Himachal Pradesh High Court
H.P. State Forest Corporation Ltd. vs Charan Singh And Company on 8 November, 2002
Equivalent citations: 2003(3)ARBLR659(HP)
Author: Lokeshwar Singh Panta
Bench: Lokeshwar Singh Panta
JUDGMENT Lokeshwar Singh Panta, J.
1. This appeal under Section 39 of the Arbitration Act, 1940 (hereinafter for short "the Act") has been preferred by the Himachal Pradesh State Forest Corporation Ltd.--defendant herein against the judgment dated 22.10.1992 of the learned Single Judge passed in Civil Suit No. 22 of 1991 whereby the objections preferred by M/s. Charan Singh and Company--Plaintiff herein under Section 30 of the Act to the Award dated 14.03.1991 recorded by the Arbitrator were allowed and as a result thereof the Award was set aside directing the Arbitrator to decide the Arbitration proceedings afresh.
2. Briefly stated the facts leading to filing of the appeal arise in the following circumstances. The work of launching and floating of Ghall (1980-1981, pertaining to Timber Extraction Division Sawra consisting of approximately 15,000 M3 logs-sawn timber and hakries through Tons River to be launched from Tuini Launching Depot upto boom head (Ichhari) and thereafter the truck haulage upto the sale depot at Mantaruwala and stacking of the same there was Awarded to the plaintiff-contractor vide letter No. 9088 dated October, 27, 1980 by Conservator of Forest, Shimla. The plaintiff-contractor was to execute the contract by February-22, 1981. The work was launched by the plaintiff-contractor on November 12, 1980. The plaintiff-contractor was entrusted timber measuring 13161.2659 cubic metres for launching at Tuini. On February 15, 1982, total timber measuring 11800 cubic metres had already reached at Mantaruwala Sale Depot in respect of which a running bill for Rs. 15,732.91 was passed by D.O. Mantaruwala. The bill was handed over to Divisional Manager, Sawra for payment who did not make the payment.
3. The remaining timber was handed over to the defendant-Corporation after February 15, 1982 since a dispute arose between the parties with regard to such agreement and the execution of the work. The Managing Director of defendant-Corporation appointed Shri G.C. Gupta, I.F.S. Arbitrator-cum-Director (South), H.P. State Forest Corporation as sole Arbitrator to go into the dispute between the parties and to make his Award in respect thereof. As many as seven claims under various heads were raised by the plaintiff-Contractor. Only five claims were raised by the defendant-corporation in their counter claim. The Arbitrator on consideration of the material placed before him Awarded a total sum of Rs. 9,89,462.80 under the various heads of counter claims in favour of defendant corporation vide his Award dated 14.03.1991. The claim of the plaintiff-contractor was partly allowed and the parties were directed to bear their own costs of the Arbitration-proceedings.
4. The Arbitrator filed the Award in this Court on 09.04.1991 under Section 14(1) of the Act. On 24.04.1991, the Court recorded the following order :
"24.04.1991 :
Present: None.
Let notice be issued to the parties of the filing of the Award by the Arbitrator in accordance with the provisions of Section 14 of the Arbitration Act to show-cause as to why the Award be not made rule of the Court. Notice need not be issued to the plaintiff-firm as it is represented by a counsel."
5. The case was taken up on 07.06.1991. On such date the following order was passed by the Court :
"07.06.1991 :
Present: Mrs. Shyama Dogra, Advocate for the petitioner.
Shri Prem Goel, Advocate has put in appearance on behalf of the respondents. List the case on 26th June, 1991 for orders."
6. When the matter came up before the Court on 11.07.1991 it was stated by the learned counsel for the plaintiff-contractor that on June 24, 1991 objections under Section 30 of the Act to the Award being made the rule of the Court were filed by the plaintiff-contractor on June 24, 1991 in the Registry. Such objections came to be registered as OMP. No. 274 of 1991. The learned counsel for the defendant-corporation took four weeks time to file reply to the objections filed by the plaintiff-contractor and the case was ordered to be listed after four weeks. On 16.08.1991 at the request of learned counsel for the plaintiff-contractor, three weeks time was allowed by the Court to file rejoinder to the reply filed by the defendant-corporation to the objections of the plaintiff-contractor,
7. On 11.09.1991 this Court framed the following issues :
"(1) Whether the objections are within time ? O.P. Objector.
(2) Whether the Arbitrator has misconducted himself and the proceedings, as alleged in the objection petition ? O.P. Objector."
8. The parties thereafter led their evidence by filing affidavit(s). The learned Single Judge on consideration of the evidence on record set aside the Award made by the Arbitrator and remitted the proceedings to the Arbitrator to decide the dispute afresh.
