Hindusthan Aeronautics Limited v. Das Electric Trading Company
2010-06-28
A.S.NAIDU
body2010
DigiLaw.ai
JUDGMENT A.S. NAIDU, J. : This appeal under Section 39 of the Arbitration Act, 1842 has been filed by Hindusthan Aeronautics Limited, a Government of India Enterprise assailing the judgment dated 26th August, 2000 passed by learned Civil Judge (Senior Division), Koraput in O.S. No.27 of 2000. 2. The scenario of facts reveal that the appellant-company after following all paraphernalia selected and awarded execution of work, i.e., “Internal Power Distribution, Lighting of Block 5B and 6B, Electrification of Stores Block and re-sitting of machin¬eries in Block No.5” to the respondent-firm. An agreement was entered into between the appellant-company and the respondent-firm on 4.8.1986 stipulating different terms and providing other specifications with regard to the execution of the said work. After execution of the agreement, the respondent-firm commenced its work as per the terms. During such execution, inter-se disputes cropped up between the appellant and the respondent, consequently in consonance with the terms of the agreement, which stipulated that any dispute arising out of or relating to the work in question, shall be decided by the arbitrator, the re¬spondent issued a letter stating that he intends to invoke the arbitration clause for deciding the inter-se disputes. Conse¬quently, Sri Ashok Kumar Rath, Chief Engineer of M/s. National Aluminimum Company, Damonjodi was appointed as the sole arbitra¬tor and the dispute was referred to him for adjudication. Both parties appeared before the Arbitrator and put-forth their claim. The arbitrator after hearing the parties, passed the award. For the sake of brevity of the operative portion of the award is quoted here-in-below for better understanding : Final bill payment shown by the respondent (+) the deviation amount due to discrepancy in measurement calcu¬lated (list attached & sent with 14.7.95 minutes) calculation was made after receiving the copy of measurement book (+) Refund of E.M.D. (-) The final payment made by cheque to Sri B.N. Das, the pro¬prietor of M/s. Das Electric Trading Co. M/s. Das Electric Trading Co. is due to get from M/s. H.A.L. from this work executed under work order no.MNE/C-1/86/697 dated 5.4.86 (Inclusive of supply cost for 196.5 mtrs. Of Trunking fixed in stores block (claimed by claimant). Payment of interest :- (i) M/s. H.A.L. has to pay the interest at 12% instead of 18% as claimed by the claimant.
M/s. Das Electric Trading Co. is due to get from M/s. H.A.L. from this work executed under work order no.MNE/C-1/86/697 dated 5.4.86 (Inclusive of supply cost for 196.5 mtrs. Of Trunking fixed in stores block (claimed by claimant). Payment of interest :- (i) M/s. H.A.L. has to pay the interest at 12% instead of 18% as claimed by the claimant. (a) For Rs.39,500.00 (from 3.9.86 to 14.7.95) (b) For Rs.54,447.00 (from 17.10.86 to 4.7.95) (c) For Rs.1,09,380.00 (from 1.1.88 to 4.1.90) (ii) M/s. H.A.L. has to pay to claimant towards damage at 10% on the work order amount of the other contractor named M/s. P.K. Sahoo & associates, who carried out the balance work after can¬cellation of the disputed work (H.A.L. exhibit. ANN-M/1) on value Rs.2,56,611.50 instead of Rs.48,000/- as claimed by the claimant. Damage payable to the claimant by M/s. H.A.L. on Rs.2,56,611.50...... at the rate of 10% = (iii) M/s. H.A.L. has to pay to claimant towards contract work sale tax sum of = (iv) M/s. H.A.L. has to pay back to the claimant the sum of rupees deducted by H.A.L. from the final bill of claimant towards the extra cost (as stated by H.A.L.) incurred by them amounting (v) The counter claims of M/s. H.A.L. to realize from claimant a sum of Rs.12,500/- towards extra cost incurred by them and a sum of Rs.4,000/- towards the damage is disallowed and rejected, as it merits no consideration. M/s. H.A.L. is directed to make payment to the claimant M/s. Das Electric Trading Co. with 30 days from the date of receipt of this order. (vi) M/s. H.A.L. has agreed vide its letter no. KPT/NEE/c-1/88/1814 dtd.30.9.88 and letter no.NEEB/C-1/89/2464 dtd.31.8.89 (refer claimants exhibit no.54 and 56) that 120 mtrs. of Trunking was brought to site (by claimant) later (but before cancellation of disputed work order) for which that quantity of Trunking could not be entered in Measurement book and no bill is paid by M/s. H.A.L. for this quantity of trunking. I Advise that either 120 mtrs. of Trunking should be returned by M/s. H.A.L. to the con¬tractor (claimant) or payment in place. (vii) Required fees are to be paid by both the parties equally. 3. In the year 1995 the arbitrator filed the award before learned Civil Jude (Senior Division), Koraput for making it a “rule of the Court” and O.S. No.53 of 1995 was registered.
