Research › Browse › Judgment

Delhi High Court · body

1987 DIGILAW 337 (DEL)

VIRENDER SINGH v. DELHI DEVELOPMENT AUTHORITY

1987-09-07

Y.K.SABHARWAL

body1987
Y. K. SABHARWAL, J. ( 1 ) THE respondent No. 1, namely, Delhi Development Authority (for short d. D. A. ) awarded a construction work to the petitioner in the year 1981. Certain disputes and differences arose between the parties. The agreement provides that disputes and differences between the parties shall be referred to arbitration. On 10th January 1983 the D. D. A. appointed Sh. G. Subramaniam, its Superintending Engineer as an arbitrator to decide and make the award regarding the disputes between the parties. Shri Subramaniam entered upon the reference on 19th February 1983. Time for making and publishing the award was enlarged from time to time with the mutual consent of the parties. On 6th August 1984 Shri Subramaniam made and published his award. ( 2 ) ON 10th August 1984 the petitioner- contractor filed a petition in this Court under Ss. 14,17 and 29 of the Arbitration Act, 1940 and prayed that the arbitrator be directed to file the award dated 6th August 1984 and further prayed that the award be made a rule of the court. On 3rd September 1984 the court directed that notice be issued to respondent No. 2 the arbitrator for filing the arbitration award and the proceedings thereof. It is apparent from the record that the petitioner came to know about the death of the arbitrator from the report of the process server. Thereafter the petitioner filed an application giving particulars of the new arbitrator, namely, Shri Banarsi Das, Superintending Engineer (ARB. I) and prayed that dasti summons be given to him. Dasti summons were ordered to be given. It appears that in pursuance of these summons the award and the proceedings were filed in court and notice of filing of the award was issued to the parties. The D. D. A. filed objections to the award (LA. 1598/85 ). On the pleadings of the parties the following issues were framed : " 1. Whether the award and the proceedings have not been filed in the court by a duly authorised person ? OPO 2. Whether the award is liable to be set aside on the objections contained in I. A. 3. Relief. " ( 3 ) COUNSEL for the parties agreed that the record of the arbitration proceedings be read into evidence in support of the issues. Both the parties have filed their respective affidavits in support of their case. OPO 2. Whether the award is liable to be set aside on the objections contained in I. A. 3. Relief. " ( 3 ) COUNSEL for the parties agreed that the record of the arbitration proceedings be read into evidence in support of the issues. Both the parties have filed their respective affidavits in support of their case. ( 4 ) ISSUE No. 1. The award was made and published on 6th August 1984. The D. D. A. has stated in the objection petition that Shri Subramaniam died on 18th August 1984. Shri Subramaniam did not authorise any one to file the award and the proceedings in court before his death. The original award and the proceedings were filed in this court along with a covering letter dated 11th February 1985 sent by Private Assistant to the Superintending Engineer (Arbitration) D. D. A. It has been stated in the covering letter dated 11th February 1985 that Shri Umesh Prasad Bhakta is authorised to file the original award along with all the proceedings. During the course of the arguments I was told that Shri Bhakta was an employee of D. D. A. ( 5 ) THE contention on behalf of the D. D. A. Is that from the above sequence of facts and dates it is apparent that Shri Subramaniam had not authorised any one to file the award in court. The learned counsel for the petitioner also states that it seems that the D. D. A. is right in contending that Shri Subramaniam had not expressely authorised his Private Assistant or Shri Umesh Prasad Bhakta to file the award and proceedings in court. However, the learned counsel for the petitioner contends that in the facts and circumstances of the case the absence of express authority by Mr. Subramaniam to file the award and the proceedings is of no consequence. ( 6 ) THE question for determination is what is the effect of the death of Shri Subramaniam and what is the effect of Shri Subramaniam having not authorised any person to file the award. Before determining this question it may be stated that the D. D. A. has not questioned the authenticity of the award and the proceedings but has based the legal contention on S. 14 (2)oftheact. Section 14 (2) of the Act reads as under : 14 (2 ). Before determining this question it may be stated that the D. D. A. has not questioned the authenticity of the award and the proceedings but has based the legal contention on S. 14 (2)oftheact. Section 14 (2) of the Act reads as under : 14 (2 ). The arbitrators or umpire, shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositionsand documents which may have been taken and proved before them, to be filed in the Court, and the Court shall thereupon give notice to the parties of the filing of the award. " ( 7 ) THE contention is that the arbitrator could file the award on