9. Feeling aggrieved, the defendant-corporation has filed the present appeal. Mr. Sandeep Kaushik, learned counsel for the defendant-corporation firstly contended that the learned Single Judge has erred in accepting the objections of the plaintiff-contractor beyond the period of limitation as the notice of the filing of the Award was accepted by the learned counsel for the plaintiff-contractor on 24.04.1991 whereas the objections should have been filed within the prescribed period of thirty days. In support of his contention the learned counsel placed reliance on the ratio of the decisions of the Apex Court in Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Ningashetti and Ors., AIR 1962 SC 666 and Secretary to Govt. of Karnataka and Anr. v. V. Harishbabu, (1996) 5 SCC 400=1996(2) Arb. LR 276 (SC).
10. The learned counsel for the plaintiff-contractor on the other hand has contended that the notice of the Award having been filed in the Court was not accepted by the counsel on behalf of the plaintiff-contractor on 24.04.1991 as Mrs. Shyama Dogra, Advocate had put in appearance on behalf of the plaintiff-contractor only on 07.06.1991 and thereafter objections to the Award were filed by the plaintiff-contractor on June 24, 1991 and as such the objections were filed within the stipulated period of thirty days within the meaning of Article 119(b), The Limitation Act, 1963. In support of his submission, the learned counsel placed reliance on Indian Rayon Corporation Ltd. v. Raunaq and Company Pvt. Ltd., AIR 1988 SC 2054=1988(2) Arb. LR 441 (SC).
11. Before appreciating the rival contentions of the learned counsel for the parties we extract below Sub-section (2) of Section 14 of the Act:
"14(2) The Arbitrators or Umpire shall, at the request of any party of the Arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the Arbitration and Award and of the costs and charges of filing the Award, cause the Award or a signed copy together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parries of the filing of the Award."
12. Now we shall refer to the cases cited and relied upon by the learned counsel for the defendant-corporation. In Nilkantha Sidramappa's case (supra), four Judge Bench while considering Sub-section (2) of Section 14 of the Act held as follows : (AIR, para 8 page 668).
"(8) Sub-section (1) of Section 14 of the Arbitration Act, 1940 (Act X of 1940) requires the Arbitrators or umpire to give notice in writing to the parties of the making and signing of the Award. Sub-section (2) of that section requires the Court, after the filing of the Award, to give notice to the parties of the filing of the Award. The difference in the provisions of the two sub-sections with respect to the giving of notice is significant and indicates clearly that the notice which the Court is to give to the parties of the filing of the Award need not be a notice in writing. The notice can be given orally. No question of the service of the notice in the formal way of delivering the notice or tendering it to the party can arise in the case of a notice given orally. The communication of the information that an Award has been filed is sufficient compliance with the requirements of Subsection (2) of Section 14 with respect to the giving of the notice to the parties concerned about the filing of the Award. 'Notice' does not necessarily mean 'communication in writing'. 'Notice', according to the Oxford Concise Dictionary, means 'intimation, intelligence, warning' and has this meaning in expressions like 'give notice, have notice' and it also, means 'formal intimation of something or instructions to do something and has such a meaning in expressions like 'notice to quit, till further notice'. We are of opinion that the expression 'give notice' in Sub-section (2) of Section 14, simply means giving intimation of the filing of the Award, which certainly was given to the parties through their pleaders on February 21, 1948. Notice to the pleader is notice to the party. In view of Rule 5 of Order III, Civil Procedure Code, which provides that, any process served on the pleader of any party shall be presumed to be duly communicated and made known to the party whom the pleader represents and, unless the Court otherwise directs, shall be as effectual for all purposes as if the same had been given to or served on the party in person."
