ELECTRIC CONSTRUCTION AND EQUIPMENT COMPANY LIMITED v. NATIONAL THERMAL POWER CORPORATION LIMITED
1985-05-14
M.K.CHAWLA
body1985
DigiLaw.ai
M. K. Chawla ( 1 ) IN compliance with the directions of this court dated 11-10-1979 in Suit No. 577-A/1979the Chairman of the Central Electricity Authority appointed Shri H. R. Kulkarni, Ex. Member (Thermal), Central Electricity Authority as the sole arbitrator to enter upon the reference and decide the disputes mentioned in paragraph 11 of the petition under Section 20 of the Arbitration Act. ( 2 ) THE learned arbitrator entered upon reference, considered the claims and counter claim filed by the parties alongwith the documentary evidence and after hearing the parties made and published the award on 23-12-1982. The learned arbitrator filed the award and the proceedings in this court on 16-9- 1983. The learned counsel for the parties accepted the notice of the fling of the award and within the stipulated period the petitioner M/s. Electric Construction and equipment company limited filed the objections under Sections 30 and 33 of the Arbitration Act praying for setting aside the award for the following amongst other grounds :- (A) that the learned arbitrator had no jurisdiction to consider any claim made by the respondent on the ground that it was not one of the disputes referred to him by this court ; (b) that the learned arbitrator ought not to have enhanced the scope of reference without the order of this court ; (c) that the learned arbitrator has Illegally taken into consideration the documents filed by the respondents which were not admissible in evidence ; (d) that the learned arbitrator is guilty of misconduct and as such the award is liable to be set aside. ( 3 ) IN reply the respondents controverted each and every ground made as the basis for the setting aside of the award. It is further alleged that in pursuance of the order of this court the Chairman, Central Electricity Authority nominated Shri H. R. Kulkarni to act as the sole arbitrator in the dispute between the parties on the points which may be raised from time to time by either of the parties to the above contract. In view of the contents of the letter dated 9-11-1979 of the Chairman the learned arbitrator had the jurisdiction to call for and deal with the counter claim of the respondent. The learned arbitrator under these circumstances acted within his jurisdiction and did not enhance the scope of the reference.
In view of the contents of the letter dated 9-11-1979 of the Chairman the learned arbitrator had the jurisdiction to call for and deal with the counter claim of the respondent. The learned arbitrator under these circumstances acted within his jurisdiction and did not enhance the scope of the reference. It is also mentioned that in the present case this court did not appoint the arbitrator and referred the disputes to arbitration but only directed the respondent to appoint an arbitrator in accordance with clause 23 of the A/t. Clause 23 of the A/t is wide enough to cover the counter claim of the respondents. The objections of the petitioners are not only vague and unspecific but without any substance as well. The award under these circumstances is not liable to be set aside. ( 4 ) ON the pleadings of the parties the following issues were framed :- (1) Whether the arbitrator had jurisdiction to decide the counter claim of the respondent ? (2) Whether the arbitrator has misconducted himself or the proceedings ? (3) Relief. On the suggestion of the parties the issues were directed to be disposed of by way of filing the affidavits. The objector preferred to file the affidavit of Shri K. L. Aggarwal, who is the constituted attorney of the petitioner company whereas the respondents relied upon the affidavit of Shri A. B. Gaikwad, the Deputy Manager of the respondent corporation. I have heard the arguments of the learned counsel for the parties and with their help gone through the record carefully. ( 5 ) DURING the course of hearing the arguments the learned counsel for the Objector only pressed the objections forming part of issue No. 1. According to him the learned arbitrator acted illegally and in utter disregard of the orders of this court dated 11-10-1979 and without any authority adjudicated upon the counter claim of the respondents. The learned arbitrator was not empowered to enhance the scope of reference and in doing so misconducted himself and the proceedings and the impugned award is, therefore, liable to be quashed/set aside to that extent only. In support of his submission the learned counsel referred to the order of this court dated 11-10-1979 in Suit No. 577-A/1979 wherein the 4 disputes mentioned in paragraph 11 of the application were referred to the sole arbitrator for determination.
