JUDGMENT Surinder Sarup. J.—The brief facts of the case are that a contract agreement was entered between the objector, i. e. Garrison Engineer Jutog, Shimla and the Contractor i e. M/s Mayur Engineers, Garkhal, Solan, for the work allotted to the latter regarding provision of water supply at Karcham, This contract between the parties is dated 23-12-1982. The amount of the contract was to the tune of Rs 5.43,962. The date of the commencement of the work, as agreed upon between the parties was the same i. e. 23 12-1982, and as per the terms of the agreement it was to be completed by 3-1-1983 However, the date of completion was further extended upto 2-1-1984 on the request of the plaintiff contractor He failed to complete the work even within the period thus extended. This compelled the defendant to issue notices bearing various dates. However, in spite of the same the plaintiff contractor failed to complete the work. Ultimately, the defendant had no option but to cancel the contract vide order dated 10-6-1988. 2. Cancellation of the contract resulted in disputes/differences between the parties, which, in turn, led the contractor to invoke the arbitration Clause (No.70) incorporated in the contract agreement. 3. The plaintiff-contractor applied to this Court vide Civil Suit No, 90 of 1988 for appointment of an Arbitrator, During the pendency of the same, the defendant appointed an Arbitrator. Therefore, the suit was disposed of by this Court on 11-1-1989. The Arbitrator thereafter entered into the reference and finally announced the award on 11-6-1993. Ultimately, the award was filed in this Court, to be made a rule of the Court. 4. The defendant has filed objections under section 30 read with section 33 of the Arbitration Act (hereinafter to be referred to as the Act) for setting aside the said award dated il-6-1993. The grounds on which the award has been challenged, inter alia, are as follows : (a) Awarding a sum of Rs. 34,800 as against the claim of the contractor of Rs, 54,861 67 is beyond the agreed terms and conditions of the contract. Thus, the proceedings have been misconducted by the Arbitrator.
The grounds on which the award has been challenged, inter alia, are as follows : (a) Awarding a sum of Rs. 34,800 as against the claim of the contractor of Rs, 54,861 67 is beyond the agreed terms and conditions of the contract. Thus, the proceedings have been misconducted by the Arbitrator. (b) The plea taken by the Union of India represented through the Garrison Engineer with respect to non-completion of work has not been taken into consideration by the Arbitrator, nor has the plea put forth on its behalf regarding the sub-standard material retrieved during the execution of risk and cost work which was lying at site has been considered by the Arbitrator. On the other hand, the contractors claim regarding non-availability of water for gravity flow was false and fabricated. In view of all this, awarding a sum of Rs. 2,67,000. which is neither contract tually nor legally doe to him, is also bad, inasmuch as the Arbitrator has travelled beyond the terms and conditions of the contract agreement. (c) Regarding the contractors claim No, 4 for damages suffered on account of breach of contract, including non-issue of completion certificate etc an amount of Rs 50,000 has been awarded, the same is arbitrary and legally untenable in pursuance of the agreed terms and conditions between the parties. (d) The interest allowed by the Arbitrator on the principal amount is in excess of his power and is otherwise exorbitant. (e) As regards the claim of the Union of India for a sum of Rs. 4,51,864 towards the minus amount of the final bill, no amount whatsoever, has been awarded to it, despite the objector having established its claims in respect of the same beyond all reasonable doubt before the Arbitrator. (f) The Arbitrator has failed to appreciate the material placed on record by the objector, misread the evidence and the contract agreement, assumed the role of a conciliator, not considered the facts on the record and denied a reasonable opportunity to the objector to prove its claim during arbitration proceedings. 5.
(f) The Arbitrator has failed to appreciate the material placed on record by the objector, misread the evidence and the contract agreement, assumed the role of a conciliator, not considered the facts on the record and denied a reasonable opportunity to the objector to prove its claim during arbitration proceedings. 5. In the reply filed on behalf of the plaintiff/claimant/contractor, objections have been taken that no legal ground for setting aside the award has been made out by the objector, and this Court is not a Court of Appeal which can substitute its own decision for the award of the Arbitrator, who is final judge of both law and fact. His decision is binding between the parties and not open to challenge. Another objection regarding limitation has been taken to the effect that the objections of the defendant arc time-barred. On merits, the objections against the award have been traversed and denied as being untenable. It has been denied that the Arbitrator has exceeded his jurisdiction as alleged, and that his award has been made after considering the pleadings and the evidence led by the parties. It has been stated m the reply of the plaintiff-claimant-contractor that legally this Court is not a Court of appeal, which can re-appraise and re-appreciate the evidence of the parties led before the Arbitrator by them. As regards interest, the plea in the reply is that the Arbitrator had the jurisdiction to award interest under the provisions of the Interest Act, 1978. Other grounds taken in the objection petition have also been specifically denied in the reply. On the pleadings of the parties, the following issues have been framed in this case :— “1. Whether the objection petition has been preferred within the statutory period of limitation ? O. P. Objector 2. Whether the Arbitrator has exceeded his jurisdiction, as alleged ? O. P. Objector 3. Whether the Arbitrator has misconducted the proceedings and himself, as alleged if so, its effect ? O. P. Objector 4. Whether the Arbitrator has acted beyond the terms and conditions contained in contract agreement, as alleged, if so its effect ? O. P. Objector 5. Relief." 6. The learned Counsel for the parties have been heard at length and with their assistance this Court has gone through the record of the case.
