1. The appeal from order, it has been as preferred by the appellants herein by invoking Section 37 of the Arbitration & Conciliation Act of 1996, is as a consequence of the rejection of their application under Section 34 of the Arbitration and Conciliation Act of 1996 (hereinafter to be referred as an Act of 1996) by virtue of the impugned order dated 29.11.2014, as passed by the District Judge, Uttarkashi in Misc. Case No.01 of 2014 State of Uttarakhand and another vs. M/s N.K.G. Infrastructure Limited, the learned Court had rejected the application under Section 34 of the Act of 1996 and consequently has affirmed the judgment and award dated 02.09.2013 it has been as passed by the sole Arbitrator.
2. The appeal from order in question, was instituted before the Registry of this Court on 11.03.2015. The inter-se pleadings between the parties were exchanged and it was thereafter, that the appellant had filed the Misc. Application No.18311 of 2021, by invoking the provisions contained under Order 1 Rule 10, to be read with Section 151 of the C.P.C. by filing the same before the Registry on 13.03.2021, after a long eight years of pendency of proceedings before this Court for the first time to implead NTPC Limited, Loharinag Pala Hydro Power Project, Post Office Bhatwari as one of the respondents in the present appeal from order.
3. The application for impleadment is vehemently opposed by the counsel for the respondent. There are various grounds, which has been raised in the objection:-
i. That the NTPC, since not being one of the parties, who was the signatory to the agreement, it cannot be introduced, as a party for the first time at an appellate stage, because their participation in the proceedings would not at all be necessary to decide the inter-se dispute between the parties, which were governed by and arising out of the terms and conditions of the contract itself.
ii. He submits that even at the stage, when the proceedings were seized before the Arbitrator, the contentions and the logic, which has now been assigned by the appellant, herein by filing an application under Order 1 Rule 10 of the C.P.C. were the contentions, which were very well available before the Arbitrator itself, but for the reasons best known to the appellant, no efforts of any nature whatsoever was ever made by the appellants to introduce the NTPC, as one of the respondents before the Arbitration proceedings.
iii. He submits, that the argument as extended by the counsel for the appellant in support of the impleadment application, on the pretext that there has been some stray correspondences between the appellant and the NTPC, for the purposes of settlement of the admitted liabilities emanating from the work project, undertaken by the respondents, that in itself would have an inter-se binding effect between the appellant and the NTPC and if at all under law, but that will not itself be the reason to implead the NTPC, at an appellate stage under Section 37 of Act of 1996.
iv. He further submits that the participation of the NTPC, at an appellate stage, may not be necessary party at all where subject matter of judicial scrutiny in the present appeal from order, is to the order of rejection of his application under Section 34 of the Act and resulting into its ultimate affirmation of the award of 02.09.2013. Once there was a determined settled right by the award of 02.09.2013, by an intended act to implead NTPC as a party, it may not be permitted by this courts to enable the appellants to open out new avenues for the appellants to have resort to the proceedings de-novo, opening altogether a new chapter, which was not part of the agreement or even in evidence before the arbitrator or under Section 34 proceedings. v. Lastly, he submits, that the application preferred by the appellants by invoking the provisions of Order 1 Rule 10 to be read with Section 151 of C.P.C., would not be maintainable in view of the bar created by the Act itself. In view of the objections, which had been taken by the respondents in their objection, to the impleadment application, coupled with the fact, that the provisions of the C.P.C. had not been made applicable over the proceedings which are held under the Act of 1996, the provisions of Order 1 Rule 10 to be read with Section 151 of the C.P.C. will not apply in the instant case at this appellate stage, in order to enable the petitioner to file an application under Order 1 Rule 10 of the C.P.C. because had it been a case which was falling within the ambit of Arbitration and Conciliation Act of 1940 where the C.P.C. was made application, in view of the provisions contained under Section 41 of the Act of 1940, the issue would have been slightly divergent in its judicial consideration while considering the application for impleadment under Order 1 Rule 10 of the C.P.C.
4. In order to meet out the argument extended by the learned counsel for the respondents, while opposing the Impleadment Application, the learned counsel for the appellants has placed reliance on a judgment reported in AIR 1963 Supreme Court 786 Udit Narain Singh Malpaharia vs. Additional Member Board of Revenue, Bihar and another and particularly he has made reference to para 7, which is extracted hereunder:-
“(7) To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled: it is enough if we state the principle. A necessary party is one without whom no order can be made effectively; a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceedings.”
5. The principles given in para 7, if they are taken into consideration, in the context and facts of this case, in fact it will not be a factually applicable under the circumstance of the present case, which was arising out of an arbitration proceedings, where there was a specific ouster of applicability of the provisions of the Code of Civil Procedure. Hence, the wider principle laid down in para 7, where it has provided that normally without hearing the effected parties the proceedings would be void, but here the affected parties would be the appellants herein and respondent, and not the NTPC. It is not the NTPC, who has come with the case that they are likely to be effected by orders if any to be passed, who could have invoked the proceedings to get themselves impleaded before this Court in an appeal under Section 37 of the Act of 1996.
