# M/S Shyam Lalit Dubey & Anr v. U.O.I. & Anr

- **Citation:** (2024) 7 ILRA 977
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-07-15
- **Case number:** Conciliation Act No. 66 of 2023
- **Bench:** Arun Bhansali, C.J. Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-shyam-lalit-dubey-anr-v-u-o-i-anr-52361
- **Pages:** 10

## Headnote

Civil Law (The Arbitration and Conciliation
Act, 1996-Sections 31(7), 34 & 37) (The
Indian Contract Act-1872-Section 70)- The
disputes and differences have to arise out of or
in connection with the contract in question. As
has been firmly established in the present case
that while the contract in question pertains to
rebuilding of Bridge No. 70 at Km 34/13-14
between Lalgopalganj (LGO) and Bhadri (BHDR)
Station, the same has nothing to do with epoxy
grouting in relation to the other bridges. The
said work was wholly alien and independent to
the work under contract and as only incidentally
the contract in question was in existence, it
cannot be said that the work of epoxy grouting
arose out of or in connection with the contract
in question-In an arbitral dispute with reference
to quantum meruit or Section 70 of the Act,
1872, for a work undertaken which is wholly
independent of the contract containing the
arbitration clause, the same cannot become an
arbitral dispute. (Para 34, 35 & 42)

Appeal partly allowed. (E-15)
978 INDIAN LAW REPORTS ALLAHABAD SERIES
List of Cases cited:

## Text

7 All. M/S Shyam Lalit Dubey & Anr. Vs. U.O.I. & Anr.
977
complainant on alarm or provoked him to
commit any act which could breach the
peace. The words used for alleged insult are
also not specific except that "ग िी गिौच की" or
"गधदी गधदी ग हिय ाँ दी". Accordingly, in view of
Mohammad Wajid and another (supra),
even ingredients of offences under Sections
504 and 506 I.P.C. are also made as well as
the
Court
is
of view
that
present
proceedings were initiated by opposite
party only in order to wrecking vengeance
as they were facing criminal proceedings
on a complaint of applicant No.1 for
committing offences related to a woman.

10. The outcome of above
discussion is that facts of present case are
squarely falls within the parameters as
referred in a judgment passed by Supreme
Court in State of Haryana v. Bhajan Lal,
1992 Supp (1) SCC 335 : 1992 SCC (Cri)
426, where inherent power could be
invoked to quash criminal proceedings, and
for reference para 102(7) of Bhajan Lal
(supra) is reproduced hereinafter:

"(7) Where a criminal proceeding
is manifestly attended with mala fide
and/or where the proceeding is maliciously
instituted with an ulterior motive for
wreaking vengeance on the accused and
with a view to spite him due to private and
personal grudge."

11. Accordingly, impugned order
dated
28.02.2024
is
set
aside
and
consequently criminal proceedings arising
out of complaint Case No.6204 of 2024
under Sections 504, 506, 384 I.P.C. (Anju
Garg Vs. Dr. Hemika Agarwal and others)
are also quashed.

12. Accordingly, application is
Allowed.
13. Registrar Compliance to take
steps.
----------
(2024) 7 ILRA 977
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 15.07.2024

BEFORE

THE HON'BLE ARUN BHANSALI, C.J.
THE HON'BLE JASPREET SINGH, J.

Appeal Under Section 37 of Arbitration and
Conciliation Act No. 66 of 2023

M/S Shyam Lalit Dubey & Anr.
 ...Appellants
Versus
U.O.I. & Anr. ...Respondents

Counsel for the Appellants:
Pritish Kumar, Shantanu Gupta

Counsel for the Respondents:
Deepanshu Dass, Varun Pandey

Civil Law (The Arbitration and Conciliation
Act, 1996-Sections 31(7), 34 & 37) (The
Indian Contract Act-1872-Section 70)- The
disputes and differences have to arise out of or
in connection with the contract in question. As
has been firmly established in the present case
that while the contract in question pertains to
rebuilding of Bridge No. 70 at Km 34/13-14
between Lalgopalganj (LGO) and Bhadri (BHDR)
Station, the same has nothing to do with epoxy
grouting in relation to the other bridges. The
said work was wholly alien and independent to
the work under contract and as only incidentally
the contract in question was in existence, it
cannot be said that the work of epoxy grouting
arose out of or in connection with the contract
in question-In an arbitral dispute with reference
to quantum meruit or Section 70 of the Act,
1872, for a work undertaken which is wholly
independent of the contract containing the
arbitration clause, the same cannot become an
arbitral dispute. (Para 34, 35 & 42)

