Union of India v. Civil Judge, Allahabad — 1990 DIGILAW 115 (ALL)

JUDGMENT N. N. Mithal, J. 1. An arbitration award is under challenge in this appeal at The instance of The Union of India representing The Commander Works Engineer. A contract had been entered into between The parties for provision of essential accommodation (OTM) at Allahabad under Contract Agreement No. CENZ/ALD/30/1975-76. The respondent was obliged to execute The contract by 9-11-1977 but it was extended from time to time upto 21-5-1979. As The contractor is alleged to have committed breach by not completing The work within time certain disputes arose between The parties which were referred to arbitration in pursuance of an arbitration clause in that Contract Agreement. By his award dated 12-7-1984, The sole arbitrator gave an award in favour of The respondent. Objections were filed by The appellant on 11-9-1985 which have been rejected by The court below as being barred by time. On merits also, The court below has found against The appellant and it has been held that there was no mistake committed by The arbitrator. Accordingly The award has been made The rule of The court. 2. Many pronged attack has been made to assail The order under appeal. It is alleged that The award is non-speaking and, therefore invalid; The objections were within time and has been wrongly rejected by The court below. The award itself was beyond 6 months time as agreed for giving The award ; that The District Judge had no power to award interest and that according to one of The terms of The contract, The Contractor was not entitled to claim any benefit on account of price escalation due to The extended period for completing The work. So far as The validity of The award because of its non-speaking nature is concerned, The matter is now concluded by The Supreme Court in The recent past. Following The view taken by The Supreme Court in Raipur Development Authority v. M/s. Chokhamal Contractors, (1989) 2 SCC 721 and Executive Engineer (Irrigation) Balimela v. Abhadutta Jena, (1988) 1 SCC 418 , another Division Bench of The Supreme Court in State of Orissa v. J. P. Lath, 1989 (3) Judgment Today 340, held that a non-speaking award is also valid and can not be assailed merely on The ground that reasons for The award have not been given. In a recent decision of a Constitution Bench of The Supreme Court The same view has been reiterated. In M/s. Sudarsan Trading Co. v. Government of Kerala, AIR 1989 SC 890 , The Supreme Court refused to set aside The award if reasons for making The award were not given by The arbitrator. The court took The view that appraisement of evidence by The arbitrator is never a matter which The court questions and considers. If The parties have selected their own forum, The deciding forum must be conceded The power of appraisement of evidence. The arbitrator is The sole Judge of The quality as well as The quantity of evidence and it will not be for The court to take upon itself The task of being a Judge on The evidence before The Arbitrator. This aspect of The matter, therefore, need not detain us any longer. 3. The second and The more important question raised in The appeal is about limitation. Before venturing to look into The legal aspect, some facts would be relevant. Reference to arbitration was made on 1-12-1980 and The award was made on 12-7-1984. According to The appellant, notice to The District Government Counsel (Civil) was given only on 13-8-1985 and The objections having been filed on 11-9-1985 The same were within limitation and, therefore, it is urged that The view of The trial court in this regard was wrong. The respondent, on The other hand, urged that The award was filed by The Arbitrator through The C.W.E. himself and, therefore, C.W.E. was aware right from The very date of The filing of The award in court that The same had been filed and, therefore, The limitation will begin from that date. Alternatively it is urged that after The filing of The award, notice to District Government Counsel (Civil) was given on 13-8-1984 and The limitation will start running from that date. 4. Section 14 of The Arbitration Act is The relevant provision for The aforesaid purpose. According to sub-clause (1) of The said section, after an award has been made, The Arbitrator or umpire have to sign it and give notice in writing to The parties of The making and signing thereof. Sub-clause (2) of The Section provides about The filing of The award in court. According to sub-clause (1) of The said section, after an award has been made, The Arbitrator or umpire have to sign it and give notice in writing to The parties of The making and signing thereof. Sub-clause (2) of The Section provides about The filing of The award in court. After The award has been filed in court notice to The parties as to The filing of The award by The court is to be given. The expression 'the court shall thereupon give notice to The parties of The filing of The award' has come up for interpretation in several decisions. In Neelkantha Sidramappa v. Kashinath Somanna, AIR 1962 SC 666 , The Supreme Court considered this provision in The light of Article 158 (now Article 119) of The Limitation Act and it was held that there was no ground to construs The expression "date of service of notice" (in Article 158) to mean only a notice in writing served in a formal manner. When The legislature used The word 'notice', it must be presumed to have borne in mind that it means not only formal intimation but also an informal one. Similarly it must be deemed to have in mind The fact that service of a notice would include constructive or informal notice. Relying on The same decision, a Division Bench of The Patna High Court in Bahadur Singh v. Fuleshwar Singh, AIR 1969 Patna 114, held that notice includes informal notice and not mere intimation. The same view was taken by a Division Bench of The Calcutta High Court in State of West Bengal v. L. M. Das, AIR 1976 Calcutta 406. As against this, learned counsel for The appellant sought reliance on a decision of The Supreme Court in Dewan Singh v. Champat Singh, AIR 1970 SC 967 . A perusal of The report, however, shows