Delhi High Court
M/S. R. Murlidhar Reddy & Co. vs National Projects Construction ... on 22 April, 1992
Equivalent citations: AIR1993DELHI68, 1992(2)ARBLR295(DELHI), 1992(23)DRJ334, 1992RLR288, AIR 1993 DELHI 68, (1992) 2 ARBILR 295, (1992) 2 CURCC 400, (1992) 23 DRJ 334
ORDER
1. The petitioner entered into a contract with the respondent for execution of a portion of the work of "Contraction of Rajghat Masonary Dam and appurtenant works across the River Betwa at Rajghat, Lalitpur Distt. U.P." The work was awarded to the petitioner sometime in December, 1984. The stipulated date of commencement of the work, was December 31, 1984. The work was to be completed by June 30, 1988. The value of the contract was over Rs. 2 crores. It is admitted by both the parties that the work came to a stand still in December, 1986 or thereabout. The balance work, which was left unfinished, was to the tune of Rs. 209 lakhs. The case of the petitioner was that the execution of the work was impeded and delayed and could not be completed because of the defaults of the respondent. It was further alleged that the site and quarries were not handed over by the respondent in time with the result that the establishment of the petitioner remained deployed for a long period of time causing an enormous loss to it. On the other hand the case of the respondent was that it was the petitioner who miserably failed to execute the contract. It was also denied that the site and quarries were not handed over to the petitioner in time. The disputes between the parties were referred to Mr. K. C. Kathuria, Retired Chief Engineer, Central Water Commission on June 7, 1988, before whom the parties filed their claims and counter claims. The arbitrator by his award dated November 2, 1989 adjudicated the disputes between the parties and awarded to the petitioner a sum of Rs. 13,10,495/-together with interest @ 15% per annum from the date of award till the date of actual payment to him. This award of the arbitrator is the subject matter of the present application filed by the respondent under Ss. 16, 30 and 33 of the Arbitration Act.
2. I have heard the learned counsel for the parties. The arguments advanced by the learned counsel for the respondent can be conveniently reduced to the following points :
1. The award is bad in law on the face of it as the arbitrator has given a lump sum award and it is not possible to know as to which claim or counter claim of the parties has been accepted or rejected and to what extent?
2. The award is not supported by evidence.
3. The award falls outside the purview of the contract between the parties.
4. The form in which some of the claims were couched was defective and the same were liable to be rejected on this score alone.
5. That no reasons have been given in support of the award.
6. That the arbitrator has misconducted himself in as much as he was meeting the petitioner behind the back of the respondent.
3. I have given my earnest consideration to the submissions of the learned counsel for the respondent and those of the learned counsel for the petitioner in reply thereto.
4. The opening submission of the learned counsel for the respondent that the award is bad in law as it was not given item wise , is no! available to the learned counsel in view of the several decisions of the Supreme Court.
5. In Smt. Santa Shila Devi v. Dhirendra Nath Sen, the Supreme Court while examining the same question laid down as under (at page 1680) :
10. Before dealing with this point it is necessary to emphasise certain basic positions. The first of them is that a Court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal (Sec Selby v. Whitbread and Co., (1917) 1 KB 736 at p. 748). Besides it is obvious that unless the reference to arbitration specifically so requires the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award. The legal position is clear that unless so specifically required an award need not formally express the decision of the arbitrator on each matter of difference. (Vide Rc. Brown and the Croydon Canal Co. (1839) 9 Ad and Ell 522 : 112 ER 1309 and Jewell v. Christie (1867) 2 CP 296. Further as Parke, B himself put it during the course of arguments in (1853) 138 ER 1254:
"Unless the contrary appears the Court will presume that the award disposes finally of all the matters in difference."
and to repeat a sentence from the extract quoted earlier :
"Where an award is made de praemissis, the presumption is, that the arbitrator intended to dispose finally of all the matters in difference; and his award will be held final, if by any intendment it can be made so".
We shall approach the argument addressed to us in the light of these considerations. Now the award opens with a paragraph which recites, after setting out the reference:
"Whereas I have heard and duly considered all the allegations advanced evidence adduced before me regarding the respective cases of the parties..... I do hereby make and publish this, my award in writing as to all the disputes mentioned above."
It need hardly be added that the arbitration agreement and the statements filed extracts from which we have set out earlier were among the documents incorporated with this award and included among the matters considered by the arbitrator which disputes he intended to resolve by this award. The award, therefore, on its face intended and purported to decide all the disputes raised for this adjudication and therefore the Court will assume that he has considered and disposed of every claim made or defense raised. Since the award now impugned expressly states that it is made "de praemissis" i.e., of and concerning all the matters in dispute referred to the arbitrator, there is a presumption that the award is complete. In the circumstances the principle of construction enunciated by Parke, B. aptly covers the case and the silence of the award as regards the claim for accounting must, therefore, be taken to be intended as a decision rejecting the claim to that relief".
Again in the case of The Union of India v. Jai Narain Misra, AIR 1970 SC 753, dealing with somewhat similar situation, the Supreme Court held as under (at page 754) :
"6. The arbitrator is not bound to give an award on each point. He can make his award on the whole case. See Ghulam Khan v. Mohammad Hassan, (1901) 2nd 29 Cal 167 at p. 186(PC). An arbitrator may award one sum generally in respect of all money claims submitted to him, unless the submission requires him to award separately on some one or more of them. See Whiteworth v. Hulse, (1866) LR 1 Ex.251. The arbitrator can lawfully make an award of a sum admitted to be due and a lump sum in respect of the remaining claim. As the final award in favor of the respondent professes to be made of and concerning all the matters referred to him, it must be presumed that in making it the arbitrator has taken into consideration all the claims and counter claims. See Harrison v.
Creswick, (1853) 13 CB 399, Jewell v. Christie, (1867) 2 CP 296. We hold that the award is final and certain determination of all the disputes referred."
6. In State of Rajasthan v. M/s. R. S. Sharma & Co. the Supreme Court reiterated its earlier view and held as follows :
"9. In Firm Mandanlal Roshanlal Mahajan v. Hukumchand Mills Ltd. Indore, Bachawat, J. speaking for the Court observed that an arbitrator could give a lump sum award. He was not bound to give a separate award for each claim. His award on both fact and law is final. There is no appeal from his verdict. The Court cannot review his award and correct any mistake in his adjudication, unless an objection to the legality of the award is apparent on the face of it".
7. Thus it is apparent from the above that an arbitrator is not bound to deal with each claim or counter claim separately unless the reference to the arbitrator specifically so requires. It is not disputed that in the present case the reference to the arbitrator did not require the arbitrator to give an item wise award. The arbitrator was, therefore, free to deliver a lump sum and consolidated award.
8. At this stage it is relevant to note that while making the award the arbitrator has taken into consideration the claims and counter claims of the parties. This appears from the following recitals in award :
"Now after carefully considering the matter in dispute and after hearing, examining and considering the submissions/documents produced and arguments of both the parties, I, K.C. Kathuria, do hereby make and publish my award as follows in relation to all claims and counter claims.
On due adjustment of the amount held justified under the counter claims made by respondents (N.P.C.C.) against the amount held justified under the claims of claimants (M/s. Muralidhar Reddy & Co.), I hereby award that the respondents shall pay to the claimants a sum of Rupees 13,10,475/-
(rupees Thirteen Lakh Ten Thousand four hundred and seventy five only)".
9. My attention has been drawn by Mr. Kumar, learned counsel for the respondent to the decision of this Court in G. S. Atwal & Co. v. Union of India, in which it was held that an arbitrator should give an item wise award instead of giving a lum sum amounl, as in the latter case the arbitrator deprives the Court of an opportunity of finding out which of the claims had been allowed, and which of the claims had been disallowed. I am afraid the decision in Smt. Santa Devi and another is of no avail to the respondent in view of the aforesaid decisions of the Supreme Court.
10. It is next contended by the learned counsel for the respondent that the conclusion of the arbitrator is not supported by any evidence whatsoever. It is well settled that the arbitration is a forum which is selected by the parties. In case there is some evidence to sustain the award, the Court should proceed in a manner which is conducive to respecting and uphold ing the award of the arbitrator, if that is reasonably possible. The parties have invited my attention to the evidence which was led before the arbitrator. It cannot be said that this is a case where no evidence would be available to support the award. It is well settled that it is not open to the Court to either review the award or reappraise, reassess and re-examine the evidence. The Court is also not concerned with the quantity and quality of the evidence on which the arbitrator bases his award.
11. In view of the aforesaid discussion, I am not inclined to accept the submission of the learned counsel that the award should be set aside on the ground that there is no evidence to support the same.
12. Learned counsel for the respondent submits that a perusal of the claims of the petitioner would show, that a claim was made on account of use of glass ("shisha") in the work which was not a part of the contract. Mr. Kumar wants me to assume that the arbitrator awarded this claim in favor of the petitioner even though the same was outside the scope of the agreement between the parties. I do not think I can draw any such inference from the award merely because a claim was made by the petitioner.
13. Mr. Kumar further contends that the claims were made in such a form as would make it impossible for any arbitrator to award a huge sum of Rs. 13 lacs (approximately) in favor of the petitioner. I think this contention has only to be mentioned to be rejected. It is the substance and not the form of the claim which is material. Again it is entirely within the domain of the arbitrator to judge the substance of the claim. While so judging it was for the arbitrator to see whether or not any amount was to be awarded to the petitioner keeping in view the material on record before him. Since no reasons have been given by the arbitrator the court can not speculate as to what impelled the arbitrator to arrive at the conclusion reached by him. It is not possible to gauge the mind of the arbitrator. There is also no error apparent on the face of the award. No legal proposition flows from the award which can be said to be erroneous.
14. Mr. Kumar also submits that the award is vitiated as no reasons have been given in support thereof. In Rajpur Development Authority etc. etc. v. M/s. Chokhamal Contractors etc. etc. it has been laid down by the Supreme Court that unless the reference to the arbitrator specifically so requires, the arbitrator is not bound to give reasons for the award. In view of the authoritative pronouncement by the Supreme Court, no further discussion is needed on this aspect of the matter. The submission of the learned counsel is accordingly rejected.
15. Learned counsel for the respondent lastly submits that the arbitrator was holding meetings with the petitioner behind the back of the respondent which according to him amounted to grave misconduct on the part of the arbitrator. The question whether the arbitrator was holding any such meetings behind the back of the respondent or not is a question of fact. No evidence has been led by the respondent in this regard. On February 20, 1991 learned counsel for the parties stated that no evidence would be required to be adduced in the matter and the record of the arbitrator be read in evidence. The allegation thai the arbitrator was holding meetings with the petitioner is contained in para 8 of the application. An affidavit of Mr. M. Sharma, an officer of the respondent Corporation, has been filed in support of the application. The affidavit does not disclose the source of information or the basis of knowledge of the affiant with regard to averments made in the application including para 8 thereof. In the paragraph relating to verification it is merely stated that the deponent is conversant with the facts of the case and the contents of the objections under Ss. 16, 30 and 33 of the Arbitration Act are true to his knowledge. To say the least this affidavit is not in accordance with the provisions of Order 19, Rule 3, CPC. Even at this stage Mr. Kumar does not claim to lead any evidence on this aspect of the matter. The aforesaid submission of the respondent not being supported by any evidence cannot go far. It may be pertinent to point out that before the arbitrator no complaint was made that he was meeting the petitioner behind the back of the respondent. The objection appears to be an after-thought. My attention has been drawn by the respondent to the note of the arbitrator recorded on the reverse of page 45 of the rejoinder submitted by the petitioner before the arbitrator on January 9, 1989. This note is as follows :
"General practice in Govt. Deptt. while preparing estimates of construction works --10% profit.
Delhi Analysis of Rates Rates & Cost Committee recommendations.
.
AIR 1985 Ker 45.
."
16. Learned counsel submits that no such argument as noted by the arbitrator was advanced in the presence of the respondent and the same must have been noted during one of the meetings which the arbitrator held with the petitioner. This he deduces from the fact that the minutes of the proceedings do not make any mention of the said argument. In my view no such inference can be drawn. It is merely an assertion of the counsel for the respondent which is being made for the first time before the court. There is nothing unusual about the note of the arbitrator. When arguments are addressed notes are usually taken down by a judge or an arbitrator hearing the matter and it is not essential that the same should be mentioned in the minutes of the proceedings. There is thus no substance in the submission of the learned counsel for the respondent which is hereby rejected.
17. There is another point which also needs consideration. The arbitrator has a-warded interest from the date of the award till realisation of the amount in question. This the arbitrator was not competent to award. Accordingly this part of the award which grants interest to the petitioner is set aside. The rest of the award is however, made a rule of the court. Let a decree follow. The petitioner shall be entitled to future interest @ 15% from the date of the decree till realisation.
18. In light of the above order Suit and Objections (I.A. 6075/90) stand disposed of.
19. Order accordingly.