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2004 DIGILAW 1059 (PAT)

Engineers Syndicate Through Shri Devendra Tiwari, Managing Partner v. State Of Bihar

2004-09-30

S.N.HUSSAIN

body2004
Judgment 1. Heard learned counsel for the parties. 2. The petitioner is plaintiff in Title Suit No. 169 of 1991, converted from Misc. Case No. 5 of 1986, which was filed by the petitioner in the court of Subordinate Judge-I, Muzaffarpur under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as the Act; for the sake of brevity) to appoint an Arbitrator to make Award in respect of his claim arising out of his agreement with the defendants bearing no. 58F-2 of 1981-82 for construction and other works enumerated in the agreement for which final bill was submitted with respect to which a dispute had arisen. Ultimately in the said case the disputes were referred to Sri Awadhesh Kumar, retired Chief Engineer, who was appointed Arbitrator under Section 22 of the Act pursuant to the order of the said court dated 2.3.1988 in the said case, whereafter notices were issued to the parties, who appeared and filed their statements and counter statements as well as documentary evidence and also made their submissions before the Arbitrator. Thereafter the said Arbitrator decided the dispute vide Award dated 4th July, 1988 and forwarded the same to the said court in Misc. Case No. 5/1986. On petitioners objection to the said Award notices were sent to the opposite parties, who filed their rejoinder and prayed that a judgment be passed in terms of the said Award. In the aforesaid circumstances the said Miscellaneous case was converted into a title suit bearing Title Suit No. 169/ 1991, which was decreed on 30.3.1992 rejecting the claim of the opposite parties. 3. Against the said judgment and decree of the learned Subordinate Judge-1, Muzaffarpur, the State of Bihar preferred First Appeal No. 159 of 1992, which was later converted into Misc. Appeal No. 245 of 1995, which was dismissed by this Court on 7.2.1996, whereafter the State of Bihar preferred SLP(C) No. 15106 of 1996 before the Hon ble Supreme Court, giving rise to Civil Appeal....of 1996, which was allowed on 16.8.1996 by the Hon ble Supreme Court, which set aside the orders of the lower courts and directed the learned Subordinate Judge to dispose of the matter on merits within three months from the date of receipt of that order. It was only thereafter that Title Suit No. 169/1991 revived. 4. It was only thereafter that Title Suit No. 169/1991 revived. 4. Thereafter the learned lst Subordinate Judge, Muzaffarpur reheard the matter and passed the impugned order dated 10.8.2001 holding that without mentioning any of the items of the claim the Arbitrator had erroneously arrived at a finding and awarded a huge sum in favour of the claimant (plaintiff) for all his claims without any reason, which shows that the Arbitrator had misconducted the proceeding and passed an invalid Award, which cannot be allowed to be sustained and hence he set aside the Award of the Arbitrator(opposite party no. 4) and sent the matter back to him to decide it afresh after hearing the parties and after considering the claim of the plaintiff itemwise and also to decide the objection raised by the defendants in its entirety. 5. The plaintiff-petitioner has challenged the aforesaid impugned order of the learned court below on three grounds; the first, that the civil revision is maintainable and necessary in the instant circumstances, the second, that it is the Arbitrator himself who can decide as to in what way the jurisdiction has to be exercised by him and the court cannot substitute its own evaluation and third, that the Arbitrator now being dead, there is no question of remitting the matter back to him for preparing a fresh Award. 6. With respect to the question of maintainability of the civil revision the learned counsel for the petitioner submitted that in case of remission of the matter to the arbitrator under Section 16 of the Act no appeal was maintainable as the appeal is provided under Section 39 of the Act only against an order under Section 30 setting aside an Award. In support of this contention he has relied upon the case of Iftikhar Ahmed and Ors. V/s. Syed Meharban Ali and Ors. reported in AIR 1974 Supreme Court 749. He further contended that by the said ruling, the decision of this Court reported in AIR 1968 Patna 399 had stood over-ruled. 7. In support of this contention he has relied upon the case of Iftikhar Ahmed and Ors. V/s. Syed Meharban Ali and Ors. reported in AIR 1974 Supreme Court 749. He further contended that by the said ruling, the decision of this Court reported in AIR 1968 Patna 399 had stood over-ruled. 