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2000 DIGILAW 287 (GAU)

Union of India v. S. M. Construction Company

2000-09-05

BRIJESH KUMAR, D.N.CHOWDHURY

body2000
Brijesh Kumar, C.J.— This is an appeal against the order dated 21.3.97 passed by the Deputy Commissioner (A)/District Magistrate (A), Aizawl, District Aizawl, Mizoram, in Arbitration Case No. 1 of 1996 rejecting the objections preferred by the Chief Engineer, Project Pushpak, C/o 99 APO, defendant in the proceedings under section 16 of the Arbitration Act, 1940, praying for remitting the Award back to the Arbitrator with directions as provided under sections 15 or 16 of the Arbitration Act for reviewing, modifying, amending or annulling the Award and allowing the parties to appear before the Arbitrator for de' novo assessment/valuation of the work. 2. It appears that the dispute arose between the parties in relation to a contract between them, namely, M/s SM Construction Company and the Union of India, represented by Chief Engineer (P) Pushpak, HQ CE (P) Pushpak, C/o 99 APO. The contract was for the purpose of handling/conveyance of cement from Joghigopa Railway Station to various locations under the Project Pushpak for the years 1987-88. Dispute arose between the parties in connection with the above contract and the matter was ultimately referred for settlement of the dispute by sole Arbitrator Shri NC Mitra, Chief Engineer, HQ DGBR. The sole Arbitrator gave his Award in respect of which he gave notice to the parties of having made the Award on October 5, 1996. 3. It appears that the Award was filed before the Court under section 14 (2) of the Arbitration Act, 1940. It was admitted and registered in the Court of the Deputy Commissioner and October 30, 1996 was fixed for hearing after notice to the parties. The Award also seems to have been received in the Court as sent by the Arbitrator on October 30, 1996 and 6.11.96 was fixed for hearing. The learned counsel on behalf of the Chief Engineer, Project Pushpak had put in appearance on 6.11.96 before the Court of the Deputy Commissioner and prayed for a week's time to file a petition which was allowed, according to which the petition was to be filed by 12.11.96 and November 20,1996 was fixed for hearing. The .case was later on adjourned for hearing on the request of coiuisel for both the sides. The appellant, namely, CE Project Pushpak filed objection under section 16 of the Arbitration Act, on 12.11.96. Ultimately the case was fixed for final hearing on 5.2.97. On 5.2.97. The .case was later on adjourned for hearing on the request of coiuisel for both the sides. The appellant, namely, CE Project Pushpak filed objection under section 16 of the Arbitration Act, on 12.11.96. Ultimately the case was fixed for final hearing on 5.2.97. On 5.2.97. it appears, counsel for the defendant, namely, CE Project Pushpak filed a-petition under section 30 of the Arbitration Act, 1940 which was accepted and the copy was given to the counsel for the petitioner, namely, SM Construction Company. 17.2.97 was thereafter fixed for hearing. The case was heard on that date, namely, on 17.2.97. The order sheets of the dates 5.2.97 and 17.2.97 are being reproduced below: “5.2.97: Both sides present. The learned counsel for defendant presented a petition in continuation of their previous petition under section 30 of Arbitration Act, 1940. Petition accepted. Copy be given to learned counsel for petitioner. Shri W. Sam Joseph filed his Vakalatnama on behalf of petitioner which is accepted. Learned counsel for defendant prayed for 10 days time for hearing as he wants to submit more documents on the case. Prayer granted. The documents which the defendants want to submit should be submitted on or before the next Court date, failing which no further extension of date for submission of documents would be made. Fix 17.2.1997 for final hearing. 17.2.97 : Both sides present. Heard the petitioner on the case. Also heard the learned counsel for defendants. Fix. 26.2.1997 for judgment Both sides present through their respective counsel. The case was fixed for judgment for 26.2.97, however as I had proceeded on leave, the judgment could not be pronounced Considering the documents on record, the arguments of the learned counsel for the petitioners and defendants and taking into accounts the relevant provisions of law, the Court allows the petition. Detail judgment is being pronounced separately.” The judgment was delivered on 21.3.97 which has been impugned in the present appeal by the Union of India. 4. We have heard Shri KK Mahanta, learned counsel appearing for the appellant and Shri DK Mishra, learned counsel appearing for the respondent M/s SM Construction Company. 5. Detail judgment is being pronounced separately.” The judgment was delivered on 21.3.97 which has been impugned in the present appeal by the Union of India. 4. We have heard Shri KK Mahanta, learned counsel appearing for the appellant and Shri DK Mishra, learned counsel appearing for the respondent M/s SM Construction Company. 5. One of the contentions which has been raised on behalf of the appellant is that the order dated March 21,1997 passed by the Court below suffers from illegality inasmuch as the petition filed by the appellant under section 30 of the Arbitration Act, 1940 has not been considered, nor disposed of, hence, no order could be passed under section 17 of the Arbitration Act, 1940, making the Award, Rule of the Court. It is submitted hat the Court would pronounce the judgment according to the Award in case there is no cause to remit the Award for reconsi­deration or to set it aside, after the time for making an application to set aside the Award has expired or in case such an application has been moved, only after refusing the same. Section 17 of the Arbitration Act, 1940 is quoted below : “17. Judgment in terms of award-Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award.” 