the request of any party to the arbitration agreement or any person claiming under such authority or if so directed by the court. The arbitrator can either file the award and the proceedings himself or cause the same to be filed in court. It is not the case of any of the parties that the award was filed at the request of any party. It appears, as stated above, that the award and the original proceedings and documents etc. were filed in court in pursuance to a notice issued by the court directing the filing of the award and the proceedings. It is obvious that the arbitrator did not authorise the Private Assistant to file the award. Does it mean, as contended by the D. D. A. that the award and the proceedings all became unenforceable ? Reliance has been on the judgment of the Supreme Court in AIR 1953 SC 313 Re: Kumbha Mawji v. Dominion of India (now the Union of India) for the proposition that the award and the proceedings have to be filed by a duly authorised person. In Kumbha Mawji s (supra), the Supreme Court held that where the award or a signed copy thereof is in fact filed into court by a party, he should have the authority of the Umpire for doing so. In Kumbha Mawji s (supra), the Supreme Court held that where the award or a signed copy thereof is in fact filed into court by a party, he should have the authority of the Umpire for doing so. The Supreme Court further held that where the awards are handed over by the Umpire to the party, it cannot be assumed that the mere handing over of the awards necessarily implies the authority of the Umpire to file the same into court on his behalf and that the authority has to be specifically alleged and proved. It was further held that in the absence of such authority, the filing of the awards by the party cannot be the filing by the Umpire. ( 8 ) THE aforesaid judgment of the Supreme Court in Kumbha Mawji s case, in my view, has no applicability to the facts and circumstances of the present case. The Supreme Court was concerned with a case of filing of the award by a party. It is not so in the present case. The Supreme Court was not considering the case of death of an umpire before filing the award or authorising any one to file the same. The Supreme Court proceeded on the assumption that an umpire is alive or available to file the award and, therefore, came to the conclusion that no party can file it within the meaning of S. 14 (2) of the Act unless the party files it with the authority of the arbitrator or umpire given to him to file it on his behalf. The Supreme Court did not lay down that if an umpire dies before filing the award or before authorising any one to file it, the award would become unenforceable. ( 9 ) SIMILARLY, the judgment of the learned single Judge of Rajasthan High Court reported in AIR 1970 Raj 22 Re : Smt. Hoora v. Abdul Karim, also does not advance the case of the D. D. A. any further. In the aforesaid judgment the Rajasthan High Court held while interpreting S. 14 (2) of the Act that the award could only be filed by the authority of all the arbitrators who give the award. The learned single Judge expressed his agreement with certain observation made in the judgment reported in AIR 1958 All 720 Re : Amod Kumar Verma v. Hari Prasad Burman. The learned single Judge expressed his agreement with certain observation made in the judgment reported in AIR 1958 All 720 Re : Amod Kumar Verma v. Hari Prasad Burman. The learned counsel for the D. D. A. has also relied upon the judgment in Amod Kumar s case. In case the view expressed in Smt. Hoora s case and Amod Kumar s case (supra) is correct then it is likely to lead to many difficulties. Take an example of a case where there are more arbitrators than one and if all of them are not unanimous in their decision and the arbitrator in minority refuses to join the other arbitrators in majority in filing or causing the award to be filed in court the said award would become unenforceable. Likewise, if one of the arbitrators is not available because of death or for some other unforseen circumstance then too the award would become unenforceable. Such an intention cannot be attributed to the Arbitration Act. It is well settled that the Arbitration Act has been enacted with the object of permitting the parties to get their disputes settled by a domestic forum. If the aforesaid judgment of the Rajasthan High Court is taken to have laid down correct law it would mean that the exercise of making the award again would have to be taken by some other arbitrators who would ultimately all agree to cause the award to be filed. The interpretation given by the Rajasthan High Court would vest a power of vote in one arbitrator. That could not be the intention of S. 14 (2 ). It would be reasonable to hold that if an award is made and published by more than one arbitrator it could be filed or cause to be filed in court by any one of them and the same would be sufficient compliance of S. 14 (2) of the Act. I respectfully differ from the view expressed in the case of Smt. Hoora (supra ). ( 10 ) IN Amod Kumar s case (supra) the Allahabad High Court was not concerned with non availability of