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1997 DIGILAW 17 (ALL)

SHANKER NATH v. U P VAN NIGAM

1997-01-08

B.M.LAL

body1997
BHAGWAN DIN, J. All these appeals arise out of a common judgment and order dated 6-6-1988 passed by the District Judge, Almora allowing Misc. Civil Suit No. 77 of 1987, dismissing Misc Civil Suit No. 19 of 1987 and setting aside the award made in Arbitration Case No. 20 of 1982. Since the common question of law and facts is involved in all these appeals, therefore, they are taken up together and conveniently disposed of by a common judgment. 2. The facts having bearing on the controversy in these appeals are that Bishan Nath, the father of the present appellants, entered into an agreement with the Uttar Pradesh, Van Nigam-respondent No. 1 for felling, transporting and stocking of pine trees of lot No. 32 Lamgara Compart No. 21, Someshwar Range, West Almora Forest Division, Almora. Under the agreement the wooden logs were to be transported to Haldwani Depot of Van Nigam. Bishan Nath completed the entire work under the agreement in time and a sum of Rs. 9,24,001. 50 after deducting the income tax accrued due to him on account of work done under the agreement. 3. The respondent No. 1 on the protest that Bishan Nath wrote 2 letters to the department authorising Shital Singh Parihar to receive money on his behalf, refused to pay the amount accrued due to him. Thus a dispute with regard to deduction in the amount payable to Bishan Nath in view of the 2 letters alleged to have been written by him, arose. So Bishan Nath filed original Suit No. 20 of 1982 for recovery of the Money. The court was pleased to appoint an Arbitrator to settle the dispute between the parties. In the course of the proceedings before the Arbitrator, Bishan Nath expired, in his place the legal representatives were brought on record. The Arbitrator made an award rejecting the plea that respondent No. 1 has right to withhold the money paid to Shital Singh Parihar under the authority of Bishan Nath and directing for making the payment which had accrued to the legal representatives of Bishan Nath for the work done by him. 4. The appellants filed Misc. Suit No. 19 of 1981 for making the award the rule of the courts. On the other hand respondent No. 1 also filed Suit No. 77 of 1987 for setting aside the award. 5. 4. The appellants filed Misc. Suit No. 19 of 1981 for making the award the rule of the courts. On the other hand respondent No. 1 also filed Suit No. 77 of 1987 for setting aside the award. 5. The learned District Judge dismissed the case of appellants and decreed the suit of respondent No. 1 setting aside the award. Feeling aggrieved of the judgment and decree passed by the District Judge, the appellants, have filed these appeals. 6. Learned counsel for the appellants challenged the propriety and validity of the impugned judgment and order on the around that the District Judge has no right to set aside the award as there was no misconduct on the part of the Arbitrator or misconduct of the proceedings. Reliance has been placed by him in the cases of M/s. Sudarsan Trading Co. v. Government of Kerala. AIR 1989 SC 890 ; Food Corporation of India v. M/s. Vashno Rice Mills, AIR 1989 SC 1263 ; Jagdish Chander Bhatia v. Lachhman Das Bhatia, JT 1993 (1) SC 232 and Jitendra Nath Srivastava (dead) through L. Rs. v. Mayank Srivastava, JT 1994 (5) SC 195. 7. In M/s. Sudarsan Trading Co. (supra) the Supreme Court has held that only in a speaking award the court can look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. . . . . . . . Further more, in any event, reasonableness of the reasons given by the arbitrator cannot be challenged. Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a judge on the evidence before the arbitrator. 8. In Food Corporation of India (supra) the Supreme Court has observed that if it was apparent from the award that a legal proposition which formed its basis was erroneous, the award was liable to be set aside. 9. 8. In Food Corporation of India (supra) the Supreme Court has observed that if it was apparent from the award that a legal proposition which formed its basis was erroneous, the award was liable to be set aside. 9. In Jagdish Chander Bhatia (supra) the Supreme Court has held that an award of an Arbitrator can only be interferred with or set aside modified within the four corners of the procedure provided by the statute. The Court must find out whether the Arbitrator has misconducted himself or there was any infirmity in the procedure, such as, the Arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award. It is not misconduct on the part of an Arbitrator to come to an erroneous conclusion on a disputed issue. The Supreme Court has further held that it must be demonstrated to the court that the reasons given by the Arbitrator are so palpably erroneous in law that they have resulted in the Arbitrator taking a view which cannot be sustained in law. To put in differently, the court does not sit in appeal and does not re-assess the evidence. Even if the court feels that had it been left to it, it would have assessed the evidence differently that would not be a valid ground for setting aside the award. 10. In Bijendra Nath Srivastava (supra), the Supreme Court has once more pointed out that the Arbitrator is the sole Judge of the quality as well as the quantity of the evidence and it will not be for the court to (sic) take upon itself the task of being a Judge or evidence before the Arbitrator. The court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal. 11. The learned counsel for the respondents opposed the contentions of the learned counsel for the appellants that there is an error of law apparent on the face of the record, that Arbitrator has taken decision on the points which were not referred, such as, me validity of letters was not referred to an Arbitrator for settlement but the Arbitrator has taken this point by consideration and settlement. 12. 12. In the instant case the dispute referred to the Arbitrator was regarding deduction made by respondent No. 1 from the amount payable to Bishan Nath deceased, the father of the appellants. The District Judge observed that it was only an adjustment of an amount paid to Shital Singh Parihar, the Arbitrator has not properly understood the scope of dispute referred to him, he had to examine the existence of an authority or direction given by Bishan Nath to adjust and deduct the amount due from Shital Singh Parihar, the legality of the authority or direction had never been challenged in the claim put forth by Bishan Nath or the present claimants, the learned Arbitrator has misdirected himself in this respect and it amounts to a misconducting or proceedings. The court below with a view to make out a case of misconducting of proceedings by the Arbitrator nicely has twisted the subject of dispute and held that the Arbitrator himself misconducted by travelling beyond the terms of the reference. The plain reading of the award in question shows that the dispute relating to the deduction on the basis of the letters written by Bishan Nath was referred to the Arbitrator and on this point, the Arbitrator has very clearly observed that letters are vague and appear to have been written for the return or security of Shital Singh Parihar and, therefore, no deduction should be made on this ground. 13. In view of the observation made by the Supreme Court in the cases referred to above, it is now well settled that the court has no right to re-assess and re-examine the evidence produced before an Arbitrator even if it feels that had it been left to it, would assess the evidence differently. In the case in hand, the District Judge has re-examined the material evidence and also re-valuated its propriety and arrived at a different decision. The law prohibits him to do it. In our opinion, the Court below has committed an inherent error in dismissing the suit of the appellants, decreeing the suit of respondent No. 1 and setting aside the award made by the Arbitrator. 14. In the result, the appeals succeed and are allowed and the judgment and decree of the court below is set aside the award be made as Rule of the Court. Appeal allowed. .