Appeal partly allowed. (E-15)
978 INDIAN LAW REPORTS ALLAHABAD SERIES
List of Cases cited:

1. U.O.I. Vs Promode Kumar Agarwalla & anr.
1967 Lawsuit (Cal) 293,

2.Municipal Corporation of Delhi Vs Ravi Kumar
in OMP No. 273 of 2008 decided on 22.11.2017
by Delhi High Court

3.Bharat Sanchar Nigam Limited Vs Vihaan
Networks Ltd., : 2023 Lawsuit (Del) 3385.

4.M/s. Patel Engineering Co. Ltd. Vs Indian Oil
Corporation Ltd. : 1975 AIR (Patna) 212,

5. U.O.I. Vs Monoranjan Mondal : 2006(1) ICC
168

6.The Sports Authority of Assam Vs Larsen and
Tourbo Ltd. 2024 (1) GauLR 894

7.Renusagar Power Co. Ltd. Vs General Electric
Co.& anr. (1984) 4 SCC 679

8. U.O.I. Vs. Salween Timber Construction
(India) : AIR 1969 SC 488

9.A. M. Mair & Co. Vs Gordhandas Sagarmull :
1951 AIR (SC) 9

(Delivered by Hon'ble Arun Bhansali, C.J.)

1. This appeal is directed against the
judgement dated 28.06.2023 passed by the
Commercial Court, Lucknow whereby the
petition filed by the respondents under
Section
34
of
the
Arbitration
and
Conciliation Act, 1996 (for short the 'Act,
1996') has been allowed and the arbitral
award dated 6.11.2020 has been set aside.

2. Tender offer of the appellants
for the work of rebuilding of Bridge No. 70
at Km 34/13-14 between Lalgopalganj
(LGO) and Bhadri (BHDR) Station on
ARC
Section
under ADEM/PRG
of
Lucknow
Divison
was
submitted
in
pursuance of the tender notice dated
21.12.2016, which was accepted by the
competent authority at the offered rates.
The total cost of assigned work was
Rs.2,50,86,758.87P.

3. Pursuant to the said acceptance,
Letter
of
Acceptance
(LoA)
dated
01.05.2017 was issued. Pursuant to the
terms of the contract, earnest money
deposited by the appellants with the tender
documents was retained and balance
security deposit was to be recovered from
the progressive bills @ 10% till full
security
amount
was
recovered.
A
performance guarantee of Rs.12,54,340/-
was required to be submitted, which was
submitted in the shape of FDRs by the
appellants. A formal agreement was entered
into between the parties to which the
general conditions of Railways contract
('GCC')
were
applicable.
Under
the
agreement, the appellants were required to
complete the work within eight months
from the date of issue of LoA i.e. by
31.12.2017
in
conformity
with
the
approved drawing.

4. It was claimed by the appellants
that it arranged the entire paraphernalia and
infrastructure including labour, staff, tools
and materials at the site to execute the
awarded contract. However, the contract
could not be carried out between the period
01.05.2017 to 31.12.2017 in terms of the
agreement as the respondents failed to
provide approved drawing to construct the
bridge, though it was provided that the
same would be supplied at the time of
execution of the agreement. The contract
period was extended without penalty from
01.01.2018 to 31.07.2018. However, even
during the extended period the approved
drawing was not supplied.

5. It is claimed that in June, 2018,
the appellants were directed by the Senior
7 All. M/S Shyam Lalit Dubey & Anr. Vs. U.O.I. & Anr.
979
Divisional Engineer-IV to perform epoxy
grouting work on Bridges No. 4, 6, 8, 12,
110, 115, 119, 96, 151, 148, 146, 146A,
147, 144, 140, 120, 116, 105A, 105, 117,
104A, 104, 127, 123, 109 & 131A. It is
further claimed that though the said work
was not provided in the contract, keeping in
view the long standing association of the
appellants with the Railways and emergent
and urgent nature of the work, the same
was performed whereby the appellants
expended about Rs.65 Lakhs. The said
epoxy grouting work was approved and
verified
by
the
competent
Railway
Authorities. However, the payment was not
made.

