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1994 DIGILAW 192 (DEL)

SWARAN SINGH v. UNIVERSITY OF DELHI

1994-03-17

SAT PAL

body1994
Satpal ( 1 ) THIS is a petition filed on behalf of Shri Swaran Singh (hereinafter REFERRED TO to as the Contractor ) under Sections 14 and 17 of thearbitration Act, 1940 and in this petition it has been prayed that respondent No. 2, the sole arbitrator, be directed to file the award dated 21/03/1989 alongwith the proceedings in this Court and thereafter the objections, if any, be calledfor and the award be made a rule of the Court. 1. After the receipt of the award from the Arbitrator, notice of filing of theaward was issued to the parties on 4/07/1989. Thereafter, respondent No. 1,university of Delhi (hereinafter REFERRED TO to as the University ) filed objectionsagainst theawardvideapplicationbearinglano. 6175/89. These objections werecontroverted by the Contractor in his reply to the said application. The followingissues were framed on 26/02/1990:- (1) Whether the award dated 21/03/1989 is liable to be set aside forthe grounds taken by the respondent in the objection petition? (2) Reliefon the same date the parties were directed to file affidavits. Pursuant to thisorder, the University filed its affidavit by way of evidence on 24/07/1991 andcounter affidavit on behalf of the Contractor was filed on 11/11/1991. ( 2 ) MR. Chaudhary, the learned Senior Counsel, appearing on behalf of theuniversity submitted that the learned Arbitrator committed error apparent onthe face of the award while interpreting the provisions of Clause 7 and Clause25 of the conditions of the contract. He submitted that in terms of clause 7 thecontractor was required to submit a list of disputed to do so, the clums weredeemed to have been waived and since the Contractor did not submit any list ofdisputed items within the stipulated period, any claim filed on his behalf wasnot maintainable. He further submitted that Clause 25 would come intooperation only if the Contractor had submitted a list of disputed items within theperiod mentioned in Clause 7. He submitted that the learned Abitratorcommitted grave error inholding that under Clause 25 limitation was 90 days andas such the Contractor had invoked the arbitration clause within limitation. He, therefore, contended that interpretation of Clause 7 and Clause 25 by thearbitrator was contrary to the law and as such the award was liable to be set asideby this Court. He submitted that the learned Abitratorcommitted grave error inholding that under Clause 25 limitation was 90 days andas such the Contractor had invoked the arbitration clause within limitation. He, therefore, contended that interpretation of Clause 7 and Clause 25 by thearbitrator was contrary to the law and as such the award was liable to be set asideby this Court. In support of his contention, the learned Counsel placed reliance ontwo judgments of the Supreme Court reported in Bungo Steel furniiture (Pvt.) Ltd. v Union of lndia, air 1967 SC 378 and M/s. Alien Berry and Co. Private Ltd. v. The Union of India, AIR 1971 SC 696 . ( 3 ) THE learned Counsel further submitted that there was another error on theface of the award as the learned Arbitrator ignored the material documents filedon behalf of the University particularly the documents which were exhibits R-3 tor-5, R-9 to R-12 and R-14. He, therefore, contended that since the Arbitratorignored the said important documents filed on behalf of the University, theaward was liable to be set aside on this ground. In support of this contention, the learned Counsel placed reliance on a Division Bench judgment of this Court in College of Vocational Studies v. S. S. Jaitely, AIR 1987 Delhi 134. ( 4 ) THE learned Counsel further submitted that from the award it was alsoapparent that the Arbitrator was biased against the University. In this connectionhe drew my attention to the observations of the learned Arbitrator that, "theuniversity is not agreeable for extension of time. This was obviously veryimproper behaviour of the University engineer, as this amounts to nullifyingreference of the disputes by the Vice-Chancellor of the University to me. " Thelearned Counsel also submitted that the Arbitrator committed error in grantinginterest even for the preference period. The learned Counsel also submitted thatthe conclusions arrived at by the Arbitrator against the various claims of thecontractor were not valid ones. He, therefore, contended that the award shouldbe set aside. ( 5 ) MR. Rohtagi, the learned Senior Counsel on behalf of the Contractorsubmitted that in the present case the award was aspeaking one and the findingsof the learned Arbitrator were based on evidence on record. He furthersubmitted that the relevant clause to invoke arbitration was Clause 25 and notclause 7 of the conditions of the contract. ( 5 ) MR. Rohtagi, the learned Senior Counsel on behalf of the Contractorsubmitted that in the present case the award was aspeaking one and the findingsof the learned Arbitrator were based on evidence on record. He furthersubmitted that the relevant clause to invoke arbitration was Clause 25 and notclause 7 of the conditions of the contract. He submitted that Clause 25 clearlyprovided that the arbitration in respect of any claim in writing could be invokedwithin 90 days of receiving the intimation from the University that the bill wasready for payment. He submitted that in the present case the final bill wassubmitted on 24/08/1985 and the arbitration was invoked on 2 9/09/1985 and till 28/09/1985 no communication of disallowanceof the final bill was received by the Contractor. He further submitted that in anycase the arbitration was invoked within 90 days from the date of submissionof the final bill. He further submitted that the learned Arbitrator had interpretedboth the clauses in harmonious manner and it could not be said that theinterpretation given by the Arbitrator was not conceivable of possible. He alsointerpretation of the two clauses, such a mistake was not amenable to be correctedin respect of the award by the Court. In support of his contention he placedreliance on two judgments of the Supreme Court in the case of M/s. Sudarsan Trading Co. v. The Government of Kerala and Another, AIR 1989 SC 890 and Food Corporation of India v. Ms. Veshno Rice Millers, AIR 1989 SC 1263 . ( 6 ) THE learned Counsel drew my attention to the award and submittedthat in the award it has clearly been stated that, "after careful consideration ofwritten statements and documentary evidence produced by both the parties, thetwo instalments of detailed written arguments on behalf of the claimants on2. 2. 1988 and 15. 2. 1989 and the oral but elaborate arguments of the Counsel for therespondents concluded oral but elaborate arguments of the Counsel for therespondents concluded on 6. 2. 1989, I have come to the conclusion that therespondents have committed breach of contract in the supply of drawings/details, cement and steel. " Relying on these observations, the learned Counselsubmitted that the contention urged on behalf of the learned Counsel for theuniversity that the Arbitrator had ignored some of the important documents filedon behalf of the University was without any merit. " Relying on these observations, the learned Counselsubmitted that the contention urged on behalf of the learned Counsel for theuniversity that the Arbitrator had ignored some of the important documents filedon behalf of the University was without any merit. The learned Counsel furthersubmitted that the learned Arbitrator had given adequate opportunity to theparties to place their grievance in the manner provided by the Arbitrationagreement and after considering the material on record, he had given his findings. He further contended that this Court could not re-examine and re-assess thematerials in these proceedings and reasonableness of the reasons given by thearbitrator could also not be challenged. Insupport of this contention, the learnedcounsel placed reliance on two judgments of the Supreme Court Pun Construction Pvt. Ltd. v. Union of India, AIR 1989 SC 777 (supra) and a judgment of this Court in Mehta Teja Singh and Co. v. Delhidevelopment Authority Another, 1994 (1) AD (DELHI) 821. ( 7 ) THE learned Counsel for the Contractor further submitted that the reasonsgiven by the Arbitrator were valid ones and were based on the evidence on record. He; therefore, contended that in the present case it could not be said that thereasons given by the Arbitrator were so palpably erroneous in law that they hadresulted in the Arbitrator taking a view which could not be sustainable in lawand as such the award cannot be set aside. In support of this contention thelearned Counsel has placed reliance on a judgment of the Supreme Court injagdish Chander Bhatia v. Lachhman Das Bhatia, (1993) I SCC 548. ( 8 ) LASTLY the learned Counsel contended that the Arbitrator had awarded theamount on account of interest in accordance with the law laid down by thesupreme Court. In support of this contention he placed reliance on a judgmentof the Supreme Court in Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. , and Another, AIR 1989 SC 973 . ( 9 ) I have given my thoughtful consideration to the submission made by thelearned Counsel for the parties and have also perused the record. From the awardi find that the Arbitrator has given elaborate reasons in support of his findings. ( 9 ) I have given my thoughtful consideration to the submission made by thelearned Counsel for the parties and have also perused the record. From the awardi find that the Arbitrator has given elaborate reasons in support of his findings. From the award it is also clear that the Arbitrator has considered the writtenstatement documentary evidence produced by both the parties, detailedarguments filed on behalf of the Contractor and the oral arguments of the Counselarguments filed on behalf of the Contractor and the oral arguments of the Counselfor the University and thereafter became to the conclusion that the University hadcommitted breach in the supply of drawings/details, cement and steel. As held bythe Supreme Court in the cases of Pun Construction Pvt. Ltd. , (supra) andsudersan Trading Company (supra) this Court has no jurisdiction to re-examinethe evidence adduced before the Arbitrator and the reasonable nese of the reasonsgiven by the Arbitrator cannot be challenged in these proceedings. I, therefore,do not find any merit in the contention urged by the learned Counsel for theuniversity that the findings given by the Arbitrator are perverse as he has failedto refer to certain documents filed on behalf of the University. ( 10 ) AS regards the interpretation of Clauses 7 and 25 of the conditions ofcontract, by reading of these two clauses it is clear that the clause for invokingarbitration is clause 25 and not Clause 7. In terms of Clause 25, the Contractor wasrequired to raise demand in writing in respect of any claim within 90 days ofreceiving the intimation from the University that the bill was ready for payment. In the present case admittedly the final bill was submitted on 24/08/1985and the demand in terms of Clause 25 was raised by the Contractor on 2 8/09/1985 i. e. within 90 days from the date of submission of the bill itself. Further from the award I find that with regard to the interpretation of these twoclauses by the Arbitrator, it cannot be said that such an interpretation is notconceivable or possible. As held by the Supreme Court in the case of Foodcorporation of India (supra), even assuming for the sake of argument that therewas some mistake in the construction of a particular clause of the contract such amistake Is not amenable to be corrected in these proceedings. As held by the Supreme Court in the case of Foodcorporation of India (supra), even assuming for the sake of argument that therewas some mistake in the construction of a particular clause of the contract such amistake Is not amenable to be corrected in these proceedings. I, therefore, do notfind any merit in this contention urged on behalf of the learned Counsel for theuniversity that the interpretation of the aforesaid two clauses by the Arbitratorwas contrary to law. ( 11 ) FROM the award I also find that the parties were given adequateopportunity to place their grievance and examine their witnesses. The reasonsgiven by the Arbitrator in respect of the various claims cannot be said to bepalpably erroneous in law. I, therefore, do not find any merit in the objectionsraised on behalf of the University with regard to the various claims in theirobjection petition. In face there is no error apparent on the fact of the award, andas such the objection petition of the University is liable to be dismissed. ( 12 ) I also do not find any merit in the contention raised by the learned Counselfor the University that the Arbitrator was biased against the University as he hadgiven some observations against the University. From the award I find that theseobservations in fact are not against the University but are against the improperbehaviour of the University engineer. The said remarks cannot be a ground forbias particularly when the Arbitrator has given comprehensive reasons in supportof his conclusions. ( 13 ) AS regards the grant of interest by the Arbitrator I do not find anyinfirmity except regarding the grant of interest for the period 15/12/1984of 19/04/1986 amounting to Rs. 23,778. 00. In this connection a reference maybe made to a judgment of the Supreme Court in the case of Gujarat Water andsewerage Board (supra) wherein it was held by the Supreme Court that, since inact, 1978, the arbitrator under Section 3 (1) (a) of the said Act was entitled to awardinterest from 6/08/1981 till 21st August, 1984 From th the said judgment it isclear that on 6/08/1981 the Contractor had approached the Civil Courtfor appointment of an Arbitrator. In terms of this judgment the interest could beawarded from the date of appointment of the Arbitrator and not for the prior tohis appointment. In terms of this judgment the interest could beawarded from the date of appointment of the Arbitrator and not for the prior tohis appointment. Since the reference was made on 15/01/1986 thecontractor will be entitled to interest only from 15/01/1986 and not from 15/12/1984. Accordingly, the interest from 15/12/1984 to 1 4/01/1986 is disallowed. ( 14 ) IN view of the above discussion the objection petition being IA No. 6175/89 is dismissed. The objections having been dismissed the award as modifiedwith regard to interest hereinabove, is made a rule of the Court. Let a decree bedrawn in terms of the award as modified, which shall form part of decree. Ifurther direct that in case the decretal amount is not paid within a period of twomonths from the date of decree, the Contractor will be entitled to interest at the rateof 15 per cent per annum from the date of decree till realisation. The parties are,however, left to bear their own costs.