7. The contention of the learned counsel for the petitioner with respect to his second point is that even in case of error on the face of record by the Arbitrator the Award cannot be interfered with unless the agreement was recorded in the Award and also that the Arbitrator can himself decide as to in what way he should exercise the jurisdiction conferred upon him and the court cannot substitute its own view. In support of this contention learned counsel for the petitioner relied upon the cases of M/s Sudarsan Trading Co. V/s. Government of Kerala and another reported in (1989)2 Supreme Court Cases 38 and Nagar Palika Mirzapur V/s. The Mirzapur Elect. Supply Co. Ltd. reported in AIR 1990 Supreme Court 2273. It was further contended on behalf of the petitioner that if any claim of the parties to the case remained unconsidered, only then the court can legally interfere into such Award and remit back the matter to the Arbitrator. In support of this contention he relied upon the case of Ramachandra Reddy & Co. V/s. State of A.P. and others reported in (2001)4 Supreme Court Cases 241. It was also contended on behalf of the petitioner that there is no allegation of any sort against the Arbitrator and hence the lower court should have itself decided the matter on merit and there was no occasion for remitting the matter to the Arbitrator. 8. With respect to his third point learned counsel for the petitioner submits that the Arbitrator-opposite party no.4, Sri Awadhesh Kumar, had admittedly died and accordingly his name has been expunged from the record of this case on 8.5.2003 and in the aforesaid circumstances the matter cannot be referred back to him and in any view of the matter a new Arbitrator has to be appointed. 9. 9. On the other hand, learned counsel for the opposite parties contended that the order of the court remitting the matter to the Arbitrator for fresh Award is not revisable under Section 115 of the C.P.C. In support of this contention he relies upon the case of Mt. Zaralbibi and others V/s. Shamsuddin Khan Abdul Kadirkhan and others reported in AIR(33) 1946 Sind 141. 10. Learned counsel for the opposite parties further submitted that admittedly the Award did not show that for which claim it was passed. There was neither any statement nor any discussion about any of the several claims and hence the learned court below had no option but to invoke provision of Section 16(1) of the Act in which three grounds were given for remittance i.e. (a) any matter left undetermined, (b) so indefinite as inexecutable and (c) illegality on ihe face of the Award. In this connection the learned counsel for the opposite parties relies upon the case of Bharat Coking Coal Ltd. V/s. M/s Annapuma Construction reported in 2004(1) P.L.J.R. (SC) page 19, in which it was specifically held that Arbitrator cannot act arbitrarily and that non-consideration of relevant matters affects the Award. Hence the Award was clearly bad in law and had to be set aside. He further relied upon the case of Ramachandra Reddy & Co. (supra) in which it was specifically held that the lower court had the power to remit the matter for fresh Award, which according to him was necessary in the facts and circumstances of the case. Learned counsel for the opposite parties has also relied on several other decisions, namely, AIR 1981 Delhi 399, AIR 1970 Madhya Pradesh 119, AIR 1962 Supreme Court 1123, AIR 1953 Calcutta 646 and AIR 1955 Calcutta 302. All of which justify remission under Section 16(1) of the Act. 11. Learned counsel for the opposite parties submits that this civil revision has itself become infructuous as opposite party no. 4 had died much earlier but the revision-petitioner did not file any petition for substitution of his heirs even after orders of this Court dated 16.12.2002, 20.1.2003 and 7.4.2003 and this Court on its own had to expunge the name of opposite party no. 4 at the risk of the petitioner vide order dated 8.5.2003. It was also contended on behalf of the opposite parties that opposite party no. 4 at the risk of the petitioner vide order dated 8.5.2003. It was also contended on behalf of the opposite parties that opposite party no. 4 was a necessary party and non-substitution of whom has affected the civil revision, which is fit to be dismissed on that score alone. 12. After hearing the contentions of the learned counsel for the parties and after perusing the materials on record as well as the provisions of law and the case laws cited by the parties, it is apparent that no appeal was provided against the order of remittance under Section 16(1) of the Act and hence this civil revision is maintainable. 