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2005 DIGILAW 1193 (PNJ)

Rajinder Singh Lamba v. Haryana State Electricity Board

2005-11-18

VINEY MITTAL

body2005
Judgment Viney Mittal, J. 1. This order shall dispose of two revision petitions being Civil Revision No. 2429 of 1987 and 2430 of 1987 as common questions of law and fact are involved. 2. For the sake of convenience, the facts are borrowed from Civil Revision No. 2429 of 1987. 3. At the outset, it may be noticed that the learned counsel for the petitioner has prayed that the present revision petition be treated as a petition field under Article 227 of the Constitution of India. The request of the learned counsel for the petitioner is accepted. The petition filed by the petitioner shall be treated as a petition filed under Article 227 of the Constitution of India. 4. The petitioner before this Court is a contractor. He has impugned the order dated May 14, 1987 passed by the learned Additional District Judge whereby the judgment and decree dated December 2, 1985 passed by the Sub Judge, 1st Class was set aside. The learned Sub Judge vide his judgment and decree dated December 2, 1985 had directed that the award dated January 20, 1985 passed by the Arbitrator be made Rule of the Court. The objections filed by the respondent Haryana State Electricity Board (for short, the Board) were rejected. The appeal filed by the Board was allowed by the learned Additional District Judge and the judgment and decree passed by the learned Sub Judge were set aside. Consequently, the award made by the Arbitrator was also set aside. 5. The contractor had entered into an agreement with the Board relating to earth work, excavation, transportation etc, Subsequently, a dispute arose between the parties and as per the agreement between the parties, the matter was duly referred for determination to the Arbitrator. The Arbitrator entered into reference on December 5, 1983. Subsequently, the Arbitrator Kaushal Dev retired on attaining the age of superannuation. At that stage, a communication dated March 28, 1984 was issued by the Board to the effect that since the Arbitrator had already entered into the arbitration proceedings, therefore, the aforesaid Arbitrator Shri Kaushal Dev shall continue with the proceedings. It was, thus, clear that after the superannuation of the aforesaid Arbitrator, the proceedings were entrusted to him by name for being continued. The parties placed relevant material in support of their respective pleas before the Arbitrator. It was, thus, clear that after the superannuation of the aforesaid Arbitrator, the proceedings were entrusted to him by name for being continued. The parties placed relevant material in support of their respective pleas before the Arbitrator. Two specific consents Exs.A1 and A4 were also placed before the Arbitrator by the parties consenting to the Arbitrator giving award after the expiry of four months. In fact vide consent dated December 28, 1984, it was agreed between the parties that the Arbitrator could pronounce the award within two months of the aforesaid date. 6. After the pronouncement of the award dated January 20, 1985, the contractor filed an application under Section 14 read with Section 17 of the Arbitration Act, 1940 before the Sub Judge, 1st Class for making the award the Rule of the Court. Certain objections were raised by the Board. It was claimed that the award passed by the Arbitrator on January 20, 1985 could not be made the Rule of the Court. 7. The learned trial Court held that none of the objections taken by the respondents was tenable in law and as such over-ruled the same. Consequently, the award dated January 20, 1985 was made the Rule of the Court vide judgment and decree dated December 2, 1985. 8. The Haryana State Electricity Board chose to file an appeal against the judgment and decree of the learned trial Judge. The learned Additional District Judge allowed the aforesaid appeal on two grounds. Firstly, it was held that the Arbitrator while pronouncing the award dated January 20, 1985 had lost his jurisdiction, inasmuch as, he had not pronounced the award within four months of entering into the reference. Secondly, it was held that the Arbitrator was not competent in law to award interest. 9. The contractor has now challenged the aforesaid judgment of the learned Additional District Judge by filing the present revision petition. No one has chosen to appear on behalf of the respondents, despite service. 10. I have heard Shri Pritam Saini, the learned counsel for the petitioner and with his assistance have also gone through the record of case. 11. It has been vehemently argued by Shri Saini that none of the objections, on which a ward has been set aside and the appeal filed by the Board accepted by the learned Additional District Judge, had been taken by Board in the objection petition. 11. It has been vehemently argued by Shri Saini that none of the objections, on which a ward has been set aside and the appeal filed by the Board accepted by the learned Additional District Judge, had been taken by Board in the objection petition. In this regard, Shri Saini has specifically brought to my notice the objection petition filed by the Board. It has further been argued by Shri Saini that in any case the award had been pronounced on January 20, 1985 by the Arbitrator after a specific extension had been granted by mutual consent of the parties through the documents Exs. A1 and A4. In this regard, Shri Saini has placed reliance upon a judgment of the Hon ble Supreme Court in Inder Sain Mittal V/s. Housing Board, Haryana and Ors., and a judgment of this Court in Haryana State Electricity Board, Chandigarh V/s. Gurjit Metal Industries, Jagadhari Road, Yamuna Nagar 1993(3) R.R.R. 136. On the basis of the aforesaid judgments, it has been contented by the learned counsel