of Trunking should be returned by M/s. H.A.L. to the con¬tractor (claimant) or payment in place. (vii) Required fees are to be paid by both the parties equally. 3. In the year 1995 the arbitrator filed the award before learned Civil Jude (Senior Division), Koraput for making it a “rule of the Court” and O.S. No.53 of 1995 was registered. The said case was subsequently re-numbered as O.S. No.27 of 2000 after transfer to the Court of Civil Judge (Senior Division), Koraput. The appellant filed objection under Section 30 and 33 of the Arbitration Act to the aforesaid award on several grounds. Similarly, the respondent also filed a petition claiming pendentilite and future interest and cost. The petition filed by the respondent was registered as M.J.C. No.53 of 1995. Unfortunately the said M.J.C. was dismissed for default. The petition for restoration filed by the respondent was also dis¬missed. Assailing the said order of dismissal of M.J.C., and rejection of the restoration petition the respondent filed a civil revision before this Court, which was registered as C.R. No.381 of 2001. On 26.8.2000 learned Civil Judge (Senior Divi¬sion), Koraput after hearing learned counsel for the parties and going through the award and other materials was satisfied that there was no apparent error and confirmed the award, but then modified the same to the extent that the respondent would not be entitled to pendentilite interest, interest of sales tax and damages of 10%. 4. The said judgment is assailed by the appellant in this appeal. The respondent, on the other hand, filed M.A. No.813 of 2000 assailing the judgment passed by learned Civil Judge (Senior Division) modifying the award and holding that the respondent would not be entitled to pendentilite interest, return of sales tax and damages. 5. M.A. No.813 of 2000 and Civil Revision No.381 of 2001 filed by the respondent were listed before the then Hon’ble Chief Justice while His Lordship was sitting in single. After analyzing the facts and circumstances, the appeal and Civil Revision were dismissed by a reasoned order on 8.12.2002. The respondent has filed Review Petition Nos.113 of 2003 and 114 of 2003, inter alia, praying to review the order dated 8.11.2002. All the afore¬said three case, i.e., two review petitions and M.A. are taken up together for hearing. 6.
After analyzing the facts and circumstances, the appeal and Civil Revision were dismissed by a reasoned order on 8.12.2002. The respondent has filed Review Petition Nos.113 of 2003 and 114 of 2003, inter alia, praying to review the order dated 8.11.2002. All the afore¬said three case, i.e., two review petitions and M.A. are taken up together for hearing. 6. The appellant-company assails the order passed by learned Civil Judge (Senior Division) making the award rule of the Court, mainly on the ground that the respondent has no locus standi to initiate a proceeding for arbitration and as such, the award passed by the Arbitrator as well as the order passed by learned Civil Judge (Senior Division) making the same as rule of the Court was not correct. It is further averred that the dispute raised do not come within the scope, effect and ambit of the arbitration clause and as such, the proceeding itself was not maintainable. The respondent on the other hand, submitted that agreement was executed by the respondent and work was executed by him with the knowledge of the appellant-company and he has locus standi to raise the dispute. That apart, it is stated that the question of locus standi has no relevance in the present facts and circumstances of the case as the said point was not raised by the authorities at any time. 7. Heard learned counsel for the parties at length. Pe¬rused the judgment as well as the award. From the facts, it appears that in January, 1990 the appellant made the first and final payment after several correspondences, which was 50% of the approximate total amount. Payment was made in favour of the respondent. On 16.7.1991 the respondent served a pleader’s notice raising dispute of less payment and prayed that in consonance with the arbitration clause, the said dispute be referred for arbitration. On 26.7.1991 the Senior Manager (Maintenance) of the appellant-company acted upon the letter and wrote to the General Manager to appoint an arbitrator on 30.7.1991. The General Manag¬er appointed Sri Ashok Kumar Rath, Chief Engineer of M/s. Nation¬al Aluminium Company, Damonjodi as the sole arbitrator.