O. P. Objector 4. Whether the Arbitrator has acted beyond the terms and conditions contained in contract agreement, as alleged, if so its effect ? O. P. Objector 5. Relief." 6. The learned Counsel for the parties have been heard at length and with their assistance this Court has gone through the record of the case. The findings under each issue are as follows : Issue No. 1 : This issue has not been pressed by the learned Counsel of the plaintiff-claimant-contractor. Even otherwise from the record it appears that the objection petition has been filed within limitation from the date of knowledge of the filing of the award, having come to be known by the objector. This issue is decided accordingly. Issues No. 2, 3 and 4 : All these three issues are inter-connected and can thus be disposed of together. It has been strenuously argued by the learned Counsel for the objector that the impugned award of the Arbitrator is liable to be set aside on the short ground that the same is not a reasoned award and has been given by the Arbitrator without applying his mind to the facts and circumstances of the case, as also without considering the evidence led by the parties. On the other hand, it has been submitted by the learned Counsel for the plaintiff-claimant-contractor that the award in question is fully sustainable in the eye of law. In support of her arguments, the learned Counsel for the objector has cited Union of India v Jain Associates and another, (1994) 4 SCC 665, It has been held in ibis case by the apex Court as follows : "The word misconduct in section 30 (a) does not necessarily comprehend or include misconduct of fraudulent or improper conduct or moral lapse but does comprehend and include actions on the part of the arbitrator, which on the face of the award, are opposed to all rational and reasonable principles resulting in excessive award or unjust result or the like circumstances which tend to show non-application of the mind to the material facts placed before the arbitrator or umpire. In truth it points to fact that the arbitrator or umpire had not applied his mind and not adjudicated upon the matter, although the award professes to determine them. Such situation would amount to misconduct." 7.
In truth it points to fact that the arbitrator or umpire had not applied his mind and not adjudicated upon the matter, although the award professes to determine them. Such situation would amount to misconduct." 7. Applying the test laid down in the above decision of the apex Court to the present case, it will be seen that the impugned award is neither a speaking one, nor does it indicate that the same has been made by the Arbitrator by applying his mind to the claims and counter-claims raised before him by the parties He has merely mentioned that they have been heard, and their pleadings as well as the documentary and oral evidence produced before him by them have been considered. Immediately thereafter he has proceeded to give his award in respect of the claims/counterclaim of the parties, without assigning any reason whatsoever, without even hinting as to what material on record before him has prompted him to make his award in respect of the various amounts awarded by him in favour of the plaintiff claimant contractor In other words, there is no process of reasoning indicated by (he Arbitrator in the said award, which has resulted in his giving the same. Another decision of the apex Court, which has been cited at the Bar by the learned Counsel for the objector is the case of K. P. Poulose v. State of Kerala and another, AIR 1975 SC 1259. It has been laid down therein that misconduct under section 30 (a) of the Act does not connote moral lapse. It comprises legal misconduct which is complete if the Arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. In the present case also, the Arbitrator appears to have ignored the material in the shape of documentary evidence of the objector, which is apparent from a bare reading of the award itself. The same does not contain any reasons and thus cannot be said to be a just and fair decision. 8. On behalf of the plaintiff clamant-contractor, the learned Counsel has cited Raipur Development Authority etc. etc. v. M/s. Chokhamal Contractors etc etc.
The same does not contain any reasons and thus cannot be said to be a just and fair decision. 8. On behalf of the plaintiff clamant-contractor, the learned Counsel has cited Raipur Development Authority etc. etc. v. M/s. Chokhamal Contractors etc etc. AIR 1990 SC 1426 ; M/s. Sudershan Trading Co, v. The Government of Kerala and another, AIR 1989 SC 890 ; Trustees of Port of Madras v. Engineering Constructions Corporation Ltd,, AIR 1995 SC 2423 and Jajodia {Overseas) Pvt. Lid, v Industrial Development Corporation of Orissa Ltd., (1993) 2 SCC 106. On the basis of these decisions of the apex Court, the learned Counsel has argued that the impugned award in the present case is not liable to be set aside on the ground that it contains no reasons. There is no force in this submission. At the cost of repetition, it must be stated that the impugned award has been given by the Arbitrator without application of mind and without adverting to the pleadings and evidence of the parties No justification has been given in the award for the amounts under various claims, which have been awarded to the contractor. All that is indicated is the brief description of the amounts claimed under various heads, and the amounts awarded respectively, in an arbitrary manner. So much so that the counter-claims of the objector have been declined in an arbitrary manner. 9. A perusal of the impugned award indicates that the arbitrator has adopted the course and approach in the manner of an Army Establishment. He has dealt with the disputes before him in a cryptic manner. Therefore, it cannot be said that it is merely a case of an award containing no reasons. The entire approach of the Arbitrator is vitiated. Considering the present case from this angle, the rulings of the apex Court relied upon on behalf of the plaintiff-claimant contractor by his learned Counsel and referred to above, are not applicable to the facts and circumstances herein 10. To sum up the case in the light of the above discussion, this Court has no hesitation in coming to the conclusion that the Arbitrator has misconducted the proceedings and himself Issue No. 3 has thus to be answered in favour of the objector and it is decided accordingly.
To sum up the case in the light of the above discussion, this Court has no hesitation in coming to the conclusion that the Arbitrator has misconducted the proceedings and himself Issue No. 3 has thus to be answered in favour of the objector and it is decided accordingly. In view of the findings under Issue No. 3t Issues No 2 and 4 do not survive for decision. 11. For the reasons recorded above, the objections are allowed and the impugned award of the Arbitrator dated 11-6-1993 is set aside, The disputes between the parties giving rise to the reference for arbitration in the present case, are remitted back to the Arbitrator for decision in accordance with law, in the light of the observations and reasons contained here above. The parties are left to bear their own costs. Order accordingly.