JUDGMENT N.K. Mehrotra, J.
1. This is an appeal under Section 37(B) of the Arbitration and Conciliation Act, 1996, agatnst the order dated 17.4.2002 in Regular Suit No. 30 of 2001, Union of India v. Ghan Shyam Das passed by the District Judge, Lucknow.
2. I have heard the learned counsel for the parties and have gone through the record.
3. It appears that initially a tender was issued by the respondent inviting offers for supply of wooden planks and scuttling to the Inspector of Works Line in his store. The tender was opened on 12.4.1987 and the appellant's offer was accepted by the respondent at the cost of Rs. 62,800 vide letter dated 7.2.1988. The appellant was directed to commence the work immediately so as to complete the same within three months from 7.2.1988. The appellant could not complete the work and extension of time was granted several times. When upto 25.11.1988, the work could not be commenced, the Assistant Engineer (Northern Railway) informed through letter dated 25.11.1988 that the appellant has not commenced the supply despite the notices, therefore, the agreement was terminated in terms of Clause 62 (k) of the General Conditions of Contract, 1971. Since the respondents were entitled to invite fresh tender under the terms the conditions at the risk and costs of the appellant, therefore, fresh tender of supply of wooden planks and scuttling to Inspector of Works Line in his store under the Assistant Engineer-II Northern Railway, Lucknow, was floated. The appellant again offered the tender at the risk and costs of the appellant and ultimately, it was accepted by the respondent on 3.7.1990 at the approximate cost of the work Rs. 1,14,100. This letter is Annexure-5 to the counter-affidavit. In this letter a note was specifically indicated that the difference of cost, i.e., Rs. 51,300 (1,14,100-62,800) shall be recovered from the appellant. The work was to be completed within three months from 3.7.1990. The appellant accepted the letter and provided a F.D.R. dated 19.7.1990 for Rs. 2.900 as earnest money and signed the agreement on 23.7.1990. It was stipulated in this letter that the difference of cost of Rs. 51,300 will be recovered from the appellant. The copy of the agreement dated 23.7.1990 is Annexure-R-7 to the counter-affidavit. Again the contractor got the time extended upto 31.12.1990. The first bill was submitted on 16.10.1990 and the subsequent bill later on. The recovery was made from the different bills. It was for the first time after one year nine months on 3.9.1990 that the appellant referred the dispute with regard to the first agreement dated 22.4.1988. A copy of the representation dated 3.9.1990 is Annexure-R-8. This was rejected by the respondent. The final bill was submitted on 23.7.1991 and according to the terms, supplementary agreement was executed between the parties. After receipt of the final bill, the appellant submitted no claim certificate dated 4.10.1991 requesting therein to release the earnest money of Rs. 2,900. The earnest money was released with reference to the agreement dated 23.7.1990. A copy of the letter of the appellant dated 23.3.1991 is Annexure-R-11 to the counter-affidavit. The appellant filed a Writ Petition No. 735 of 1991 for mandamus directing the respondents not to recover the amount of Rs. 51,300 but this petition was dismissed. The appellant had also filed suit for appointment of the Arbitrator. It was decided on 21.1.1999. This order of the Civil Judge (Senior Division), Lucknow is Annexure-4 to the counter-affidavit. The learned Civil Judge directed the respondent to appoint an Arbitrator. The appellant also filed an application under Section 8 of the Arbitration Act, 1940, before the Civil Judge, Lucknow and the same was registered as Misc. Case No. 4 of 1992 praying therein to appoint an Arbitrator to whom the dispute existing between the parties may be referred for arbitration with respect to the two agreements but in compliance of the order of the Civil Judge, Lucknow dated 21.1.1999, Shri Mahipal Singh was appointed as sole Arbitrator and a reference was made through Annexure-R-12 annexed to the counter-affidavit along with the claim of the contractor, the claim of the Railway for Rs. 51,300 was also referred to the Arbitrator. Ultimately an award was given on 30.4.2001 (Annexure-7 to the first appeal). The Union of India, the respondent No. 1 filed an application under Section 34 of the Arbitration Act for setting aside the arbitral award dated 30.4,2001 which was decided by the impugned order dated 17.4.2001. It is against this order passed by the District Judge, Lucknow, the present appeal has been filed.
