIMITED [LAWS(SC)-1999-1-86] [DISTINGUISHED]
NEYCER INDIA LIMITED VS. GMB CERAMICS LIMITED [LAWS(SC)-2002-2-59] [REFERRED]
PRADEEP ANAND VS. I T C LIMITED [LAWS(DLH)-2000-3-102] [REFERRED .9. M/S.UTTAM SINGH DUGAL AND COMPANY V. UNION OF INDIA IN CIVIL APPEAL NO. 162/6210.]
BSES RAJDHANI POWER LTD VS. SAURASHTRA COLOR TONES PVT LTD [LAWS(DLH)-2009-7-48] [REFERRED TO]
PACHPEDA RICE MILL VS. STATE OF U P [LAWS(ALL)-2005-2-34] [REFERRED TO]
UNION OF INDIA VS. TATA IRON AND STEEL COMPANY LIMITED [LAWS(CAL)-1999-4-65] [REFERRED TO]
ROSHAN LAL VOHRA & SONS AND ORS. VS. EAST MUNICIPAL CORPORATION OF DELHI [LAWS(DLH)-2016-3-121] [REFERRED TO]
NARINDER KUMAR SEHGAL GOVT VS. UNION OF INDIA [LAWS(P&H)-2003-4-178] [REFERRED]


JUDGEMENT

- (1.)This appeal by special leave arises from the order of the single Judge of the Rajasthan High Court made in Civil Revision Petition No. 293/90, dated August 7, 1990.
(2.)The admitted position is that the appellant had entered into a contract with the respondent-State for execution of the works of widening of Gagar Diversion Bridge at Bikaner in Sri Ganganagar Section. Pursuant to a dispute which arose between the parties, in terms of the contract, the matter by mutual agreement, was referred to the arbitrator by name Sri K. L. Sethia. Pending arbitration, the respondent sought to adjust the amounts due to the appellant in another contract. Thereon the appellant filed an application in the district Court under Order XXXIX, Rule 1, Code of Civil Procedure, 1908 read with Section 41(b) of the Arbitration Act and the Second Schedule to the Arbitration Act, 1940 for ad interim injunction restraining the respondent from adjusting the same. The District Judge by his order held that such an application is not maintainable without the intervention of the Court; therefore, Section 41(b) and the Second Schedule have no application. The same came to be upheld by the learned Chief Justice in the impugned order. Thus this appeal by special leave.
(3.)Shri A. B. Rohtagi, learned senior counsel for the appellant, contends that for entertaining an application under Section 41(b) read with the Second Schedule, it is not a condition that the arbitration proceedings should be pending through the intervention of the Court. Independently thereof, when arbitration proceedings were pending between the parties in respect of the claim or counter-claim and when the respondent sought to adjust the same with the amounts due from other contracts, the Court would, in the circumstances, intervene and restrain the respondents from adjusting the same as a counter-claim. Otherwise, the arbitration proceedings would be nullified. He placed strong reliance on the judgment of a two Judge Bench of this Court in Union of India v. Raman Iron Foundry, (1974) 3 SCR 556 . The question is no longer res integra. A Bench of three judges of this Court in Kamaluddin Ansari and Co. v. Union of India, (1983) 3 SCR 607 has considered the scope of Section 41(b) and the Second Schedule and had held thus:
"The first question that falls for consideration in this appeal is about the exact scope and ambit of Section 41 in order to appreciate the contention raised on behalf of the appellant:

"41. Procedure and powers of Court:- Subject to the provisions of this Act and of rules made thereunder -

(a) the provisions of the Code of Civil Procedure, 1908 shall apply to all proceedings before the Court, and to all appeals, under this Act, and

(b) the Court shall have, for the purpose of, and in relation to, arbitration proceeding, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court:-

Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters."

In view of cl. (b) of S. 41 the Court has been given power of passing orders in respect of any of the matters set out in Second Schedule for the purpose of and in relation to any proceedings before the Court. The Second Schedule of the Arbitration Act inter alia includes interim injunction and the appointment of receiver."



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