Delhi District Court
Municipal Corporation Of Delhi vs Satnam Singh on 23 July, 2008
IN THE COURT OF DR. KAMINI LAU : ADDITIONAL
DISTRICT JUDGE : DELHI.
Suit No. 62/07
Municipal Corporation of Delhi
Through its Executive Engineer (Pr)
Under Patel Road Fly Over
Shadipur Depot, New Delhi.
....Applicant/Objectors
Versus
1. Satnam Singh
Contractors and Builders
B204, Mansarovar Park,
New Delhi110015 .....Respondent no.1.
2. Sh. G.P. Thareja (Retd.)
B201, Priya Dahrshani Apartments
I.P. Extension, Pataparganj
Delhi .....Respondent no.2.
Date of Institution : 19.05.2007
Date of reserving the Order : 16.4.2008
Date of Decision: 23.7.2008
ORDER: Vide this Order, I shall dispose off the objections U/S. 34 of the Arbitration & Conciliation Act, 1996 r/w. Section 151 CPC wherein the applicant/ objector has prayed for setting aside the Award dated 20th February, 2007 : 1 : pronounced by Sh. G.P. Thareja Arbitrator i.e respondent no.2. It is evident from the record that the petitioner/ objector MCD had also filed similar objections in respect of the arbitration award of the same dated i.e. 20.2.2007 in respect o the various claims. It is also evident that the proceedings conducted by the Arbitrator in both the cases are same and the objections raised by the petitioner/ nonclaimant are almost similar in both the case. However, certain additional objections have been raised in the present case with regard to the jurisdiction of the Arbitrator in view of the settlement between the parties. The brief facts of the case are as under:
APPLICANT / OBJECTOR / MCD'S CASE The case of the applicant/objector is that it had offered tender work named as C/O JSC (20 Seater, each double story), (1) 1, B309, JJ Colony, Pandav Nagar, (2) 184, JJ Colony, Pandav Nagar, (3) A303, JJ Colony, Pandanv Nagar, (4) Nepali Mandir, (Ramjas Ground), (5) Gopi Basti Baljit Nagar, (6) Shakti Mandir (Ramjas Ground), (7) Rakhi Market near Rajendra ka Dhaba and each work was in three parts known as (a) Civil Work, (b) Electric Work and : 2 : (C) Bore Well. The total amount of the work was Rs.47,12,800/ Part (B) Rs.34,30,000/, Part (C) Rs.13,18,079/ i.e. total Rs.63,41,728/ and the claimant had offered rates @ 22% above for the civil work while the electric work and bore well at the schedule rate. It is stated that the total cost of the tender submitted by the claimant was Rs.76,79,100/. The tender of the claimant was accepted by the Objector/MCD and work order No. 54/EE (P) TCK/2001 dated 25.10.2001 was issued to the claimant according to which the work was to be completed on 03.05.2002.
According to the objector the claimant delayed the execution of the work and completed it on 30.05.2002 as per the completion certificate recorded by the MCD and after the completion of the work the claimant raised certain disputes and filed Arbitration Application No. 507/2004 in which Ms. Sunita Gupta, ADJ, Tis Hazari Courts Delhi vide its order dated 20.1.2005 appointed Sh. G.P. Thareja A.D.J. (Retd) as the sole Arbitrator. The claimant/respondent no. 1 had filed certain claims before the Ld. Arbitrator/Respondent no. 2 and Objector/MCD filed reply to the said claims and the claimant : 3 : preferred the following claims:
i) A sum of Rs.12,62,189/ towards the final bill alleged to have been preferred by MCD/ objector.
ii) A sum of Rs. 50,000/ towards the balance amount of Security amount.
iii) A sum of Rs.76,791/ as bonus stating that the work was completed within time.
iv) A sum of Rs.1,44,000/ as watch and ward charges.
v) The claimant further claimed interest @ 18% per annum w.e.f. 3.11.2002 on amount of final bill and further claimed Rs. 50,000/ as Arbitration Cost.
It is submitted that since the contractor/ respondent no. 1 failed to complete the work on time and hence the objector MCD in terms of clause 2 of the terms and conditions agreed between the parties invoked a penalty on the contractor and filed a counter claim of Rs.6,34,170/ towards penalty/ liquidated damages. Thereafter the parties settled the matter amongst them and it was agreed that MCD would release the balance amount to the contractor and the contractor i.e. the respondent would withdraw the arbitration under dispute. It was further decided that the contractor would not raise any claim in future whatsoever including : 4 : interest etc. against the said work, the contractor further undertook to deposit the share of MCD on account of Arbitration fee paid to the Arbitrator in the said case by MCD. Pursuant to the same the claimant filed an affidavit wherein he has agreed to the terms of settlement and stated that in case he is paid the balance amount he will withdraw the case and the balance amount of Rs.10,11,519/ as per the bill prepared by the respondent was paid to the contractor/ respondent no. 1.
Vide its order dated 20.2.2007 the Ld. Arbitrator directed the MCD to make the payment of Rs.80,000/ towards the claim alongwith interest @ 6% per annum w.e.f. 7.7.2005 till the date of award subject to the condition that the payment is made within two months from the date of the award. Now being aggrieved by the Arbitration award passed by the sole Arbitrator the petitioner/ objector has approached this court on the ground that the impugned award dated 20.02.2007 passed by the respondent no. 2 is bad in the eyes of the law as the same is illegal and arbitrary and had been passed without application of judicial mind. It is further : 5 : stated that the contractor himself filed an affidavit with MCD stating that in case his balance is released he will withdraw the arbitration matter which fact has not been considered by the Ld. Arbitrator. According to the objector, the Ld. Arbitrator has wrongly awarded the claimant an amount of Rs.10,000/ on account of arbitration fee whereas the respondents no. 1 himself agreed to share the the MCD' s fee on account of Arbitration fee. It is stated that the Ld. Arbitrator has failed to appreciate the fact that the claimant never applied for extension of time to MCD and as per the terms and conditions Clause 5 agreed between the parties it was the respondent no. 1 who had to apply with the MCD for extension of time which has not been done in the present case.
