N. v. Bashyam Reddy and Co. rep. by its Managing Partner R. Yuvaraj, Bharathi Road, Cuddalore VS Food Corporation of India and Another
1990-08-17
A.R.LAKSHMANAN
body1990
DigiLaw.ai
Judgment : The matter arises under the Indian Arbitration Act, 1940. The petitioner in this original petition is the contractor. The petitioner filed O.P.No.44 of 1987 before this Court under Sec.14(2) of the Arbitration Act for a direction to file the award. This Court has received the award passed by the Arbitrator dated 11. 1987. The petitioner filed O.P.No.214 of 1988 for the following reliefs: (a) To set aside that portion of the award under Sec.30 of the Arbitration Act in respect of the rejection of the part of the claim of the peti- tioner for a sum of Rs.1,59,960-07; (b) To modify the Award by directing the payment of the sum of Rs.1,59,960-07 to the plaintiff (the amount rejected by the Arbitrator), in addition to the amount already awarded to the plaintiff, with interest as per Sec.34 of the Civil Procedure Code from the date of the passing of the decree; and The facts in brief are as follows: The petitioner was awarded a contract for clearing cum Stevedoring and Transport at Pondicherry Port by the first respondent, the Food Corporation of India. The contract was for the period from 26. 1978 to 26. 1980. It is stated in the petition that during the operation of the contract, the petitioner claimed certain bills and these bills were paid by the first respondent. Therefore, the petitioner requested the respondent to refer the matter for arbitral tion. However, the request was turned down by the Food Corporation of India. Thereafter, the petitioner moved this court in C.S.No.204 of 1983 for a direction to the respondent to appoint an arbitrator in terms of Clause No.XIX of the agreement. After notice to the first respondent this Court by order dated 11. 1986 directed the first respondent, the Food Corporation of India to appoint an arbitrator within two months from 11. 1986. Thereafter, the first respondent by order dated 13. 1986 appointed one Mr.B.S.Hegde, Additional Legal Adviser, Government of India, Ministry of Law and Justice, Department of Legal Affairs, Bangalore as the Sole Arbitrator in terms of the order passed by this Court. The Sole Arbitrator entered upon the reference on 7. 1986. The petitioner had received the copy of the award on 11. 1986. In so far as the award is against the petitioner, the petitioner has filed this O.P. challenging the said award on certain ground. .2.
The Sole Arbitrator entered upon the reference on 7. 1986. The petitioner had received the copy of the award on 11. 1986. In so far as the award is against the petitioner, the petitioner has filed this O.P. challenging the said award on certain ground. .2. According to the petitioner, the Arbitrator has committed an error apparent on the basis of the record and that the award passed by the Arbitrator negativing the claim of the petitioner for boat hire charges of Rs.1,38,611-07 is not proper and justified, On a reading of Clause XX Item No.7 of the agreement read with Appendix VII of the Schedule of rates of services. It is further contended that the Arbitrator had also acted perversely in not interpreting the above relevant Clauses in coming to the conclusion. For boat hire charges it is contended that there is no schedule of rates prescribed and therefore, the hire of boats is also one of the services contemplated and consequently the petitioner is entitled to 169% above the schedule of rates in respect of this particular claim. Therefore, the petitioner claimed a sum of Rs.1,38,611-07 on this item. Thus, the petitioner submitted that the award to that extent is liable to be set aside. It is further contended by the petitioner that the Arbitrator has also acted contrary to the evidence and records in the matter of claim for operation charges from pier to customs shed and when the Arbitrator holds that this operation is certainly more than one he should have allowed the total claim of Rs.39,386-50 instead of Rs.20,100 as awarded, the petitioner further contended that the operation of the award in awarding Rs.2,200 as against the claim of Rs.4,262 in respect of recovery of shortages is an error in so far as there is no finding that the petitioner is negligent and the loading of the good was in the presence of the respondents officials putting their seal on the wagon. 3. It is seen from the award that out of six items, the Arbitrator has negatived item No.1 and partly allowed Items 2, 4 and 5 and allowed fully item 3. In so far as Item No.6 is concerned, the petitioner has not pressed the said claim even before the Arbitration. .4. The Original Petition was opposed by the Food Corporation of India.
In so far as Item No.6 is concerned, the petitioner has not pressed the said claim even before the Arbitration. .4. The Original Petition was opposed by the Food Corporation of India. According to the first respondent, the petition filed by the petitioner is not maintainable and that the Arbitrator has correctly negatived the claims put forward by the petitioner and that, the Arbitrator has correctly appreciated the facts of the case and has also interpreted the relevant Clause of the contract correctly. It is further stated in the counter filed by the first respondent that the award of the Arbitrator negativing the claim of the petitioner is justified and there are no errors apparent on the face of the records which will justify the interference by this Court. It is further submitted that the Arbitrator/second respondent has not misconducted himself. It is also stated in the counter that the Arbitrator has properly appreciated the evidence and the relevant provisions of the agreement in regard to the claim for operation charges from pier to customs shed, i.e., according to the first respondent, the Arbitrator was justified in rejecting the claim of the petitioner and that there are no grounds made out by the petitioner for modifying or setting aside the award of the Arbitrator. 5. I have heard Mr.M.Krishnappan, learned counsel for the petitioner and Mr.P.B.Krishnamurthy, learned counsel for the first respondent, Food Corporation of India. Learned counsel for the petitioner has reiterated the contentions raised by him in the Original Petition and argued that the Arbitrator has not properly interpreted the contract and that by not doing so, the Arbitrator has misconducted himself and hence the award in so far as it is against the petitioner is liable to be set aside. 6.Per contra Mr.P.B.Krishnamurthy, learned counsel for the Food Corporation of India has argued that the Arbitrator has rightly interpreted the contract in a particular manner and that even if the interpretation is wrong it is not for this court to interfere with the award of the arbitrator. He, however, submitted that this court is not sitting on appeal and the powers of this Court in interfering with the arbitration proceedings is very limited.
He, however, submitted that this court is not sitting on appeal and the powers of this Court in interfering with the arbitration proceedings is very limited. In support of his contention, Mr.P.B.Krishnamurthy, learned counsel for the first respondent, the Food Corporation of India drew my attention to the decisions reported in Uttar Pradesh Hotels v. Uttar Pradesh State Electricity Board, A.I.R, 1989 S.C. 268, in M/s.Sudarsan Trading Company v. Government of Kerala, A.I.R 1989 S.C. 590 and in Puri Construction (P) Ltd v. Union of India, A.I.R. 1989 S.C. 777. In Uttar Pradesh Hotels v. Uttar Pradesh State Electricity Board, A.I.R. 1989 S.C. 268, the Supreme court has held, "Even assuming that there was an error of construction of the agreement or even that there was an error of law in arriving at a conclusion, such an error is not an error which is amenable to correction even in a reasoned award under the law. In order to set aside an award, there . must be a wrong proposition of law laid down in the award as the basis of the award." This view is supported by the Supreme Court in M/s.Sudarsan Trading Company v. Government of Kerala, A.I.R. 1989 S.C. 890, wherein the Supreme Court has held that the interpretation of a contract is a matter for the Arbitration on which the court cannot substitute its own decision. The Supreme Court has further held, "Once there is no dispute to the contract, which is the interpretation of that contract, is a matter for the arbitrator and on which court cannot substitute its own decision. If on a view taken of a contract, the decision of the arbitrator on certain amounts awarded, is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. Therefore, the High Court had no jurisdiction to examine the different items awarded clause by clause by the arbitrator and to hold that under the contract these were not sustainable in the facts found by the arbitrator. In Puri Construction (P) Ltd., v. Union of India, A.I.R. 1989 S.C. 777, the Supreme Court again held that the jurisdiction of the court in interfering with the arbitration proceedings is very limited and that the court cannot examine the correctness of the award on merits.
In Puri Construction (P) Ltd., v. Union of India, A.I.R. 1989 S.C. 777, the Supreme Court again held that the jurisdiction of the court in interfering with the arbitration proceedings is very limited and that the court cannot examine the correctness of the award on merits. Applying the above three rulings to the facts of the present case I am unable to interfere with the award of the arbitrator. In my opinion, the petitioner has not made out any case for interference. 7. In Chinnasamy v. Superintending Engineer, (1989)2 M.L.J. 415, a Division Bench of this Court consisting of Nainar Sundaram and Bellie, JJ. held as follows: “The Court has no jurisdiction to deal judicially with the merits of a case determined by the arbitrator. It is not the function of the Court to scrutinise the award on merits as if it is sitting in appeal on the verdict of the arbitrator. There is no scope for the Court to invoke the aid of Sec.30 of the Act for setting aside the awards.” In Hindustan Tea Company v. K.Sashikant Company, 1986S.C.C. (Supp.) 506, the Supreme Court again held that the jurisdiction of this Court to interfere with the awards passed by the arbitrator is very very limited. 8. In the instant case, the arbitrator has passed a reasoned award. The objections which have now been raised against the award cannot be taken into consideration within the limited ambit of scheme of the Arbitration Act. Under the law, the arbitrator is made a final arbiter of the dispute between the parties. Hence in my opinion, the award is not bound to be challenged on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the evidence. In these circumstances, I am unable to countenance the arguments advanced by the learned counsel for the petitioner and hence I dismiss the Original Petition No.214 of 1988. However, there will be no order as to costs. 9. In view of the findingsgiven above, there will be a decree in terms of the award passed by the arbitrator with interest at 10% from the date of award till realisation in O.P.No.44 of 1987. The counsel fee for Mr.P.B.Krishnamurthy, learned counsel for the Food Corporation of India, is fixed at Rs.2,000. The Food Corporation of India is directed to pay the same to its counsel as fixedly this Court.