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Judgment
Rajesh Tandon, J.—Heard Sri D.S. Patni, counsel for the revisionist.
Present civil revision filed u/s 115 of the CPC has been directed against the judgment and decree dated 27.8.2004 passed by the Addl. District Judge, Roorkee in Civil Appeal No. 33 of 1988 U.P. Jal Nigam v. Verendra Singh & Co. through its partner Tek Chand.
Briefly stated, a suit was filed by the plaintiff-respondent No. 1 being Original Suit No. 103 of 1989 and Civil Suit No. 24 of 1989 Verendra Singh & Co. v. U.P. Jal Nigam for setting aside the award dated 22.12.1989 on the ground that Arbitrator has misconducted himself while making the award. In the plaint, prayer has been made to the following effect:
It is, therefore, respectfully prayed that the award dated 22.2.1989 of the Arbitrator Respondent No. 2 be kindly set aside with costs through out.
According to the plaint averments, plaintiff has claimed a sum of Rs. 1,30,000/- as well as interest from 1st November, 1982 to the extent of 5% per annum till the date of decree and thereafter 12% per annum.
According to the respondents, an agreement was executed in between M/s Virendra Singh and Uttar Pradesh Jal Nigam being Agreement No. 1/S.E.-1/81-82 for laying down sewer line. However, on a dispute between the parties, matter was referred to Sri J.K. Taneja (Retired Chief Engineer, Uttar Pradesh Jal Nigam). Both the parties were heard by the Arbitrator and on 22.2.1989 the arbitrator awarded a sum of Rs. 1,30,000 with interest at the rate of 6% per annum in favour of the respondent.
According to the revisionist, the agreement was only the extent of Rs. 6.60 lacs and it was valid up to 15th August, 1981 to 14th August, 1982. Since M/s Virendra Singh and Company has not completed his work according to the norms set up by the Jal Nigam and could not complete the work and as such he has left the work and there is no provision for referring the dispute to the arbitrator and therefore, the matter could not have been referred to the arbitrator.
Against the aforesaid averments, M/s Virendra Singh & Company-respondents filed its reply that Uttar Pradesh Jal Nigam was interested in getting the work from his own agency and therefore, various obstructions were made in carrying out the work by the respondents towards laying down of the pipe-line.
On the pleadings of the parties, the trial Com! has framed following issues:
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Counsel for the revisionist has confined his argument only to this extent that the arbitrator has misconducted himself inasmuch as there was no provision in the agreement for referring the dispute to the Arbitrator.
So far as the points No. 1 is concerned, an affidavit has been filed on behalf of Uttar Pradesh Jal Nigam by Sri D.C. Sharma Junior Engineer, Doon Division, Dehradun Paper No. 12-C. On behalf of M/s Virendra Singh and Company, an affidavit was filed by one Mohan Singh Paper No. 7-Ga-2, wherein it has been stated that the dispute was rightly referred to the Arbitrator and there was a clause for referring the dispute to the arbitrator, therefore, the Managing Director has appointed Sri J.K. Taneja as an arbitrator. Point No. 1 was decided in favouir of the claimant-respondent that there was a provision for appointment of the arbitrator and arbitrator was rightly appointed.
The trial Court has decreed the suit on 22.2.1989 for a sum of Rs. 1,30,000/- and made the rule of the Court along with interest @ 6% per month.
Against the said award, the Jal Nigam filed an Appeal being Appeal No. 33 of 1998 Uttar Pradesh Jal Nigam and Ors. v. Virendra Singh and Ors. Jal Nigam has raised the question with regard to appointment of the arbitrator. The appellate Court has referred Bond Number that on 8th September, 1983 an agreement was executed between the parties, which was signed by one of the representatives of the revisionist and on behalf of the respondents one Mohar Singh-partner has signed the agreement and as such the appeal was dismissed on 27.8.2004.