6. Since the approved drawing was
not provided to the appellants within time
to complete the work awarded to them
under the contract and on account of non
payment of their dues for epoxy grouting,
the respondents were requested to appoint
an Arbitrator under clause 64 of the GCC.
However, when the Arbitrator was not
appointed, the appellants approached the
High Court, which appointed a sole
Arbitrator by its order dated 06.01.2020.

7. The Arbitrator passed the
arbitral
award
dated
06.11.2020
and
awarded the following amounts along with
12% pendente lite interest :

A. Amount under earnest
money

 :
Rs.
2,72,500.00
B.
Amount
under
the
performance guarantee

 :
Rs.12,54,340.00

C.
Amount
of
epoxy
grouting work

:
Rs.61,24,732.79
D.
Amounts
under
mobilization of resources
 :
Rs.34,13,437.50
E. Amount under 10% loss
of profit

:
Rs.25,08,675.89
F.
Fee
and
Expenses
(Rs.360937.50 + 172000.00) :
Rs. 5,32,937.50

Total : Rs.1,41,06,623.68

8. Feeling aggrieved, the petition
under Section 34 of the Act, 1996 was filed
by the respondents.

9. After hearing the parties, the
Commercial Court dealt with the issues
raised and came to the conclusion that so
far as the award pertaining to mobilization
of resources was concerned, appreciation
and re-appreciation of facts, evidence
adduced
by
the
parties
in
arbitral
proceedings under Section 34 of the Act,
1996 was not permissible. For the claim
pertaining to epoxy grouting, it was held
that the claim of epoxy grouting was not an
arbitrable dispute. The Commercial Court
also came to the conclusion that in terms of
the proviso to Section 31(7) of the Act,
1996 read with clause 16(3) of the GCC in
question, interest was not payable and
based on its discussion, on finding that the
award suffers from patent illegality, set
aside the same.

10. The present appeal has been
filed by the appellants seeking to question -
(i) Setting aside of the entire award by the
Commercial Court despite coming to the
conclusion that the award made pertaining
to mobilization of resources was justified
and on other items no finding against the
award was recorded (ii) Rejection of claim
pertaining to epoxy grouting and (iii)
980 INDIAN LAW REPORTS ALLAHABAD SERIES
setting aside of award of interest pendente
lite.

11.

During
the
course
of
submissions, counsel for the appellants
submitted that in so far as the Commercial
Court has set aside the award of interest for
the period the cause of action arose till the
award was delivered, in view of the
provisions of Section 31(7)(a) of the Act,
1996, the appellants do not press the said
ground in appeal.

12. Learned counsel for the
appellants made submissions that the
Commercial Court was not justified in
setting aside the entire award once it came
to the conclusion that in so far as the award
of claim towards mobilization of resources
was justified, only because it came to the
conclusion that the award pertaining to
epoxy grouting and interest was not
justified.

13. Learned counsel further
submitted that setting aside of the entire
award, is contrary to the proviso to Section
34(2)(a)(iv) of the Act, 1996, which clearly
provides that if the decisions on matters
submitted to arbitration can be separated
from those not so submitted, only that part
of the arbitral award which contains
decisions on matters not submitted to
arbitration may be set aside and therefore,
to that extent the judgment impugned
deserves to be set aside.

14. For the issue relating to epoxy
grouting, submissions were made that it has
not been denied by the respondents that the
work was done as directed by Engineer In
Charge of the site, who had forwarded the
record to ADRM for approval, which was
denied in view of the GCC for lack of any
written contract, which situation was
squarely covered by the provisions of
Section 70 of the Contract Act, 1872 (for
short the 'Act, 1872') and the principle of
quantum meruit and therefore, setting aside
of the award on the said count also is not
justified.

15. It was prayed that the
judgement of the Commercial Court to the
extent the claim pertaining to epoxy
grouting has been denied and/or setting
aside of the entire award deserves to be set
aside.

16. Reliance was placed on Union
of India v. Promode Kumar Agarwalla &
another : 1967 Lawsuit (Cal) 293,
Municipal Corporation of Delhi v. Ravi
Kumar in OMP No. 273 of 2008 decided
on 22.11.2017 by Delhi High Court and
Bharat Sanchar Nigam Limited v. Vihaan
Networks Ltd., : 2023 Lawsuit (Del) 3385.