It is also alleged that the Ld. Arbitrator has failed to appreciate that MCD had right to impose penalty under Clause 2 of the agreement and the same was done in the present case and it was justified on the part of MCD to deduct an amount of Rs.20,000/ on account of EOT. It is pleaded that the Ld. Arbitrator has failed to appreciate the fact that the : 6 : claimant never applied for extension of time to the MCD and as per the terms and conditions in Clause 5 agreed between the parties it was for the Contractor/ Respondent no. 1 in the present case to apply with the MCD for extension of time. According to the objector as per the terms and conditions agreed between the parties the security amount could have been refunded only after the extension of time in completion of work is obtained by the contractor from the MCD which in the present case has not been done. Further, the claimant ought to have approached the respondent for the review of the work order when he stated that the work was done beyond that agreement.
It is contended that the arbitrator derives his jurisdiction only from the agreement entered into between the parties and being a creature of the agreement, he has to remain within the four corners of the agreement and has to take into consideration various terms and conditions of the agreement and cannot ignore them merely because the same may result in hardship to one of the parties. According to the objector the Ld. Arbitrator has failed to appreciate that the : 7 : parties were free to settle the dispute themselves and after the settlement arrived between the parties the matter should have been disposed off as settled and no award should have been made. It is stated that the Ld. Arbitrator failed to appreciate that the work done by the contractor was under Yamuna Action Plan for which the grant was received from the Japan Government and the said grant was spent and there is no head under which the MCD could have made the payment and also that due to the delay in completion of work the contractor was liable to pay damages to MCD Under Clause 2 and the Ld. Arbitrator has wrongly disallowed the Counter Claims of the Objector/MCD and directed MCD to make the payment of Rs.20,000/ deducted on account of EOT.
It is further contended that the Ld. Arbitrator has committed illegality in awarding interest to the claimant and has failed to appreciate that there was no such condition in the agreement to grant interest to the contractor. According to the petitioner/ objector the award of the Ld. Arbitrator is based on the conjectures and surmises and beyond the terms and conditions of the agreement between the objector and the : 8 : respondent no. 1 and the Arbitrator has committed error in awarding Rs.10,000/ as MCD' s share of Arbitration fee which was deducted from the Contractor's Final bill as he himself agreed to bear the same due to which reason the dated 20.02.2007 of the Ld. Sole Arbitrator is liable to be set aside. NONAPPLICANT/RESPONDENT/CLAIMANT'S CASE:
In reply to the objections, the nonapplicant/ respondent has raised certain preliminary objections. It is stated that the award has been made in accordance with the Arbitration Agreement contained in clause No. 25 and is final and binding upon the parties, therefore no objections could be filed by the petitioners after obtaining the award. It is also stated that there does not exit any violation of the public policy nor it is so pleaded by the petitioner/ objector and even otherwise the petitioner has not pleaded any other ground in its objection which could be covered U/s 34(2) of the Arbitration & Conciliation Act, 1996 due to which reason the objections are not maintainable and are required to be rejected. It is stated that an award is always required to be : 9 : protected rather than to be destroyed, specifically when it is good on its face. According to the respondent the perusal of objections would show that the petitioner/objector should have been accepted the award but it has deliberately desired it to be destroyed, which is not permissible under law for which reason it is liable to be rejected more so as the petitioner/objector has neither pleaded misconduct on behalf of the Ld. Arbitrator nor proved it because the Ld. Arbitrator has granted equal opportunities to both the parties to make their respective submissions and adduce their respective evidence hence this objection petition is not maintainable.
In the parawise reply, the respondent has denied the allegations raised by the petitioner that the work never delayed by the claimant. It is stated that the respondent in fact never withdrew the claims when it appeared before the Ld. Arbitrator for the two reasons i.e. that the affidavit obtained from the respondent was under coercion, undue influence and even the terms of affidavit were not adhered to by the petitioner while releasing the payment and kept withheld by the petitioner, hence the petitioner was required : 10 : to abstain himself from taking advantage of the said affidavit which was illegal and erroneous. According to the respondent, the most improper act on behalf of the petitioner was to even force the respondent to pay the arbitration cost which was assessed to Rs.10,000/ by the petitioner and was deducted/ withheld from the bill of the petitioner. It is stated that even though in the alleged affidavit despite the assurance that the entire amount shall be paid to the respondent, he was not paid Rs.50,000/ towards the security deposit, Rs.10,000/ withheld and Rs.20,000/ deducted for grant of extension of time was also not paid and hence it cannot be treated to be a settlement. It has been stated that there was no settlement between the parties and the Ld. Arbitrator has rightly awarded a sum of Rs.80,000/ lying withheld by the respondent with interest. It is pleaded that no grounds are given as to how the award is illegal and arbitrary when full opportunities have been given to both the parties to lead their evidence.
According to the respondent it is the petitioner who has got prepared the affidavit in his office, summoned a Notary public, obtained the signatures of the respondent and forced : 11 : him to sign it and the huge money belonging to the respondent was withheld and was penalized. According to the respondent no delay in the execution of work was attributable on the part of the respondent but the entire delay was admittedly on the part of the petitioner and hence the amount was illegally withheld by the petitioner which the Ld. Arbitrator has rightly awarded it. It is pleaded that once the work has been completed and the performance of the respondent was accepted by the petitioner and the delay in the execution of work was attributable on the part of the petitioner, then there was no need for the respondent to have asked for the extension of time since as per clause 5 of the agreement, the respondent was under an obligation to grant the extension of time. According to the respondent, the release of Rs.4,50,000/ out of the total amount of Rs.5,00,000/ of security deposit is itself an evidence about the time completion of work and no extension of time was required. It has been contended that the petitioner nowhere in the agreement had alleged that the payment to the respondent shall be made under the alleged Yamuna Action Plan. It is : 12 : further stated that the payment was not to be made as the petitioner has proposed but it was required to be released in terms of the agreement. It is stated that if the petitioner had invited the tender, it was its responsibility to pay the final bill in accordance with clause 9 of the agreement. It is stated that the Ld. Arbitrator has rightly awarded the interest and even the petitioner itself has not adhered to the alleged settlement hence there is nothing wrong in awarding the interest.