On 26.7.1991 the Senior Manager (Maintenance) of the appellant-company acted upon the letter and wrote to the General Manager to appoint an arbitrator on 30.7.1991. The General Manag¬er appointed Sri Ashok Kumar Rath, Chief Engineer of M/s. Nation¬al Aluminium Company, Damonjodi as the sole arbitrator. Before the arbitrator also the appellant raised a question with regard to the locus standi of Sri B.N. Das mainly on the ground that the work was awarded and executed by M/s. Das Electric Trading Compa¬ny, which is a partnership firm and such, Sri B.N. Das has no locus standi to raise the dispute and/or prosecute the same. The said submission was stoutly denied by the respondent on the contention that Sri B.N. Das was all along representing the re¬spondent-firm, M/s. Das Electric Trading Company and all negotia¬tions and correspondences were made by him and as such raising the dispute with regard to locus standi of Mr. Das is an after-thought. The arbitrator as would be evident from the award, has considered the said aspect and has come to the conclusion that Sri B.N. Das is in fact the real owner,who has submitted the tender, signed the agreement and executed the disputed work and as such, he is entitled to receive full payment. That apart, before the learned Civil Judge (Senior Division), the award was assailed by the appellant-company only on the following three grounds; (i) the award is backed by any evidence or supporting material and as such, liable to be set aside; (ii) learned Arbi¬trator misconducted the proceeding having gone beyond the scope of reference, not correctly recorded the minutes of the proceed¬ing, omitted to provide reasonable opportunity to the defendant to adduce evidence and was biased in his conduct and (iii) the arbitrator has no jurisdiction to award and pass pendentilite interest. 8. To substantiate its case, the respondent, who was the plaintiff before the learned Civil Judge (Senior Division) got examined Sri B.N. Das as a witness. On behalf of the appellant-company, two witnesses were examined. Several documents were also exhibited on behalf of the appellant and respondent respectively. After vivid discussion of the evidence and the materials avail¬able on record, learned Civil Judge (Senior Division) came to the conclusion that the arbitrator has taken note of all the facts and did not commit any error apparent on the face of the record.
Several documents were also exhibited on behalf of the appellant and respondent respectively. After vivid discussion of the evidence and the materials avail¬able on record, learned Civil Judge (Senior Division) came to the conclusion that the arbitrator has taken note of all the facts and did not commit any error apparent on the face of the record. By a well discussed order, learned Civil Judge (Senior Division) accepted the award dated 25th September, 1995 and made the same as rule of the Court. 9. The scenario of facts further reveal that Misc. Appeal No.813 of 2000 was filed by the respondent before this Court assailing the award rejecting a portion of the claim of the respondent. The said appeal was heard along with Civil Revision No.381 of 2000. By order dated 8.11.2002, this Court had the occasion to go through the award meticulously and was satisfied that no ground had been made out for interference with the award in the appeal. It is seen that the claim of the respondent had been duly considered by the arbitrator so also the objections raised by the respondent. The arbitrator has considered the relevant questions in the light of the objections raised by the appellant. This Court also finds no palpable error committed by the arbitrator and/or Civil Judge (Senior Division) justifying interference by this Court in the appeal. Therefore, this Court finds no reason to disagree with the decision of this Court in M.A. No.813 of 2000. 10. So far as the two review petitions are concerned, it appears that by order dated 8.11.2002, the then Hon’ble Chief Justice by a well discussed order disposed of the appeal as well as the Civil Revision. The said order does not suffer from the vice of any typographical or factual errors. Section 114 read with Order 47, Rule 1, C.P.C. stipulates the scope of interfer¬ence in a review petition. On going through the order also, this Court does not find any mistake on the face of the record. The petitioner in the review petitions has also failed to satisfy that the order passed suffers from any error apparent on the face of the record and that he had discovered any new and important matter or evidence, which cannot be discovered with due diligence or it was not within his knowledge and could not be produced at the initial stage.