17. Learned counsel for the
respondents
supported
the
judgement
impugned. Submissions were made that the
Arbitrator was not justified in coming to
the conclusion that the claim made by the
appellants pertaining to mobilization of
resources etc. was required to be accepted.
Submissions were also made that when it
was proved on record that in so far as
Bridge No. 70 qua which contract was
entered into never took off, the fact that the
appellants had undertaken work of epoxy
grouting qua other bridges and the
amendment sought in the agreement was
specifically rejected by the competent
authority, there was no reason to award the
amount towards epoxy grouting.

18. Further submissions were
made that reliance placed on Section 70 of
the Act,
1872
is
wholly
misplaced
inasmuch as once the work relating to
7 All. M/S Shyam Lalit Dubey & Anr. Vs. U.O.I. & Anr.
981
epoxy grouting does not form part of the
contract in question, with reference to
Section 70 of the Act, 1872, the same
cannot become an arbitrable dispute and
once the said dispute was beyond the scope
of the arbitration clause, the award
impugned was wholly without jurisdiction
and has rightly been set aside.

19. Further submissions were
made that once the award on epoxy
grouting was found by the Commercial
Court as beyond the arbitration clause and
award of interest contrary to provisions of
Section 31(7) of the Act, setting aside of
the entire award as patently illegal cannot
be questioned and therefore, the appeal
deserves dismissal.

20. Reliance was placed on M/s.
Patel Engineering Co. Ltd. v. Indian Oil
Corporation Ltd. : 1975 AIR (Patna) 212,
Union of India vs. Monoranjan Mondal :
2006(1) ICC 168 and The Sports Authority
of Assam v. Larsen and Tourbo Limited :
2024 (1) GauLR 894.

21. We have considered the
submissions made by the counsel for the
parties and have perused the material
available on record.

22. A bare perusal of the
judgement
impugned
passed
by
the
Commercial Court would reveal that
apparently out of 6 claims on which award
was passed the challenge was laid to 2
claims and award of interest. The court has
dealt with three issues, pertaining to
mobilization of resources, epoxy grouting
and award of interest by the Arbitrator in
his arbitral award dated 06.11.2020. The
Court while upholding the findings in the
award
pertaining
to
mobilization
of
resources, came to conclusion that the issue
of epoxy grouting work was beyond the
arbitration clause and the award of interest
was contrary to the provisions of Section
31(7) of the Act, 1996. However, without
further discussing as to why the appellants
were not entitled to the amount, as awarded
by the Arbitrator, pertaining to mobilization
of resources, the Court on its finding that
the award passed was patently illegal, has
set aside the entire award.

23. We are firmly of the opinion
that setting aside of the entire award,
apparently is contrary to the proviso to subclause (iv) of clause (a) of sub-section (2)
of Section 34 of the Act, 1996. The
provision reads as under :

"34.
Application
for
setting aside arbitral award. - (1)
Recourse to a Court against an
arbitral award may be made only
by an application for setting aside
such award in accordance with
sub-section (2) and sub-section (3).
(2) An arbitral award may
be set aside by the Court only if -
(a) the party making the
application establishes on the basis
of the record of the arbitral
tribunal that -
(i) ..............
(ii) .............
(iii) ............
(iv) the arbitral award
deals
with
a
dispute
not
contemplated by or not falling
within the terms of the submission
to arbitration, or it contains
decisions on matters beyond the
scope
of
the
submission
to
arbitration :
Provided
that,
if
the
decisions on matters submitted to
arbitration can be separated from
982 INDIAN LAW REPORTS ALLAHABAD SERIES
those not so submitted, only that
part of the arbitral award which
contains decisions on matters not
submitted to arbitration may be set
aside; or
(v) ...................
(b) ..................
(2-A)
......................................"

24. A perusal of the above would
reveal that power, conferred on the Court to
set aside the arbitral award is subject to
establishing on the basis of record of the
arbitral tribunal on the ground contained in
sub-clause (i) to (v) of clause (a) and (b) of
sub-section (2) of Section 34 of the Act,
1996. While clause (iv) of Section 34(2)(a)
of the Act, 1996 provides that the arbitral
award, which deals with a dispute not
contemplated by or not falling within the
terms of the arbitration or it contains
decisions on matters beyond the scope of
the submission to arbitration, the same can
be set aside by the court. However, the
proviso saves the decisions on matters
submitted to arbitration and mandates that
only that part of the arbitral award which
contains decisions on matters not submitted
to arbitration may be set aside.

