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1996 DIGILAW 1319 (RAJ)

F. C. I. v. Om Prakash Mittal

1996-11-26

SHIV KUMAR SHARMA

body1996
JUDGMENT 1. - In all these appeals order dated 21.5.1988 of the District Judge,Dholpur has been assailed whereby he refused to set aside award dated 29.10. 987 delivered by the sole Arbitrator. 2. FACTUAL MATRIX :Food Corporation of India (In short FCI) defendant appellant in all the three appeals invited tenders for providing godowns to store its food grain on rent basis in Dholpur. In pursuance, the respondents expressed their desire to provide the accommodation and submitted tenders which were accepted and the terms and conditions agreed by the FCI and the respondents were embodied in the respective agreements. Some dispute arose between the parties and on an application filed under section 20 of the Arbitration Act, the District Judge Dholpur vide order dated 4.8.1984 directed FCI to appoint sole arbitrator who after inviting the claims of the parties submitted award before the District Judge Dholpur. The application under sections 16, 20 & 33 of the Indian Arbitration Act, 1940 (herein-after referred to as the Act) were moved by the appellant FCI which were rejected and the District Judge, Dholpur while refusing to set aside award passed a decree in respect of the amount awarded by the arbitrator with future interest vide impugned judgment. 3. It was contended by the learned counsel for the appellant that the award is liable to be quashed on the ground that it flouted the mandatory direction of passing of speaking/ reasoning award given to the arbitrator. The District Judge without giving any reason to differ with the Arbitrator's order, and ordered further interest which is ex facim contrary to law. The arbitrator refused to allow the appellant to examine his two witnesses. The objection with regard to the limitation was not considered by the arbitrator. 4. The learned counsel for the respondent supported the impugned judgment. It was argued that the District Judge had rightly made the award the rule of the Court. The claims of the plaintiffs were not time barred. There were no grounds for setting aside award or remit the same. There was no illegality in awarding future interest. 5. I have given my anxious and thoughtful consideration of the arguments advanced before me and carefully perused the impugned judgment. 6. As per agreement executed by the parties the dispute was to be referred within five years from the date of execution of agreement i.e. 7.12.1976. There was no illegality in awarding future interest. 5. I have given my anxious and thoughtful consideration of the arguments advanced before me and carefully perused the impugned judgment. 6. As per agreement executed by the parties the dispute was to be referred within five years from the date of execution of agreement i.e. 7.12.1976. Notices were issued by the plaintiffs on 31.10.1981 that is within five years from the date of agreements. Thus the plaintiff took steps within time and it cannot be said that the claim was time barred. 7. It has been held by the Calcutta High Court (By Hon'ble A.N. Ray, J. as he then was) in Union of India v. Salween Timber and Construction Company (India) & Anr., AIR 1964 Cal. 240 that there was no error of law appearing on the face of the record. The arbitrator was to judge all facts and all legal contentions advanced by the respective parties. He could go right or wrong. The award was not bad on the ground of limitation of claim made by the respondent. 8. This is a settled legal position that if an Arbitrator in deciding a dispute before him, does not record his reasons and does not indicate the principles of law on which he has proceeded, the award is not on that account vitiated, it is only when the arbitrator proceeds to give his reasons or to lay down the principles on which he was arrived at his decision that the Court is competent to examine whether he has proceeded contrary to law and is entitled to interfere if such error in law is apparent on the face of the award itself. When the arbitrator has given no reason for award nor there is any legal proposition as the basis of award, contention that there are errors of law on the face of award must be rejected. For invoking the provisions contained in Sections 30 & 33 of the Act mentioning of specific averments are necessary but in the application no averment about misconduct of the arbitrator was mentioned. 9. Mr. S.M. Mehta, learned Senior Counsel placing reliance on Santokh Singh Arora v. U.O.I. & Ors., AIR 1992 SC 1809 , has canvassed that award of future interest was also justified. 9. Mr. S.M. Mehta, learned Senior Counsel placing reliance on Santokh Singh Arora v. U.O.I. & Ors., AIR 1992 SC 1809 , has canvassed that award of future interest was also justified. The apex Court in aforesaid case has observed thus : "Matter pending before arbitrators appointed by named authority and in Courts in connection with proceedings arising out of said arbitrator, and subsequently before arbitrators appointed by Supreme Court - interest allowed for period matter was pending before arbitrators appointed by Supreme Court. Same should have been allowed for period matter has been pending in arbitration since appointment of first arbitrator by named authority and in Courts in proceedings arising therefrom and till date of award by claimant is also entitled to be compensated for costs incurred in prosecuting remedied before arbitrators as well as in Courts or Supreme Court." 10. Vide impugned judgment the District Judge Dholpur directed that the plain- tiffs shall be entitled to get the interest at the rate of six per cent per annum on the amount from the date of award i.e. 29.10.1987 till the realisation. In view of the ratio of Santokh Singh's case (supra) there is no illegality in the impugned judgment so far as awarding the interest is concerned. Plaintiffs claimants are entitled to be compensated for costs incurred in prosecuting remedies before the arbitrator as well as in the Courts and the costs may also include the interest for the period till the amount is realised. 11. In the result all the three appeals are dismissed. No costs.Appeal Dismissed. *******