KHUSHI RAM JAIN AND COMPANY v. NEW DELHI MUNICIPAL COMMITTEE
1984-10-29
M.K.CHAWLA
body1984
DigiLaw.ai
M. K. Chawala ( 1 ) M/s. Khushi Ram Jain and Company, the present petitioner moved an application under Section 14 of the Arbitration Act praying for issuance of directions to respondent No. 2, Shri Jyotirmoy Mandal, the sole arbitrator to file the original award alongwith the arbitration proceedings and deposition in the Court and thereafter making the award the Rule of the Court. As per the averments the petitioners who are doing the construction work for the last many years were awarded the work "construction of ESS-at Kidwai Nagar (W) New Delhi" for which an agreement No. 37/me (C. II)/ 76-77 was executed; that during the course of the execution of the subject work respondent No. 1, N. D. M. C. did not make the payment of the legal dues to the petitioner, as a result of which diffdences and disputes arose between the parties; that the Administrator, N. D. M. C. , by virtue of the agreement containing an arbitration clause, appointed respondent No. 2 as an arbitrator for adjudication of the disputes; that the arbitrator entered upon the reference on 5-1-1983 and made and published his award on 1-8-1983. Hence the present petition. ( 2 ) AFTER the service of the summons respondent No. 2 filed the award and the proceedings in court on 13-10-1983. Notice of the filing of the award was issued to the parties and within the prescribed period respondent No. 1 filed the objection petition under Section 33 of the Arbitration Act for setting aside the award. The only grounds urged for the setting aside of the award during the course of the arguments are.- (1) that by virtue of clause 25 of the agreement between the parties the learned arbitrator was required to give a reasoned award and this being a non-speaking award is liable to be set aside; (2) that the award relating to the mode of interest payable is illegal and in contravention of the terms of the agreement and/or the Arbitration Act; (3) the award of Rs. 1,00,000. 00 against the claim of Rs. 1,12,526. 29 on account of extra rate for quantity executed beyond deviation limit is contrary to the provisions of clause 12 (a) of the agreement.
1,00,000. 00 against the claim of Rs. 1,12,526. 29 on account of extra rate for quantity executed beyond deviation limit is contrary to the provisions of clause 12 (a) of the agreement. ( 3 ) THE petitioners have denied each and every ground urged for the Setting aside of the award by the respondents by alleging that the learned arbitrator was not required to give a reasoned award. As per the letter dated 3-1-1983 of respondent No. 1 by which the respondent No. 2 was appointed as an arbitrator, he was only required to decide and make his award regarding the claims/disputes of the petitioner and counter claim of the N. D. M. C. He was not required to give reasoned award as alleged. The petitioners have also taken up the plea that one of the disputes REFERRED TO to the arbitrator was the payment of interest and it was within the jurisdiction of the arbitrator to award interest. As regards claim No. 7 the petitioners contend that as per clause 12 (a) of the agreement the department was only to be informed of the rates at which the execution of the quantities was to be carried out by the Contractor. During the course of the execution of the work the quantities of 20 numbers of items exceeded those stipulated in the agreement deviation limit. The rates were, therefore, to be determined under this clause, which was not done by the respondents. The petitioner had asked for 50% enhancement of rates in respect of such quantities which matter was duly considered by the learned arbitrator and a sum of Rs. 1,00,000. 00 was awarded. ( 4 ) FINALLY it is also alleged that the award being a non-speaking one and the ample opportunities having been granted to the parties for filing the claims, counter claim and the documents in support of their contentions and after hearing the parties at length, the learned arbitrator gave and published his award which cannot be said to be bad on the face of it. ( 5 ) ON the pleadings of the parties the following issues were framed:- " (1) Whether the arbitrator was bound to give reasons for the award, if so, what is the consequence of the award not giving reasons for the same therein? (2) Whether the arbitrator has misconducted the proceedings?