25. In the present case, the
Commercial Court though came to the
conclusion that the issue pertaining to
epoxy grouting was not arbitrable and that
award of interest was contrary to the
provisions of Section 31(7) of the Act,
1996, still in light of the above proviso to
Section 34(2)(a)(iv), the award pertaining
to mobilization of resources was not
required to be set aside/interfered with and
to the said extent the judgement impugned
passed by the Commercial Court, cannot be
sustained.

26. Coming to the issue of award
pertaining to epoxy grouting, the findings
recorded by the Commercial Court reads as
under :

"Keeping in view the law
laid down above it has to be seen
whether the work of epoxy grouting
can be said to have been done
within the frame work of original
contract no. 48/WA/Ag/work/26/
Sr.DEN-IV-LKO/ 2016-17. From
the perusal of the agreement it is
crystal clear that as per clause
22(1) of the G C C the work of
'Rebuilding of Bridge no. 70 at Km.
34/13-14 between Lalgopal ganj
(LGO) & Bhadri (BHDR) station
on ARC section under ADENPRG
of Lucknow Division (Estt.No. 1692014) had to be performed as per
I.S.
specifications
and
in
conformity with the drawing. Since
the
drawing
was
not
made
available
to
the
Respondent/Claimant
hence
the
work of rebuilding bridge no. 70 at
Km. 34/13-14 between Lalgopal
ganj (LGO) & Bhadri (BHDR)
station on ARC section under
ADENPRG of Lucknow Division
(Estt.No. 169-2014) never started.
The work of epoxy grouting was
done at the oral insrtruction of the
Senior Divisional Manager (IV) on
several bridges bearing no. 46, 8,
12, 110, 115, 119, 96, 151, 148,
146, 146A, 147, 144, 140, 120, 116,
105A, 105, 117, 104A, 104,127,
123,109 and 131A. It is undisputed
that the said work of epoxy
grouting was never made a part of
the contract. In this way it is
palpably clear that the work of
epoxy grouting was not in any way
7 All. M/S Shyam Lalit Dubey & Anr. Vs. U.O.I. & Anr.
983
connected
with
the
original
contract no. 48/ WA/ Ag/ work/ 26/
Sr.DEN-IV-LKO/2016-17. Thus the
work of epoxy grouting was not
covered by the agreement no. 48/
WA/ Ag/ work/ 26/ Sr.DEN-IVLKO/2016-17
containing
arbitration clause. Therefore the
claim of epoxy grouting is not
arbitrable dispute. It is true that the
Respondent/Claimant
has
performed the epoxy grouting work
and the Petitioners/Railways are
enjoying
its
benefit
so
respondent/Claimant is entitled
to be compensated for the epoxy
grouting work some where else
but
not
under
the
present
arbitration
case because
the
work of epoxy grouting was
never made a part of contract
and the work of epoxy grouting
was not with in the frame work of
the agreement. In this way the
learned
Arbitrator
has
entertained a non arbitrable
dispute. Thus the award passed
under the head epoxy grouting is
contrary to provisions of the
Arbitration and Conciliation Act,
1996. Therefore the impugned
award is a result of patent
illegality,
being
against
the
public policy of India."

27.

The
findings
of
the
Commercial Court are specific that epoxy
grouting work pertaining to several bridges
was never made part of the contract and the
same was not in any way connected with
the contract in question and therefore, the
work of epoxy grouting was not covered by
the agreement containing arbitration clause
and consequently, the same was not an
arbitrable dispute.
28. The Arbitrator and counsel for
the appellants have relied on the provisions
of Section 70 of the Act, 1872 for
supporting the award, pertaining to epoxy
grouting.

29. Section 70 of the Act, 1872
reads as under :

"70. Obligation of person
enjoying benefit of non-gratuitous
act. - Where a person lawfully does
anything for another person, or
delivers anything to him, not
intending to do so gratuitously, and
such other person enjoys the
benefit thereof, the latter is bound
to make compensation to the
former in respect of, or to restore,
the thing so done or delivered."

30. The above provision deals with
an obligation of a person enjoying the
benefit of non-gratuitous act and provides
that the beneficiary is bound to make
compensation to the person for those nongratuitous services.

