Surjit Singh, J.
1. State has filed this appeal, under Section 39 of the Arbitration Act, 1940, against the order dated 10.8.2001, passed by Learned District Judge, Mandi, thereby dismissing the objections under Sections 30 and 33 of the Arbitration Act, 1940, filed by the appellant, with the observation that the same are not maintainable.
2. Relevant facts may be noticed. Appellant asking through Executive Engineer, PWD, Sundernagar awarded some work to the respondent. Written agreement was executed. Clause (25) of the agreement provided for adjudication of the dispute, that may arise between the parties, by the arbitration. The clause, inter-alia, provided that the arbitration proceeding would be governed by Arbitration Act 1940 or any other statutory modification or re-enactment thereof and the rules made thereunder. This agreement was executed some time in the year 1985. A dispute arose between the parties and reference was made to the Arbitrator in November 1994. Arbitrator gave his award in favour of the respondent on 28.9.1996. He awarded an amount of Rs. 4,41,093/with simple interest at the rate of 10% in favour of the respondent. By the time, the Arbitrator gave his award dated 28th September 1996, Arbitration Act of 1940 stood repealed by The Arbitration and Conciliation Act, 1996 as the Act came into force on 22nd January, 1996. Appellant was aggrieved by the award. It filed objections under Section 34 of The Arbitration and Conciliation Act, 1996 in this Court. A Learned Single Judge of this Court vide order dated 2nd June 1997 held that objections under Section 34 of The Arbitration and Conciliation Act, 1996 were not maintainable and competent as the new Act was not applicable. He directed the appellant to approach the appropriate forum by filing objections under the old Act i.e. The Arbitration Act, 1940. The appellant then filed objections under Section 30 read with Section 33 of the Arbitration Act, 1940 before the District Judge, Mandi because the amount of the award was within the pecuniary jurisdiction of the District Judge. When the objections were pending before the learned District Judge, Supreme Court laid down the law in Thyseen Stahlunion Gmbh v. Steel Authority of India Ltd. : (1999) 9 Supreme Court Cases 334, that where an award was given by the Arbitrator after the commencement of The Arbitration and Conciliation Act, 1996 and the arbitration agreement provided that The Arbitration Act 1940 as amended or re-enacted shall govern the arbitration matter. The Arbitration and Conciliation Act, 1996 and not the Arbitration Act, 1940 would apply to the arbitration proceedings, including the proceedings for enforcement of award, even though dispute arose before the Act of 1996 came into force and the reference to the Arbitrator was also made prior to the commencement of the said Act of 1996.
3. On coming to know about the aforesaid declaration of law by the Apex Court, respondent applied for the review of the order dated 2nd June 1997 passed by a Single Judge of this Court. That petition was dismissed by this Court with the observation that plea could be raised before the District Judge that the objections filed before him under the Arbitration Act, 1940 were not maintainable as the matter was governed by the re-enacted law i.e. The Arbitration and Conciliation Act, 1996.
4. Learned District Judge decided the matter on 10th August 2001 and passed the impugned order. He held that in view of the law laid down by the Hon'ble Supreme Court in the above referred to judgment, award passed by the Tribunal was executable without getting the same made rule of court. Objections were dismissed with the observations that The Arbitration Act, 1940 was not applicable.
5. We have heard the counsel for the parties and perused the record. Admittedly, the Arbitration clause provides that in case of any dispute arising between the parties, the same would be referred to an Arbitrator and the arbitration proceedings would be governed by The Arbitration Act, 1940 as it may be amended or-re-enacted. That means the arbitration clause as contained in the agreement is to the effect that in case The Arbitration Act, 1940 undergoes any amendment or is re-enacted subsequent to the execution of the agreement, the arbitration proceedings would be governed by such changed or re-enacted law.
6. In the present case The Arbitration Act 1940 stood repealed by The Arbitration and Conciliation Act, 1996 before the award was given by the Arbitrator, as noticed hereinabove. By the judgment reported in : (1999) 9 Supreme Court Cases 334, (Thyssen Stahlunion Gmbh v. Steel Authority of India Ltd.), the Hon'ble Supreme Court decided three cases. One of the cases decided by that judgment i.e. C.A. No. 61 of 1999, Rani Constructions (P) Ltd. v. H.P. State Electricity Board was in the nature of appeal against a Division Bench judgment of this Court.