ISSUES INVOLVED:
Perusal of the award shows that the issues under consideration before the Ld. Arbitrator were as under:
1. Whether the claimant was entitled to the amount claimed?
2. Whether the claimant is entitled to any interest? If so at what rate and on what amount?
3. Whether the claimant is entitled to watch and ward charges? If so what amount?
4. Whether the claimant is entitled to any security amount as claimed?
: 13 :
5. Whether the claimant has settled the claim? If yes to what extent?
6. Whether the respondent is entitled to any compensation/ damages? If so what amount?
7. Relief.
ARGUMENTS OF THE PARTIES AND FINDINGS:
I have gone through the authorities placed on record by both the parties. Before proceeding further to dispose off the objections raised by the objector briefly the law relating to Section 34 of the Arbitration and Conciliation Act is discussed as under: The provisions of Section 34 (1) of the Act provide that the arbitral award may be set aside by the court on an application for setting aside the same being made on any grounds specified in the subsection (2) and within the time prescribed. The provisions of Section 34 (2) (a) are reproduced as under:
''2(a) the party making the application furnishes proof that : 14 :
(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 : 15 : of this Part from which the parties cannot derogate, or failing such agreement, was not in accordance with this Part.' ' Sub section 2 (a) also provides that party making such an application shall furnish proof to the court in support of such application. The court is entitled to set aside the award only if the grounds mentioned in subsection (2) of Section 34 read with grounds stated in Section 13 and Section 16 of the Act are proved to its satisfaction by the party making such application for setting aside the award and too if satisfy the court that the allegations are true. The onus of proving that the grounds as per subsection (2) of Section 34 of the Act exists and that the award is liable to be set aside lies on the party making such an application.
The Delhi High Court has in the case of Govt. of N.C.T. Delhi Vs. Khem Chand reported in 2003 (2) RAJ 437, by relying upon the ruling of the Hon' ble Apex Court in AIR 1963 SC 677, observed that:
" ..........a Court should approach an award to support it if it is reasonable, possible rather than to dispute it, by : 16 : calling it illegal. The law in this regard as it existed prior to enactment of Arbitration and Conciliation Act, 1996 still holds the field....."
It was further observed that:
" .........the jurisdiction of the Court when called upon to decide the objections raised by a party against an arbitral award is limited, as expressly indicated in the Arbitration and Conciliation Act, 1996. The court has no jurisdiction to sit in appeal and examine the correctness of the award on merits with reference to the material produced before the arbitrator, it can not sit in appeal over the view of the arbitral ......."
The Hon' ble High Court in the above case relied upon the observations made by Russel in the case of Secretary Irrigation Department, Govt. of Orissa and Others etc. Vs. G.C. Roy reported in 1992 (1) Arbitration Law Reporter, 145 which observations are as under:
: 17 : ' 'It is not misconduct on the part of an Arbitrator to come to an erroneous decision, whether his error is one of fact or law, and whether or not his findings of fact are supported by evidence. It may, however, be misconduct if there are gross errors in failing to hear or improperly receiving evidence.'' Similar view was also taken in the case of India Tourism and Development Corporation Vs. T.P. Sharma reported in 2003 (3) Recent Arbitration Judgments 360 wherein it was observed that:
" .....findings of the arbitrator on the factual matrix need not to be interfered with as the Court does not sit in appeal and the Courts are also refrained from reappreciating or re evaluating the evidence or the material before the arbitrator unless perversity is writ large on the face of the award or the award suffers from the vice of jurisdictional error, : 18 : sanctity of award should always be maintained...."
Similar view was taken by Hon' ble High Court in Sh. M.C. Katosh Vs. Union of India & Ors. reported in 2005 (1) AD Delhi 1979(Supra) wherein it was held by the Delhi High Court that arbitrator being sole and final judge or fact and the Court is bound by the findings of arbitrator and cannot review them unless unsupported by evidence or unless appears from award itself that there was no evidence to support findings.
Similarly in the case of Indian Tourism Development Corporation Ltd. Vs. Buddiraja Electrical reported in 2003 (2) RAJ 216 (Delhi), it has been held that " ........the arbitrator has exceeded his jurisdiction and the award was against public policy of India. Clause 2(b)(ii) of the Section 34 of Arbitration and Conciliation Act, 1996 provides that the arbitral award, if it is found to be in conflict with public policy, same may be set : 19 : aside by the court. An explanation is added to the provision providing that an award shall be treated to be in conflict with public policy of India if making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81 of the Act....."
public policy of India''
This expression '' was also
considered by Hon'
ble Apex Court in Renu Sagar Power Co. Ltd., Vs. General Electric Co. reported in AIR 1994 SC 860 where it was held that " ......if the award is found to be contrary to fundamental policy of Indian Law or Indian interest or justice and morality, the same can also be held to be contrary to public policy of India. On facts, it was found that the arbitrator had recorded his reasons for coming to the conclusion for allowing the claim and no specific case should be made out to prove and establish that the arbitrator exceeded his jurisdiction in : 20 : making the award. As such, same cannot be said to be in any manner coming within the ambit of the provisions of Section 34 of the Arbitration and Conciliation Act, 1996...."
The Hon' ble Supreme Court has in the case of Oil and Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd. reported in AIR 2003, Supreme Court, 2629, has while discussing the phrase Public Policy observed as under: ''T herefore, in our view, the phrase public policy of India' '' ' used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is on the face of it, is patently in violation of statutory : 21 : provisions cannot be said to be in public interest. Such award/ judgment/ decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given public policy'' to the term '' in Renu Sagar Power Co. Ltd. Vs. General Electric Co., 1994 Supp (1) SCC 644 it is required to be held that the award could be set aside if it is patently illegal. The result would be award could be set aside if it is contrary to;
(a) Fundamental policy of
Indian Law, or
(b) the interest of Indian: or
(c) justice or morality; or
(d) in addition, it is patently
illegal
Illegally must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it : 22 : shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void.'' In the case of Bhagwati Oxygen Ltd. Vs. Hindustan Copper Ltd. reported in AIR 2005 SC 2071, it has been observed by the Hon' ble Apex Court that: " .........In Rajasthan State Mines & Minerals Ltd. Vs. Eastern Engineering Enterprises & Another, (Supra), this court after considering several decisions on the point held that if an Arbitrator has acted arbitrarily, irrationally, capriciously or beyond the terms of the agreement, as award passed by him can be set aside. In such cases the Arbitrator can be said to have acted beyond the jurisdiction conferred on him....."
It was further observed that:
" ........In U.P. State Electricity Board Vs. Searsole Chemicals Ltd. (Supra), : 23 : that: where the Arbitrator had applied his mind to the pleadings, considered the evidence adduced before him and passed an award the court could not interfere by reappraising the matter as if it were an appeal......"