31. In the present case, it is not in
dispute that the appellants had undertaken
the work of epoxy grouting at several
bridges under the oral instructions of
Senior Divisional Railway Manager-IV and
the officer attempted to get the same
included in the contract in question.
However, the effort made in this regard was
specifically rejected by the competent
authority i.e. ADRM on 08.03.2018 in the
following terms :

"Introduction of a new item
22073 for amount Rs.1,24,75,485/-
in a contract of Rs.2,50,86,758.87
is not agreeable, in view of
objection that asking for a rate for
984 INDIAN LAW REPORTS ALLAHABAD SERIES
new item 22073 may fetch a
competitive rate in open tender."

32. Once the said addition to the
contract was specifically refused, it cannot
be said that the said work undertaken by
the appellants had any relation whatsoever
with the contract, which was awarded to
them pertaining to Bridge No. 70 qua
which, no work was undertaken though
resources were mobilized. The arbitration
clause, which forms part of the GCC, to the
extent relevant inter-alia reads as under :

"63.
Matters
Finally
Determined by the Railway : All
disputes and differences of any kind
whatsoever arising out of or in
connection
with
the
contract,
whether during the progress of the
work or after its completion and
whether
before
or
after
the
determination of the contract, shall
be referred by the Contractor to
the GM and the GM shall, within
120 days after receipt of the
Contractor's
representation,
make and notify decisions on all
matters
referred
to
by
the
Contractor in writing provided
that matters for which provision
has been made in Clauses 8, 18,
22(5), 39, 43(2), 45(a), 55, 55A(5), 57, 57A, 61(1), 61(2) and
62(1) to (xiii) (B) of Standard
General Conditions of Contract
or in any Clause of the Special
Conditions of the Contract, shall
be deemed as 'excepted matters'
(matters
not
arbitrable)
and
decisions
of
the
Railway
authority, thereon shall be final
and binding on the Contractor;
provided further that 'excepted
matters' shall stand specifically
excluded from the purview of the
Arbitration Clause.
64.(1)
Demand
for
Arbitration :
64.(1) (i) In the event of
any dispute or difference between
the parties hereto as to the
construction or operation of this
contract, or the respective rights
and liabilities of the parties on
any matter in question, dispute
or difference on any account or
as to the withholding by the
Railway of any certificate to
which the Contractor may claim
to be entitled to, or if the
Railway fails to make a decision
within 120 days, then and in any
such case, but except in any of
the "excepted matters" referred
to
in
Clause
63
of
these
Conditions, the contractor, after
120 days but within 180 days of
his presenting his final claim on
disputed matters shall demand in
writing
that
the
dispute
or
difference
be
referred
to
arbitration.
64.(1)(ii) The demand for
arbitration shall specify the matters
which are in question, or subject of
the dispute or difference as also the
amount of claim item-wise. Only
such dispute(s) or difference(s) in
respect of which the demand has
been made, together with counter
claims or set off, given by the
Railway, shall be referred to
arbitration and other matters shall
not be included in the reference."

33. A perusal of the above reveals
that for disputes and differences of any
kind whatsoever arising out of or in
connection with the contract can be
7 All. M/S Shyam Lalit Dubey & Anr. Vs. U.O.I. & Anr.
985
referred by the contractor to the GM and
the GM is required to make and notify
decisions on all matters referred to by the
contractor in writing within 120 days and in
case the GM fails to make a decision within
120 days, demand in writing can be made
that the disputes and differences be referred
to arbitration.

34. From the above, it is apparent
that the disputes and differences have to
arise out of or in connection with the
contract in question. As has been firmly
established in the present case that while
the contract in question pertains to
rebuilding of Bridge No. 70 at Km 34/1314 between Lalgopalganj (LGO) and
Bhadri (BHDR) Station, the same has
nothing to do with epoxy grouting in
relation to the other bridges. The said work
was wholly alien and independent to the
work
under
contract
and
as
only
incidentally the contract in question was in
existence, it cannot be said that the work of
epoxy grouting arose out of or in
connection with the contract in question.