13. It is apparent from the plaint of the petitioner that he had raised the claim not for one item of work mentioned in the agreement but for several works claimed to have been executed by him including extra works, which were not part of the agreement. The said various works have been detailed in the plaint itself. On the other hand, the claim of the defendants-opposite parties was that the eniire bill for work under the agreement has been paid to the petitioner who has accepted it without protest and had also withdrawn the security money, whereas his earlier claim for extra work had been disallowed by the authorities concerned. It was also the case of the opposite parties in the objection filed by them that the Arbitrator had misconducted himself by allowing inadmissible claim without any proof and had amalgamated the entire matter without showing which of the claim of the plaintiff-petitioner was allowed and which of his claim was disallowed. From perusal of the Award of the Arbitrator, it is quite apparent that the Award was not prepared itemwise and none of the items or amounts claimed for it was mentioned in the Award, nor the Award indicated any objection raised by the opposite parties before the Arbitrator, Hence, ii is apparent that the Award had been prepared in favour of the plaintiff without giving any reason for the same. It was a clear case of misconduct on the part of the Arbitrator, hence, the learned court below was quite justified in setting aside the said Award and remanding the matter to the Arbitrator under the provisions of Section 16(1) of the Act. 14. It was a clear case of misconduct on the part of the Arbitrator, hence, the learned court below was quite justified in setting aside the said Award and remanding the matter to the Arbitrator under the provisions of Section 16(1) of the Act. 14. So far the case laws relied upon by the petitioner are concerned, the Hon ble Supreme Court in 1989 S.C.C. page 38 held that the court cannot substitute its own evaluation to the findings in the Award. But here the court had not substituted its own evaluation rather it had only remitted the matter to the Arbitrator for reconsideration of the claims, which were not considered by the Arbitrator in the earlier Award. So far the decisions of the Hon ble Supreme Court in AIR 1990 S.C. 2273 and (2001)4 SCC 241 are concerned the facts of the aforesaid cases before the Hon ble Supreme Court were completely different as in the first case the Arbitrator mentioned in the Award of his being cognizant of disputes raised before him and had passed the Award fully conscious of the disputes. But here in the instant case the Arbitrator is completely silent about the same. So far the second decision of the Hon ble Supreme Court mentioned above is concerned, it was passed in the circumstances when the grounds taken by the court did not come within the four corners of the provisions of Section 16 of the Act without scribing any reason for interference with the Award, but here in this case there are specific grounds for interference mentioned in the impugned order which is well within the ambit of Section 16 of the Act as the Arbitrator had left the money matters in issue undertermined and the illegality of not mentioning any item and not even considering the objection of the opposite parties, which is apparent on the face of the Award and hence even according to the aforesaid rulings cited by the petitioner the lower court had the power and jurisdiction to remit the matter and in my opinion the learned court below while passing the impugned order has considered all aspects of the matter judiciously and has rightly remitted the matter to the Arbitrator. 15. So far the question of death of the Arbitrator (opposite party no. 15. So far the question of death of the Arbitrator (opposite party no. 4) is concerned, there was no occasion for substitution as no new Arbitrator had been appointed during pendency of this civil revision and hence the death of opposite party no. 4 and non-substitution do not affect this civil revision. Moreover, under the provisions of Section 9 of the Act a new Arbitrator can be legally appointed in case of death of the earlier Arbitrator. 16. In the aforesaid circumstances, the impugned order of the iearned court below stands affirmed and the learned court below is directed to appoint a new Arbitrator as per the provisions of Section 9 of the Act and send the matter before him for a fresh determination and Award in accordance with law. 17. With the aforesaid directions, this civil revision is dismissed but in the facts and circumstances of the case there is no order as to cost.