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1999 DIGILAW 884 (BOM)

INDIAN OIL CORPORATION LTD. v. KVAERNER CONSTRUCTION INDIA LTD.

1999-12-10

D.K.DESHMUKH

body1999
ORDER 1. By this petition, the petitioner challenges the award dated 29-8-1997 by which the Arbitrator directed the petitioner to pay an amount of Rs. 98 lakhs and also directed the respondent to furnish Bank guarantee. It is a non-speaking award. 2. The learned counsel appearing for the petitioner submits that the award is without jurisdiction. The learned counsel submits that in terms of the contents of the agreement between the parties, this claim was not arbitrable. The learned counsel submits that this objection to the jurisdiction of the Arbitrator was not raised before the Arbitrator. It has also not been raised in the petition. An application filed for amendment for incorporating this ground is also rejected, as it is barred by limitation. The learned counsel, however, relying on the judgment of the Division Bench of this Court in the case of Hastimal v. Hiralal ( AIR 1954 Bom. 243 ), contends that as the petitioners is urging that there is a defect in the jurisdiction of the Arbitrator to make the award, this Court can suo motu consider this ground. According to the learned counsel the Court gets such a power because of the provisions of Section 17 of the Arbitration Act. However, perusal of the observation of the Division Bench in its judgment in Hastimal's case particularly the observations in paragraphs 7 and 8 shows that the Court can consider an objection to the award, which has not been raised by the party, suo motu only when the patent illegality is on the face of the award itself. In the present case to find out whether the Arbitrator had the jurisdiction to make the award or not, the Court will have to hold an inquiry and the alleged illegality is not patent on the face of the award itself. In my opinion, therefore, in view of the judgment of the Division Bench in Hastimal's case the Court cannot consider the question whether the award is within jurisdiction of the Arbitrator or not, as the petitioner has not raised that ground before the Arbitrator and even before this Court. The learned counsel for the petitioner next submitted that the Arbitrator had framed several issues, however, while making the award the Arbitrator has not recorded finding on the issues that the Arbitrator had framed. The learned counsel for the petitioner next submitted that the Arbitrator had framed several issues, however, while making the award the Arbitrator has not recorded finding on the issues that the Arbitrator had framed. In support of this submission he relies on a judgment of Rajasthan High Court in the case of Union of India v. Firm J. P. Sharma ( AIR 1968 Raj 99 ). In the present case, it is to be seen that after the Arbitrator framed the issues both the parties accorded their consent for the Arbitrator to make a non-speaking award. In my opinion, therefore, the Arbitrator was under no obligation to record finding on the issues which were framed by him as the parties gave their consent for making a non-speaking award. In my opinion, the learned counsel for the Respondent has rightly relied on a judgment of the Division Bench of this Court in the case of Rashtriya Chemicals and Fertilizers Ltd. v. Mohindersingh and Co. ( AIR 1985 Bom 381 ), in support of his submission that it being non-speaking award the Arbitrator was under no obligation to record independent finding against each issue. 3. Thus, it is clear that none of the objections raised by the petitioner has any substance. It is further to be seen here that by the award apart from directing the petitioner to pay certain amounts, the Arbitrator had directed the Respondent to give bank guarantees to the petitioner, which were to be valid till 14-12-1997, 13-10-1998 and 2-1-1999. This was performance bank guarantee. The Respondent pursuant to the award submitted bank guarantee. The bank guarantee has not been returned by the petitioner till date to the Respondent though the period for which the bank guarantee has been given has already expired. The bank guarantee was furnished by the Respondent immediately after the award was made in 1997. The petitioner, however, informed the Respondent only by letter dated 15-1-1998 that the petitioner is not accepting the award that the petitioner is not accepting the award and that it is challenging it. Still the bank guarantees submitted by the Respondent were retained by the petitioner. The petitioner, however, informed the Respondent only by letter dated 15-1-1998 that the petitioner is not accepting the award that the petitioner is not accepting the award and that it is challenging it. Still the bank guarantees submitted by the Respondent were retained by the petitioner. It is clear from the observations of this Court in the a case of Melanie fialho v. Malcolm Francis Pereira (1993 Mad LJ 1784), as also observations of the Supreme Court in its judgment in Prasun Roy v. Calcutta Metropolitan Development Authority,( AIR 1988 SC 205 = 1987(2) Arb. LR 196) that this conduct of the petitioner amounts to acquiescence and would preclude it from impugning the award, as the petitioner has not only accepted the benefit that accrued to it because of the award, but also enjoyed it in full. Taking over all view of the matter, therefore, in my opinion, the present petition has no substance. It is liable to be dismissed. It is accordingly dismissed. As a result of the dismissal of the petition, the only objection raised to the award does not survive. It is, therefore, directed that the decree in terms of the award be passed. The Respondent shall be entitled to interest on the amount of award at the rate of 18% from the date of decree till its realisation. At the request of the learned counsel for the petitioner, execution of the decree passed in pursuance of the award is stayed for a period of 6 weeks from today. Drawing of decree is expedited. Petition dismissed.