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1994 DIGILAW 478 (DEL)

NEW ERA INDUSTRIES v. INDIAN TOURISM DEVELOPMENT CORP. LIMITED

1994-07-26

R.L.GUPTA

body1994
R. L. Gupta, J. (Oral) ( 1 ) THE petitioner-claimant filed a petition under Sections 14 and 17 of the Arbitration Act,1940 for making the award given by respondent No. 2 Sh. B. K. Mattu, General Manager (Engineering) India Tourism Development Corporation Ltd. (hereinafter called the I. T. D. C) pertaining to Guest Room interiors of Hotel Kanishka, New Delhi. Along with this petition a copy of the award was also filed. ( 2 ) NOTICE was issued to the Arbitrator to file the award along with the proceedings. The Arbitrator filed the award. Thereafter notices were issued to the parties of the filing of the award and to file objections if any, within statutory period. Petitioner- clairnant did not file any objection. Only respondent No. l i. e. I. T. D. C filed the present objections under Sections 30 and 33 of the Arbitration Act in IA No-9253/89. Various challenges were made to the award like that award was illegal and invalid in law and that the Arbitrator had misconducted himself and the proceedings. Though the Arbitrator was required to give reasons, he failed to give reasons and on that account also the award was bad. Then reference is made to certain claims awarded by the Arbitrator in favour of the petitioner-claimant and it was said that those were allowed without any proper reasons. ( 3 ) THESE objections were rebutted by filing reply. ( 4 ) I have heard arguments advanced by learned counsel for the parties. It will be useful first to understand the scope of interference by Courts in matters of awards given by the Arbitrator. In this respect it may be noted that the Arbitrator is the General Manager (Engineering) I. T. D. C. The dispute also arose between the petitioner-claimant and I. T. D. C. Therefore, it will be seen that the Arbitrator in this case was a very high ranking officer of the respondent itself about whom it could be said that he must be a very experienced officer in such matters. In M/s Hind Builders V. Union of India AIR 1990 SC 1340 , Hon ble Supreme Court observed at page 1346 in the middle of para-11, "this may be right or wrong but this is also a plausible view. Unfortunately, this was an aspect not urged before, or considered by, the Arbitrators. In M/s Hind Builders V. Union of India AIR 1990 SC 1340 , Hon ble Supreme Court observed at page 1346 in the middle of para-11, "this may be right or wrong but this is also a plausible view. Unfortunately, this was an aspect not urged before, or considered by, the Arbitrators. There was no evidence before the arbitrators or material adduced before the Court as to the nature of these operations. It is difficult to say, by merely reading the terms of contract that the arbitrators have erroneously interpreted the terms of the contract. It is not without significance that the departmental officers did not dispute the rate of the claim. Equally, the arbitrators were experienced engineers and would not have passed, what is now said to be, an astounding claim without thought. It is difficult to assume that all these persons have overlooked that the contractor had already been paid at Rs. l8. . . . . . . . . . . . . . . . . . . . . . . . . . . "in Jagdish Chander v. Hindustan Vegetable Oils Corp. 1989 (2) Arb. L. R. page 189, a learned Single Judge of this Court held, "the jurisdiction of the court hearing objections under Section 30, Arbitration Act is not an appellate jurisdiction. It is now well settled that an award can be set aside only for the reasons specified in Section 30, Arbitration Act. When the parties by agreement refer the disputes to an arbitrator then the decision of the arbitrator is not to be lightly interfered with by the court. The arbitrator who had been appointed was a serving officer of the Government of India holding a very high rank. He was an expert in the line. He gave his award after going through the pleadings of both the parties, their claims and counter claims, the oral and documentary evidence as well as the arguments of the counsel and the authorities cited by them. As such, it is not possible to come to the conclusion that there has been any misconduct of the proceedings in this regard. "then in Madan Lal v. Union of India and others 1990 (1) Arb. L. R. page 159, another single Judge of this Court in the facts of that case observed, "the arbitrator is a very senior Class I officer of the department. "then in Madan Lal v. Union of India and others 1990 (1) Arb. L. R. page 159, another single Judge of this Court in the facts of that case observed, "the arbitrator is a very senior Class I officer of the department. He is a skilled and expert person on the subject and the parties themselves have selected him to decide the question by entering into an agreement. The award has been given by him not only after visiting the site along with the parties but also after considering the pleadings and documents filed on behalf of the parties, evidence adduced, and after hearing, considering and weighing the arguments advanced by the parties and their counsel. There is no misconduct of proceedings. "in Delhi Development Authority, New Delhi v. M/s Alkaram, New Delhi AIR 1982 Delhi 365, a Division Bench of this Court laid down, "the arbitrator is the final Judge of fact. The Court is bound by the arbitrator s findings of fact and cannot review them unless they are unsupported by evidence and unless it appears from the award itself that there was no evidence to support the finding. It is not open to the Court to examine the adequacy of evidence which led the arbitrator to his findings of fact. His findings are final. " It was further observed in this very judgment in para-2, "by reason of the submission clause the arbitrator is bound to give reasons if the claim in dispute is of Rs. 50,000. 00 and above. So the arbitrator has to give reasons for the award. If he does not, it will be a case of misconduct. But the question is what are the limits of judicial reviewability once the Court has reasons before it. All that it means is that the award is a speaking award. But the law remains unchanged. The arbitrator s award on both fact and law is final. There is no appeal from his verdict. The Court cannot review his award and correct any mistake in his ad judication, unless an objection is apparent on the face of it. " In para-4 at page 367, it was further observed, "as a sole tribunal, the arbitrator is entitled to decide rightly and wrongly. There is no appeal from his verdict. The Court cannot review his award and correct any mistake in his ad judication, unless an objection is apparent on the face of it. " In para-4 at page 367, it was further observed, "as a sole tribunal, the arbitrator is entitled to decide rightly and wrongly. Where an arbitrator makes a mistake either in law or in fact in determining the matters referred, but such mistake does not appear on the face of the award, the award is good notwithstanding the mistake, and will not be remitted or set aside. "finally Hon ble Supreme Court in M/s Hindustan Tea Co. v. M/s K. Sashikant and Co. and another AIR 1987 SC 81 described the legal position in the following language: "under the Law, the arbitrator is made the final arbiter of the dispute between the parties. The award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts. " ( 5 ) A perusal of the above referred authorities, therefore, clearly shows the scope of interference by Law courts in the findings of arbitrator. In the present case the arbitrator was required to give reasons. The award shows that while discussing various claims lodged by the petitioner- claimant before the Arbitrator, the Arbitrator has given reasons in respect of all the claims made before him. Sufficiency or insufficiency of reasons is beyond the scope of the Court. ( 6 ) LEARNED counsel for the respondent Mr. D. P. Sharma drew my attention to some of the findings of the arbitrator and urged that these findings were wrong on the face of the record and, therefore, the amount of the award to the extent of such claims at least could be set aside. For instance he has drawn my attention to Item No. 55 in Statement No. 5 of Claim-1 at page 23 of the file wherein the arbitrator has given his findings in respect to additional expenses to bank regarding extension of bank guarantee etc. incurred by the claimant. The petitioner had lodged a claim of Rs. 42,960. 00 against this item while the Arbitrator allowed a sum of Rs. 31,113. 00 only in the remarks column which are reasons given by the Arbitrator. incurred by the claimant. The petitioner had lodged a claim of Rs. 42,960. 00 against this item while the Arbitrator allowed a sum of Rs. 31,113. 00 only in the remarks column which are reasons given by the Arbitrator. It is mentioned that the bank guarantee for mobilisation advance had to be kept alive by the petitioner-claimant till 31. 3. 1982 or completion date whichever is later. But the schedule date of completion being 14. 12. 1981 had to be extended till 3. 3. 1983 for no fault of the claimant. On that account he allowed the aforesaid claim of Rs. 31,113. 00 out of Rs. 42,916. 00. Argument of the learned counsel Mr. Sharma is that the claimant was supposed to keep bank guarantee alive against mobilisation advance till 31. 3. 1992 or completion date whichever was later. Therefore, if the completion date was later, the claim of the petitioner-claimant on account of extra amount allegedly spent for extension of bank guarantee was not at all within the terms of the agreement and, therefore, it should have been dis-allowed. However, the Arbitrator in this respect has given his reasons. He says that the date of completion had to be extended and for which the claimant was not at, fault. Clearly it means that it was the department on account of whose fault the date had to be extended. Therefore, I do not find if this claim could be dis-allowed. Moreover, it may be noted that the Arbitrator has not allowed the amount claimed by the claimant in toto and has reduced it to a substantial extent. That clearly shows application of mind by the Arbitrator and it can only be said that he could apply his mind carefully because he is very experienced officer of this very department. Therefore, he must be deemed to be fully conversant with the working of the department also and the circumstances in which such claims should be allowed to a Contractor. ( 7 ) LEARNED counsel Mr. Sharma also drew my attention to Item No. 56 which according to him should not have been allowed. This item pertains to additional expenses of over time for staff from 30. 11. 1981 to March,1983. In this respect also the Arbitrator has given the contract rate prevailing from 14. 12. 1981 to 3. 3. 1983. Sharma also drew my attention to Item No. 56 which according to him should not have been allowed. This item pertains to additional expenses of over time for staff from 30. 11. 1981 to March,1983. In this respect also the Arbitrator has given the contract rate prevailing from 14. 12. 1981 to 3. 3. 1983. I have already mentioned earlier that delay was not on account of the fault of the claimant but or account of the fault of the department. Consequent result was that the petitioner-claimant had to incur expenses of Rs. l,26,730. 00 in this respect. It goes to the skill of the Arbitrator because he has allowed a sum of Rs. 71,530. 00 out of this amount. Again the credit must go to Arbitrator for scrutinizing the evidence led by both the parties carefully. I, therefore, dismiss the objections on behalf of the respondent and I do not find any error apparent on the face of the award which must be made a rule of the Court. The award is accordingly made a rule of the Court. A decree sheet shall be drawn up in accordance with award and the award will be made part of the decree. The petitioner shall also be entitled to interest at the rate of 10% per annum on the awarded amount from the date of the award till realisation.