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2004 DIGILAW 640 (DEL)

MOHD. RAFI v. UNION OF INDIA

2004-08-18

VIKRAMAJIT SEN

body2004
VIKRAMAJIT SEN, J. ( 1 ) IN this case an Award has been passed almost two decades ago but because of the filing of Objections by the Union of India, the Award is yet to be given effect to. By these Orders I shall decide/dispose of these Objections. ( 2 ) THE first question which has been raised by the Objector/union of India is that the Award is liable to be set aside for the reason that the authority of the Arbitrator has been revoked by the Union of India. The contention is that the Arbitrator, Shri Kishan Chand, had been notified by the Objector s letter dated 17th December, 1986 that his authority stood withdrawn. The arguments were concluded by the adversaries on 19. 12. 1986 as the impugned Award has been subsequently made and published on 23rd January, 1987. The Award specifically states that the said letter dated 17th December, 1986 was received by the learned Arbitrator after the final hearing, and an endorsement of receipt on 27. 12. 1986 can be found on the Arbitrator s copy of the letter dated 17. 12. 1986. This has not been controverted before me nor there is any reason to disbelieve the statement. ( 3 ) THE decision of Arjun Singh Versus Mohindra Kumar and others, AIR 1964 Supreme Court 993 immediately comes to mind which decision is to the effect that once final arguments have been addressed in a case, no further hearing is contemplated enabling the parties to communicate in any manner with the Court. The irrepressible logic of the Hon ble Supreme Court, inter alia, is that since the Court (read Arbitrator in the present instance) could pronounce the final verdict at the very moment when arguments conclude, but if this is not done for any reason, the hiatus between this event and the pronouncement of the final Orders/award is only notional. If this logic is extrapolated to the facts of the case, it will be evident that a subsequently attempted removal of the Arbitrator would have no legal efficacy whatsoever. In this case I have the advantage of the decision of learned Single Judge in Mohinder Pal Mohindra Versus Delhi Admn. and Anr. , 37 (1989) Delhi Law Times 345 in respect of this very Arbitrator. In this case I have the advantage of the decision of learned Single Judge in Mohinder Pal Mohindra Versus Delhi Admn. and Anr. , 37 (1989) Delhi Law Times 345 in respect of this very Arbitrator. As has been argued before me, it had been contended on the previous occasion also that the Arbitration Clause did not permit a retired government servant from continuing as the Arbitrator. This argument was rejected and the Court additionally found that the parties had in any event acquiesced in the arbitration continuing after retirement. My attention has been drawn to the fact that the Arbitrator was specifically named by the Chief Engineer who was the competent authority. My attention has further been drawn to the fact that the Respondents had specifically authorised the Arbitrator to continue with the arbitration immediately after his retirement. ( 4 ) A similar objection was repulsed after noting the previous decision of the M/s. Construction India Versus Secretary, Works Department, Govt. of Orissa and others, AIR 1998 SUPREME COURT 717 where it was opined that a mere reference to the office held by the Arbitrator would not disqualify him from acting as such, even after he ceases to hold that office. In view of this settled position of law, this Objection is wholly without merit and is dismissed with costs of Rs. 5,000/ -. It would be indeed dangerous to repose the power in a party to remove an Arbitrator who in its view has become inconvenient or is likely to hold/decide against it. This is a power which should only be exercised by an independent forum such as the Court, which is also the scheme of the Act. ( 5 ) ALTHOUGH almost two score years have passed since the decision of Union of India vs. Rallia Ram, AIR 1963 SC 1685 , the following observations of the Apex Court in this case have not been varied. "an award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decided a dispute submitted to him is ordinarily not liable to be challenge on the ground that it is erroneous. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary Courts. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary Courts. The Court is also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those referred. The Court has also power to remit the award when it has left some matters referred undetermined, or when the award is indefinite, or where the objection to the legality of the award is apparent on the face of the award. The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or wilful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. But it is now firmly established that an award is bad on the ground of error of law on the face of it, when in the award itself or in a document actually incorporated in it, there is found some legal proposition which is the basis of the award and which is erroneous". ( 6 ) ACKNOWLEDGING that the Arbitrator is the final judge of facts, the Apex Court in State of Orissa and Anr. vs. Kalinga Construction Co. (P) Ltd. , 1970 (2) SCC 861 held that