Review of an order is permissible only when the Court is satisfied that there is error of procedure apparent from the records, i.e., the judgment was delivered without notice to the parties or the judgment does not effectively deal with or determine any important issue in the case though argued by the parties. “Sufficient reason” means and connotes disposal of a case without affording proper opportunity. In the case of S. Nagaraj and others v. State of Karnatak, (1993) (Supp) 4 SCC 595, the Supreme Court held as follows : “Review literally and even judicially means re-examination or re-consideration. Basic philosophy inherent in it is the universal acceptance of human fallibility. Yet in the realm of law, the Courts and even the Statutes lean strongly in favour of finality of decision legally and properly made. Exceptions both statutorily and judicially have been carved out to correct acci¬dental mistakes or miscarriage of justice.... The expression, ‘for any other sufficient reason’ in the clause has been given an expanded meaning and a decree or order passed under misapprehen¬sion of true state of circumstances has been held to be suffi¬cient ground to exercise the power.” 11. It is well settled that the purpose of review is recti¬fication of an order, which stems from the fundamental principle that the justice is above all and it is exercised only to correct the error, which had occurred by the some accident, without any blame. 12. Perusal of the order dated 8.11.2002 passed in Misc. Appeal No.813 of 2000 and C.R. No.381 of 2001 do not satisfy any of such criteria. The order is very clear and all facts and issues were dealt with. After going through the orders passed, this Court is satisfied that the same does not satisfy any of the ingredients required to review the order. Consequently, both the review petitions stand dismissed. 13. Mr. Murty, learned Sr. Advocate appearing for the appellant tried his best to convince this Court that Mr. B.N. Das has no locus standi to pursue the litigation, but then in view of the materials available and past conduct of the parties before the dispute arose, this Court remains unconvinced. The arbitrator has rightly arrived at a conclusion that Sri Das had locus standi to raise dispute. Mr. Murty also tried to assail the award on the ground that enough opportunity was not granted to the appellant.
The arbitrator has rightly arrived at a conclusion that Sri Das had locus standi to raise dispute. Mr. Murty also tried to assail the award on the ground that enough opportunity was not granted to the appellant. Perusal of the award as well as the order-sheet reveals that such contentions cannot be accepted on its face value inasmuch, the order-sheet reveals that the appellant, who was the defendant before the learned Civil Judge (Senior Division) did not act with promptitude. That apart, law is well settled that the jurisdic¬tion of the Court to interfere with the award of an arbitrator is very limited. The adjudication of the arbitrator is generally binding between the parties and it is not open to the Court to attempt to prove the mental process by which the arbitrator has reached his conclusion. Award of an arbitrator can be set aside by a Court only on the grounds indicated in the Arbitration Act. It is not open to the Court to re-assess the evidence to find whether arbitrator has committed any error or to decide the question of adequacy of evidence, nor the Court cannot sit on the conclusion of the arbitrator by re-examining and re-appreciating the evidence considered by the arbitrator. 14. The award of an arbitrator cannot be set aside unless there is an error of law apparent on the face of the records. The award is ordinarily final and conclusive, unless a contrary intention is disclosed 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 evidence in the manner provided by the arbitration agreement. 15. Accordingly, M.A. No.792 of 2000 stands dismissed. Ordered accordingly.