Swapan Saha vs Union of India (UOI)

N.G. Das, J.—These two appeals filed u/s 39 of the Arbitration Act, 1940 (abbreviated as ''the Act'') are directed against the award of learned Subordinate Judge dated 25.7.94 Passed in T.S. (Arbitration) No. 94 of 1989.

Both the appeals having arisen from the same award these two appeals are disposed of by this common judgment.

I have heard Mr. A. Chakraborty, learned senior counsel appearing on behalf of the Appellant in First Appeal No. 102 of 1994 and Respondent In First Appeal No 3 of 1995 und Mr. S. Bhattacharjee, learned Counsel appearing on behalf of the Union of India.

Shorn of details, the facts relevant for disposal of those appeals are that Sri Monaranjan Saha, the father of the present Appellant Swapan Saha in First Appeal No. 102 of 94 was awarded the work, namely, construction of Youth/Tourists hostel building at Agartala Vide order No. 23 (24)/TCA/AGT/87/504 dated 24.2.87 and the time for completion of the work was 10 months, Pursuant to this work order, an agreement bearing No. 42/SE/EE/TCD/AGT/86-87 was executed between the parties, namely, the Appellant and the Respondent of the aforesaid two appeals. It was Stipulated in the agreement that if any dispute arises between the parties in respect of the execution of the aforesaid work, then the matter has to be referred to an Arbitrator.

But before completion of the work, some dispute arose between the parties for non-supply of materials in time etc. So Monoranjan Saha, the original contractor filed suit No. TS (Arbitration) No. 94 of 1989 in the Court of learned Subordinate Judge, West Tripura with a prayer for referring the dispute to the Arbitrator for arbitration of the dispute. Accordingly, learned Subordinate Judge by order dated 21.1.92 referred the matter to Chief Engineer (NEZ), CPWD, Dhankheti, Shillong for arbitration. Pursuant to this order, the Chief Engineer appointed one Mr. T.K. Misra, Arbitrator for adjudication of the disputes between the parties.

Accordingly, the Arbitrator after hearing the parties made the award on 14.5.93 followed by a corrigendum dated 4.6.93. According to the award the contractor was entitled to get a sum of Rs. 2,82,106/- with simple interest. But the Union of India submitted a written objection against that award on various grounds, fine of the grounds was mat the Arbitrator misconducted himself by improper appreciation of the documentary evidence. Learned Subordinate Judge accepted the contention of the Union of India and modified the award by deducting certain amount.

As already stated the main ground set forth in the memo of appeal is that the arbitrator misconducted himself as he did not take into consideration several documents which wore placed on record before him. But Mr. A. Chakraborty, learned senior counsel appearing on behalf the Appellant in First Appeal No. 102 of 994 comended that powers of the Court for interference with the findings of the Arbitrator are very much circumscribed and that only under three specified conditions as laid down u/s 30 of the Act, the Court can interfere, otherwise not. It may, therefore, be advantageous at this stage 10 quote Section 30 of the Act. Section 30 of the Act reads as under:

Grounds for setting aside award : An award shall not be set aside except on one or more of the following grounds namely-

(a) that an arbitrator or umpire has misconducted himself of the proceedings;

(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid u/s 35;

(c) that an award has been improperly procured or is otherwise invalid.

In the instant case it appears from the judgment of the learned trail Court that the trial Court interfered with the award on the ground that the Arbitrator misconducted himself in not appreciating some documentary evidence properly. The learned court below made the finding that there was some error committed by Arbitrator thereby calling for the interference and hence he modified the award, Learned trial Court held that the Arbitrator misconducted himself in awarding compensation for termination of the contract in the mid-way due to the death of the contractor by the Defendant and also for delay in supply of materials. It is observed by the trial Court that by his finding the Arbitrator travelled beyond the scope of the contract. Therefore, learned trial Court set aside this part of the award. But it docs not appear that the learned trial Court assigned any reason how the Arbitrator travelled beyond the scope of the contract. Apart from this, it was held by the learned trial Court that the discussion which the Arbitrator made in the award showed that the establishment remained idle from the middle of 1989 to June 1991, that is for about 24 months only. But the Arbitrator look the period as for 33 months, The Arbitrator dealt with this aspect under claim No. 3. The findings of the Arbitrator in respect of keeping the establishment idle are as follows:

The claimant notified in his letter dated 19.10.89 for loss due to maintaining the regular staff for prolongation of work during over-run period. The work could not be proceeded from the middle of the year, 1989 due to non availability of cement/payment etc. and finally the work was closed by the Respondent under Clause 39 vide their letter dated 28.9.91. No penalty was imposed under Clause 2 of the agreement. The claimant had to execute the work during overrun period by maintaining his establishment and labour for the interest of work. It was difficult to curtail the establishment/labour frequently. The claimant submitted documents in support of the claim.