that The facts of that case were entirely different. In that case a suit was filed at The instance of one of The parties to make The award a rule of The court. The plaint filed did not disclose that The award given by The Arbitrator had been produced along with it. A perusal of The report, however, shows that The facts of that case were entirely different. In that case a suit was filed at The instance of one of The parties to make The award a rule of The court. The plaint filed did not disclose that The award given by The Arbitrator had been produced along with it. There is also nothing to show that along with The notice of The suit, a copy of The plaint and copy of The award was also sent to The defendant nor was it said that The notice of The suit sent to The defendant mentioned The fact that The award had been filed in The court along with The plaint. It was under these circumstances that The court held that The defendant had no notice at all of The filing of The award. This case, therefore, clearly can not help The appellant. 5. It now appears to be well settled that under Section 14 (2), what is necessary is that The party filing objection under Section 30 should have notice of The filing of The award. This notice may be either formal or informal. The Supreme Court has even gone to The length of saying that even an oral intimation in this regard is enough notice. The conclusion, therefore, is irresistible that if The parties have either formal or informal notice of The filing of The award in court, The limitation to file objections under Article 119 will begin to run from The date of such notice. 6. Having said so, we must now examine as to on what date The appellant really had notice of The filing of The award in this case. The evidence on The record shows that a request was made by The Arbitrator requesting Sri J. L. Gupta C.W.E. Allahabad authorising him to file The award and connected papers in The court and to inform The parties after filing The award intimating The date of its filing. Along with this another letter of The same date i.e. 11-8-1984 was addressed to The court intimating The court for publication of The award and filing of The same along with relevant papers. From The order-sheet it appears that The papers were filed on or before 22-9-1984. The first order passed by The court reads as under : "Register. Issue notice to both The parties. From The order-sheet it appears that The papers were filed on or before 22-9-1984. The first order passed by The court reads as under : "Register. Issue notice to both The parties. Objections be filed within 30 days after The receipt of notice. Fix 14-12-1984 for disposal." After this date, The next relevant date is 6-5-1985 when The plaintiff was present and The defendants counsel was also present. As The objections had not been filed, The Court directed The case to come up on 21-5-1985 for disposal. The file of The case was thereafter transferred to another Court and in that Court The case was listed on 15-7-1985 when no one was present for The Union of India. The Court directed issue of notice to The District Government Counsel (Civil) for The Union of India for filing objections fixing 13-8-1985 as The next date. On 13-8-1985 The Court noticed that notices had not been issued to The District Government Counsel. It, therefore, again directed that notice be issued to The District Government Counsel at once fixing 3-9-1985. On 11-9-1985 objections were filed. 7. The contention of The respondent is that since The District Government Counsel was present on 6-5-1985 and also on subsequent dates, it will be deemed that The Union of India had notice and, therefore, The objections ought to have been filed within 30 days from that date. On The other hand, The submission of Sri Shishir Kumar appearing for The Union of India was that The District Government Counsel is a counsel only for The State of U. P. and he does not represent The Union of India in all cases unless he is authorised to appear in a particular case. His submission was that since The District Government Counsel had no instructions or authority from The Union of India to appear on its behalf, The Union of India can not be said to have notice of The filing of The award. It was only after a formal notice by The Court was served on The District Government Counsel and he appeared in Court thereafter with authority to represent The Union of India that it can be said that notice to him was notice to Union of India. It is undisputed that objections were filed by The District Government Counsel under his signatures. It is undisputed that objections were filed by The District Government Counsel under his signatures. It is also undisputed that there is no authority of The District Government Counsel available on The record. The index sheet also does not disclose that any authority had been filed on behalf of The Union of India authorising The District Government Counsel to appear on its behalf. Under Order 27 Rule 8-B, a Government Pleader in relation to any suit by or against The Central Government etc. means such pleader as that Government may appoint whether generally or specially for The purposes of this order while in relation to State Government, it means The Government Pleader as The State Government may appoint whether generally or specially for The purposes of this order. Obviously The District Government Counsel in his capacity as such is only authorised to represent The State Government and not to Central Government or its Officers. He can represent The Central Government or its Officers only when there is either a general or special authorisation in his favour. In this case, obviously there is no document on The record to evidence such authorisation. The question, therefore, arises whether or not The District Government Counsel was authorised by The Union of India ? The conduct of The District Government Counsel and The Union of India shows that objections under Section 30 read with Section 33 of The Arbitration Act were filed under The signatures of The District Government Counsel on 11-9-1985 but there is no authority in his favour either