( 5 ) ON the pleadings of the parties the following issues were framed:- " (1) Whether the arbitrator was bound to give reasons for the award, if so, what is the consequence of the award not giving reasons for the same therein? (2) Whether the arbitrator has misconducted the proceedings? (3) Whether the arbitrator was empowered to award interest on the amount as awarded by him, if not to what effect? (4) Relief". ( 6 ) LEARNED counsel for the parties agreed to file their affidavits in respect of their contentions. The petitioner filed the affidavit of Shri N. N. Nayyar, one of the registered partners of the petitioner firm while the respondents placed reliance on the affidavit of Shri V. K. Monga, Executive Engineer, N. D. M. C. ( 7 ) I have heard the learned counsel for the parties and with their help gone through the record carefully. ISSUES No. 1 to 3. "at the outset it may be stated that the award in dispute is a no-speaking one. It does not deal with any of the propositions. As per the judicial pronouncements the award can be set aside on the ground of error of law on the face of the award only when in the award or in the documents incorporated in it there is found some legal proposition which is made the basis of the awardand which is erroneous. As per the observations in N. Chellappan v. Secretary of Kerala State Electricity Board and another1; the sole arbitrator was not required 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 an erroneous proposition of law is stated in the award which is the basis of the award, can the award be set aside or remitted on the ground of error law apparent on the face of the record". ( 8 ) APPLYING the said principle on the facts of the present case it can safely be concluded that the award does not suffer from any error of law and the conclusions being based an the evidence placed and proved before the learned arbitrator cannot be challenged and set aside. ( 9 ) EVEN otherwise the learned arbitrator was not required to give a reasoned award.
( 9 ) EVEN otherwise the learned arbitrator was not required to give a reasoned award. The appointment of respondent No. 2 as an arbitrator by Shri P. S. Bhatnagar, Administrator, N D. M. C. indicates that he was required to decide and make his award regarding the claims/disputes of the claimant as per the statement enclosed and counter claims of N. D. M. C. , to follow, if any, subject however, to their admissibility under clause 25 of the agreement. No other document or evidence has been pointed out by the learned counsel for the respondents suggesting that the learned arbitrator was required to give a reasoned award. Mere oral submission to this effect has no bearing. This part of the objection under these circumstances has no substance. ( 10 ) IT has also not been pointed out by the learned counsel for the respondents during the course of the arguments as to how and under what conditions and in respect of which item of the claim the learned arbitrator misconducted himself or the proceedings. With regard to claim No. 7 the contention of the learned counsel for the respondents is that the learned arbitrator has not given any details of the amount awarded against this item, and the figure has been reached without caring for the provisions of clause 12 (a) of the agreement. This argument is contrary to the documents placed and proved before the learned arbitrator. As per clause 12 (a) of the agreement with regard to the execution of the quantities the department is to be informed of the rates at which the same will be executed by the Contractor. In this case during the course of the execution of the work the quantities of 20 numbers of items exceeded those stipulated in the agreement deviation limit. The contractor wrote letters to the department informing that for the execution of the item beyond deviation limit the petitioner would claim 50% enhancement of the rates. The respondents for reasons best known to them did not settle the claim. The learned arbitrator after going through the correspondence exchanged between the parties on this item awarded a sum of Rs. 1,00,000. 00 as against the claim of Rs. 1,12,526. 29. Even this is a question of fact based on the evidence and cannot be made the basis for the setting aside of the award.
The learned arbitrator after going through the correspondence exchanged between the parties on this item awarded a sum of Rs. 1,00,000. 00 as against the claim of Rs. 1,12,526. 29. Even this is a question of fact based on the evidence and cannot be made the basis for the setting aside of the award. ( 11 ) THERE remains only the ground of the award of interest which according to the learned counsel for the claimants, the learned arbitrator has given on the higher side. As per claim 12 relating to interest the claimant contended that the pendentelite and future interest is within the exclusive domain of the learned arbitrator. He asked for the grant of interest at the rate of 19% for withholding/delay in the payments by the respondents. The learned arbitrator on consideration of thematerial on record did not allow interest for the period prior to the date of the award. He also declined to allow interest for the first month from the date of the award and thereafter interest @l5% till the payment is made was allowed. On the face of it there does not appear to be any mistake in the conclusion arrived at by the learned arbitrator. However, in my view the learned arbitrator could have awarded the interest from the date of the award till payment or the decree passed thereon, whichever is earlier. The future interest could only be awarded by the court passing the decree. On this aspect also it cannot be said that the learned arbitrator acted without jurisdiction. In fact the grievance should have been to the petitioner for not having bwn allowed interest from 1977 when the dues were admittedly payable to them. The respondents took about 4 years in the appointment of an arbitrator. Thus depriving the petitioner of the interest from the due date. The rate of interest awarded by the arbitrator cannot be said to be excessive. The petitioner shall also be entitled to future interest @ 15% per annum from the date of the decree till realisation. ( 12 ) AS a result of the above discussion all the issues are decided against the respondents. There is no merit in the objections and the same are hereby dismissed. The award is made a Rule of the Court. Decree in terms of the award is passed. Decree sheet be prepared accordingly.