In support of his submission the learned counsel referred to the order of this court dated 11-10-1979 in Suit No. 577-A/1979 wherein the 4 disputes mentioned in paragraph 11 of the application were referred to the sole arbitrator for determination. These disputes read as under :- (A) that the respondents have only to make available the site as a part of their obligation ; (b) that the deduction to the tune of Rs. 19,628. 95 from the bills of the petitioner made by the respondent is illegal and unlawful inasmuch as contrary to the terms of the acceptance of tender by the respondents ; (c) that the purported notice calling upon the bank of Tokyo Ltd. , 3, Parliament Street, New Delhi for a sum of Rs. 14,311. 00being the bank guarantee is illegal. (d) that the delay, if any, was and is on the part of the respondents and not on the part of the petitioner ; ( 6 ) LEARNED counsel for the Objector further pointed out that in the written statement the respondents have not raised any dispute/counter claim which was also required to be gone into by the learned arbitrator. Learned counsel also points out that before the learned arbitrator it was also pointed out that the counter claim of the respondents cannot be entertained or looked into while deciding the scope of the disputes referred to him by the order of this court. On the basis of these objections the learned arbitrator framed one of the issues reading as under :- "whether counter claims relating to the issues other than the above fall within the jurisdiction of the arbitrator ?" ( 7 ) THE learned arbitrator while disposing of this issue held as under :- "a preliminary objection was raised by the claimant to the consideration of issues other than those listed in the order of Justice S. N. Kumar dated 17-10-1979 within the purview of this arbitration This is not sustainable as the order of justice Mr. S. N. Kumar, has also reiterated in the order of Mr. Justice Avadh Behari Rohatgi dated 21-8-1981, basically require the matter tobe referred to arbitration in terms of clause 23 of the A/t which governs the contract. This clause gives the widest coverage to the scope of arbitration and there is no bar to any party raising any issue before the Arbitrator at any time.
Justice Avadh Behari Rohatgi dated 21-8-1981, basically require the matter tobe referred to arbitration in terms of clause 23 of the A/t which governs the contract. This clause gives the widest coverage to the scope of arbitration and there is no bar to any party raising any issue before the Arbitrator at any time. Further, the counter issues raised by the respondents are intimately related to the issues raised by the claimant and as such even if clause 23 had not given vide coverage, the counter claims would have legitimately fallen within the purview of this arbitration. The claimant s objection is, therefore, over-ruled". ( 8 ) THIS part of the finding of the learned arbitrator prima facie is contrary to the well settled proposition of law. It is not disputed that the arbitrator derives his power from the reference which furnishes the source and prescribes the limit of his authority. He cannot enlarge the scope the reference by construing the agreement in a particular manner. The learned counsel for the Objector in support of his submission has placed reliance on a judgment reported as Orissa Mining Corporation Ltd. v. M/s. Prannath Vishwanath Rawllay, AIR 1977 SC 2014 . wherein while interpreting the scope of the reference, during the course of the judgment it was held as under:- "when an agreement is filed in court and order of reference is made under S. 20 (4) then the claim as a result of the Order of reference is limited to a particular relief and the arbitrator cannot enlarge the scope of the reference and entertain fresh claims with-out a further order of reference from the Court. Thus, on the facts of this case it was held that the amount had been specified in the plaint and when the reference was confined to the claim made in the plaint the arbitrator would have to restrict his award only to the claim, but the arbitrator had exceeded his jurisdiction in embarking on the claim that was for the first time put forward before him by the respondent. There was, therefore, an error apparent on the face of the award.
There was, therefore, an error apparent on the face of the award. " ( 9 ) ALMOST similar is the view taken by this court in a judgment reported as Jagan Nath Phool Chand v. Union of India and Others, AIR 1982 Delhi 93 and Food Corporation of India v. P. L. Juneja, AIR 1981 Delhi 43, The ratio decided of the above said cases fairly and squarely applies to the facts of the present case and the learned counsel for the respondents was not able to point out any distinguishing feature or rely upon any judgment to the contrary. ( 10 ) AS a result of the above discussion I accept the objections and set aside the award to the extent of Rs. 72,629. 70 pertaining to the counter claim of the respondents and the rest of the award pertaining to the claim of the petitioner is hereby made a Rule of the Court. With these observations the petition as well as the objections are disposed of. The petitioner shall be entitled to interest @ 18% per annum from the date of the award till reali- sation, if the amount is not paid within 2 months from today.