the arbitrator because of death or for some other reason. However, the learned Judges did make certain observations to the effect that an award can be filed in court only by the arbitrator or under his authority. ( 10 ) IN Amod Kumar s case (supra) the Allahabad High Court was not concerned with non availability of the arbitrator because of death or for some other reason. However, the learned Judges did make certain observations to the effect that an award can be filed in court only by the arbitrator or under his authority. It was contended before Allahabad High Court that in case arbitrator dies after making the award and without authorising any one to file the award it would lead to difficulties and all arbitration proceedings, if that view was correct, would become futile. It was held that "there is undoubtedly much force in the contention that if the law is that the award can be filed in the court only by the arbitrator, the making of it would be rendered futile in some cases; but our jurisdiction consists in interpreting the law and not enacting a law". ( 11 ) I can find no compelling reasons to construe S. 14 (2) in the strict manner in which it was interpreted by either the Allahabad High Court or the Rajasthan High Court. It would be unreasonable to construe S. 14 (2) in the manner in which it was so construed by the learned Judges of the aforesaid two courts. This I say so with utmost respect and in this connection Irespectfully differ from the views expressed in these judgments. Both the High Courts, for coming to the conclusion, as they did, relied upon the judgment of the Supreme Court in Kumbha Mawji s case ( AIR 1953 SC 313 ) (supra ). As I have stated above, the Supreme Court judgment has to be construed as laying down the manner of filing the award in court when an arbitrator is available to file it or cause it to be filed. The Supreme Court did not lay down that in case arbitrator dies, all the proceedings would become futile. As I have stated above, the Supreme Court judgment has to be construed as laying down the manner of filing the award in court when an arbitrator is available to file it or cause it to be filed. The Supreme Court did not lay down that in case arbitrator dies, all the proceedings would become futile. Although protracted arbitration proceedings may have been held in a particular case in accordance with an agreement between the parties, although award may have been made and there may not be any dispute about the authenticity of the award or the proceedings but in all these cases if the arbitrator dies without filing it or authorising any other person to file it on his behalf, all the proceedings before the arbitrator which the parties had chosen for themselves, must become futile. ( 12 ) THIS cannot be the intention and object of the Arbitration Act. Take the facts of the present case. The arbitrator had hardly any opportunity to file the award. Within about 12 days of the making of the award the arbitrator dies. An application under Ss. 14, 17 and 29 of the Act was filed before the death of the arbitrator. The arbitrator had hardly any opportunity even to authorise any one to file the award. It cannot be the intention of the Legislature that in such type of eventuality all proceedings would become infructuous and futile. The filing of the award is a ministerial act and as stated above no dispute has been raised about the authenticity of the award and the proceedings. The inherent powers of the court under S. 151 Civil Procedure Code can also be brought to aid in such an eventuality as in the present case. ( 13 ) FOR the reasons stated above it cannot be held that the award and the proceedings have not been filed in court by a duly authorised person. I accordingly decide issue No. 1 against D. D. A. ( 14 ) ISSUE No. 2 Learned counsel for D. D. A. in support of the contention that the award is liable to be set aside has pressed two objections, namely, (1) that the arbitrator was required to give reasons in the award but he has failed to give any reasons and (2) the arbitrator has found a sum of Rs. 1,31,877. 1,31,877. 59 as payable to the claimant which amount is even more than the amount actually claimed. ( 15 ) IN order to appreciate the aforesaid two objections it would be necessary to reproduce the relevant portions of the award and the reasons recorded by the arbitrator in Annexure a which has been made as an enclosure to the award. The relevant portion of the award reads as under : "claims DISPUTE AWARD 1. The claimant claims a sum of Rs. 1,00,000 The arbitrator is to The claim is justified towards the final bill. determine whether to the extent of the claim of the Rs. 65,367. 00. claimant is justified, and if so, to what extent? 2. The claimant claims a sum of Rs. 3,000. 00 do The claim is not deducted on account justified. of observation of C. T. E. 3. The claimant claims refund of security do The claim is justified deposit amount of to the extent of Rs. 15,000. 00. Rs. 14,582. 00. 4. The claimant claims do See for reason a sum of Rs. 3,690. 