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2009 DIGILAW 696 (JK)

Union Of India v. Darshan Kumar Sharma

2009-12-31

J.P.SINGH

body2009
1. The dispute between the parties, arising out of Contract, for the Supply of Firewood/Charcoal/ Limequick at FSD ASC Udhampur for the period commencing from Ist April, 1995 to 31st March, 1996 pertains to the determination concluded by IC-34024W LT Col. R. C.Vermas Award of February 10, 1997. 2. Union of India, through its CMP No.48/1997 seeks direction to make the Award, Rule of the Court, whereas Darshan Kumar Sharma, through his Arbitration Application No.57/1998, prays for its setting aside. 3. The resolution of the disputes raised in the above two Petitions, depends on the findings on the following issues to which the parties were put vide Courts order of July 06, 2000:- "i) Whether the award is liable to be set-aside on the ground of misconduct. If so, how? O.P.Objector. ii) Whether the award suffers from any illegality? O.P.Objector." 4. The parties have opted not to lead evidence by Affidavits or otherwise, despite being allowed opportunity, so to do in terms of the aforementioned order. 5. I have considered the submissions made by learned counsel for the parties and perused the records of the Arbitrator, which were summoned pursuant to the order passed during the currency of the proceedings. 6. Before considering the submissions made by learned counsel for the parties, the Award made by the Arbitrator and Clause 21(g) of the Contract Agreement entered into by the parties, needs to be noticed. The award reads thus:- "AWARD Whereas certain differences arose between the Claimant and Respondent out of a contract in writing Deed no.CD-17 for the year 1995-96 made between the Respondent of the one part and the claimant of the other part and whereas the said differences were referred to me for determination; Now I, IC-34024W Lt Col R.C.Verma of 244 Medium Regiment C/O 56 APO having taken upon myself the burden of the reference and having duly considered the matter to me; Do hereby make and publish this my final Award in writing of and concerning the matter so referred to me as follows:- iii) I award and direct that the Respondent shall pay to Claimant a total sum of Rs.97,332.59 (Rupees ninety seven thousand three hundred and thirty two and paise fifty nine only). (Total recovery due Rs.1,18,142.13 minus security deposit of Rs.19,100/- & Rs.1709.54 value of sup made by contractor during month of Mar 96 not paid to him. (Total recovery due Rs.1,18,142.13 minus security deposit of Rs.19,100/- & Rs.1709.54 value of sup made by contractor during month of Mar 96 not paid to him. iv) The security deposit amounting to Rs.19,100.00 (Rupees Nineteen thousand one hundred only) be re-appropriated and adjusted against the dues to be recovered from the Respondent. v) I Award and dirrect that the parties bear their own costs of the suit as well as of the proceedings before me. As Witness my hand this 10th day of February 1997. Sd/- (R.C.Verma) Lt. Col 2IC Field 244 Medium Regiment 10 Feb 97 ARBITRATOR. Witness 1. In the presence of IC-47595N Maj Ajay Sharma Copy to Award forwarded to :- FSD ASC Udhampur M/s. Darshan Kumar Sharma Vill & PO : Manpa The & Distt : Udhampur (J&K) The copy of the Award is forwarded in lieu of the notice of the making, signing and publishing of the Award by me on the date shown hereinabove. Sd/- (R.C.Verma) Lt. Col. 2IC ARBITRATOR" Clause 21(g) of the Contract Agreement reads thus:- "It is also term of the contract that in case where the amount of claim of dispute is Rs.30,000/- and above the arbitrator shall give reasons for his award." 7. Perusal of the Award quoted hereinabove reveals that the learned Arbitrator has not given any reason(s) to justify payment of Rs 97,332.50 by Darshan Kumar Sharma to Union of India and in providing for re-appropriation and adjustment of Darshan Kumar Sharmas Security Deposit amounting to Rs.19,100/- by Union of India. 8. Omission of the learned Arbitrator to give reasons, in support of the Award, as he was required so to do, in terms of Clause-21(g) of the Contract Agreement, the error committed by him in issuing the Award contravening essential term of the Contract between the parties, thus becomes apparent on the face of the records. 9. That apart, the records of the Arbitrator reveal that he had not maintained the minutes of the proceedings taken by him during the arbitration proceedings, in absence whereof it is not discernable from the records received from him as to what proceedings had he conducted during the arbitration proceedings to resolve the dispute, referred to him for adjudication. 9. That apart, the records of the Arbitrator reveal that he had not maintained the minutes of the proceedings taken by him during the arbitration proceedings, in absence whereof it is not discernable from the records received from him as to what proceedings had he conducted during the arbitration proceedings to resolve the dispute, referred to him for adjudication. The records are further silent about the methodology that the learned Arbitrator had devised to resolve the dispute, in that, no evidence of any type whatsoever appears to have been led before the Arbitrator by one or the other party. The Arbitrator appears to have issued the Award without recording the evidence of the parties and the complaint made by Darshan Kumar Sharma in his CMP under section 30/33 of the Jammu and Kashmir Arbitration Act that there was no material before the Arbitrator to pass the Award, which the learned Arbitrator had issued without application of mind, is found justified. 10. The Non-speaking Award issued without any evidence or material, in support thereof, and violating the express term of the Contract, entered into by the parties, requiring the Arbitrator to give reasons in support of the Award, renders it in-valid. 11. Indian Oil Corporation v. Union Carbon Ltd, reported as AIR 1988 SC 1340 and M/s Northern Sanitation v. M/s Hotel Corporation of India, reported as AIR 1994 J&K 3, referred to by learned Counsel for Union of India are not attracted to the facts of the present case, in that, in Indian Oil Corporation Limiteds case the reasons have been stated by the Arbitrator in the Award itself and in M/s Northern Sanitations case, it was not obligatory on the Arbitrator to spell out reasons, in support of the Award. 12. The error committed by the Arbitrator in making and publishing his Award without recording evidence of the parties or giving any reason(s) as required by the Contract Agreement between the parties, is therefore, held to be illegal. 13. Both the issues raised in the case are, therefore, decided in favour of Darshan Kumar Sharma. 14. Accordingly, allowing Darshan Kumar Sharmas Arbitration Application No. 57/ 1998, Award dated February 10, 1997 of R.C Verma Lt Col 2 IC 244 Medium Regiment is, accordingly, set aside, dismissing Union of Indias Application seeking making the Award Rule of Court.