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2014 DIGILAW 1594 (RAJ)

Shri Vijay Waliya v. Urban Improvement Trust Ajmer

2014-09-30

ALOK SHARMA

body2014
JUDGMENT 1. - Dismissal by the Additional District Judge No.1 Ajmer (hereinafter 'the learned ADJ') claimant's-appellant (hereinafter 'the claimant') objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter 1996 Act') against the award dated 15-7-2000 passed by the Arbitrator is the subject matter of challenge in this civil miscellaneous appeal under Section 37 of the 1996 Act. 2. The facts of the case are that vide work order dated 3-2-1995 the claimant was awarded a contract to construct the Central Verge Circle in Panchsheel Nagar Ajmer for an amount of Rs. 9,44,252/- on specified terms and conditions. The work was to be completed within six months i.e. from 15-2-1995 to 14-8-1995. The agreement included an arbitration clause, where under disputes/ difference arising out or otherwise relating to execution of the work order dated 3-2-1995 were to be decided by an Arbitrator. 3. Disputes arose between the parties and the Arbitrator was appointed. Thereupon the claimant claimed an amount of Rs. 5,35,550/- under various heads. The non claimant-respondent Urban Improvement Trust Ajmer (hereinafter 'the non claimant UIT') denied the claim and instead alleged that the claimant was in breach of his contractual obligations and hence liable to pay a sum of Rs. 1,60,552/-. A counter claim was laid. 4. The Arbitrator vide his award dated 15-7-2000 dismissed the claim of the claimant, as also the non claimant's counter claim. Objections to the award dated 15-7-2000 were filed by the claimant under Section 34 of the 1996 Act and have been dismissed by the learned ADJ by his impugned order dated 7-8-2008. Hence this appeal. 5. Mr. Ranjan, learned Senior Counsel appearing along with Mr. Daulat Sharma on behalf of the claimant has submitted that the learned ADJ in dismissing the objections under Section 34 of the 1996 Act has erred in not appreciating the report of the Commissioner in the correct perspective. It was submitted that for execution of the contracted work construction of a BMW road was an essential pre-requisite and only thereafter the Central Verge Circle could be constructed thereon. He submitted that upto the date of commencement of the work i.e. 15-2-1995, the BMW road had not been constructed. It was submitted that for execution of the contracted work construction of a BMW road was an essential pre-requisite and only thereafter the Central Verge Circle could be constructed thereon. He submitted that upto the date of commencement of the work i.e. 15-2-1995, the BMW road had not been constructed. In this view of the matter the claimant could not have been held liable for breach of the contract in failing to execute the work within the contracted time frame of six months i.e. commencing 15-2-1995 and ending 14-8-1995. It was submitted that in the circumstances to hold the claimant as a defaulter in execution of the contracted work awarded by work order dated 3-2-1995 was erroneous. It was submitted that the non claimant UIT should have been held liable for having first caused the delay in execution of the work awarded to the claimant, then rescinding the contract unlawfully and causing loses to the claimant. And such a finding should have entailed the claim of Rs. 5,35,550/- being allowed. 6. Heard. Considered. 7. This appeal is against the rejection of objections filed by the claimant under Section 34 of the 1996 Act. The scope of the powers of the Civil courts and by extension the appellate court in interfering with the award passed by an Arbitrator under the 1996 Act is limited to the situations detailed in Section 34(2) of the 1996 Act. For facility of reference, Section 34(2) is reproduced here under:- 34. Application for setting aside arbitral award. The scope of the powers of the Civil courts and by extension the appellate court in interfering with the award passed by an Arbitrator under the 1996 Act is limited to the situations detailed in Section 34(2) of the 1996 Act. For facility of reference, Section 34(2) is reproduced here under:- 34. Application for setting aside arbitral award. (1) x x x (2) An arbitral award may be set aside by the court only if- (a) the party making the application furnishes proof that- (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force; or (ii) the arbitral award is in conflict with the public policy of India. Explanation.- without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. 8. Explanation.- without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. 8. It is well settled by the judgments of the Hon'ble Apex Court and this Court that the power of setting aside an award passed under the 1996 Act is supervisory in nature and not appellate or revisional. Interference with the award made under the 1996 Act can be warranted only when the award is contrary to the conditions of the contract between the parties, or is patently illegal, or exceeds the reference made to the Arbitrator, or is vitiated for palpable ex-facie perversity, or is in excess of the Arbitrator's jurisdiction. In fact courts have even conclusively held that mere errors of law and facts even if attributable to an Arbitrator in the award passed are within his jurisdiction and would not vitiate such an award for "misconduct" or render it amenable to the corrective processes of civil courts. Further the Hon'ble Supreme Court in the case of Ram Chandra Reddy v. State of A.P. [ (2001)4 SCC 241 ] has held that the court will not interfere with an award passed by an Arbitrator on the basis of new facts placed before the court or by travelling beyond the evidence which was before the Arbitrator. 9. In the above state of law, reverting to the facts of the instant case would show that the Arbitrator has found that the claimant was not entitled for the payments of monies as claimed by him on the basis of evidence brought on record of the arbitration proceedings. The finding of the Arbitrator is wholly one of fact and fully within his jurisdiction. Mr. Ranjan learned Senior counsel has not been able to satisfy this court as to how in arriving at the aforesaid finding the Arbitrator had overlooked any clause of the contract between the parties or any provision of law to render the award passed by him vulnerable on the ground of it being contrary to public policy i.e. Section 34 (2) (3) of the 1996 Act. For that was the only argument made and no other ground has been agitated in the course of this appeal being argued. 10. The learned ADJ in the impugned order dated 7-8-2008 has taken into consideration all aspects of the matter and found that the award dated 15-7-2000 was passed on the basis of pleadings of the parties and evidence laid before the Arbitrator and did not suffer from any of the disabilities which could render it liable to be set aside for reason of any of the grounds set out under Section 34 (2) (a) of the 1996 Act. The contention of Mr. Ranjan with regard to breach of contract by the non claimant UIT cannot commend itself to be addressed by this court in this appeal arising from dismissal of objections filed by the claimant under Section 34 of the 1996 Act. Breach of contract is a question of fact wholly within the jurisdiction of the Arbitrator. It required no interference under Section 34 of the 1996 Act, nor can it so require in this appeal therefrom under Section 37 of the 1996 Act. 11. There is no force in the civil miscellaneous appeal. Dismissed.Appeal Dismissed. *******