SETH SUNDER PARSHAD AND SONS, NEW DELHI v. STATE OF H. P.
1983-07-10
V.P.GUPTA
body1983
DigiLaw.ai
ORDER 1. M/s. Seth Sunder Parshad and Sons contractors (Plaintiff) agreed to execute some work for the construction of Government residential accommodation quartrs at Kasumpti Simla, vide agreement No. 6 entered into between the plaintiff and the State of Himachal Pradesh (defendant). The work order was issued to the plaintiff in Sept./October, 1973, and the plaintiff in accordance with the terms of the agreement constructed the quarters. 2. In the agreement under cl.25. all questions and disputes arising out of or relating to the contract were to be decided by an arbitrator to be appointed by the Chief Engineer. Himachal Pradesh Public Works Department. 3. Disputes arose between the parties and they were referred to the arbitration of Shri O.P. Sablok. Superintending Engineer. H.P. P.W.D. The arbitrator entered on the reference on 30th June, 1977 and gave his award on 27th Feb. 1978. 4. The arbitrator filed the award in this court on 1st July, 1978 with a prayer that the award be made a rule of the Court. 5. Notices regarding the filing of the award were given to the parties. The plaintiff filed objections under S.30 read with S.33 of the Arbitration Act on 13th Nov. 1978 i.e. within the statutory period. The defendant filed a reply and contested the claim of the plaintiff. 6. On the pleadings of the parties the following issues were framed on 22nd March, 1979 : "1. Whether the Arbitrator misconducted himself in proceedings? 2. Whether the Award was made beyond the time prescribed? If so to what effect? 3. Whether the Award suffers from any illegality on its face? 7. The parties were allowed to lead evidence. Shri Shiv Prashad Seth (plaintiff) appeared in the witness-box and further stated that the arbitration file be read in evidence. The defendant also stated that the arbitration file be read in evidence. Arguments were heard. Issue No.1: 8. Shri H.K. Bhardwaj appearing on behalf of the plaintiff-objector contends that the arbitrator has made wrong calculations and has awarded lesser amount to the plaintiff. The next contention of the learned counsel is that the plaintiff should have been allowed rates 66% above the amended schedule of rates as were available on 17-9-1973. According to the learned counsel the plaintiff has been allowed rates which are 66% above the schedule of rates of 1968. He refers to the agreement and the letter, dt.
The next contention of the learned counsel is that the plaintiff should have been allowed rates 66% above the amended schedule of rates as were available on 17-9-1973. According to the learned counsel the plaintiff has been allowed rates which are 66% above the schedule of rates of 1968. He refers to the agreement and the letter, dt. 13-9-73 (Exhibit P-1) addressed by the plaintiff to the Chief Engineer, H. P. P.W.D. He also referred to the reply, dt. 8-10-73 from the Executive Engineer. Simla Division No. 4 to the plaintiff, which is available in the file pertaining to agreement No. 1. 9. Shri M.L. Chauhan appearing on behalf of the defendant contends that the award is a non-speaking award and no reasons have been given in the award. It is contended that the evidence has not been discussed in the award and there is no error of law or fact apparent on the face of the award. The learned counsel further contends that no other document except the award can be looked into for adjudication of the present objections filed by the plaintiff. 10. It is not disputed that in this case the award is non-speaking award. The plaintiff claimed Rs.67,488-93 on account of various claims filed by him before the arbitrator in the shape of a final bill. This statement of claims is Schedule A in the arbitration file. The arbitrator has awarded Rs.6,496-30 against this claim of the plaintiff without giving any reasons. The defendant also filed a counter-claim of Rs.6,496-30 but the arbitrator did not accept this claim. The arbitrator has not given any reasons for allowing a part of the plaintiffs claim or for disallowing the defendants counter-claim. 11. In N. Chellappan v. Secy Kerala State Electricity Board (AIR 1975 SC 230) it was held in paras 12 and 13 of the judgment : "The umpire as sole arbitrator was not bound to give a reasoned award and if in passing the award he makes a mistake of law or of fact, that is no ground for challenging the validity of the award. It is only when a proposition of law is stated in the award and which is the basis of the award, and that is erroneous can the award be set aside or remitted on the ground of error of law apparent on the face of the record.
It is only when a proposition of law is stated in the award and which is the basis of the award, and that is erroneous can the award be set aside or remitted on the ground of error of law apparent on the face of the record. Where an arbitrator makes a mistake either in law or in fact in determining the matters referred, but such mistake does not appear on the face of the award, the award is good notwithstanding the mistake and will not be remitted or set aside. An error of law on the face of the award means that you can find in the award or a document actually incorporated thereto, as, for instance, a note appended by the arbitrator stating the reasons for his judgment some legal proposition which is the basis of the award and which you can then say is erroneous. The Court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for the purpose of finding out, whether or not, the arbitrator has committed an error of law." This judgment of the Supreme Court is based upon the observation made in Champsey Bhara and Co. v. Jivrai Ballo Co. (AIR 1923 PC 66 (69)) and Union of India v. Bungo Steel Furniture Pvt. Ltd. (AIR 1967 SC 1032). 12. Similarly, in Omvik Electronics Pvt. Ltd. Kanpur v. Union of India ((1980) 82 Pun LR (D) 167) : (AIR 1980 Delhi 169) it was observed that "no part of an agreement can be referred to for the purpose of finding an error apparent on the face of the record unless that part of the agreement is incorporated in the award itself." This observation is based upon Allen Berry and Co Pvt. Ltd. v. Union of India (AIR 1971 SC 696) wherein it is held : "The rule thus is that as the parties choose their own arbitrator to be the Judge in the dispute between them, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts.
Therefore, even when an arbitrator commits a mistake either in law or in fact in determining the matters referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake." 13. In view of the settled law, as stated above, this Court is not competent to find out the mistake in calculations or otherwise from the statement of claims filed by the plaintiff. This Court is also not competent to find out as to whether the plaintiff has been allowed 66% above the schedule of rates of 1968 or the schedule of rates as available on 17-9-1973. The award of the arbitrator, dt. 27th Feb., 1978 does not give any facts or the reasonings for accepting or rejecting the claims. 14. The learned counsel for the plaintiff could not point out any other misconduct of the arbitrator or the proceedings. 15. In view of the above discussion, issue No. 1 is decided against the plaintiff-objector. Issue No. 2: 16. No evidence has been adduced on this issue by the plaintiff. The arbitrator in his award has stated that the time limit for announcing the award was up to 28-2-78. The award was announced on 27-2-78. In these circumstances this issue is decided against the plaintiff-objector. Issue No. 3: 17. The learned counsel for the plaintiff could not point out any illegality in the award. After going through the award. I find that the same is not illegal. This issue is decided against the plaintiff. 18. In view of the above discussion, the objections of the plaintiff-objector are dismissed and the award is made a rule of the Court. A decree in terms of the award is passed in favour of the plaintiff and against the defendant. Suit dismissed.