6. In the present case it is evident that the appellant had filed its objection under section 16 of the Act against the application for making the Award rule of the Court on 12.11.96. Thereafter dates were fixed for hearing but on 5.2.97 a petition under section 30 of the Arbitration Act, 1940 had also been filed by the appellant with a prayer that the Award may be set aside and the case be decided de novo. The case was listed for hearing. Thereafter dates were fixed for hearing but on 5.2.97 a petition under section 30 of the Arbitration Act, 1940 had also been filed by the appellant with a prayer that the Award may be set aside and the case be decided de novo. The case was listed for hearing. But a perusal of the judgment dated 21.3.97 does not indicate that the petition filed on 5.2.97 under section 30 of the Arbitration Act, 1940 had also been considered and refused by means of the impugned order. As a matter of fact in the beginning of the order itself a mention about section 17 of the Arbitration Act, 1940 alone has been made. There also does not seem to be any separate order rejecting petition under section 30 of the Act. 7. Learned counsel for the respondent Shri DK Mishra submits that according to section 17 of the Act, the Court is to dispose of an application for setting aside of the Award in case it is made within time. In case no such application is filed within the time prescribed for the purpose, the Court shall be free to pass an order under section 17 of the Act. So far contention as it is, there seems to be no fallacy in the argument. In a case where the Award has been filed in the Court and notices have been issued to the parties for making the Award, Rule of the Court, the Court would obviously be entitled to pass the order on expiry of the period of limitation for filing the application for setting aside the Award, in case no application has been filed. It is submitted that the time for filing the application under section 30 of the Act is only 30 days. The appellant had received notice of filing of the Award on 6.11.96 and appearance on their behalf was put in before the Court on that date and they had asked for a weeks time to file objections. As a matter of fact objections under section 16 of the Arbitration Act have also been filed by the appellant before the Court on 12.11.96. But no application under section 30 for setting aside the Award was moved till then. It was moved much after the period of limitation had expired i.e. on 5.2.97. As a matter of fact objections under section 16 of the Arbitration Act have also been filed by the appellant before the Court on 12.11.96. But no application under section 30 for setting aside the Award was moved till then. It was moved much after the period of limitation had expired i.e. on 5.2.97. There is no dispute that no application for condonation of delay in filing the petition under section 30 of the Act was moved. According to respondent, the Court could not pass impugned order ignoring application under section 30. 8. However, the fact remains that the petition filed under section 30 of the Act on 5.2.97 was accepted as it is mentioned in the order dated 5.2.97 and the matter was fixed for hearing thereafter. The petition could either been dismissed having been filed beyond time or the delay in filing the petition could be condoned, in case such a prayer was made, if permissible under the law. In our view the petition filed could not be left unattended or thrown unread, nor the Court could proceed to pass the order under section 17 of the Act without disposing of the application under section 30 of the Arbitration Act. Whether it should be decided on the point of limitation or otherwise, would be a matter to be considered by the Court itself. But the course adopted by the Court does not seem to be permissible under the law as once having accepted the petition under section 30 of the Act and getting a copy of the same served upon the other side and fixing the date of hearing, it could not be totally ignored. This would, on the face of it, be against the provisions as contained under section 16 of the Arbitration Act. 9. We also find force in the submission made on behalf of the appellant that the order passed by the Court below contains no reason and is almost a bald order We find that in the beginning the Court below has mentioned about the application moved on behalf of the appellant and the prayer made and in the next paragraph it is mentioned that the Court had perused the record and had given due consideration and it appeared to the Court that the Arbitrator had followed all the procedure and the order passed by the Arbitrator was in order. Hence the Award was accepted without any modification and so made Rule of the Court. It is hardly an order which can be said to be a speaking or reasoned order nor it can be said that the Court below had applied its mind to the objections filed by the appellant against making the Award Rule of the Court. For this reason also in our view, the order passed by the Court below under section 17 of the Arbitration Act suffers from illegality and the same does not seem to be sustainable. 10. For the two reasons indicated above, in our view, the order is liable to be set aside. In the result the appeal is allowed. The order passed by the Court below under section 17 of the Arbitration Act dated 21.3.97 is set aside and the case is remanded to the Court below for deciding the matter afresh in accordance with law and in the light of the observations made in this judgment. Since the matter is pending since long, the Court shall dispose of the matter at the earliest by expediting the hearing of the case. We further direct both parities to appear before the Court below on September 26, 2000 on which date the Court below may either proceed with the matter or fix any other date for further hearing in this case. The parties to bear their own cost. 11. Shri KK Mahanta, learned counsel for the appellant informs that under the interim orders of this Court, half of the decretal amount has been withdrawn by the respondent on the condition of furnishing Bank guarantee to the extent of the amount withdrawn. It is informed that the period of Bank guarantee has already lapsed. It is not disputed that the said period has lapsed. Shri DK Mishra, learned counsel for the respondent submitted that the period shall be extended. Let the Bank guarantee for the amount already withdrawn under the interim order of this Court be furnished before the Court below by the next date fixed by us, namely, by September 26,2000.