" .......In Indu Engineering & Textiles Ltd. Vs Delhi Development Authority (Supra) that: ''An Arbitrator is a judge appointed by the parties and as such the award passed by him is not to be lightly interfered with......"
" .......In Bharat Coking Coal Ltd. Vs. M/s Annapurna Construction (Supra) that: there is distinction between error within jurisdiction and error in excess of jurisdiction. The role of the Arbitrator is to arbitrate within the terms of the contract and if he acts in accordance with the terms of the agreement, his decision cannot be set aside. It is only when he travels beyond the contract that he acts in excess of jurisdiction in which case the award passed by him becomes : 24 : vulnerable and can be questioned in an appropriate court....."
Also in the case of Kesar Enterprises Vs. D.C.M. Shriram Industries Ltd. & Another reported in 2000 VII Apex Decisions (Delhi) 794 Hon' ble Mr. Justice Vikramajit Sen, Judge Delhi High Court has in para 8 dealt with case titled M/s Sundaram Finance Ltd. Vs. M/s. NEPC India Ltd., reported as A.I.R. 1999, SC 565 and observed as under: ' '............ the following passage from M/s Sundaram Finance Ltd. Vs. M/s. NEPC India Ltd. reported as A.I.R. 1999, SC 565 wholly clarifies the view of the Apex Court: ' 'The 1996 Act is very different from the Arbitration Act, 1940. The provisions of this Act have, therefore, to be interpreted and construed independently and in fact reference to 1940 Act may actually read to misconception. In other words, the Provisions of 1996 Act have to be interpreted being uncommenced by : 25 : the principles underlying the 1940 Act. In order to get help in construing these provisions it is very relevant to refer to the UNCITRAL MODEL LAW rather than 1940 Act.'' It was further observed that :
" .........These provisions have been amended clearly with a view to circumscribe to a narrow point, the objections that can be entertained where an Arbitral Award is assailed. To widen the scope of Section 34 would be ignoring and setting at nought the legislative intent, which perhaps was itself a response to the judicial lament extracted above....."
" .........In these circumstances, I am unable to read and interpret the public policy of India' words '' ', as being at all attracted in cases where a particular party alleges that a point was raised before the Arbitrator but not subsequently dealt with by him in the Award. I am in no manner of doubt, that such a conduct, even if it : 26 : did happen, would not amount to an infraction of public policy, or for that matter, the rules of natural justice..."
Further in the case of Tribal Cooperative Marketing Development Federation of India Ltd. Vs. Auro Industries Limited, reported in 2002 VII Apex Decisions (Delhi) 194 it was observed as under: " ..........Any finding of the Arbitrator either on factual or on legal matrix if on subsequent examination is found to be wholly unsound the award is liable to be set aside as it amounts to factual or legal misconduct. In ordinary course the Court does not sit in Appeal nor is it required to reappreciate the evidence and the material on record produced before the Arbitrator. Even if there are erroneous findings of the Arbitrator as to the facts the Court should always refrain from interfering with it. What should irk the Court is that perversity of illegality should be writ large on the fact of the award....."
: 27 : Hence, in view of the various authoritative pronouncements discussed above it is clear that this court is not sitting in appeal against the award passed by the sole arbitrator and the court is not required to reappreciate or re evaluate the evidence led before the arbitrator.
It is a settled law that this court cannot substitute its own decision that of arbitration and that the award of the arbitrator both on facts and law is final. In this regard the observations of the Mumbai High Court in the case of Laxmi Mathur vs. the Chief General Manager, MTNL reported in 2000 (3) Arb. L.R. 684 is very clear:
" ......Arbitral award is not invalid merely because on the basis of some inferences and some arguments it may be alleged that Arbitral Tribunal has committed some mistake in arriving at its conclusion on merits of the dispute referred to it for adjudication.
When the court is called upon to decide the objections raised by a party against the arbitral award, the jurisdiction of the court is limited as : 28 : expressly indicated in Section 34 of the Act and it has no jurisdiction to sit in appeal and to examine the correctness of the award on merits with reference to the material produced before the Arbitral Tribunal. The court cannot sit in appeal over the view of the Arbitral Tribunal by reexamining and re appreciating the material....."
The Hon' ble court has further observed that:
" ......The arbitral award is not open to challenge on the ground that the Arbitral Tribunal has reached to a wrong conclusion or has failed to appreciate the facts and evidence. It is well settled that the parties constitute the Arbitral Tribunal as the sole and final judge as of the disputes arising between them and they bind themselves as a rule to accept the arbitral award as final and conclusive. The arbitral award is not liable to be set aside on the ground that either on facts of in law it is : 29 : erroneous......"
In the case of Union of India vs. Ramesh Lalwani reported in 1997 (Suppl.) Arb. L.R. 64 the Delhi High Court has observed that an award made by the Arbitrator is conclusive and the court is only entitled to set aside the same if the arbitrator has misconducted himself and the scope in this regard is limited. It is a settled preposition of law that it will not be open for the court to reappriase the evidence and to arrive at a contrary conclusion which have already been rendered by the arbitrator on cogent grounds.
Hon'bl e Mr. Justice C.M. Nayar has in the same judgment relied upon the judgment in the case of Municipal Corporation of Delhi vs. M/s. Jagan Nath Ashok Kumar reported in AIR 1989 SC 2316 wherein the observations made by Lord Goddard, Chief Justice in Mediterranean & Eastern Export Co. Ltd. vs. Fortress Fabrics Ltd. reported in (1948) 2 All ER 186 are as under:
" ........The day has long gone by when the courts looked with jealously on : 30 : the jurisdiction of the arbitrators.
The modern Tendency is in any opinion more especially in commercial arbitrations, to endaveour to uphold awards of the skilled persons that the parties themselves have selected to decide the questions at issue between them. If an arbitrator has acted within the terms of the submissions and has not violated any rules of what is so often called natural justice the courts should be show indeed to set aside his award....."
