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1994 DIGILAW 190 (DEL)

NATIONAL BUILDINGS CONSTRUCTIONCORPORATION LIMITED v. MUNCIPAL CORPORATION OF DELHI

1994-03-17

J.K.MEHRA

body1994
J. K. Mehra, J. ( 1 ) THESE are the objections to the award of Mr. V. R. Vaishand S. C. Jain, Arbitrators dated 31/10/1991. The Arbitrators dealt with boththe claims of the objections as also counter-claims of the respondents. It is furthernoticed that the award is a non-speaking award. The objections are mainly takento the findings of the Arbitrator on claims No. 2,13,15 and 23 and the findings oncounter-claims No. 19 Item No. 12 of Sub Head (ii) and 22. ( 2 ) BEFORE considering various claims, I think it appropriate to state the legalposition, which is as follows :- ( 3 ) EVEN when an Arbitrator is required to give reasons, according to thesettled law, it is not for the Court to examine the reasonableness of the reasons givenby the Arbitrator and it is also not necessary for the Arbitrator to discuss in detailthe evidence placed before him. A reference in this behalf may be made to the caseof Sudarshan Trading Company v. Governmentof Kerala and Another, reported as air 1989 SC 890 and College of Vocational Studies v. S. S. Jaitley, reported as AIR1987 Delhi 134. It is also settled law that it will not be for the Court to take by itselfthe task of being a Judge of the evidence before the Arbitrator and appraisement ofevidence by the Arbitrator is never a matter which the Court questions. Thejurisdiction of the Court when it is called upon to decide objections raised by a partyagainst an arbitration award, is limited, as expressly indicated in the Arbitrationact and it has no jurisdiction to sit in appeal and examine the correctness of awardon merits. In this behalf, the cases of Puri Construction Private Limited v. Unionof India, reported as AIR 1989 SC 777 and Municipal Corporation of Delhi v. Jagannath Ashok Kumar, reported as (1987) 4 SCC 497 may be REFERRED TO. In the caseof K. P. Poulose v. State of Kerala andanother, reported as AIR 1975 SC 1259 , thehon ble Supreme Court had clearly laid down that it is the legal misconduct whichcan be interfered with and not every misconduct. In the caseof K. P. Poulose v. State of Kerala andanother, reported as AIR 1975 SC 1259 , thehon ble Supreme Court had clearly laid down that it is the legal misconduct whichcan be interfered with and not every misconduct. Again in the case of Coimbatoredistrict Podu Thozillar Samgam v. Balasubramania Foundary and Others, reported as (1987) 3 SCC 723 = air 1987 SC 2045 , it was laid down that it is only theerrors of law apparent on the face of the award and not the factual errors that areopen to correction and interference by the Court. The above principles of law inaddition to what is discussed under objection to Claim No. 15 hereunder will haveto be born in mind while deciding the objections. My findings on the variousobjections are as under:- ( 4 ) CLAIM No. 2. Coming to the said claims, I find that the Arbitrators havereturned their findings on the basis of the material placed before them. It is notopen to the Court to interfere with such findings nor this Court can interfere withthe award on the plea that it would have decided the matter differently. Thisobjection is, therefore, rejected. ( 5 ) CLAIM No. 13 With regard to Claim No. 13, the only objection is that thereis a totalling error in the award when all the items are added up, they read upto Rs. 7,54,779. 00 instead of Rs. 7,51,282. 50 paise. This error is not disputed. This is onlyan arithrnatical error, which can be corrected by the Court and accordingly, I modify the award to the extent that the award on this claim will be deemed to be for Rs. 7,54,779. 00. ( 6 ) CLAIM No. 15 Counsel for the objectors has very vehemently pressed hisobjections to claim No. 15, which relates to claim for a sum of Rs. 51 lakhs onaccount of compensation for causing delay in the execution of the work. It isadmitted that both the parties had REFERRED TO all their respective claims and counterclaims to the arbitration and had invited findings of the Arbitrators thereon. It isonly after the judgment in the case of Vishwanath Sood, reported as AIR 1989 SC952 that the claimants for the first time wrote to the Arbitrators not to order on thisclaim. It isadmitted that both the parties had REFERRED TO all their respective claims and counterclaims to the arbitration and had invited findings of the Arbitrators thereon. It isonly after the judgment in the case of Vishwanath Sood, reported as AIR 1989 SC952 that the claimants for the first time wrote to the Arbitrators not to order on thisclaim. It may be pointed out that by that time, the arbitration was already morethan five years old and various extensions of time had already been granted by theparties and they have proceeded to invite the decision of the Arbitrators withoutany objection to the jurisdiction of the Arbitrators. On the letter of the claimants,no orders were passed by the Arbitrators nor did the claimants move the Courtagainst the Arbitrators proceeding with the determination of the claims inspite ofthat letter. Despite that, this claim had already been argued and the entire materialin respect thereof had already been examined by the Arbitrators in the year 1988prior to the letter. The parties continued to agree to extension of time for makingthe award even after the said application. ( 7 ) IT is further contended by the respondents that no personal hearing orproper scrutiny with regard to this imposition of any compensation or penalty wasever granted nor are they aware of any excercise in the nature of determination ofthe exact amount by taking into consideration the litigating circumstances, havingbeen carried out on record. It is conceded that no recovery pursuant to suchdetermination was affected. Instead the said claim was REFERRED TO by the objector tothe Arbitrators. Assuming that the amount had already been determined as issought to be pointed out by Counsel for the objectors, the only object of making areference of this claim could be to invite a finding by the Arbitrators in respectthereof before affecting the recovery. It was open to the claimants not to haveclaimed this amount, but having done of their own volition and having pressedtheir claim after leading evidence and concluding arguments, it