Case: H.L. Batra &amp; Company Vs. State of Haryana &amp; Another

2. Originally the appellant had in1 entered into an agreement with the respondent for construction of a workshop and service station over thed at Rewari. The agreement contained an arbitration clause. On account of disputes between the parties, the arbitrator was appointed by the parties outside the court for deciding the disputes. The arbitrator gave his award on5 in favour of the appellants for a sum of Rs.. This award was ultimately set aside by the Additional District Judge, Gurgaon, vide his order dated. By the said order the parties were directed to appear before the Chief Engineer of the respondents who was directed to appoint another officer of the rank of Superintending Engineer for giving a fresh award. Accordingly by office order dated, pursuant to the said judgment of8 the Chief Engineer (Haryana) PWD,R Branch appointed B. K. Wadhwa, Superintending Engineer, PWD,"for settling the disputes between the parties, that is to say, M/s. H. L. Batra and Company on the one side and the State of Haryana through the Executive Engineer, Provisional Division, PWD,R Branch, Gurgaon on the other side in Agreement No. 22 for the year1 for the work of construction of a workshop complex and service station atThereafter the arbitrator issued a notice dated9 directing both the parties to send their claims in duplicate to him. Accordingly the appellant sent its claims. The respondents filed. The arbitrator by ag award dated, awarded to the appellant a sum of Rs. 27, 303/3. This award was set aside by the, Gurgaon by an order dated1 on the ground that originally before the first arbitrator the appellant had filed 30 claims. Before the second arbitrator, it had filed 7 additional claims, thereby enlarging the scope of arbitration which was not permissible in law. The judgment proceeded on the basis that the second arbitrator was required only to consider the 30 claims originally filed before the first arbitrator and no others. This judgment has been upheld in appeal by the District Judge and a revision from the same has also been dismissed by the High Court.

Court's reasoning:
4. The courts thus seem to have proceeded on the basis that the scope of the second arbitration was confined only to 30 claims which were originally filed before the first arbitrator. However, from the office order of9 which we have referred to and reproduced earlier, it is clear that the arbitrator has been appointed for the purpose of settling disputes between the parties. The terms of reference do not confine the second arbitration only to 30 claims. The first notice of the arbitrator dated9 calling upon both sides to file their claims also proceeds on the basis that the arbitration pertains to all the disputes between the parties. Therefore, the scope of the arbitration has not been enlarged by the appellant contrary to law. The claims filed by the appellant pertained to the said contract. Therefore, these disputed claims are within the terms of reference before the arbitrator. Even them which has been filed has been considered by the arbitrator on the same basis. Therefore, the award cannot be set aside on the ground that it is beyond the scope of arbitration or the terms of reference to arbitration5. The order of thee dated1 also refers to the other contention relating to the award beingd because the arbitrator had not delivered the award within four months of his appointment. This point, however, does not survive for our consideration since it has been held that the time for making the award was extended by the consent of the parties.