4. The learned District Judge has held that the dispute relates to the second agreement and Arbitrator had to decide firstly ; whether there was any existing dispute requiring adjudication, and secondly ; whether the arbitration clause in the second contract was still available for exercise of Jurisdiction by arbitral Tribunal. The learned District Judge has also held that there was an agreement dated 23.7.1999 before the Arbitrator. The agreement between the parties in Clause 37 clearly provides that after the work is completed and taken over by the Railways, as per terms and conditions of the contract agreement, or the contract is otherwise concluded by the parties with mutual consent and final payment is made by the railways to the contractor for the work done under the contract, the parties shall execute supplementary agreement and that supplementary agreement was executed on 29.7.1991 between the parties. It clearly contains an acknowledgment of the contractor that he has received full and final settlement of his bills/disputed claims under the principal agreement. In the supplementary agreement, it is provided that the arbitration clause contained in the said principal agreement, shall cease to have any effect and/or shall be deemed to be non-existent for all purposes and admittedly the contractor had Issued 'no claim certificate' and had secured withdrawal of security deposits of the second contract as well as first contract. The District Judge has also recorded a finding that the second contract has been fully exhausted and arbitration clause has become nonexistent and the dispute relating to the deduction of Rs. 51,300 from the bill of the second contract could not have been raised and the attempt of the appellant to relate this dispute and confine it to the first contract is legally not permissible. The District Judge has recorded a finding that the award is hit by Clauses (ii) and (iv) of Part (a) of Sub-section (2) of Section 34 of the Arbitration Act, 1996. The award contains decision on matter beyond the scope of submissions to arbitration. The District Judge has also held that the scope of submission to the arbitration was till the agreement was not exhausted and the contract did not cease to exist. He has also recorded a finding that raising of claim after the contract has ceased and giving decision on it by the arbitral Tribunal is clearly a matter beyond the scope of submission to arbitration. After recording these findings, the District Judge has allowed the application under Section 34 of the Arbitration Act, 1996 and has set aside the award.
5. The learned counsel for the appellant has assailed this judgment of the District Judge that the finding that the arbitration clause did not exist is not correct. In my opinion, this contention has no force. The first agreement could not be complied with. The second agreement was taken by the same contractor, and the document filed with the counter claim clearly establishes that the second contract was accepted at the risk and costs of the appellant and after the completion of the second contract, the arbitration clause did not exist. The learned counsel for the appellant has further contended that the dispute relates to the first agreement. This contention has also no substance because the amount of Ra. 51,300 was deducted from the bills of the second contract and it cannot be said that this amount relates to the first agreement and not the second agreement. It has been further contended that the respondents did not raise this issue before the arbitrator and therefore, this Issue could not be raised before the District Judge but this contention has also no force. The application moved by the respondents and the interference by the District Judge in the award is within the scope of Section 34(2) Clauses (ii), (iv) of the Arbitration Act, 1996. It has been further argued that the District Judge has exceeded his jurisdiction as given under Section 34 of the Act but in view of the annexures filed along with the counter-affidavit, it is clear that there is dispute relating to the second agreement in which 'no claim certificate' has been Issued after preparation of the final bills and supplementary agreement was executed according to the terms of the agreement and in the supplementary agreement, there is an arbitration clause which exhausted and, therefore, the contention of the learned counsel for the appellant has no force. The learned counsel for the appellant has referred Narayan Prasad Lohia v. Nikunj Kumar Lohia and Ors., 2002 (1) Arb LR 493 (SC) ; Mapoor Nilokheri Co-operative Dairy Farm Society Ltd. v. Union of India and Ors.. AIR 1973 SC 1338 and Friends Coal Carbonisation v. Hindustan Zinc Ltd., AIR 2002 Raj 116, but the facts of all these three cases are not similar and the controversy involved in the instant appeal is not similar to the facts on which the aforesaid three cases were decided. In the instant case, under appeal, it is a clear case that the dispute relates to the second agreement and after the final payment 'no claim certificate' has been given and as per supplementary agreement executed between the parties, after conclusion of the work, the arbitration clause exhausted, therefore, the learned District Judge has correctly allowed the application under Section 34 of the Arbitration Act, 1996.
6. In result, the appeal has no force and is dismissed.