So far as the agreement dated 8th September, 1983 is concerned, the same is quoted below:
This agreement made on 8th day of September, 1983 between the Uttar Pradesh Jal Nigam a statutory Corporation established by the Uttar Pradesh Water Supply & Sewerage Act 1975 (U.P. Act No. 43 of 1975) and having its head office at 6 Rana Pratap Marg Lucknow 226001 (hereinafter called ''The Jal Nigam'' which expression shall include its successors and assigns wherever the contest of meaning shall be sorequried or permit) of the one part and M/s Virendra Singh and Co. Ka-45 Kavi Nagar Ghaziabad (Hereinafter called the firm which expression shall include his heirs; legal representatives and sucessors of the second part.
Whereas u/s 31(a)(b) of Uttar Pradesh Water Supply and Sewereage Act 1975 (U.P. Act No. 45 of 1975) all the rights and liabilities and obligations of the State Government whether arising out of any contract or otherwise pertaining to the local Self Government Bingineering Department are the rights, liabilities and obligations of the Jal Nigam.
And whereas in supercession of the agreement of reference the parties have agreed in the manner hereinafter.
NOW THIS DEEP WITNESSES AS FOLLOWS
As per Section 4 of the Arbitration Act 1940, both parties of the contract bond No. 1/SE/81-82 agree to refer the matter of dispute relating to the aforesaid contract bond, to the sole arbitration of Sri J.K. Taneja Retd Zonal Chief Engineer, B-140, Nirala Nagar, Lucknow.
It is further agreed that the decision of such arbitrator thereon shall be final conclusive and binding on the parties to this agreement. The arbitrator may from time to time with the consent of the parties enlarge the time for making and publishing the award.
2) Save as varied and modified as above the said contract shall remain in full force and effect.
In witness whereof the superintending Engineer, 1st. Circle, U.P. Jal Nigam, Meerut for and on behalf of the U.P. Jal Nigam and Sri Mohan Singh KA-45, Kavinagar, Ghaziabad for and on behalf of the firm have signed this deed on the day first above written.
The appellate Court has recorded the finding that so far as the arbitration agreement dated 8th September, 1983 is concerned the same has not been disputed completely, therefore, it cannot be said that the arbitrator has misconducted himself. The appeal was dismissed.
Hence, present civil revision has been filed. A perusal of the record shows that in pursuance of the agreement between the parties, the matter was referred to the Arbitrator and the Arbitrator having considered the claim of the respondents, no interference is required.
So far as proceedings u/s 30/33 of the Arbitration Act are concerned, Apex Court has from time to time has observed that no interference can be made.
On behalf of Jal Nigam, a written argument was submitted before the Civil Judge, Roorkee, where Jal Nigam has relied upon the contract between the U.P. Jal Nigam and Virendra Singh and Company The same is quoted below:
That a contract Agreement Bno. 1/SE-I/81-82 was entered into between the U.P. Jal Nigam through its Superintending Engineer, I Circle, U.P. Jal Nigam, Meerut and M/s Virendra Singh & Co. through its partner Shir Mohar Singh for the work of "laying & joining of R.C.C. Hune Pipe Sewar and apartment works Bhoopatwala, Hardwar.
I have also perused the award. The arbitrator has referred the contract and has observed as under:
And whereas certain dispute arose between the two parties and I, J.K. Taneja, Addl. Chief Engineer, U.P. Jal Nigam (Retd.) was appointed as a Sole Arbitrator by the Managing Director vide his letter No. 541/ (sic) 7-8-8 4 to adjudicate the said dispute between the parties.
And whereas I, J.K. ,Taneja, took upon myself the burden of reference for arbitration agreement executed between the parties and notice wre issued by me to both the parties vide my letter dated 18.8.84.
And whereas M/s Virendra Singh & Co., claimant submitted their statement of facts & claims, the opposite party, the Superintending Engineer submitted his written statement and again his additional written statement.
That the evidence both documentary and oral was submitted by both the parties.
That the time limit of the arbitration proceedings was fixed by 31/5/85 with the consent of both parties but the proceedings remained deferred till 2/12/88 because of a Civil Case filed by the Opposite Party in the court of Civil Judge, Roorkee & thereafter in the court of District Judge, Saharanpur by way of appeal and ultimately the Hon''ble Court of Civil Judge Roorkee, extended the time for making and publishing the award upto 31/1/1989, and thereafter on the request of the O.P. and with the consent of both the parties, the time was extended by the Hon''ble Court by order dated 25.1.1989 for one month w.e.f. 25.1.89.