that once the parties had specifically consented to the extension of time and had been appearing before the Arbitrator without raising any objection, then it would be clear that the parties had acquiesced to the proceedings being taken before the Arbitrator and subsequently could not be allowed to raise objection on the ground that the Arbitrator had no jurisdiction to pass the award, I find merit in the submissions made by Shri Saini. In fact, both the judgments relied upon by the learned counsel fully support the claim of the contractor. In Inder Sain Mittals case (supra), it was held by the Supreme Court as under: Where even though Arbitrator appointed by Court was transferred but he continued with arbitration proceedings in spite of his transfer and passed award after giving opportunity of hearing to the parties, who participated in proceedings, objections under Section 30 of the Act on ground inter alia that awards in question were without authority and jurisdiction and upon transfer of Arbitrator he had no jurisdiction to further continue arbitration proceedings, cannot be allowed. It cannot be said that continuance of the proceedings and rendering of awards therein by the Arbitrator after his transfer was in disregard of any provision of law much 1ess mandatory one but, at the highest, in breach of agreement. It cannot be said that continuance of the proceedings and rendering of awards therein by the Arbitrator after his transfer was in disregard of any provision of law much 1ess mandatory one but, at the highest, in breach of agreement. Therefore, by their conduct by participating in the arbitration proceedings without any protest the parties would be deemed to have waived their right to challenge validity of the proceedings and the awards consequently, the objections taken to this effect do not merit any consideration and award cannot be set aside. Grounds of objection under Section 30 of the Act to the reference made, with or without intervention of the Court, arbitration proceedings and the award can be classified into two categories, viz. one emanating from agreement and the other law. In case the ground of attack flows from agreement between the parties which would undoubtedly be a lawful agreement and the same is raised at the initial stage or even subsequently in case the party objecting has not participated in the proceedings or participated under protest. But if a party acquiesced to the invalidity by his conduct by participating in the proceedings and taking a chance therein cannot be allowed to turn round after the award goes against him and is estopped from challenging validity or otherwise of reference, arbitration proceedings and/or award inasmuch as right of such a party to take objection is defeated. Where ground is based upon breach of mandatory provision of law, a party cannot be estopped from raising the same in his objection to the award even after he participated in the arbitration proceedings in view of the well settled maxim that there is no estoppel against statute. If, however, basis for ground of attack is violation of such a provision of law which is not mandatory but directory and raised at the initial stage, the illegality, in appropriate case, may be set right, but in such an eventuality if a party participated in the proceedings without any protest, he would be precluded from raising the point in the objection after making of the award. 12. In M/s Gurjit Metal Industries case (supra), this Court had held that once the parties had waived the objection with regard to the time period in which the award was to be given, subsequently, no objection could be permitted to be raised. 12. In M/s Gurjit Metal Industries case (supra), this Court had held that once the parties had waived the objection with regard to the time period in which the award was to be given, subsequently, no objection could be permitted to be raised. In these circumstances, it is clear that the observations given by the learned Additional District Judge to the effect that the award had been passed by the Arbitrator on January 20, 1985 after the expiry of a period of four months is contrary to the law as laid down by the Supreme Court. In any case, since the parties have been appearing before the Arbitrator without raising any objection, the aforesaid award dated January 20, 1985 shall be deemed to be passed within the period stipulated under law. 13. The second contention of Shri Saini pertains to the interest awarded by the Arbitrator. The learned counsel states that the learned Additional District Judge has erred in law in holding that the Arbitrator was not entitled to grant the interest. In this regard, the learned counsel has placed reliance upon judgments of the Supreme Court in Bhagawati Oxygen Ltd. V/s. Hindustan Copper Ltd. (2005)6 S.C.C. 462 and Rajendra Construction Co. V/s. Maharashtra Housing & Area Development Authority and others,. The aforesaid judgment also support the claim of the contractor qua the award of interest by the Arbitrator. In the present case, the Arbitrator has awarded the interest at the rate of 6% per annum from the date of reference till the date of award and after passing of the award, the interest has been awarded at the rate of 15% per annum. In view of the law laid down by the Apex Court in the aforesaid judgments, the award of interest at the rate of 6% per annum is fully justified. However, the award of interest at the rate of 15% is excessive and accordingly it is held that the contractor would be entitled to interest at the rate of 10% per annum from the date of the award till the actual date of payment. 14. With the aforesaid observations, the present revision petition is allowed. The order of the learned Additional District Judge is set aside. The award, as modified qua interest as noted above, shall be made Rule of the Court.