However, I consider that the claimant should or/could have mitigated his loss by proper planning to some extent.

I consider fit to award Rs. 10,000/- by assessment for idle labour and further, I consider that the claimant should be compensated to maintain his permanent establishment for 33 months at the following rates by consideration of documents filed by the claimant beyond stipulated date of completion:

(i) 13 months @ Rs. 2.500/-p. m.

Total-Rs. 62,500/-

(ii) 20 months @ Rs. 1,500/-p.m.

I, therefore, award Rs. 72.500/-(Rs. 10,000/-+ Rs. 62,500/-) to the claimant under this claim.

The above findings of the Arbitrator show that the Arbitrator went through the documents which were filed by the claimant and on going through those document he arrived at a conclusion that the claimant should get the compensation @ Rs. 2,500/- per mensem for 13 months and @ Rs. 1,500/- per mensem for 20 months. But learned Subordinate Judge did not accept these findings simply on the ground that the establishment remained idle for the period starting from middle of 1989 to June, 1991. According to him, this period is only for 24 months. But the findings of the Arbitrator show that he went through some other documents which were placed before him. Learned Subordinate Judge does not appear to have considered those documents and without considering those documents he came to the conclusion that it was an error apparent.

In this context, Mr. A. Chakraborty has placed reliance upon a decision of the Supreme Court in the case jagdish Chandra Bhatia Appellant v. Lachhman Das Bhatia reported in 1994 (1) CCC 23. In the aforesaid judgment in paragraph 4, the Supreme Court made the following observation:

This Court pointed out in Food Corporation of India v. Joginderpal Mohinderpal that an award of an Arbitrator can only be interfered with or set aside or modified within the four corners of the procedure provided by the statute. The Court must find out whether the Arbitrator has misconducted himself or there was any infirmity in the procedure, such, as the Arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award. It is not misconduct on the part of an Arbitrator to come to an erroneous conclusion on the disputed issue. In case of error apparent on the face of the award, the award can be set aside only if there is any proposition of law on which the award is based which is in conflict with law. It must be demonstrated to the Court that the reasons given by the Arbitrator are so palpably erroneous in law that they have resulted in the Arbitrator taking a view which cannot be sustained in law. To put it differently the Court does not sit in appeal and does not re-assess the evidence. Even if the Court feels that had it been left to it, it would have assessed the evidence differently that would not be a valid ground for setting aside the award. In Hind Builders v. Union of India this Court pointed out that where on an interpretation of any contract or document, two views are possible and the Arbitrator accepts one view while he other view is more appealing, it would not be open to the Court to interfere with the award. We, therefore, in the facts and circumstances of this case, see no reason to interfere with the award of the Arbitrator.

The above observation clearly indicates that if the Court comes to different finding after appreciation of the evidence then also it would not be a valid ground for setting aside the award.

In the case of Municipal Corporation of Delhi Vs. Jagan Nath Ashok Kumar and Another, the Supreme Court made the following observation:

The reasonableness of the reasons given by an arbitrator in making his award cannot be challenged in a special leave petition. In the instant case, there was no evidence of violation of any principle of natural justice. The arbitrator is the solo judge of the quality as well as quantity of evidence and it will not be for the Supreme Court to take upon itself the task of being a judge of the evidence before the arbitrator. It may be possible that on the same evidence the Court might have arrived at a different conclusion than the one arrived at by the arbitrator but that by itself is no ground for selling aside the award of an arbitrator,

Mr. S. Bhattacharjee, learned Counsel appearing on behalf of the Union of India has, however, quite strenuously argued that the Arbitrator did not appreciate (he contents of the letter dated 26.12.86. It is submitted by him that the amount of Rs. 62,189/- which was assessed under claim No. 2 was justified. But when the Court desired to know how the assessment was made, Mr. Bhattacharjee could not show the basis of which date aforesaid amount was assessed.

For the reasons stated above, the judgment/award of the learned Subordinate Judge is set aside and the award made by the Arbitrator is restored. The parties are directed to bear their own costs in these appeals under the facts and circumstances of the case. The result is that while First Appeal No. 102 of 1994 is allowed, First Appeal No. 3 of 1995 is dismissed.