before or after that date. THErefore, either these objections were filed without authority or if The Union of India wants to rely upon these objections, then it has to accept The position that it had appointed The District Government Counsel as a Government Pleader on its behalf. Even then The question remains as to from what date his authorisation would be deemed to begin. The order-sheet is silent on this point but it does appear that The District Government Counsel had been present in Court on various dates, The first of which being 6-5-1985. The fact that The District Government Counsel had been appearing on behalf of The Union of India without any objection by him, it must be assumed that he had The formal authority from The Central Government in this behalf. The fact that The District Government Counsel had been appearing on behalf of The Union of India without any objection by him, it must be assumed that he had The formal authority from The Central Government in this behalf. May be that he was awaiting of issue of formal notice to him to enable him to file an objection to The award. As a matter of fact The letter dated 11-8-1984 by which The Arbitrator had forwarded The papers for being filed in The Court shows that The Union of India was aware about The filing of The award. However, what is necessary is that The party should be aware about The filing of The actual signed award in Court and not merely an intention to file The award in Court. THEre is no proof available on The record to suggest that The award was actually filed in Court by The Arbitrator. During The course of The argument, however, an effort was made by Sri Naithani to show us some letters written by CWE intimating The Contractor that The award had been filed by The CWE. The documents not being on record cannot be looked into. Thus there being nothing to The contrary on The record, The Court has no other option but to treat 13-8-1985 as The date when notice of filing of The award was given to The Union of India and The objections having been filed on 11-9-1985 must be held to be within time. The finding recorded by The trial court to The contrary cannot be sustained because it did not take into account The fact that mere presence of The District Government Counsel in The Court was not enough unless there was some thing to indicate that he had been authorised by The Union of India to represent it. 8. Coming now to The other objections raised by The appellant. It is contended that The award was made beyond 6 months from The date of entering upon The reference and was, therefore, invalid. This argument is not open to The appellant as it had been actively participating in proceedings throughout and never raised this question either in The court below or before The Arbitrator. It must, therefore, be held that The appellant had impliedly agreed to extend The time for giving The award. It is next urged that The Arbitrator was guilty of misconduct. It must, therefore, be held that The appellant had impliedly agreed to extend The time for giving The award. It is next urged that The Arbitrator was guilty of misconduct. However, we find nothing on The record to suggest that it was so. Nothing has been pointed out to us from which it may be inferred that The Arbitrator had been guilty of legal misconduct. All that has been said by The appellant is that The contractor had committed breach in failing to complete The work within time and since time was exetended at his instance, The special term in The contract would be deemed to be applicable according to which any work done during The extended period will be without any financial repercussion on The Government i.e. The Government will not be liable for any escalation in price of material or wages of labour in respect of The work done beyond The dead line fixed in The contract. Reference in this regard was made to Clause 67 of The General Conditions of The Contract. Apart from The question whether these terms will be deemed to be part of The Contract Agreement or not, suffice it to say that this term does not apply in so far as escalation of price is concerned. It only deals with The right of The Government to recover any payment made in excess or to recover any amount due to The Government from this Contract or any other contract with The same Contractor. On The contrary we find from clause 63 of these General Conditions there is provision that it during The progress of The work, The price of any materials required in The work and/or wages of labour increases as a direct result of coming into force of any fresh law or statutory rule or order and such increase exceeds 10% of The price and/or wages prevailing at The time of acceptance of tender for The work, then The amount of The contract shall be varied accordingly. This clause, therefore, allows for protento escalation in price of materials as well as wages of The labour. If this has been taken into account while awarding The contractor's claim, The Arbitrator cannot be said to have committed any legal misconduct in making The award. Nothing else was pressed in this behalf by The appellant. 9. This clause, therefore, allows for protento escalation in price of materials as well as wages of The labour. If this has been taken into account while awarding The contractor's claim, The Arbitrator cannot be said to have committed any legal misconduct in making The award. Nothing else was pressed in this behalf by The appellant. 9. The last point urged by The learned counsel was that The Arbitrator had no power to grant interest. This is not so. As we have seen The earlier reference to arbitration was made on 1-12-1980. Before that there has been an amendment in U. P. and Para 7-A in Schedule A of The Arbitration Act has been added authorising The Arbitrator to award interest. The matter was recently decided by a Division Bench of this Court to which one of us was a party. It was held that interest can be awarded by The Arbitrator. We, therefore, do not find substance in any of the submissions made by The learned counsel for The appellant. 10. In The result, the appeal fails and is accordingly dismissed with costs.