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1995 DIGILAW 320 (MAD)

The Executive Engineer and Administrative Officer, Trichy v. C. Srinivasa Rao

1995-03-17

JAYASIMHA BABU

body1995
Judgment :- 1. The defendant in C.S. 139/94 has filed O.P. 191/95 for setting aside the Award made by the Arbitrator appointed by this Court in C.S. 139/94, which had been filed under Sec. 20 of the Arbitration Act. The Award was made on 28.11.94. A.1378/96 in O.P. 809/94 has been filed by the plaintiff in the suit for passing a decree in terms of the award. In this order, parties are referred to with reference to their rank in the civil suit. 2. By the said Award, the arbitrator has decided the disputes that had arisen between the parties to the agreement bearing No. SEAgt. No. 9/90-91 for providing storm water drain and culvert phase 3 Navalpattu. Plaintiff/Claimants case is that his contract was illegally terminated by the defendant on 15.5.1991. The Arbitrator has found that the termination so effected was not legally tenable and has awarded a sum of Rs. 1,73,415.70 together with interest at 18% p.a. from the date of the Award till date of payment. 3. The defendant having filed a counter claim for payment of triple the value of the materials which had not been returned by the plaintiff, the Arbitrator has allowed the counter claim of the respondent to the extent of single recovery of the value of such unreturned materials from the claimant the amount being Rs. 50,945.47 Further, a sum of Rs. 3,518/- being the single recovery of the materials used in the works, has also been awarded by the arbitrator to the defendant. 4. The defendant in the suit by O.P. 191/95 has sought the setting aside of the Award inter alia on the following grounds:— that the Award is not a reasoned one; that there are traces of bias; that the facts and principles of law as also the documents were not considered by the arbitrator in the proper perspective; that the termination ought to have been held to be legal; that the EMD and Security Deposit ought not to have been directed to be refunded; that the Award exhibits bias and has not discussed on the points raised by the petitioner in detail; and that interest awarded at the rate of 18% p.a. is high. 5. The contention that the award is not a reasoned one is wholly untenable. A perusal of the Award shows that reasons have been given in support of the findings rendered by the arbitrator. 5. The contention that the award is not a reasoned one is wholly untenable. A perusal of the Award shows that reasons have been given in support of the findings rendered by the arbitrator. The arbitrator had considered the documents placed before him, has adverted to the arguments addressed before him and then proceeded to give reasons for the conclusion arrived at. 6. As regards the contention that there are traces of bias, no case of bias is made out by the plaintiff. The Award does not disclose any bias on the part of the Arbitrator. Due opportunity has been given to the parties to place their respective cases and the evidence placed by the parties has been duly considered. 7. The contention that the Award was passed without considering the documents and other evidence in the proper perspective is not only vague but also is contrary to the record. In any event, it was within the jurisdiction of the arbitrator to consider the documents and on basis of such consideration reach his own conclusions. 8. As regards the contention that the termination ought to have been held as legal and valid, reasons have been given holding that the termination was not legal. The law bearing on this point has been adverted to and discussed and only thereafter, the arbitrator reached the conclusion that the termination, without making time the essence of the contract, was not valid. Having held so, the arbitrator has held further, that the claimant is entitled to refund of EMD and the security deposit in view of the termination itself being illegal. As regards, interest it is not in dispute that the arbitrator has the owner to award interest. The appropriate rate of interest is a matter for the arbitrator to decide, so long as it does not amount to a penalty and is not usurious. The rate of 18% p.a. awarded by the arbitrator is neither penal nor usurious. 9. None of the grounds on which the defendant has sought to have the Award set aside are tenable. 10. Learned counsel for the plaintiff referred to and relied on several rulings of the Supreme Court and of the other Courts. These decisions have emphasised the limited scope of the enquiry by the court while considering an application for setting aside the Award of an arbitrator. 11. 10. Learned counsel for the plaintiff referred to and relied on several rulings of the Supreme Court and of the other Courts. These decisions have emphasised the limited scope of the enquiry by the court while considering an application for setting aside the Award of an arbitrator. 11. In the case of N. Chellappan v. Secretary, Kerala State Electricity Board and another ( AIR 1975 SC 230 ), the Supreme Court held that mistakes of law or facts are not grounds for setting aside the Award and that the Award can be set aside if it is based on erroneous propositions of law. 12. In the case of Hindustan Construction Co. Ltd. v. State of Jammu and Kashmir ( 1992 (4) SCC 217 ), it was held that the Award cannot be set aside on the ground that it is based on wrong conclusion or that the Arbitrator has failed to appreciate the facts. 13. In the case of Coimbatore District Podu Thozhilalar Sangam v. Balasubramana Foundry and others ( AIR 1987 SC 2045 ) as also in the case of State of Orissa and others v. Lall Brothers (1988 (4) SCC 153) and Supreme Court held that a mistake of law in the award is not amenable to the direction by the Court. 14. Learned counsel referred to the case of Goa, Daman and Diu Housing Board v. Ramakant V.P. Dervotkar ( 1991 (4) SCC 293 ); Municipal Corporation of Delhi v. Jaganath Ashok Kumar and another ( 1987 (4) SCC 497 ); State of Orissa v. Harihar Palo (AIR 1981 Orissa 141); and Eastern and North East Frontier Railway Co-operative Bank Ltd. , v. B. Guha and Co. ( AIR 1986 Cal. 146 ) in support of the submission that a reasoned award based on evidence cannot be set aside. State of Kerala and others v. T.A. Thomas ( AIR 1973 Ker. 262 ) was referred to by counsel in support of the submission that an award made after observing rules of fair play cannot be set aside. 15. Finally reliance was placed by the counsel for the plaintiff on the decision of this Court in the case of Superintending Engineer, TNUDP Madras Circle and another v. A.V. Rangaraja and another ( AIR 1994 Mad. 15. Finally reliance was placed by the counsel for the plaintiff on the decision of this Court in the case of Superintending Engineer, TNUDP Madras Circle and another v. A.V. Rangaraja and another ( AIR 1994 Mad. 217 ) in support of his submission that High Court cannot sit in appeal or review or reappraise the evidence nor the conclusion arrived at by the Arbitrator. 16. In the instant case, the Arbitrator has applied, given due opportunity to the parties to place their respective cases before him, has discussed the evidence, has applied well settled propositions of law to the facts of the case and has given a reasoned award. The award in not vitiated by bias. The Arbitrator has not misconducted himself or the proceedings. 17. In the result, this petition for setting aside the award is rejected. There shall be decree in terms of the Award.