the High Court erred in considering the matter as a court of appeal and in re-evaluating the evidence and that it further erred in recording a finding in reversal of the conclusions of the arbitrator. In Hindustan Iron Co. v. K. Shashikant and Co. vs. Kalinga Construction Co. (P) Ltd. , 1970 (2) SCC 861 held that the High Court erred in considering the matter as a court of appeal and in re-evaluating the evidence and that it further erred in recording a finding in reversal of the conclusions of the arbitrator. In Hindustan Iron Co. v. K. Shashikant and Co. , AIR 1987 SC 81 the Court held that the award of the Arbitrator ought not to be set aside for the reason that, in the opinion of the Court, the Arbitrator reached wrong conclusions or failed to appreciate the facts. That this was a well settled proposition of law was reiterated in the decision of the Apex Court in Coimbatore District Podu Thozillar Sangam vs. Balasubramania Foundary and Ors, AIR 1987 SC 2045 where it has been opined that it is only an error of law and not a mistake of fact committed by the arbitrator which is justiciable in the application/objection before the Court. If there is no legal proposition either in the award or in any document annexed with the award which is erroneous and the alleged mistakes or alleged errors, are only mistakes of fact and if the award is made fairly, after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement, the award is not amenable to corrections of the Court. Similar views were again expressed in Indian Oil Corporation Ltd. vs. Indian Carbon ltd. , (1988) 3 SCC 36 ; Jawahar Lal Wadhwa and Anr. vs. Haripada Chakroberty, (1989) 1 SCC 76 ; Puri Construction Pvt. Ltd. vs. Union of India, (1989) 1 SCC 411 ; M/s. Sudarsan Trading Co. vs. Government of Kerala and Anr. , (1989) 2 SCC 30; Food Corporation of India vs. Joginderpal Mohinderpal and Anr. , AIR 1989 SC 1263 where even a plausible view taken by the Arbitrator was held not to be open to Court interference. In Municipal Corporation of Delhi vs. M/s. Jagan Nath Ashok Kumar and Anr. , AIR 1987 SC 2316 the Court held that if the reasons appear per se to be not unreasonable and irrational the Court ought not to reappreciate the evidence. In Municipal Corporation of Delhi vs. M/s. Jagan Nath Ashok Kumar and Anr. , AIR 1987 SC 2316 the Court held that if the reasons appear per se to be not unreasonable and irrational the Court ought not to reappreciate the evidence. In Hind Builders vs. Union of India, AIR 1990 SC 1340 the Court cautioned that where two views were possible it could not be predicated that there was an error apparent on the face of the award. In Bijendra Nath Srivastava v. Mayank Srivastava and Ors. , AIR 1994 SC 2562 the view was expressed that the reasonableness of reasons given by the arbitrator were not open to challenge and that the proper approach would be for the Court to support the award. Similarly, in Hindustan Construction Co. Ltd. v. Governor of Orissa and Ors. , AIR 1995 SC 2189 it was repeated that the Court cannot reappreciate the material on the record. In Trustees of the Port of Madras v. Engineering Constructions Corporation Ltd. , (1995) 5 SCC 531 the decision of a Division Bench of the High Court of Madras, which reversed the Award on a question of fact and not a question of law, was set aside by the Supreme Court. After considering its previous decisions, the Apex Court in B. V. Radha Krishna v. Sponge Iron India Ltd. , (1997) 4 SCC 693 again held that the Court could not substitute its own view in place of that of the Arbitrator. In Army Welfare Housing Organisation v. Gautam Construction and Fisheries Ltd. (1998) 7 SCC 290 the Court declined to vary an award for the reason that without re-appreciating evidence it would not be possible to fault the quantum awarded towards anticipated expenses. ( 7 ) LEARNED counsel for Union of India had relentlessly sought to argue all the Objections raised pertaining to the sums awarded against each claim. Shri Tandon had particularly drawn attention to the claims 9 and 11 which pertain to Claim No. 3 and the release of Rs. 1 lac together with rejection of the counter-claim filed by the Union of India. So far as Claim No. 3 is concerned, this relates to work executed at the site and the use of filter material. Findings of fact ought not to be overturned by the Court and I decline from doing so. 1 lac together with rejection of the counter-claim filed by the Union of India. So far as Claim No. 3 is concerned, this relates to work executed at the site and the use of filter material. Findings of fact ought not to be overturned by the Court and I decline from doing so. In respect of second ground, the learned Arbitrator has found that the contractor was justified in executing the work beyond the time allowed to him as per the terms and conditions of the Agreement. This finding ought not to be interfered with by the Court while hearing Objections. ( 8 ) I find no error of law apparent on the face of the Award. There is no reason to remit or to modify the Award. There is also no ground for reconsidering or setting aside the Award. I accordingly pronounce judgment according to the Award. In these circumstances, the Objections are dismissed and the Award is made Rule of the Court. --- *** --- .