I have examined in detail the pleadings of the parties, the evidence-documentary and orai placed by the parties before me after considering the pleadings of the parties and the arguments advanced in support of their cases and after careful study of the case, the relevant records and hearing the arguments of the parties at length and applying my mind to the case I make the following award.
The net amount payable to the claimant is Rs. 1.30 Lacs (Rupees One Lac Thirty Thousand Only), which the Opposite Party shall pay to the claimant. The O.P. shall further pay interest @ 6% per annum fromk thue date of the decree or on actual payment whichever is earlier.
Stamp duty on the award is payable by the claimant and the same amounting to Rs. 300/- has been paid by the claimant.
Both the parties will bear their costs.
(J.K. Tanjea)
Addl. Chief Engineer (Retd.)
U.P. Jal Nigam, Lucknow.
SOLE ARBITRATOR.
Award made, signed & published by me on 22nd February, 1989.
Account book, which was submitted before the Arbitrator is also a part of the record of the case and I have perused the same and on the basis of which the Arbitrator has come to the conclusion that the respondent is bound for to pay the amount.
Clause 13-B refers that in the event of dispute, the decision of the Zonal Chief Engineer shall be final and will be binding on the parties, thereafter, the bond was executed for referring the dispute to the arbitration. Clause 13(B) is quoted below:
(B) By analysis based on the rate of labouir and materials as given in the schedule and based on the market rates of labour and materials whichever is less.
In the even of dispute the decision of the Zonal Chief Engineer shall be final and binding on parties to the contract.
Counsel for the appellant has raised the plea with regard to interest that pre reference interest cannot be awarded.
Relying upon State of Rajasthan Vs. Puri Construction Co. Ltd. and Another, in Rajasthan State Road Transport Corpn. Vs. Indag Rubber Ltd., , the Apex Court has held as under:
However, in the anxiety to render justice to the party to arbitration, the court should not reappraise the evidence intrinsically with a close scrutiny for finding out that the conclusion drawn from some facts, by the arbitrator is, according to the understanding of the court, erroneous. Such exercise of power which can be exercised by an appellate court with power to reverse the finding of fact, is alien to the scope and ambit of challenge of an award under the Arbitration Act. If a question of law is referred to arbitrator and the arbitrator comes to a conclusion, it is not open to challenge the award on the ground that an alternative view of law is possible. Even if it is assumed that on the materials on record, a different view could have been taken and the arbitrators have failed to consider the documents and materials on record in their proper perspective, the award is not liable to be struck down in view of judicial decisions referred to hereinbefore. Error apparent on the face of the record does not mean that on closer scrutiny of the import of documents and materials on record, the finding made by the arbitrator may be held to be erroneous. An error of law or fact committed by an arbitrator by itself does not constitute misconduct warranting interference with the award.
In B.V. Radha Krishna Vs. Sponge Iron India Ltd., , the Apex Court has observed as under:
The disposal of the matter by the High Court in the manner shown above does not come within the ambit of Section 30 of the Arbitration Act. This Court, time and again, has pointed out that the scope and ambit of Section 30 of the Act. In State of Rajasthan Vs. Puri Construction Co. Ltd. and Another, , after referring to decisions of this Court as well as English cases, the Court observed as follows (Para 11 of AIR):
On the scope and ambit of the power of interference by the Court with an award made by various decisions have been made from time to time by law Courts of India including this Court and also by the Privy Council and the English Courts. Both the parties have referred to such decisions in support of their respective contentions. The factual contentions of the respective parties are proposed to be scrutinized and then the facts are proposed to be tested within the conspectus of judicial decisions governing the issues involved.
This Court again observed in paras 26-28 (of SCC) : (Paras 25-27 of AIR) as follows:
The Arbitrator is the final arbiter for the disputes between the parties and it is not open to challenge the award on the ground that the Arbitrator has drawn his own conclusion or has failed to appreciate the facts. In Sudarsan Trading Co. Vs. Government of Kerala and Another, , it has been held by this Court that there is a distinction between disputes as to the jurisdiction of the Arbitrator and the disputes as to in what way that jurisdiction should be exercised. There may be a conflict as to the power of the Arbitrator to grant a particular remedy. One has to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the Arbitrator had acted contrary to the bargain between the parties (Emphasis supplied). Whether a particular amount was liable to be paid is a decision within the competency of the Arbitrator. By purporting to construe the contract the Court cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. If on a view taken of a amount awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. Where the reasons have been given by the Aribtrator in makng the award the Court cannot examine the reasonableness of the reasons. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of evidence. The Arbitrator is the sole Judge of the quality as well as the quantity of evidence and it will not be a Judge on the evidence before the Arbitrator.
In Municipal Corporation of Delhi Vs. Jagan Nath Ashok Kumar and Another, , it has been held by the Apex Court that appraisement of evidence by the Arbitrator is ordinarily never a matter which the Court questions and considers. It may be possible that on the same evidence the Court may arrive at a different conclusion than the one arrived at by the Arbitrator but that by itself is not ground for setting aside the award. It has also been held in the said decision that it is difficult to give an exact definition of the word ''reasonable''. Reasons varies in its conclusions according to the idiosyncrasies of the individual and the time and circumstances in which he thinks. In cases not covered by authority the verdict of jury or the decision of a Judge sitting as a jury usually determines what is ''reasonable'' in each particular case. The word reasonable has in law prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably known or ought to know. An arbitrator acting as a Judge has to exercise a discretion informed by tradition, methodized by analogy, disciplined by a system and subordinated to the primordial necessity of order in the social life. Therefore, whose reasons genuine and relevant for the Arbitrator to hold the manner he did, have been indicated, it cannot be said that the reasons are unreasonable.
In The Hindustan Construction Co. Ltd. Vs. Governor of Orissa and others, this Court observed on the scope of interference by the Court as follows (at p. 1582 of AIR):
It is well known that the Court while considering the question whether the award should be set aside, does not examine the question as an appellate Court. While exercising the said power, the Court cannot reappreciate all the materials on the record for the purpose of recording a finding whether in the facts and circumstances of a particular case the award in question could have been made. Such award can be set aside on any of the grounds specified in Section 30 of the Act.
In Coimbatore District Podu Thozillar Samgam v. Bala Subramania Foundry and Ors. reported in AIR 1987 Supreme Court 2045, it has been held as under:
An award can only be set aside where there is an error on its face. Further, it is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the court. It is an error of law and not mistake of fact committed by the arbitrator which is amenable to corrections by the Court.
Where the alleged mistakes or alleged errors, if there be any of which grievances were made were mistakes of fact if at all, and did not amount to error apparent on the face of the record, the objections were not sustainable and award could not be set aside.
In Puri Constructions Pvt. Ltd. v. Union of India reported in AIR 189 S C 777 and in the case of Food Corporation of India v. Joginderpal Mohinderpal and Anr. page 1263 has held that-
It is not necessary for a court to examine the merits of the award with reference to the materials produced before the arbitrator. The Court cannot sit in appeal over the views of the arbitrator by re-examining and reassessing the materials.
Scope of revisional jurisdiction is also limited and this Court cannot act as a Court of Appeal while hearing the revision u/s 115 of the Code of Civil Procedure. Further the reasoned award having been made as the rule of the Court, and was confirmed in appeal cannot be a matter of interference u/s 115 of the Code of Civil Procedure.
In view of the aforesaid, I do not find any infirmity in the order passed by the two courts below. So far as the claim of the respondent is concerned, parties have stated that the amount has already been paid.
Counsel for the applicant has also referred about the interest part, the same is modified to the extent that from the date of the reference till the date of the payment at the rate of 6% per annum on the award made by the Arbitrator.
Subject to the aforesaid observations, revision is dismissed. No order as to costs.