35. In so far as reliance placed on
provisions of Section 70 of the Act, 1872,
i.e.
principle
of quantum
meruit
is
concerned, though in present circumstance
in relation to epoxy grouting the same may
apply but as to whether on account of
provisions of Section 70 of the Act, 1872,
the same can ipso facto become an
arbitrable
dispute
in
relation
to
an
arbitration
clause
contained
in
an
agreement subject matter of which had no
relation to the work non gratuitously done
by the appellants ? Qua the said aspect of
the matter, wherein some extra work etc.
pertaining to the same contract has been
undertaken may form part of the arbitrable
dispute, however, in an arbitral dispute with
reference to quantum meruit or Section 70
of the Act, 1872, for a work undertaken
which is wholly independent of the contract
containing the arbitration clause, the same
cannot become an arbitral dispute.

36. Hon'ble Supreme Court in
Renusagar Power Co. Ltd. Vs. General
Electric Company And Another : (1984)
4 SCC 679, dealing with the said aspect
while referring to the judgement in Union
of
India
Vs.
Salween
Timber
Construction (India) : AIR 1969 SC 488,
observed as under:

"Arbitration Clause in the
contract covered any question or
dispute arising under the contract
or
"in
connection
with
the
contract". On the question whether
the arbitrators had jurisdiction to
adjudicate upon that claim this
Court, relying upon its earlier
decision
in
Ruby
General
Insurance Co. Ltd. v. Pearey Lal
Kumar held, that the test for
determining the question is whether
recourse to the contract, by which
both the parties are bound, was
necessary for the purpose of
determining whether the claim of
the respondent was justified or
otherwise
and
since
it
was
necessary in the case to have
recourse to the terms of the
contract
for
the
purpose
of
deciding the matter in dispute the
matter was within the scope of the
arbitration
clause
and
the
arbitrators had jurisdiction to
decide it."

The Hon'ble Court laid down the
test for determining the question whether
the arbitrator had jurisdiction to adjudicate
upon the claim i.e. whether recourse to the
986 INDIAN LAW REPORTS ALLAHABAD SERIES
contract was necessary for the purpose of
determining whether the claim was justified
or otherwise.

37. In the present case, for
determination of issue pertaining to epoxy
grouting, no reference whatsoever was
required to be made to the contract in
question as the same only pertained to
rebuilding the Bridge No. 70, the dispute in
this regard, cannot and does not fall within
the arbitrable dispute. The Commercial
Court was perfectly justified in observing
that the appellants may be entitled to be
compensated for epoxy grouting work
somewhere else but not under the present
arbitration case.

38. So far as the judgement relied
on by the counsel for the appellants are
concerned,
none
of
the
judgements
apparently deal with execution of nongratuitous work wholly independent of the
contracted work.

39. In the case of Promode Kumar
Agarwalla (Supra) also, the court referred
to the judgement in A. M. Mair & Co. v.
Gordhandas Sagarmull : 1951 AIR (SC)
9 wherein also the principle was laid down
that if a party has to take recourse to the
contract to establish the claim, the dispute
in respect of which the claim arises is a
dispute under or arising out of the contract.
As noticed herein-before, the case of the
appellants fails on the touchstone of the
said principle laid down by Hon'ble
Supreme Court.

40. In case of Ravi Kumar
(Supra), the dispute pertained to additional
work, in relation to the contract in question.
Similarly, in the case of Bharat Sanchar
Nigam Limited (Supra) also the dispute
arose out of the contract containing an
arbitration clause and was found to be
arbitrable.

41. In view of the above
discussions, findings recorded by the
Commercial Court in relation to the claim
pertaining to epoxy grouting being not
arbitrable cannot be faulted.

42. Consequently, the appeal is
partly allowed. The judgement impugned
dated
28.06.2023
passed
by
the
Commercial Court in Arbitration Case No.
19 of 2021 is set aside. While the Arbitral
Award dated 06.11.2020 relating to claim
of the appellants pertaining to epoxy
grouting amounting to Rs.61,24,732.79P.
and payment of interest @ 12% from the
date on which the cause of action arose till
the date of award, is set aside, the rest of
the award is upheld.

43. The appellant, except for the
amount of epoxy grouting and pendente lite
interest awarded by the Arbitrator, would
be entitled to execute the rest of the award
in accordance with law.

44. No order as to costs.
----------
(2024) 7 ILRA 986
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 15.07.2024

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Crl. Misc. Anticipatory Bail Application U/S 438
Cr.P.C. No. 1422 of 2024

Achchey Lal Jaiswal ...Applicant
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Applicant: