IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 73 of 2003 Date of Decision: 19th August, 2008 M/s Himalayan Const. Co. Appellant Versus The State of H.P. and others Respondents. Coram The Hon’ble Mr. Justice Sanjay Karol,J. Whether approved for reporting1? Yes. For the appellant: Mr. Suneet Goel, Advocate. For the respondents: Mr. R.K.Bawa, Advocate General, with Mr. Vivek Singh Thakur, Addl. Advocate General. Sanjay Karol, J. (Oral) The present appeal arises out of judgment, decree dated 23.11.2002 passed by learned District Judge, Kangra at Dharamshala, in Civil Suit No. 7-D/1 of 99, titled as M/s Himalyan Const. Co. vs. The State of H.P. and others, dismissing the plaintiff’s suit for recovery of a sum of Rs. 2,19,992/-, alongwith interest thereupon. Certain disputes arising out of construction agreement No. EE-39/1986-87 entered into between the plaintiff (appellant herein) and the defendants (respondents herein) were subjected to the arbitration in terms of the Arbitration clause No. 25 of the agreement. The sole Arbitrator, i.e. Superintending Engineer, HP PWD, 2nd Circle, Shimla, HP in terms of his Whether the reporters of Local Papers are allowed to see the Judgment? 2 award dated 8.1.1999 Ext.PW-1/D came to the conclusion that claim No.2 being escalation charges was not arbitrable and hence no amount was awarded with respect to the same. Consequently, plaintiff filed the suit in question claiming a sum of Rs.2,19,992/- alongwith interest towards the said escalation charges, which were held to be non-arbitrable by the sole Arbitrator. Based on the pleadings of the parties, the Court below framed the following issues:- 1. Whether the plaintiff is entitled to the damages? If so, to what extent? OPP 2. Whether the suit is not maintainable? OPD 3. Whether this Court has no jurisdiction to try this suit? OPD 4. Whether the suit is time barred? OPD 5. Whether the suit is liable to be dismissed for want of issuance of legal notice? OPD 6. Relief. Appreciating the material on record, the Court below while deciding Issue No.2 relied upon the Award Ext.PW-1/D and the relevant clauses of the agreement Ext.PW-1/A and held that in view of arbitration clause the Court had no jurisdiction to try the suit as the matter had been adjudicated upon by the Arbitrator and for the amount claimed by the plaintiff in the suit, under the head of escalation in terms of clause 10(c) of the agreement was not maintainable for the reason that no amount had been awarded by the Arbitrator in favour of the plaintiff. For the reason that issues No.2 and 3 were decided against the plaintiff, the Court did not go 3 into the merits and adjudicated the remaining issues and dismissed the plaintiff’s suit. Hence, the present appeal. I have heard the learned counsel for the parties and perused the record. Clause 10(c) of the agreement Ext.PW-1/A provides a mechanism whereby the contractor’s claims for escalation charges are to be determined by the Superintending Engineer whose opinion is final and binding on the parties. Clause 25 of the agreement contains the arbitration clause. Clause 2 of General conditions of the contract, which is similar to clause 10(c) of the agreement has been held to be non-arbitrable by the Apex Court in Vishwanath Sood vs. Union of India and another, AIR 1989 SC 952. Therefore, the plaintiff’s claim filed before the Arbitrator was rightly held to be non-arbitrable and not considered by the Arbitrator appointed in terms of the agreement. Undoubtedly, clause 10(c), non-arbitrable clause, provides for a complete mechanism for adjudication of the dispute in relation to escalation charges. However, in the absence of any decision/rejection by the Superintending Engineer for whatever reason, it cannot be said that the plaintiff’s suit for adjudication of its dispute for the same can be held to be non-maintainable. Replying upon the findings of the Arbitrator, the Court observed that the dispute was not arbitrable yet the plaintiff’s suit was dismissed for want of jurisdiction on the ground that agreement contained an arbitration clause. The plaintiff had already exhausted its remedies in terms of the agreement and only when it was not-suited, it approached the Civil Court for getting the matter adjudicated in accordance with the terms 4 of the agreement and the law. The findings of the Court are also inconsistent to the extent that in para 10 of the impugned judgment it has observed that the dispute was not arbitrable yet in para 14, it has held that “the arbitrator, as per his award never inferred that he was not competent for purpose of clause 10(c) of the agreement and assess any compensation”. The findings being clearly contradictory needs to be set aside. Section 9 of the Code of Civil Procedure, 1908 reads as under:- “9. Courts to try all civil suits unless barred- The Courts shall subject to the provisions herein contained have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.” There is no express or implied bar in entertaining the plaintiff’s Suit and, therefore, it cannot be said that the jurisdiction of the Civil Court is barred and the same cannot be adjudicated upon by the Civil Court. The plaintiff’s suit is totally maintainable and the jurisdiction of the Civil Court to try the suit is not barred by any law. For the aforesaid reasons, the appeal is allowed and the judgment, decree passed by the Court below is set aside. Since the suit was not decided by the Court below on merits, therefore, the matter is remanded back to the concerned Court. The suit is restored to its original position. Except for issues No.2 and 3, the learned Judge shall decide the suit on merits in accordance with law. The parties through their learned counsel are directed to appear before the Court of learned District Judge, Kangra at Dharamshala 5 on 25th September, 2008. Since the matter pertains to the year 1999, therefore, it is expected of the learned Judge to decide the same as expeditiously as possible and not later than 30th June, 2009. 19th August, 2008 (Sanjay Karol) (C) Judge.