6. Hence, in that eventuality, the principle of para 7 of the said judgment was being dealt with in that matter, which was arising out of the proceedings under the Bihar Revenue Laws and particularly under the factual part which was subject matter of consideration, is taken into consideration, it related to the recovery of revenue as a consequence of the controversy arising out of issuance of a licence for a liquor shop, which was cancelled by the Excise Authorities of the State of Bihar. Hence, the backdrop under which the said aspect of the effect of impleadment, was taken into consideration was altogether under a different context and set of facts, and would not be equally made applicable in the present case.
7. There is another reason for not to accept to apply the said principle in the present case for the reason being, that and though marginally this Court has already observed earlier, that it was a judgment which was rendered by the Hon’ble Apex Court on 19.10.1962, even much prior to the enforcement of the Arbitration and Conciliation Act of 1996, which was legislated as a consequence of the United Nation Commission on International Law, when it adopted the modern law on International Commercial Arbitration, it was then only that the Legislature felt it, to be necessary to legislate the Arbitration and Conciliation Act of 1996, and consciously the provisions contained under Section 41 of the Arbitration and Conciliation Act of 1940, was not attracted to be made applicable in the present Act and case, because it defeated the very purpose and objective of the Act of 1996. Hence, the principle which are considered therein in the judgment of Udit Narain (Supra) as relied by the counsel for the appellants will not apply, because the procedure which was under consideration therein was governed by the General Revenue Laws, as applicable in the State of Bihar which is not akin to the similar circumstances, as it engages consideration in the proceedings, which were held under the Arbitration and Conciliation Act and that too under the Act which was legislated much thereafter, the rendering of the judgment by the Hon’ble Apex Court on 19.10.1962.
8. There is yet another judgment on which the learned counsel for the appellants has placed reliance, that is the judgment as reported in (2010) 10 Supreme Court Case 408 State of Assam vs. Union of India & others which was considering the implications of the Order 1 Rule 10 of the C.P.C. in the light of the observations which were made in para 16 of the judgment. The factual backdrop which was then considered in the said case was as a consequence of enforcement of a Family Welfare Scheme, under its family planning programme, which was issued by the Union of India, where the provisions for appointment of voluntary female attendant, on an honorarium basis was a subject matter of consideration, before the Hon’ble Apex Court and it was in that context and the factual backdrop, the Hon’ble Apex Court in para 16 of the judgment had observed that what would be the parameters required, that whether a person could be impleded in order to effectively decide the dispute and that was a ratio which was based upon the principle of Udit Narain’s case only as already discussed above, this Court too since, it was absolutely a divergent and independent case in its nature, then too, the proceedings which are exclusively governed by the Act of 1996, will not apply in the present case and the aforesaid principle as relied by the counsel for the appellants will not apply over arbitration proceedings.
9. In view of the observations, which has been made above dealing with the issue, as to under what circumstances a third person, who is an alien to an agreement or a contract, who is not at all affected nor a signatory to it and who is not at all necessary to be impleaded in order to get it determined and adjudicated on merits before the Arbitrator and particularly when no efforts were made ever since the initiation of the reference proceedings before the Arbitrator till 2021, when the impleadment application was filed before this Court, this Court is of the view that the objection taken by the respondent to the impleadment application is sustainable and the NTPC will not at all be a necessary party to be impleaded in the present appeal from order under Section 37 of the Act, which is exclusively procedurally confined for the purposes of adjudicating an inter-se dispute which was arising between the two signatories of the contract of the work awarded to the respondent.
10. Thus the impleadment application lacks merits and the same is accordingly rejected.
11. After the culmination of the aforesaid judgment, the learned counsel for the appellant has drawn attention of this Court, in extension of his previous arguments to the provisions contained under Sub Clause (b) of Sub Section (4) of Section 7 of the Arbitration and Conciliation Act of 1996. If the provisions contained under Chapter 2 of which the aforesaid Section forms to be a part of, if its title head is taken into consideration it only refers to arbitration agreement. The term arbitration agreement therein it only stipulates the conditions, which are required to be enshrined under the terms of the contract. They are not substantive provisions, they are only procedural and admittedly the correspondences inter-se between the appellants and the NTPC were not a subject matter, which was ever at any stage of the proceedings was included in the contract, as per the implications of Sub Clause (b) Sub Section (4) of Section 7 of the Act of 1996. Hence, this argument of the counsel for the appellants too, at this stage after having submitted to the terms of the agreement is not admissible. Hence, the same is turned down.
12. List in the first week of July 2022 for hearing.