was not open to theobjectors themselves to ask the Arbitrators not to go ahead and make their award. Having themselves invoked the arbitration on this claim and both parties havinglead evidence and concluded evidence, the objectors are estopped (particularly inthe absence of any objection to jurisdiction of Arbitrators) from challenging theaward on the plea of jurisdiction of Arbitrators. Having themselves invoked the arbitration on this claim and both parties havinglead evidence and concluded evidence, the objectors are estopped (particularly inthe absence of any objection to jurisdiction of Arbitrators) from challenging theaward on the plea of jurisdiction of Arbitrators. The following decisions of thehon ble Supreme Court be REFERRED TO to in this connection:- 1. M/s Tarapore and Co. v. Cochin Shipyard Ltd. ,cochin, reported as AIR 1984 SC 1072 , wherein Hon ble Supreme Court laid down that, ". . . BUT of its own it REFERRED TO a specific question of law to the Arbitrator for hisdecision, participated in the arbitration proceeding invited the Arbitrator todecide the specific question and took a chance of a decision. It cannot,therefore, now be permitted to turn round and contend to the contrary on thenebulous plea that it had REFERRED TO the claim/dispute to the sole Arbitratorwithout prejudice to its right to contend to the contrary. " 2. Prasun Roy v. The Calcutta Metropolitan Development Authority andanother, reported as AIR 1988 SC 205 , wherein the aforesaid principlewas reiterated and it was further laid down that, "mr. Kacker submitted that this principle could be invoked only in a situationwhere the challenge is made only after the making of an award, and notbefore. We are unable to accept this differentiation. The principle is that aparty shall not be allowed toblow hot and cold simultaneously. Longparticipation and acquiescence in the proceeding preclude such a party fromcontending that the proceedings were without jurisdiction. " "the Judicial Committee in decision in Chowdhury Murtaza Hossein v. Mussumat Bibi Bechunnisea (1876) 3 Ind App 209 observed at p. 220 :"on the whole, therefore, their Lordships think that the appellant, having aclear knowledge of the circumstances on which he might have founded anobjection to the Arbitrators proceedings to make their awards, did submit tothe arbitration going on; that he allowed the Arbitrators to deal with the caseas it stood before them, taking his chance of the decision being more or lessfavourable to himself; and that is too late for him, after the award has beenmade, and on the application to file the award, to insist on this objection to thefiling of the award. " RELYING on the aforesaid observations, this Court in N. Chellappan v. Secy. " RELYING on the aforesaid observations, this Court in N. Chellappan v. Secy. ,kerala State Electricity Board, (1975) I SCC 289; ( AIR 1975 SC 230 ) actedupon the principle that acquiescence defeated the right of the applicant at alatter stage. In that case, the facts were similar. It was held by conduct therewas acquiescence. Even in a case where initial order was not passed byconsent of the parties a party by participation and acquiescence can precludefuture challenges. "in the case of Vishwanath Sood, mentioned above, the Hon ble Supremecourt has based its decision on the detained machinery provided therein includingthat to appeal and duration of the decision of engineer by his superiors includingthe provision of appellate jurisdiction in reaching the final determination, which isabsent in the prsent contract. In any event, having themselves placed this claimbefore the Arbitrators for determination, it is not open to the claimants themselvesnow to challenge the same without any objection from their opponents and afternot only the entire evidence on this claim had been lead, but also after argumentshad also been addressed and the parties had closed their case on this claim simplyon the plea that they were not conscious of the legal position as determined later onin Vishwanath Sood s case, which to my mind is inapplicable in the light of thedecision in the cases of Tarapore Company and Prasun Roy. I find that Hon blesabyasachi Mukharji was a party to both the decisions, i. e. , Prasun Roy s case asalso Vishwanath Sood s case. The subsequent decision did not in any manneroverrule the former decision and was rendered in the light of the peculiar facts ofthat case wherein detained machinery for determining the amount had beenprovided. In the light of the above, I do not find any merit in this objection andreject this objection. The objection in respect of this claim is also rejected. Claim No. 23 Coming to Claim No. 23, the Arbitrators have already appliedtheir mind and reached a certain figure inclusive of interest at the contractual rateupto the date of the acceptance of their appointment. It is argued that thearbitrators should have allowed interest upto the date on which they entered uponreference and thereafter it was in their discretion whether to award or not to awardpendente lite interest. I am not inclined to interfere with this part of the award. It is argued that thearbitrators should have allowed interest upto the date on which they entered uponreference and thereafter it was in their discretion whether to award or not to awardpendente lite interest. I am not inclined to interfere with this part of the award. Counter-claim No. 19 In counter-claim No. 19,1 find that the amount, whichwas claimed under item No. 12 of sub head (ii) of claim No. 19 was Rs-5,704. 56 paisewhereas the Arbitrators have awarded Rs. 16,821. 98 paise. In my opinion, thearbitrators could not award more than what was claimed even if they on the basisof the material placed before them reached a conclusion that a higher amountshould have been claimed. Accordingly, I set aside the award on item No. 12 to theextent that the amount awarded shall be Rs. 5,704. 56 paise instead of Rs. 16,821. 98paise. The award subject to the above modifications is made Rule of the Court. Theaward shall form part of the decree. No order as to costs. It is pointed out that the amount awarded has in fact already been paid by theobjectors to the petitioner. The same maybe adjusted in accordance with the abovedecision. The bond, after the adjustments are carried out, shall stand discharged. Suit and I. A. stand disposed of.