Also in the case of Municipal Corporation of Delhi vs. M/s. Jagan Nath Ashok Kumar reported in AIR 1989 SC 2316 it has been observed that:
" .......when the reasons given by the arbitrator are germane, relevant and have rational nexus with the conclusions arrived at by him, the reasonableness of the reasons cannot be challenged and it cannot be said to be unreasonable. The word : 31 : " reasonable" has in law the primafacie meaning of reasonable in regard to those circumstances of which the actor called on to act reasonable knows or ought to know. Reasons vary in its conclusions according to the idiosyncrasy of the individual and the times and circumstances in which he thinks......"
In the case of M/s. Sanykt Nirmata vs. DDA and Anr. Reported in 1997 III AD (Delhi) 400 it has been observed as under:
" ......It is well established that an award made by an arbitrator is conclusive as a judgment between the parties and the court is entitled to set aside the award only if the arbitrator has misconducted himself for the proceedings or when the award has been made after the use of an order by the court superseding the arbitration or if the arbitration proceedings have become invalid under Section 35 of the Act, or where : 32 : an award has been improperly procured or he has proceeded beyond jurisdiction or is otherwise invalid under Section 30 of the Act. The award may be set aside by the court on the ground of error on the face of the award but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator had committed some mistake in arriving at some conclusion.............."
Further, the Delhi High Court has relied upon the judgments in the case of Jivaraj Bhai Ujamshi Sheth and Ors. vs. Chintamanrao Balaji reported in AIR 1965 SC 214 and in the case of State of Rajasthan vs. M/s. R.S. Sharma reported in (1988) 4 SCC 353, it has been observed that:
" ........The scope of interference by the court of limited Appraisement of evidence by the arbitrator is ordinarily never a matter which the court questions and considers. The : 33 : parties have selected their own forum and the deciding forum must be conceded the power of appraisement of evidence. The court has no jurisdiction to sit in appeal and examine the correctness of the award on merits. The arbitrator is the sole judge of the quality as well as quantity of the evidence and it is not for the court to taken 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 arrive at different conclusions than the one arrived at by the arbitrator but that by itself is no ground of setting aside the award of an arbitrator where there is no violation of principles of natural justice nor there is any allegations of misconduct nor that the arbitrator has not considered the material procedure before him or has not heard the parties or has not given opportunity to lead evidence......."
: 34 : It was held in the case of New India Civil Contractors Pvt. Ltd. vs. Oil and Natural Gas Corporation reported in JT 1997 (2) SC 633 that normally the courts would not interfere with the arbitral award and the attempt of the court should always be to support the award within letter of law.
Also in the case of M/s. Parmar Construction Co. vs. DDA reported in 1996 (2) Arb.L.R. 73 it was held by the Hon' ble Mr. Justice Devinder Gupta that:
" .....If the award of the arbitrator is a reasoned one and reasons have been assigned for making award against each claim. Learned counsel for the objector, during the course of arguments dealt specifically with each claim and questioned the findings recorded by the arbitrator thereupon.
The scope of interference to the arbitrator' s award in such like case where objections are to the effect that the same is bad on the ground of error apparent on the face of the record is limited. Arbitrator' s award : 35 : both on facts and law is final. Court cannot review and correct any mistake in his adjudication unless objection is to the legality of award which is apparent on the face of it. An error of law apparent on the face of the record means that you can find in the award or a document actually incorporated thereto some legal preposition which is the basis of the award which you can they say is erroneous. It is not permissible to refer to any other document to show that the award is erroneous. Court cannot substitute its own decision for that of the arbitrator. Assessment of evidence is a matter within the province of the arbitrator......."
Now coming to the aspect of grant of interest by the Arbitrator. The provisions of Section 34 of the Code of Civil Procedure provides that: " .......Now Section 34 of the Code of Civil Procedure has no application to arbitration proceedings since : 36 : Arbitrator cannot be said to be a 'cou rt' within the meaning of the Code. But an Arbitrator has power and jurisdiction to grant interest for all the three stages provided the rate of interest is reasonable....."
Further in para - 37 the aspect of interest for pre reference period has also been considered and it is observed as under: " ........So far as interest for pre reference period is concerned in view of the conflicting decisions of this Court, the matter was referred to a larger Bench in Executive Engineer, Dhenkanal Minor Irrigation Division & Others Vs. N.C. Budhraj (Deceased) by Lrs & Others (2001) 2 SCC 721. The Court by majority held that an arbitrator has power to grant interest for prereference period provided there is no prohibition in the arbitration agreement excluding his jurisdiction to grant interest....."
: 37 : Further while considering the aspect of awarding of interest the Hon' ble Supreme Court has in the case of Secretary Irrigation Department, Govt. of Orissa and Others etc. Vs. G.C. Roy reported in 1992 (1) Arb. Law Reported 145 after discussing the law in detail held as under::
" .......an arbitrator has jurisdiction to award pendente lite interest where the arbitration agreement so provides but no pendente lite interest can be allowed by the arbitrator if the agreement expressly provides that no pendente lite interest should be allowed. Where there is no express prohibition, such power must be inferred....."
In the same judgment the Hon' ble Apex Court has laid down the following principles:
" The question still remains whether arbitrator has the power to award interest pendente lite, and if so on what Principal. We must reiterate that we are dealing with the situation where the agreement does not provide : 38 : for grant of such interest nor does it prohibit such grant. In other words , we are dealing with a case where the agreement is silent as to award of interest. On a conspectus of aforementioned decisions, the following Principles emerge:
(i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is not the period prior to the arbitrator entering upon the reference. This is the Principal of Section 34 CPC and there is no reason or Principal to hold otherwise in the case of arbitrator.
(ii) An arbitrator is an alternative form for resolution of disputes arising between the parties If so, he must have the power to decide all the disputes or differences arising between the parties. If the arbitrator : 39 : has no power to award interest pendente lite the party claiming it would have to approach the court for that purpose even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings.
(iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law.
(The proviso to Section 41 and Section 3 of Arbitration Act illustrate this point). All the same the agreement must be in conformity with law. The arbitrator must also act and make his award in accordance with the general law of the land and the agreement.
(iv) Over the years, the English and Indian Courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest : 40 : the arbitrator must have the power to award interest pendent lite.
Thawardas has not been followed in the later decisions of this court. It has been explained and distinguished on the basis that in that case there was no claim for interest but only a claim for unliquidated damages. It has been said repeatedly that observations in the said judgement were not intended to lay down any such absolute or universal rule as they appear to, on first impression until Jena' s case almost all the courts in the country had upheld the power of the arbitrator to award interest pendente lite Continuity and certainty is a highly desirable feature of law.
(v) Interest pendente lite is not a matter of substantive law. Like interest for the period anterior to reference (prereference period). For doing complete justice between the parties, such power has always been inferred."
" ..........where the agreement between the parties does not prohibit grant of : 41 : interest and where a party claims interest and that dispute (alongwith the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties and therefore when the parties refer all their disputes or refer the dispute as to interest as such - to the arbitrator he shall have the power to award interest. This does not mean that it in every case the arbitrator should necessarily award interest pendente lite. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case. Keeping the ends of justice in view...."
In the case of Bhagwati Oxygen Ltd. Vs. Hindustan Copper Ltd. (Supra) the Hon' ble Court has discussed the law relating to grant of interest at three different : 42 : stages i.e. prereference, pendente lite and post award interest. The law laid down in Secretary Irrigation Department Govt. of Orissa & Other Vs. G.C. Roy (Supra) has been discussed in para36 of the said judgment.
So far grant of pendente lite interest is concerned, in para38 of this judgment titled Bhagwati Oxygen Ltd. Vs. Hindustan Copper Ltd. (Supra) the grant of pendente lite has been discussed thereby following principles laid down in the case of Secretary Irrigation Department, Govt. of Orissa & Others Vs. G.C. Roy (Supra).
In para39 of judgment titled Bhagwati Oxygen Ltd. Vs. Hindustan Copper Ltd. (Supra) grant of interest for post award period has been discussed as under: " .......As to postaward interest, the point is covered by the decision of this Court in Hindustan Construction Co. Ltd. Vs. Jammu & Kashmir, (1992) 4 SCC 217. It was held there that an arbitrator is competent to award interest for the period from the date of the award to the date of decree or date of realization , whichever is : 43 : earlier....."
In the case titled C. Lal Gupta Vs. DDA reported in 129 (2006) Delhi Law Times 531 (DB), Hon' ble Mr. Justice Badar Durrez Ahmed of our own Delhi High Court has while referring to the case of Secretary Irrigation Department, Govt. of Orissa and Ors Vs. G.C. Roy (Supra) has held as under:
" ..........This in itself makes it clear that it is not necessary that in every case, that the Arbitrator should necessarily award interest pendente lite. It is a matter within the Arbitrator' s discretion to be exercised in the light of the facts and circumstances of each case keeping the ends of justice in view of the provisions of Section 31(7) (b) of the Arbitration and Conciliation Act, 1996......."
In Union of India Vs. Suchita Steels (India) reported in 2006 (1) Arbitration Law Reporter 83 (Delhi) : 44 : (DB) it has been held that : " .....Law of arbitration is well settled. If there are two probable views this court will not interfere with the award merely because it feels that the view of the court is more plausible or better than the one taken by the arbitrator...."
In the case of Delhi Development Authority Vs. S.S. Jetley reported in 2001 (1) Arbitration Law Reporter 289 (Delhi) (DB), Hon'bl e Mr. Justice Arun Kumar (as his Lordship then was) and Hon' ble Mr. Justice A.K. Sikri Judge, Delhi High Court have discussed regarding award of pre suit and pendete lite interest and also the scope of Section 73 and 74 of the Indian Contract Act, 1872.
Further in the case of Saraswati Construction Co. Vs. Delhi Development Authority reported in 2004 (2) Arbitration Law Reporter 429 (Delhi) our own Hon' ble High Court has decided in respect of future interest to be payable on entire amount comprising of claims as well as number suit : 45 : and pendentelite interest as under: ''.
......Learned counsel for the Decree Holder has relied upon a judgment of Apex Court in Oil and Natural Gas Commission Vs. M.C. Clelland Engineers S.A., (1999) 4 SCC 327 = 1999 (2) Arb. LR 509 (SC) in which their Lordships considered the question of interest on interest and held that the power of the Arbitrator to grant interest on the amount of interest, which may be termed as interest on damages or compensation for delayed payment, would also become part of the principal amount and as such, Section 3 of the Interest Act does not come into play to forbid the payment of such interest. He has also relied upon a judgement pronounced by a learned Single Judge of the Punjab & Haryana High Court in Union of India Vs. Harbans Singh Tuli & Sons Builders (P) Ltd., AIR 2000 P&H 313 = 2000 (2) Arb.
LR 360 (P&H) (DB) in which the aforesaid judgement of the Apex Court was relied upon to hold that the : 46 : interest on the amount of interest may be termed as interest on damages / compensation for delayed payment and would become part of the principal sum adjudged....."
In the same judgment it has been held that : " ........In view of the aforesaid judgments, this Court is of the considered view that after the passing of an Award or the dismissal of the objections by the Court and passing a decree in terms of the Award, not only the amount of a claim upheld by the Arbitrator of the Court but the presuit and pendente lite interest awarded in favour of the Decree Holder crystallizes into the decretal amount and the future interest becomes payable on the entire amount comprised of the claims as well as the presuit and pendente lite interest. Therefore, from the date of passing of decree, the future interest is not to be calculated merely on the amount of the claims upheld by the Arbitrator/Court but also on the : 47 : amount of the interest awarded by the Arbitrator or the Court. In many cases, as in the present case, the amount of interest upto the date of the passing of the Award or passing of the decree is much higher than the principal amount and in case a view is taken that the future amount is not payable on the amount of interest, a decree holder may be put to substantial monetary loss by an unscrupulous judgement Debtor by withholding the amount and ultimately paying future interest only on the amount of claims. Courts cannot permit any party to take undue advantage of law and exploit legal provisions to cause wrongful loss to the opposite party....."
Applying the settled principle of law to the facts of the present case the first objection raised by the applicant is that the arbitrator has exceeded his jurisdiction and has ignored the material, provisions of agreement and settlement was arrived at between the parties and relied upon unsound : 48 : preposition of law which rendered the award anomily. It is argued that the respondent no.1 Arbitrator has failed to appreciate that the parties were free to settle the disputes between themselves and after the settlement arrived at between the parties the matter should have been disposed off and settled and no award should have been made. According to the Ld. counsel appearing appearing on behalf of the applicant the respondent no.1 after deriving the benefit under settlement and making the other party change its position, cannot turn around and say that the award and satisfaction is not binding on him and hence when the disputes are settled outside the arbitration they do not remain arbitrable disputes and loose their jurisdiction despite which the learned Arbitrator went ahead and passed the award whereas the matter should have been instead disposed off as settled.
Learned counsel for the respondent no.1 on the other hand has pointed out that there was a settlement between the parties wherein the respondent / claimant furnished an affidavit stating that he will withdraw from the suit if the entire amount is paid. It is argued that the said : 49 : settlement was only conditional and conclusive subject to the condition that the entire balance payment should be released by the MCD, hence when the payment was made to the respondent no.1 and the total amount awarded was only Rs.4,800/ per annum and Rs.10,000/ was withheld as Arbitrator fee and another Rs.10,000/ withheld. Therefore since the applicant themselves had committed default therefore now they cannot claim the benefit of its own wrong.
In this regard the learned counsel for the MCD has placed her reliance on the authorities reported in Double Dot Finance Limited vs. Goel. M.G. Gases Ltd. & Anr. Reported in 117 (2005) DLT 330 and also Vol. III (2003) SCT 324 in the case of Oil & Natural Gas Corporation vs. Saw Pipes wherein the Hon' ble Courts had observed that if amicable settlement are discarded and rejected on flimsy pleas, parties would be wary of entering into negotiated settlement and making payments as shrewd party may pocket amount received under it, and challenge settlement and reagitate dispute causing immeasurable loss and : 50 : harassment to the party making payments thereunder.
It is argued that such tendencies are required to be checked and such litigants are required to be dispatched by the Courts since amicable settlement is a public policy of India and should be duly ownered by both the parties.
In this regard she has placed her reliance on the case of Fountain Head Developers Vs. Maria Arcangela Sequeira reported in 2007 (2) Arb. L.R. Bombay 362 (Full Bench) and in the case of Rodemadan India Ltd. Vs. International Trade Expo Centre Ltd. reported in 2006 (11) Supreme Court Cases 651. According to the Ld. Counsel for the petitioner/ objector, the objections have not been filed before the court of competent jurisdiction. It is submitted that the sole arbitrator i.e. the respondent no. 2 had been appointed by the Delhi High Court vide order dated 23.2.2005 and hence in view of the aforesaid it is the said court alone who would have the jurisdiction to decide the objections and all subsequent applications arising out of the said agreement. In this regard the Ld. Counsel for the respondent has pointed out that the sole arbitrator/ respondent : 51 : no. 2 had been appointed in consequence to the petition under Section 11 of the Arbitration and Conciliation Act and the total amount in the suit was more than Rs. 23 lakhs and it was for this reason that the Delhi High Court has the pecuniary jurisdiction to try the suit. It is pointed out that in so far as the present award is concerned the same falls within the pecuniary jurisdiction of this court.
I have considered the submissions made before me. It is evident from the arbitration award and the statement of claims filed before the arbitrator that the dispute before the arbitrator was in respect of the various claims raised by the respondent wherein the Ld. Arbitrator by way of the award dated 20.2.2007 directed the petitioner/ objector MCD to make the payment of Rs.3,11,171/ to the claimant within a period of two months. Therefore, since the dispute raised is with regard to the amount awarded i.e. Rs.3,11,171/ under these circumstances I hereby hold that the objection raised by the petitioner/ objector is without any merits in as much as it is this court who would have the pecuniary jurisdiction to consider the objections raised in respect of the said award.
: 52 : It is argued by the Ld. Counsel appearing on behalf of the respondent that it is the claimant/ respondent who was required to pay the entire amount and the petitioner had committed default, therefore, now at this stage the petitioner cannot be allowed to take the benefits of his own wrong since the respondent had never agreed to any rejection/ withholding as alleged. I have gone through the arbitration award. The settlement is not denied by the respondent. The affidavit of the respondent shows that the said settlement was subject to the Objector/ Applicant/ MCD releasing the balance payment due to the respondent. I have gone through the said affidavit filed by the respondent Satnam Singh wherein he has specifically deposed that he would withdraw the case against the MCD on his free consent, will and without any pressure or without any influence on him if his balance payment is released by the MCD. Under these circumstances if the applicant/ objector MCD does not release the balance payment to the respondent or wrongfully withheld the said amount due to him, then this itself would be a violation of the settlement/ agreement between the parties and the respondent : 53 : under these circumstances would be justified in approaching for arbitration and the objection raised by the applicant/ objector/ MCD that the arbitrator did not have the jurisdiction is without any basis.
The second objection raised by the applicant is that the waiving of Rs.50,000/as security is wrong and illegal and the said deduction has been made by the MCD on account of the fact that as per the terms and conditions agreed upon between the parties the security amount could have been refunded only after the extension of time in completion of work obtained by the contractor from MCD which in the present case was not done. I have gone through the arbitration award which reveals that the objector/ applicant has nowhere raised the aforesaid plea regarding the security amount being refunded only after extension of time in completion of work before the learned Arbitrator. The findings of the learned Arbitrator are based upon the evidence of the claimant who has been examined by the Arbitrator and the witness of the objector i.e. Vijay Prakash and Umesh Parasar and also the affidavit of Murtaja Saluja. I have : 54 : perused the testimonies of the aforesaid witnesses and also the documents placed before the arbitrator. The Ld. Arbitrator has very specifically in his findings on the said aspect observed that the amount of security was Rs.50,000/ which was to be deducted earlier, was not deducted in the bill by which the payment was made. Thus no amount after the payment of this bill is due towards the security amount as well as the principle amount. It is also settled by the parties that towards the dues of the claim a sum of Rs.1,607,263/ including the security amount were due to the claimant on the finalization of the bill which was originally prepared on 30.5.2002 by the JE. Such amount has been paid after framing of the points above. It is therefore, held that the claimant after the said claimant is not entitled to further amount towards the final bill including the balance security deposit and the objections are decided accordingly" ...
In view of the aforesaid I hereby hold that the findings of the learned Arbitrator on the aforesaid aspect are specific and clear. The question which has not been raised by the applicant before the Arbitrator at the first instance despite : 55 : opportunity cannot be allowed to be raised now at this stage.
The third objection raised by the objector is that the deduction of Rs.20,000/ by the MCD also awarded by the Arbitrator to the claimant / contractor is not justified. It is stated that this deduction made by the MCD is on account of penalty imposed on Clause 2 of the agreement and the plaintiff has never applied for extension of the time as per Clause 5 of the terms and conditions. Further, a sum of Rs.10,000/ awarded as arbitration fee is likely to be set aside since it was agreed that the fees of the Arbitrator to be paid by the MCD shall be deducted from the claimant's bill.
In this regard it is stated that the respondent had completed the work in stipulated time which is more than that stated in the agreement. It is stated that even otherwise it is incumbent upon the part of the objector to have granted the extension of time when the delay was not attributable on the part of the respondent and hence the illegality if any of not granting the extension under Clause 5 had been committed by the objector itself and the respondent has nothing to do with the same. It is also pointed out that there was no delay : 56 : attributable on the part of the respondent nor any loss were suffered or proved by the applicant/ objector and in fact no penalty / compensation has been levied whatsoever.
It is pointed out by the learned counsel appearing on behalf of the respondent that the perusal of the testimony of the witnesses of the respondent RW.2 Umesh Parashar would show that there was no delay in the work and the work was completed to the extend of 1/4th. Similarly, when half the work was completed also there was no delay and further again there was no delay in completion of the work when 3/4th of the work was completed. According to the said witness the work was to be completed on 2.5.2002 and it was completed on 20.5.2002 and there is estimated delay of 29 days. It is pointed out that it is not disputed by the parties that extra work was taken from the respondent by the applicant/ objector and he had been paid for the extra work. It is also admitted that the objector did not give any notice for the delay in work showing an intention to impose the penalty. Further, it is pointed out that the respondent has stated that extra work of bricks, Tiron frames and alike items which are : 57 : MB had been taken and it is only after such extra work was done the jaalis were fixed upto 30.5.2002 as well when the extra work was taken up and its payment was made the respondent was not made responsible for the penalty for the delay of 29 days as claimed by them and therefore it is for this reason that while preparing the final bill no penalty was imposed.
The perusal of the arbitration award shows that the learned Arbitrator has duly dealt with these aspects and in page 10 and 11 of the said award while discussing the evidence adduced by the complainant has concluded that under the circumstances of the case and upon considering the evidence on record the MCD would not be entitled to any penalty as claimed since they had themselves had not imposed any penalty while preparing the final bill and nor the penalty was imposed by the competent authority. The learned Arbitrator while disposing off this issue has given reasons which are clear and reasonable and by no stretch of imagination can be deemed to be contrary to the existing law or public policy. It is settled law that this court under these : 58 : circumstances cannot sit as a court of appeal and reevaluate the evidence before the arbitrator nor can this court substitute its own opinion for that of the Arbitrator. Therefore, the objection raised by the applicant is devoid of merits.
Lastly, the applicant has objected to the imposition of interest awarded by the Arbitrator and has argued that there was no condition in the agreement for grant of interest to the contractor and even otherwise there was no notice under Section 9 of the Interest Act given by the respondent in the absence of which no interest can be claimed.
In this regard the learned counsel has placed his reliance on the provisions of Section 31(vii)(b) of the Arbitration & Conciliation Act, 1996 which provides that " a sum directed to be paid by an arbitral award shall, unless the award otherwise directs at the rate of eighteen per centum per annum from the date of the award to the date of payment" .
The learned counsel has also placed his reliance on the following authorities which I have duly perused:
: 59 :
1. Jagson International Limited vs. Oil & Natural Gas Corporation Ltd., 2004 (II) RAJ 239 (Bom).
2. State of Orissa & Ors. vs. Larsen & Tubro Ltd., 2006(2) RAJ 217 (Orissa).
3. Government of NCT of Delhi vs. Ved Prakash Mehta, 2006 (1) R.A.J. 168 (Del).
It is settled law that the objector is required to satisfy that the objections are relatable to an agreement under Clause 34 of the Act. A general talk of content and conclusion of the award would not satisfactorily calls for interference by this Court.
Having applied my mind to the submissions made before me, it is settled law that where the terms and conditions of an agreement are silent on the aspect of interest, the Arbitrator can give any reasonable amount of interest as per the provisions of Section 31(vii)(b) of the Arbitration & Conciliation Act and the grant of interest under these circumstances cannot be held to be against public policy. The learned Arbitrator has in page 8,9 and 10 given detailed reasons for grant of interest @ 6% per annum under the law on the amount stated to have been illegally withheld by the : 60 : respondent even after the submission of the affidavit by the claimant. He has declined to award the interest of the earlier period in view of the fact that the claimant himself in his affidavit had waived the same. Therefore, I do not find any merit in the objection raised by the applicant/ objector.
It is settled law as reported in the case of Associated Engineering Company vs. Govt. of Andhra Pradesh, reported in 1992 SC 232 that an arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract and has sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract his award cannot be interfered" ...
Therefore, in view of my aforesaid discussion, I hereby hold that the arbitration award dated 20.2.2007 is a reasoned award and does not suffer from any infirmity or error apparent on the face of the award. It is not for this : 61 : Court to sit in appraisal of the evidence lead before the learned Arbitrator and this Court will not open itself the task of being a judge on the evidence placed before the learned Arbitrator which was subject matter of dispute. In the present case the learned Arbitrator has decided upon the issues under reference which was within his competency and as per the agreement entered into between the parties. There are no allegations against the learned Arbitrator regarding mis conduct nor of having misconducted the proceedings which have either been alleged by the petitioner or established. The Arbitrator has duly explained the reasons for arriving at his decisions with which I find no ground to intervene.
Hence in view of the aforesaid reasons I hereby hold that the objector/ petitioner has failed to make out any case for requiring any interference with the award under Section 34 of the Arbitration and Conciliation Act, 1996 and accordingly the objections are devoid of merits. The petition is dismissed. Parties are directed to bear their own costs. File be consigned to record room.
Announced in the open Court (Dr. KAMINI LAU)
Dated: 23.7.2008 Addl. District Judge: Delhi
: 62 :
MCD Vs. Satnam Singh
Suit No. 62/2003
23.7.2008
Present: Ms. Pooja Kalra Advocate for the objector/ petitioner.
Sh. B.M. Sehgal Advocate for the respondent. Vide my separate detailed order of the date, dictated and announced in the open Court not not yet typed the objections are dismissed. Parties to bear their own costs. File be consigned to record room.
ADJ/Delhi 23.7.2008 : 63 :