7. Facts of Rani Construction (P) Ltd. v. H.P. State Electricity Board (supra) were that some work was awarded by the H.P. State Electricity Board to Rani Construction Company. Agreement was executed. Clause (25) of the agreement provided for settlement of dispute, if any, by arbitration. The clause said that the Indian Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to all arbitration proceedings under this clause. The arbitration clause was similar to the clause incorporated in the agreement of the case in hand. A dispute arose, which was referred to the Arbitrator on 4.12.1993. Award was given by the Arbitrator on 23rd February, 1996. Arbitration Act, 1940 was repealed by Arbitration and Conciliation Act, 1996 which came into force on 25.1.1996. Question arose whether the repealed Act of 1940 or the new Act of 1996 was to apply for the enforcement of the award and also for filing objections against the award. A Single Bench of this Court made reference to the Division Bench whether the expression 'unless otherwise agreed by the parties' appearing in Section 85(2) of the Arbitration and Conciliation Act, 1996 (reproduced below) admitted of a meaning that the parties could agree to the applicability of the provision of the new Act before it came into force.
85. Repeal and saving.-(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.
(2) Notwithstanding such repeal,:
(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force.
(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act.
Division Bench answered that the relevant clause of the agreement (as referred to hereinabove) did not admit of an interpretation that the case was governed by Arbitration and Conciliation Act, 1996. Matter went to the Hon'ble Supreme Court. Reversing the decision of the Division Bench, the Hon'ble Supreme Court concluded as follows, vide conclusion No. 3, in para 22 at page 368:
In case where arbitral proceedings have commenced before the coming into force of the new Act and are pending before the arbitrator, it is open to the parties to agree that the new Act be applicable to such arbitral proceedings and they can so agree even before the coming into force of the new Act.
Reasons in support of the aforesaid conclusion are given in para-35 of the report at page 375, which reproduced below:
Parties can agree to the applicability of the new Act even before the new Act comes into force and when the old Act is still holding the field. There is nothing in the language of Section 85(2)(a) which bars the parties from so agreeing. There is, however, a bar that they cannot agree to the applicability of the old Act after the new Act has come into force when arbitral proceedings under the old Act have not commenced though the arbitral agreement was under the old Act. Arbitration clause in the contract in the case of Rani Constructions (Civil Appeal No, 61 of 1999) uses the expression 'for the time being in force' meaning thereby that provision of that Act would apply to the arbitration proceedings which will be in force at the relevant time when arbitration proceedings are held. We have been referred to two decisions-one of the Bombay High Court and the other of the Madhya Pradesh High Court on the interpretation of the expression 'for the time being in force' and we agree with them that the expression aforementioned not only refers to the law in force at the time the arbitration agreement was entered into but also to any law that may be in force for the conduct of arbitration proceedings, which would also include the enforcement of the award as well. The expression 'unless otherwise agreed' as appearing in Section 85(2)(a) of the new Act would clearly apply in the case of Rani Constructions in Civil Appeal No. 61 of 1999. Parties were clear in their minds that it would be the old Act or any statutory modification or re-enactment of the Act which would govern the arbitration. We accept the submission of the appellant Rani Constructions that parties could anticipate that the new enactment may come into operation at the time the disputes arise. We have seen Section 28 of the Contract Act. It is difficult for us to comprehend that arbitration agreement could be said to be In restraint of legal proceedings. There is no substance in the submission of the respondent that parties could not have agreed to the application of the new Act till they knew the provisions thereof and that would mean that any such agreement as mentioned in the arbitration clause could be entered into only after the new Act had come into force. When the agreement uses the expressions 'unless otherwise agreed' and 'law into force' it does give an option to the parties to agree that the new Act would apply to the pending arbitration proceedings. That agreement can be entered into even before the new Act comes into force and it cannot be said that agreement has to be entered into only after the coming into force of the new Act.
8. The judgment of the Hon'ble Supreme Court in the above referred to case applies to the facts of the present case on all fours.
9. In view of the above stated position, we find no merit in the present appeal. The same is, therefore, dismissed. However, in view of the peculiar facts and circumstances of the case, especially the fact that initially the appellant had filed objections under Section 34 of The Arbitration and Conciliation Act, 1996, the appellant may, if so advised, file fresh objections under Section 34 of the Act of 1996, along with an application seeking condonation of delay, under Section 14 and 5 of the Limitation Act, 1963 and/or any other provision of law providing for condonation of delay in such a situation.