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2001 DIGILAW 512 (RAJ)

STATE OF RAJASTHAN v. SHREE PIPES LTD

2001-03-28

S.K.SHARMA

body2001
Judgment SHIV KUMAR SHARMA, J. ( 1 ) THE appellant State of Rajasthan in the instant miscellaneous appeal seeks to quash the order dated october 24, 1996 of the learned Additional district Judge No. 2, Jaipur City whereby award of the Arbitrator dated September 6,1994 was made rule of Court and decree in the sum of rs. 2. 55,752/- was passed together with interest and costs. ( 2 ) CONTEXTUAL facts depict that the Public health Engineering Department, Government of Rajasthan (in short the appellant) had invited tenders for supply of A. C. Pressure Pipes of various size on the terms and conditions narrated in the tender notice. As many as 24 concerns had participated in the tender. Tenders were thereafter opened on April 10,1985, wherein the rates submitted by M/s Shree Pipes ltd. (in short the respondent) were not found to be lowest, yet it was decided in the meeting of the Store Purchase Committee that 25% of the requirement of AC Pressure Pipes of 150 mm. and above may be awarded to the respondent at the lowest approved rates being the respondent Company situated in the State of Rajasthan. Rate contract was entered into between the appellant and the respondent and a condition of price fall and also included in the terms and conditions of the rate of contract. One M/s Hyderabad Asbestos Cement products Ltd. , New Delhi which was on rate contract for supply of AC Pressure Pipes informed the appellant vide letter dated November 8, 1985 that there was a downward revision in price and, therefore, they are ready to supply AC Pressure pipes on a lower rate. On receipt of the said letter, the appellant had sent a telegram to the respondent on February 15, 1986, wherein it was clarified that if the respondent Company was agreeable to supply ac Pressure Pipes on the rates to be approved by the Government, the respondent may send its acceptance. In response to the telegram, the respondent conveyed their acceptance to supply the goods in pursuance to the condition enumerated in the telegram and accordingly the appellant issued a supply order vide their Order No. 231/gs for supply of AC Pressure Pipes and couplings. While giving the order for supply, the rate quoted therein were at variance with the rate of contract. While giving the order for supply, the rate quoted therein were at variance with the rate of contract. The respondent supplied the material as was demanded by the appellant but there was some delay in supply of the same. ( 3 ) DURING the pendency of the supply of the material M/s Hyderabad Asbestos Cement products Ltd. , New Delhi gave the offer to supply AC Pressure Pipes on lower price at jaipur Depot charging only RST. It was given out that the Government would be having 4 per cent rate difference on the lower side on account of non-payment of CST. The matter was considered by the Store Purchase Committee of the appellant in its 100th meeting and a decision was taken that the rates of m/s Hyderabad Asbestos Cement Products ltd. without CST were to be taken as reduced rate which were to be offered to the supplier. Accordingly revised provisional rates were intimated to all Field Officers and suppliers with direction to make recoveries from suppliers on account of previous provisional rates allowed to them for the supplies made on or after January 6, 1986 vide letter dated November 24, 1987. The respondent Company had asked for a reference to the Arbitrator as dispute arose after issuance of the letter dated November 24, 1987. Accordingly the matter was initially referred to the Sole Arbitrator Mr. Justice D. P. Gupta. On his Lordships sad demise Mr. Justice N. M. Kasliwal, (Retd. Supreme Court judge) vide order dated December 13, 1993 was appointed as Sole Arbitrator. The Arbitrator gave award on September 6, 1994 and it was made rule of the Court vide order dated october 24, 1996 of the learned Additional district Judge No. 2, Jaipur City which has been called in question in the instant miscellaneous appeal. ( 4 ) MR. S. M. Mehta, learned Advocate general canvassed on behalf of the appellant that denial to accept affidavit and documents available on record was nothing but a gross misconduct on the part of the Arbitrator. The respondent did not have any basis to assail the rates determined by the appellant. ( 4 ) MR. S. M. Mehta, learned Advocate general canvassed on behalf of the appellant that denial to accept affidavit and documents available on record was nothing but a gross misconduct on the part of the Arbitrator. The respondent did not have any basis to assail the rates determined by the appellant. The supplies made by the respondent on or after February 20, 1986 were on the basis of price fall and the respondent became liable for refund of amount to the extent of 4%, The application moved by the appellant for taking certain documents on record was also erroneously rejected by the Arbitrator during the course of arguments when there was no bar to make such application. There was no inconsistency in the action of the Arbitrator. Application filed by Kam Raj Sharma and P. C. Kasliwal for summoning in evidence the subsequent documents ought to have been decided by the Arbitrator before initiating the proceedings but it was ignored. The Arbitrator had acted without jurisdiction in holding that J. I. T. C. had no authority to make an offer on behalf of the respondent. The counter claims of the appellant was erroneously rejected. Thus the Arbitrator had committed misconduct but the learned Additional district Judge did not properly appreciate the legal questions in making the award as a rule of the Court and erroneously burdened the appellant to make the payment of full fee contrary to the award. I was taken through the impugned award and the order of the Court. Reliance was placed on Rajasthan State Mines and Minerals Ltd. v. Eastern Engg. Enterprises. ( 5 ) MR. Paras Kuhad, learned counsel for the respondent on the other hand supported the impugned orders and placed reliance on u. P. State Electricity Ltd. v. Man Structural ltd. , S. B. Civil Misc. Appeal No. 936/1994 decided on 22. 