00 Annexure a counter the amount deducted on claim No. 10 account of non return of empty bitumen drums, (The amount is adjusted in the Claim No. 1 5. The claimant claims do Already considered a sum of Rs. 30,000. 00 in Claim No. 1. for the extra item of filing the voids with blinding material. 6. The claimant claims do Already considered a sum of Rs. 5,000. 00 in Claim No. 1. "on account of earth work. The relevant portion of Annexure a reads as under: "reasons for The Award. Sub: In the matter of arbitration between Sh. Virender Singh and D. D. A. for the work "construction of Indoor Stadium at I. P. Estate, New Delhi. Sh : constn. of Road (Phase-1) along covered nallah. Agreement No. 6/pev/is/dda/80-81. Claim No. 1. The contractor/claimant and the respondent produced their measurements before the arbitrator. The arbitrator visited the site and made a random check of measurements. Keeping in view the measurements the arbitrator went through the final bill of the respondent and found a sum of Rs. 1,31,877. 59 is payable against the final bill. In this amount the recoveries proposed by the respondent are not taken into consideration. For the recoveries the respondent has made counter claims. Keeping in view the measurements the arbitrator went through the final bill of the respondent and found a sum of Rs. 1,31,877. 59 is payable against the final bill. In this amount the recoveries proposed by the respondent are not taken into consideration. For the recoveries the respondent has made counter claims. The amount payable to the respondent by the claimant against counter claims is Rs. 66510. 59. Therefore, the net amount payable is Rs. 65,367. 00 against claim No. 1. " ( 16 ) THERE is ho dispute between the parties that in pursuance of Cl. 25 of the agreement the arbitrator was required to give reasons. The only point of dispute is whether the reasons have been given or not. According to the D. D. A. the reasons reproduced above are no reasons in the eye of law. According to the petitioner the aforesaid reasons are sufficient in law. ( 17 ) IT is clear from the reasons given by the arbitrator and as reproduced above that the arbitrator arrived at the figure of Rs. 1,31,877. 59 as payable to the claimant against the final bill, on the basis of the measurements produced before him and random check of the measurements after visiting the site. It cannot, therefore, be said that no reasons have been given bythe arbitrator. It is well settled that when an arbitrator gives a reasoned award he is not required to write a detailed judgment setting out each logical step of his reasoning but it is sufficient if he indicates the trend of his thought process, so that errors can be eliminated and arbitrariness avoided. But the Court s function remains restricted. It does not permit reviewability of the reason nor a combing through as an appellate forum would be advised to do as this would amount to impeachment of the award which is not permissible, the purpose of arbitration being speedy, cheapness and certainty, a necessary requirement for commercial conduct of business. However, the court can set aside the award if it is apparent therefrom that the reasons referred to therein are based on no evidence and/or on an erroneous proposition of law. Neither is true in the present case See : AIR 1982 Delhi 365 Re; Delhi Development Authority v. M/s. Alkaram. The D. D. A. has not contended that the reasons are based on no evidence. Neither is true in the present case See : AIR 1982 Delhi 365 Re; Delhi Development Authority v. M/s. Alkaram. The D. D. A. has not contended that the reasons are based on no evidence. It has also not been contended that the award is based on an erroneous proposition of law. The arbitrator has sufficiently indicated the trend of his thought process. It cannot be that the arbitrator has failed to give the reasons. ( 18 ) TURNING now to a second objection that the arbitrator has awarded more amount than the claim of the contractor. It would be seen from the award reproduced above that Claims Nos. 5 and 6 were considered along with claim No. 1. In Claim No. 1 the amount is Rs. 1 Lakh, in Claim No. 5 the amount claimed is Rs. 30,000. 00 and in Claim No. 6 it is Rs. 5,000. 00. The total comes to Rs. 1,35,000. 00. The amount found due by the arbitrator is Rs. 1,31,877. 59. The amount found payable to D. D. A. is Rs. 66,510-59. Thus the net amount found payable to the claimant by the D. D. A. has been worked out to be Rs. 65,367. 00. The award cannot, therefore, be set aside on the ground that the claimant has been awarded more amount than what was claimed. ( 19 ) THE award is not liable to be set aside on any of the aforesaid two grounds. Accordingly, Issue No. 2 is decided in favour of the petitioner and against the D. D. A. ( 20 ) THE result of the aforesaid discussion is-that the objections (I. A. 1598 / 85) are dismissed. The award is made a rule of the court and a decree is passed in accordance with the award. The award will be made a part of the decree. The petitioner will also be entitled to interest at the rate of 9% p. a. from the date of the award till the date of payment. In the facts and circumstances of the case the parties are left to bear their own costs.