Food Corporation of India v. Chaudhari Transport Company
2005-02-01
A.K.GOHIL, S.S.JHA
body2005
DigiLaw.ai
JUDGMENT This appeal under section 39 of the Arbitration Act is filed by the appellant challenging the act of the trial Court whereby the trial Court has made the award of the arbitrator as a rule of Court. Brief facts of the case are that plaintiff-appellant has filed a civil suit for recovery of Rs. 3,93,960.61 paise against the respondent Chaudhari Transport Company. When the suit was filed, an application under section 34 of the Arbitration Act was filed by the defendant stating therein that there is an arbitration clause and the proceedings in the suit be stayed. Trial Court stayed the proceedings and directed to get the dispute settled through arbitrator. Arbitrator delivered his award on 3.9.1992. Objections were raised by the appellant on 5.8.1993 to the award passed by the sole arbitrator. It is prayed that the award should be quashed and should not be made a rule of Court. Four grounds were raised by the appellant for setting aside the award. First ground was that the arbitrator has recorded a wrong finding pertaining to the revised offer by the contractor on 12.12.1979. Second ground pertains to the finding recorded regarding ground No.1 that the arbitrator has committed an error in recording a finding regarding revival of the tender conditions by the contractor. Third ground raised by the appellant was that the arbitrator committed an error in holding that the contract was not completed on 15.12.1979 and the fourth ground was that the arbitrator has passed the award without going through the record. Trial Court after considering the application, dismissed the application and made the award as a rule of Court. Trial Court held that none of the grounds under section 30 of the Arbitration Act are made out to interfere with the award of the arbitrator. Counsel for the appellant emphasised that the award passed by the arbitrator is contrary to law and is against the basic principles of Contract Act. Counsel for the appellant further submitted that there is no provision of Survey No. 1207 situated in village Indergarh, Tahsil Seondha to petitioner vide Annexure P-2. It is the case of the petitioner that in pursuance to the order of the State Government District Collector Datia vide order dated 27.6.1991 has granted thc Survey No. 1207 vide Annexure P-3.
Counsel for the appellant further submitted that there is no provision of Survey No. 1207 situated in village Indergarh, Tahsil Seondha to petitioner vide Annexure P-2. It is the case of the petitioner that in pursuance to the order of the State Government District Collector Datia vide order dated 27.6.1991 has granted thc Survey No. 1207 vide Annexure P-3. Order of Collector was challenged by one Shri Ataullah Khan by filing an appeal before the Commissioner Gwalior which was dismissed vide Annexure P-4 on 2.6.1992. It is the case of the petitioner that petitioner's brother Rajendra Singh has died who is the owner of the property and after his death petitioner's name has been entered in the Khasra entries in the year 1993 and petitioner is in continuous possession of the property. Revenue records in this regard are filed as Annexure P/5-A. It is the grievance of the petitioner that after lapse of all these years, District Wakf Board has filed a suit for declaring the land of the petitioner to be a Wakf property. The matter is pending before the Wakf's Tribunal. It is the case of the petitioner that by virtue of the order dated 15.9.1989 passed by the State Government granting land bearing Survey No. 1207 in village Indergarh Tahsil Seondha Distt. Datia, the order attained finality and petitioner has obtained Bhoomi Swami rights and the local residents belonging to a particular community under the political influences are encroaching on the land of the petitioner. Petitioner has sought a relief of restraining the respondents from interfering with 'his possession. On the basis of the aforesaid factual assertion, relief claimed for by the petitioner is a writ of mandamus or any other suitable writ or direction be given, the fact that petitioner's settled position be not disturbed and in case State Government is willing to acquire the land of the petitioner then a suitable award of the land in question as per market value be granted to the petitioner. Keeping in view the aforesaid assertions made by the petitioner an interim order directing the respondents not to disturb possession of the petitioner was passed by this Court on 17.3.2004 while issuing notice to the respondents.
Keeping in view the aforesaid assertions made by the petitioner an interim order directing the respondents not to disturb possession of the petitioner was passed by this Court on 17.3.2004 while issuing notice to the respondents. On notice being issued, respondents have filed the return and in the return filed by the State Government supported by the affidavit of Shri A.R. Dhok, SDO, Seondha it is submitted that petitioner had applied for obtaining the land bearing Survey No. 1207 in exchange of his land bearing Survey No. 990, 996 and 1907. However, it is stated by the respondents that even though petitioner had applied for exchange of land and grant of land bearing Survey No. 1207, the same was not granted. The prayer of the petitioner was rejected by the District Collector vide order dated 30.9.1985 Annexure R-l. Against this order Annexure R-1, petitioner preferred an appeal before the Commissioner' which was dismissed on 5.9.1988. It is stated by the respondents that thereafter petitioner submitted a representation to the State Government and the State Government passed an order Annexure P-2 on 15.8.1989 directing the competent authority to take appropriate action in the matter of granting land bearing Survey No. 1207 and in case land is exchanged then difference of amount be taken from the petitioner. It is the case of the respondents that in pursuance to the order of the State Government, Collector passed an order Annexure P-3 granting Survey No. 1207 area 0.081 hectares to the petitioner. Respondents admitted the fact that appeal filed by Ataullah Khan has been dismissed. However, it is the case of the respondents that on the basis of various queries raised in the matter the entire records were again checked and on scrutiny of the records it was found that Survey No. 1207 has been recorded as a 'Marghat' and, therefore, under law it could not be allotted to the petitioner. That apart, it is stated by the respondents that when the allotment was made in the name of the petitioner vide Annexure P-3 pendency of the dispute before the wakfs Tribunal was also not brought to the notice of the competent authority.