9. 1997. ( 6 ) I have given my anxious consideration to the rival submissions and carefully scrutinised the record. ( 7 ) SUM and substance of the submissions of Mr. S. M. Mehta, learned Advocate General is that this Court should reappreciate all the materials on record for the purpose of recording a finding that the award in question could not have been made but 1 am unable to pursuade myself to agree with the arguments advanced on behalf of the Company. S. M. Mehta, learned Advocate General is that this Court should reappreciate all the materials on record for the purpose of recording a finding that the award in question could not have been made but 1 am unable to pursuade myself to agree with the arguments advanced on behalf of the Company. Three-judge Bench of the Honble Supreme Court in Hindustan Construction Co. Ltd. v. Governor of Orissa2, indicated that award cannot be set aside by the High Court on the basis of reappreciation of the evidence as the High court does not examine the question as an appellate Court. Award can only be set-aside on any of the grounds specified in Section 30 of the 1940 Act. ( 8 ) UNDER Section 30 an award can be set aside if Arbitrator has misconducted himself. Misconduct comprehends action on the part of the Arbitrator which upon the face of it, is opposed to all rational and reasonable principles that should govern the procedure of any person who is called upon to decide questions in difference referred to him by the parties. After having closely scrutinised the award I do not see any thing radically wrong and vicious in the proceedings before the Arbitrator. In my considered opinion rejection of the application for taking additional documents on record during the course of arguments does not constitute misconduct. The objections raised on behalf of the appellant are technical in nature, pitted against the cause of substantial justice. In Rajasthan State Mines and Minerals v. Eastern Engg. Enterprises Ltd. (supra), their lordships of the Supreme Court in para 44 propounded thus:"44. From the resume of the aforesaid decisions it can be stated that- (a) It is not open to the Court to speculate, where no reasons are given by the Arbitrator, as to what impelled the Arbitrator to arrive at his conclusion. (b) It is not open to the Court to admit to probe the mental process by which the Arbitrator has reached his conclusion where it is not disclosed by the terms of the award. (c) If the Arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the Court cannot interfere. (d ). . . . . . . . . . . . . . . . . . . . . (c) If the Arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the Court cannot interfere. (d ). . . . . . . . . . . . . . . . . . . . . " ( 9 ) I am satisfied that in the instant case the Arbitrator did not ignore any fundamental term of the agreement between the parties. In order to interfere with the award of the Arbitrator there must be an error apparent on the face of the record. An error either of fact or of law which has to be proved by a process either or reasoning or an examination of facts cannot be termed as an error apparent on the face of the record. I do not find any error on the face of the record in the award of the Arbitrator. The learned Additional District Judge also did not act unreasonably and considered all the relevant facts. The discretion given to the Court was not misused. Interprettion of the price fall clause given by the Arbitrator was rightly appreciated by the Court below. ( 10 ) THE Arbitrator while rejecting the counter claim of the appellant allowed the claims of the respondent partially. It was observed that the respondent shall be entitled to claim the prices on the basis of the rates mentioned in the respective supply orders. The respondent would be entitled to 98% of the payment on presentation of documents through bank and 2% within one month of receipt of material at destination as per terms and condition specified in the rate contract. The respondent would also be entitled to such amount which was wrongfully withheld by the appellant. The respondent shall further be entitled to the interest @ 10% per annum on the entire amount found due on the date of claim petition, pending the arbitration proceedings and in future also till payment. ( 11 ) COSTS of the proceedings were not awarded by the Arbitrator but the Court below in the impugned order directed the appellant to pay to the respondent entire costs of the proceedings. This direction of the learned court below is erroneous and deserves to be set-aside. ( 11 ) COSTS of the proceedings were not awarded by the Arbitrator but the Court below in the impugned order directed the appellant to pay to the respondent entire costs of the proceedings. This direction of the learned court below is erroneous and deserves to be set-aside. ( 12 ) FOR the foregoing reasons, I do not find any fault with the award of the Arbitrator and impugned order of the Court below in making the said award as rule of the Court. In so far as the direction of payment of costs of the proceedings is concerned, the orders of the Court below to that extent is without jurisdiction and set-aside the said direction. To that extent only the appeal stands allowed, rest of the impugned order is maintained and prayer made in the appeal is declined. ( 13 ) THE appeal stands disposed of as indicated above. No costs. Appeal disposed of accordingly.