G C KANUNGO D C ROUTRAY Vs. STATE OF ORISSA

JUDGEMENT

(1.) QUESTION of constitutionality of the Arbitration (Orissa Second Amendment) Act, 1991, to be referred to hereinafter as the 1991 Amendment Act, which has amended the Arbitration Act, 1940, to be referred to hereinafter as the 'Principal Act,' in its application to the State of Orissa, arises for our consideration and decision in the present writ petitions filed under Article 32 of the Constitution.

(2.) PETITIONER in Writ Petition No. 1151 of 1991 had entered into two contracts with the Orissa Government in the year 1969 and 1970 for construction of 'high level bridges' ( one over the river Daya and another over the river Rushikulya. Any dispute to arise between the parties under the said contracts, was required to be resolved by having recourse to Arbitration under the Principal Act because of the Arbitration clause that stood incorporated in each of them, by agreement of parties. The Orissa Government which rescinded both the contracts ( one in the year 1974 and another in the year 1975, it appears, did not concede to the petitioner's claim, exceeding rupees one crore made in relation to each of them. This situation appears to have led the petitioner to institute two separate proceedings under the Principal Act in the Court of Sub-Judge, Bhuvaneshwar - 'the Court of Sub-Judge' seeking appointment of arbitrators to decide the disputes relating to his claims made in respect of the said two contracts. The appointment of a separate arbitrator for deciding each of the said disputes, it appears was made by the Court of Sub-Judge in the year 1981. But, in the year 1982 when the Principal Act, as applicable to the State of Orissa , was amended by the Arbitration (Orissa Amendment) Act, 1982 - the 1982 Amendment Act, providing forum of Arbitration Tribunal for deciding arbitral disputes arisen or arising from contracts as those of the petitioner, a controversy appears to have cropped up, as to whether the arbitrators appointed by the Court of Sub-Judge, in the proceedings before, had to be replaced by an Arbitration Tribunal to be constituted 'according to the 1982 Amendment Act.' When the said controversy had still to be resolved, the Arbitration (Orissa Amendment) Act, 1984 - 'the 1984 Amendment Act,' it is said came into force amending the Principal Act insofar as it became applicable to the Orissa State by providing for a Special Arbitration Tribunal to be constituted by the State Government, for deciding arbitral disputes arisen or arising in relation to the contracts, as those of the petitioner, where claim involved was, of rupees one crore or above. The aforesaid controversy, whether the arbitrators earlier appointed by the Court of Sub-Judge, should be replaced by Special Arbitration Tribunal to be appointed by the State Government as required under the 1984 amendment Act, which had cropped up because of the coming into force of the said two Amendment Acts, it is said, ultimately ended in this Court with the replacement of arbitrators who had been appointed by the Court of Sub-Judge, by Special Arbitration Tribunals constituted by the State Government with power conferred on those Special Arbitration Tribunals to decide the arbitral disputes raised by the petitioner in respect of this two contracts which had been entered into with the State Government but rescinded by the latter. Two Special Arbitration Tribunals which were so constituted by the State Government, it is said, decided the arbitral disputes of the petitioner referred to them , by the making of awards -- one in the year 1988 and another in the year 1989. The Court of Sub-Judge, before which those two awards had come to be placed for making them 'Rules of Court' are said to have been made 'Rules of Court' by its judgments and decrees. The 'Rule of Court' so made in relation to each award by the Court of Sub-Judge, is said to have been affirmed by the High Court of Orissa. When the 'Rule of Court ' so affirmed by the High Court in both the matters were brought up before this Court by the Orissa Government in S. L. P.'s one of them has been dismissed while in the other leave has been granted, however, allowing the petitioner to take Rs. 25 lakhs out of the amount payable under the concerned award made in his favour by one of the Special Arbitration Tribunals. It appears, one of those awards which was made a 'Rule of Court' by the Sub-Judge and unsuccessfully challenged up to this Court by the Orissa Government, is under execution in an execution proceeding before the Court of Sub-Judge. Thus, when, the amount payable under one award which was made a 'Rule of Court' was pending realisation before the Executing Court and another arbitral award which was made a 'Rule of Court' by the Court of Sub-Judge, was pending consideration by this Court in a civil Appeal, the State Government, it is said, promulgated the Arbitration (Orissa Amendment) Ordinance, 1991, amending the Principal Act as amended by the earlier amendment Acts, in its application to the State of Orissa. However, that ordinance came to bereplaced the 1991 Amendment Act. As the 1991 Amendment Act has in effect nullified the aforesaid two awards made in favour of the petitioner by two Special Arbitration Tribunals Constituted by the State Government under the 1984 Amendment Act, even after each of them had been made a 'Rule of Court' and directed the petitioner to get the arbitral disputes raised by him, resolved afresh by the Arbitration Tribunal constituted under the principal Act as stood amended by the 1982 Amendment Act, the constitutionality of the 1991 Amendment Act, has been challenged by the petitioner by filing the Writ Petition.

(3.) THE petitioners in the present Writ Petitions have since challenged the constitutionality of the 1991 Amendment Act, which is found in the notification published in the Orissa Gazette Extraordinary on 22/01/1991, that Notification itself, for the sake of convenience, is reproduced: