Calcutta High Court Union Of India (Uoi) vs P.C. Ray And Co. (India) (P.) Ltd. on 30 September, 1986 Equivalent citations: [1989]65COMPCAS625(CAL) JUDGMENT Pratibha Bonnerjea, J. 1. The parties to these proceedings had entered into a contract on August 31, 1951, containing an arbitration Clause for adjudication of disputes arising out of the contract or relating thereto by two arbitrators. Disputes and differences having arisen between the parties from time to time, five separate references were started between the parties. All the five references were private references and were as follows: 1. In 1961, the respondent company as the claimant made the first reference against the Union of India for recovery of Rs. 2,08,12,135 and the Union of India made certain counterclaims therein. 2. In March, 1964, the Union of India as the claimant made the second reference for recovery of Rs. 1,00,90,041.39 and the respondent company made certain counterclaims in that reference. 3. In July, 1964, the respondent started the third reference claiming Rs. 39,00,000 and the Union of India made certain counterclaims therein. 4. In October, 1969, the fourth reference was started by the respondent claiming Rs: 1,73,63,850 and the Union of India made certain counterclaims therein. 5. In January, 1972, the fifth reference was started by the respondent company claiming Rs. 1,01,25,000 and the Union of India also made certain counterclaims therein. 2. The award in the first reference was made on August 18, 1967, in favour of the Union of India and the same was filed in this court. The respondent company had filed an application for setting aside the said award but by order dated August 9, 1968, the said application was dismissed and a judgment upon the said award was passed. The Union of India thus became a decreeholder and/or a creditor of the respondent company. 3. During the pendency of the second, third, fourth and fifth references, one Bibhuti Bhushan Dutta P. Ltd., a creditor of the respondent company, took out Company Petition No. 203 of 1975 on June 4, 1973, for winding up of the respondent company. In that application, the present petitioner, the Union of India, as the decreeholder creditor, was substituted in place and stead of the original petitioning creditor, Bibhuti Bhushan Dutta P. Ltd., on April 1, 1974. One Saurashtra Agency P. Ltd., another creditor of the company, applied for stay" of Windingup Proceeding No. 203 of 1975. By an order dated June 25, 1974, passed by the winding up court, the stay application was rejected and the respondent company was directed to be wound up. Both Saurashtra Agency and the respondent company filed two appeals from the orders dated June 25, 1975, passed in their respective applications. They also prayed for stay of the order of winding up. The appeal court rejected the prayer for stay and confirmed the order of winding up by its order dated September 2, 1975, but at the same time the appeal court directed the official liquidator to continue all the pending arbitration proceedings on behalf of the company in liquidation. This order of the appeal court dated September 2, 1975, was further clarified and/or modified by another order dated February 9, 1976. Pursuant to the orders of the appeal court, the arbitration proceedings continued and one of the joint arbitrators made awards in all the five references in favour of the Union of India but the other arbitrator refused to sign the said awards. Hence, there were disagreements between the two arbitrators in all the five pending arbitration proceedings. As a result, it became necessary for the umpire to enter upon the references. Under Clause 33 of the agreement, the Chief Justice of India was to appoint the umpire and he appointed Mr. Justice G. K. Mitter, a retired judge of the Supreme Court as the umpire. On September 3, 1976, the umpire entered upon the references. 4. It should be noted that the arbitration proceedings were directed to be continued by the appeal court in appeals arising out of the windingup order and the liquidator was conducting the arbitration proceedings pursuant to that order subject to the control and supervision of the winding up court. In short, the appeal court, while exercising its jurisdiction in windingup matters, directed the official liquidator to continue the references. 5. On March 6, 1978, the Union of India, the petitioning creditor, took out Application No... of 1978 in Company Petition No. 203 of 1975 before the winding up court under Section 5 of the Arbitration Act for revocation of the authority of the umpire. On that application, by an order dated March 7, 1978, the winding up court revoked the authority of the umpire and superseded all the four pending references by directing that the arbitration agreement would cease to have effect with respect to the differences referred. The Saurashtra Agency (P.) Ltd. again preferred