M/S Anant Raj Agencies vs DDA and Another

H.R. Malhotra, J.—By making this petition u/s 14 and 17 of the Arbitration Act 1940 the petitioner desire this Court to issue notice to the Arbitrator i.e. respondent No. 2 to file the award and then same be made rule of the Court. Upon filing this petition, this Court issued notice to the Arbitrator. The Arbitrator filed the award and its proceedings.

Notice of the filing of award was given to the respondent No. 1 to prefer objections, if any against the award within the statutory period. Respondent No. 1 preferred objections against the validity of the award assailing its correctness on numerous grounds.

Before adverting to the objections, it is expedient to recapitulate facts in succinct.

The petitioner was awarded the work of construction of 504, MIG Houses at Pitam Pura vide agreement No. 36/DD-II/ DDA/82-83.

Certain disputes arose between the parties in regard to the agreement which were referred to the arbitration of respondent No. 2, there being an arbitration clause in the agreement. The Arbitrator published its award on 25th March, 1997 accepting the claim of the petitioner in respect of certain works of the said project. Feeling dissatisfied respondent No. 2 filed objections.

Claim No. 1 related to amount of Rs. 8.60 lacs on account of procurement of flush door shutters. It is the case of respondent No. 2 that machine panel shutters made of visa shal wood were to be provided by respondent No. 2 DDA but the petitioner firm procured this item themselves which was contrary to the agreement between the parties. The Arbitrator, according to respondent No. 2 erroneously accepted the claim of the petitioner despite there being deviation from the agreement by the petitioner firm. It is also the grievance of respondent No. 2 that the petitioner had procured the material of the value of Rs. 7.75 lacs whereas the Arbitrator accepted the claim of the petitioner for a sum of Rs. 8.60 lacs. It is further the case of the respondent that the Arbitrator overlooked the fact that there was absolutely no question of procurement of shutters by the petitioner in the month of February, 1983 particularly when the work which commenced in October, 1982 was to be completed in October, 1983 and therefore, according to respondent No. 2 there was no necessity to make purchases much before the structural work was to be completed. It is further stated in the objections that flush door shutters were only to be provided in the sample house and not in the entire project as was indicated in letter Ex. C-4. The Arbitrator without looking into this aspect and also without applying his mind, accepted the claim of the petitioner in toto.

Similar is the complaint in respect of providing of "sinks" in the kitchens. According to them there was really no necessity of procuring sinks and that too in the month of February, 1983 particularly when the structure work was to be completed in October, 1983. The award, as per respondent No. 2 is based on no evidence and rather it is contrary to the evidence on the record and liable to be set aside. These are the two primary objections on which the award is sought to be set aside.

The petitioner repudiated the averments made in such objections and claimed that objections as raised in the petition do not fall within the ambit and scope of 30 and 33 of the Arbitration Act, 1940 and further reiterated that the award dated 25th March, 1997 was reasoned one and in accordance with the law and there was absolutely no ground to assail the same. Petitioner further stated in the reply that interference in the award would amount to sitting as a court of appeal on the findings of the Arbitrator which is not permissible in law.

On merits of the case, the petitioner stated that there were direct instructions by the respondent to provide flush door shutters and Sh. V.N. Thakker, Additional Chief Engineer had desired in January, 1983 that as per the instructions from engineer DDA, flush door shutters were to be provided in the housing scheme and in this regard a letter Ex. C-2 was written indicating the procurement of the material by the petitioner. Pursuant thereto, the petitioner procured the flush door shutters by spending a sum of Rs. 8.60 lacs, bills of which were produced before the Arbitrator and Exhibited as C-32 to C-34. According to the petitioner, the respondent subsequently changed the said decision vide their letter dated 19th December, 1983 Ex. C-3. The Arbitrator after going through the letter Ex. C-2 and also Ex. C-3 rightly relied upon Ex. C-2. Even otherwise, according to the petitioner, the findings of the Arbitrator being the findings of facts cannot be assailed by the respondent, as the Arbitrator is the sole judge for appreciating the sufficiency of the evidence and it is the exclusive domain of the Arbitrator to make appraisal of the evidence and then reach the conclusion which could not be ordinarily upset unless court find that the Arbitrator misconducted himself. The petitioner has primarily placed reliance on letter Ex. C-2 whereas respondent while preferring objections though admitted the correctness of Ex. C-2 but stated that it was only internal communication and was not meant to be sent to the petitioner.

I have thoroughly considered the objections preferred by respondent No. 2. Impugned award has also been carefully perused besides perusal of correspondences exchanged between the parties including Ex. C-2 and Ex. C-3.

Primarily the dispute between the parties seems to be on the aspect of procuring construction material. It is the case of the petitioner that vide letter Ex. C-2, they were authorized to procure material whereas according to respondent No. 2, the material was to be provided by them.

I may state that this was domain of the Arbitrator to look into this aspect for which he had undertaken complete exercise by affording opportunities to both the parties to adduce evidence in that regard.

As is seen, the impugned award is a speaking award and well reasoned. The legal position in regard to the importing of Section 30 and 33 of the Arbitration Act is quite clear. Reading of these two provisions make it clear that statute is far making award rule of the court unless the person who desire the court to reverse it brings his case within the four corners of essentials as provided u/s 33 of the Arbitration Act, 1940.

Learned Counsel for the petitioner has also placed reliance on various judgments. These are Hindustan Tea Co. Vs. K. Sashikant Co. and Another, and also at page 2316. He has also laid emphasis on yet another authority reported in 1994, Volume II, Arbitration Law Reporter, 479.

All these authorities speak about power of the Arbitrators and the manner in which he is to conduct the proceedings and sanctity of the award. In the first authority cited above, the Apex court while dealing with the objections observed as under:-

The Arbitrator is made the final arbiter of the dispute between the parties. The award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts.

In the authority at Sr. No. 2 above, the Arbitrator in that case had also given speaking award which was assailed by the party against whom the award was. Their Lordships while dealing with the provisions of Section 30 of the Arbitration Act remarked as under:-

Unless it was demonstrated to the court that reasons so given by the Arbitrator were erroneous as such as a proposition of law or a view which the Arbitrator had taken was a view which could not possibly be sustained on any view of the matter, then the challenge to the award of the Arbitrator cannot be sustained. The Arbitrator had construed the effect of particular case of the contract. It cannot be said that such a construction is a construction which is not conceivable or possible. If that is the position arising even for the arguments there was some mistakes in the construction, such a mistakes is not amenable to be corrected in respect of the award by the court.

The Apex court also dealt with another aspect on the power of the court for setting aside the award.

For the reasons above, I find that the objections preferred by respondent No. 2 are devoid of any substance. No infirmity of any nature is noticed in the award as such no valid ground exist for setting aside the award. Consequently the objections preferred by respondent No. 2 are dismissed resulting in making the award rule of the court. No order as to costs.