That apart, it is stated by the respondents that when the allotment was made in the name of the petitioner vide Annexure P-3 pendency of the dispute before the wakfs Tribunal was also not brought to the notice of the competent authority. It is stated that it was only when certain members of a particular community made representation to the SDO, the entire old records from Samvat 2020 to 2024 and from Sam vat 2031 to 2034 and again from Samvat 2036 to 2040 were seen and it was observed that the land is recorded as 'marghat' land and, therefore, such a land could not be given in exchange to any person. It is the case of the respondents that petitioner's. father Himmat Singh was working as Reader in the Office of Nayab Tahsildar and petitioner's father in collusion with the Patwari Shri Om Prakash manipulated the entry of Survey No. 1207 as Kadim land without there being any order of the competent authority. The same has been ,done by manipulating the khasra entries for Samvat 2034 it was stated that benefit was granted to the petitioner illegally. Respondents contend that land bearing Survey No. 1207 on prima facie examination is found to be a 'marghat' (graveyard) land which could not be allotted in exchange to the petitioner and certain claims have been made by persons of a particular community claimed it to be a 'Marghat' land. It is the case of the respondents that because of illegality committed by the petitioner's father along with Patwari and because of wrong entries made in the land records, a mistake was committed in allotting land bearing survey No. 1207 to the petitioner. Accordingly it is stated that action is being taken for rectifying the mistake and no relief can now be granted to the petitioner in this petition. Having considered the aforesaid it is seen that even though certain orders have been passed with regard to allotment of land in question situated in survey No. 1207 in the name of the petitioner but prima facie it is established from the records that there is some illegality in the matter of allotment of land to the petitioner. Respondents having realised the mistake have taken action in the matter and, therefore, at this stage interference by this Court is not called for.
Respondents having realised the mistake have taken action in the matter and, therefore, at this stage interference by this Court is not called for. In case, land has been incorrectly allotted in exchange to the petitioner, State Government and the competent authority are well within their right to correct the mistake for refund of the earnest money under the agreement and the Arbitrator has committed an error in refunding the earnest money. Counsel for the appellant further submitted that on account of failure of the respondent in performing his part of contract, appellant had suffered great losses and the appellant is entitled to recover the same from the respondent. On the other hand, counsel for the respondent submitted that the award has rightly been made rule of Court and no grounds have been made out by the appellant for setting aside the award. In support of his contention, counsel for the appellant has referred to the judgment in the case of Continental Construction Ltd. v. State of U.P., reported in [ (2003) 8 SCC 4 ]. He invited attention to para 21 of the judgment wherein the apex Court has referred to the judgment of three-Judges Bench of the apex Court in the case of State of U.P. v. Allied Constructions [ (2003) 7 SCC 396 ] and it is held that the award made by the Arbitrator may be wrong either on law or on fact and error of law on the face of it could not nullify an award. The award is a speaking one. The arbitrator has assigned sufficient and cogent reasons in support thereof interpretation of a contract, it is trite, is a matter for arbitrator to determine. The award can be set aside if grounds under section 30 of the Arbitration Act are made out. Counsel for the respondent further referred to the judgment in the case of Food Corporation of India v. Joginderpal Mohinderpal, [ AIR 1989 SC 1263 ] for the same principle. On the other hand, counsel for the appellant has referred to the judgment of single Bench of Rajasthan High Court in the case of Bhanwarlal v. State [AIR 1976 Rajasthan 215] and another judgment of apex Court in the case of Rohtas Industries Ltd. v. Rohtas Industries Staff Union [ AIR 1976 SC 425 ] and referred to paragraphs 15 and 16 of the judgment.
It is held in para 16 that the arbitrator may not state the law as such. Even then such cute silence confers no greater or subtler immunity on the award than plain speech. The need for a speaking order, where considerable numbers are affected in their substantial rights, may well be a facet of natural justice or fair procedure, although in this case, we do not have to go so far. If, as here, you find an erroneous law as the necessary buckle between the facts found and the conclusions recorded, the award bears its condemnation on its bosom and thereby it is held that due to wrong interpretation of law award has been passed which affects the rights of number of employees and it should be set at naught. It this case, the dispute was between the employer and the employees and the dispute was referred under the Industrial Dispute Act. We do not find that any law has been erroneously interpreted by the arbitrator. On the contrary, the arbitrator has determined the dispute between the parties and has held that on account of conduct of the appellant date of opening of tenders was extended unilaterally and in place of 7.12.1979 tenders were opened on 15.12.1979 without notice to the tenderer. Even otherwise, respondent has submitted revised rate of contract in the light that supply of diesel was under the control of Government and, therefore, he has simply mentioned that supply of diesel shall be made by the appellant and price of the diesel should be paid on the market price payable at the relevant time. Respondent has not rescinded the contract but had only informed the change in conditions due to change of circumstances. This fact has been considered by the Arbitrator and the Arbitrator has held that there is no fault on the part of respondent and directed refund of earnest money to the respondent. Arbitrator has further held that no damages can be recovered from the respondent. Since no grounds are made out to interfere with the award of the arbitrator, trial Court has rightly dismissed the objections and accepted the award and the award has been made as a rule of Court. We do not find any infirmity in the order passed by the trial Court. Appeal has no merit and is dismissed with costs. Counsel's fee as per schedule, if certified.