In Secretary to Govt. of Karnataka and Anr. v. V. Harishbabu (supra), the Supreme Court had occasion to consider again Sub-section (2) of Section 14 of the Act, the Bench noticed the Judgment passed in Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Ningashetti and Ors. (supra), and held as under : (Para 10, Page 406) :
"(10) An analysis of Sub-section (2) of Section 14 shows that it mandates the Court, after the filing of the Award duly signed by the Arbitrator or the umpire as the case may be, to give notice to the parties of the filing of the Award. Sub-section (1) of Section 14 requires the Arbitrator or umpire to give a notice in writing to the parties of the making and signing of the Award. The two provisions operate under different set of circumstances. The issuance of a notice under Section 14(2) of the Act by the Court is a mandatory requirement though the section does not prescribed any formal mode for the service of the notice. What is essential under the said provision is that there must be service of notice or intimation or communication of the filing of the Award by the Court to the parties, the mode of service of such a notice being immaterial. It is the substance and not the form of the notice which is relevant and once it is established that a notice or communication or information of the filing of the Award has been issued by the Court and served on the party concerned, the statutory requirements of Section 14(2) of the Act would stand satisfied. Keeping in view the difference in the phraseology of Sections 14(1) and 14(2) of the Act, it follows that the notice from the Court under Section 14(2) of the Act need not be in writing. It can be oral also but what is necessary is that a notice, communication or information to the effect that an Award has been filed in the Court must be given by the Court to the parties concerned. Notice to the pleaders of the parties, who are representing the parties before the Court, would of course be sufficient compliance with the requirement of Sub-section (2) of Section 14 of the Act. A notice by the Arbitrator under Sub-section (1) of the act is not a substitute for the notice which the Court is enjoined upon to issue under Sub-section (2) of Section 14 of the Act. Where the Arbitrator himself files an Award in the Court, the Court is bound to give notice to the parties that the Award has been filed and the Court cannot pass a decree in terms of the Award, unless such notice has been served on the party concerned and till after the expiry of a period of 30 days from the date of service of such a notice as contemplated by Article 119(b) of the Limitation Act, 1963. In a case where a party has knowledge alinude of the filing of the Award and seeks time to file objections to the Award, absence of a formal notice from the Court would be rendered immaterial and in such a case the date when the party enters its appearance and either through an application in writing or orally seeks time to file objections to the Award, shall be deemed to be the date of service of the notice within the meaning of Clause (b) of Article 119 of the Limitation Act read with Section 14(2) of the Act. However, where the order of the Court merely records the presence of parties or their counsel, after an Award is filed by the Arbitrator in the Court, but does not indicate that the notice of the filing of the Award has been given to the parties, no service of notice can be presumed from that order. No formality in the act of filing of the Award in the Court is required but what is required is that the filing of the Award must be by or on behalf of the Arbitrator and after the same has been filed the notice of the filing of the Award must follow from the Court under Sub-section (2) of Section 14 of the Act."
13. The dictum in these cases was also followed by two Judge Bench of the Supreme Court in East India Hotels Ltd. v. Agra Development Authority, JT 2001(4) SC 84=2001(1) Arb. LR 692 (SC).
14. In view of the settled law of the Supreme Court in the above said decisions, we are of the view that the period of limitation for filing objections seeking setting aside of an Arbitration Award commences from the date of service of the notice issued by the Court upon the parties regarding the filing of the Award under Section 14(2) of the Act and such notice need not be in writing but what is essential is that the notice or intimation or communication of the filing of the Award must be issued by the Court to the parties and served upon the parties concerned. However, where the Court merely records the presence of the parties or their counsel, after an Award is filed by the Arbitrator in the Court, but does not indicate that the notice of the filing of the Award has been given to the parties, no service of notice, can be presumed from that order. In the present case order dated 24.04.1991 extracted herein-above does not show the presence of the plaintiff-contractor nor it shows the presence of the learned counsel who accepted the notice on behalf of the plaintiff-contractor of the filing of the Award by the Arbitrator in the Court. Thus, no notice, whether in writing or orally, was ever issued by the Court to the plaintiff-contractor regarding the filing of the Award in the Court so as to enable the Company to file objections, if any, seeking setting aside of the Award. The presence of the counsel was not recorded by the Court in order dated 24.04.1991 nor it is reflected in the order that the counsel who appeared on behalf of the plaintiff-contractor had waived service of the notice. There is nothing to show that the plaintiff-contractor or his counsel had waived service at the relevant time. From the perusal of the above extracted orders, it is clear that Ms. Shyama Dogra, Advocate had put in appearance, on behalf of the plaintiff-contractor and Shri Prem Goel, Advocate appeared on behalf of defendant-corporation only on 07.06.1991 when the case was ordered to be listed by the Court on 26th June, 1991 for orders. When the case was listed on 11.07.1991 it was represented by Shri D.C. Jistu, Advocate appearing on behalf of the plaintiff-contractor that objections under Section 30 of the Act to the Award being made the rule of the Court were filed by the plaintiff-contractor on June 24, 1991 to mean that objections were within the period of limitation from 07.06.1991 when the learned counsel for the plaintiff-contractor appeared in the Court and as such the learned Single Judge has rightly held that the objections were filed by the plaintiff-contractor within the period of limitation as prescribed under Article 119(b) of the Limitation Act. It is no doubt true that the plaintiff-contractor filed OMP No. 113 of 1992 under Section 5 of the Limitation Act for condonation of delay in filing the objections but since the objections filed by the plaintiff-contractor were held to be submitted within the prescribed period of limitation of 30 days, there was no need to condone the delay in filing the objections. The ratio of the judgment relied upon by the learned counsel for the plaintiff-contractor in Indian Rayon Corporation Ltd. v. Raunaq and Company Pvt. Ltd. (supra), has been relied on by the Supreme Court in Secretary to Govt. of Karnataka and Anr. v. V. Harishbabu (supra). In this view of the matter, the period of limitation for filing objections in the present case has to be taken from 07.06.1991 and not from 24.04.1991 as contended by the learned counsel for the defendant-corporation. It is no doubt true that power of attorney on behalf of the plaintiff-contractor was filed by Mr. Jishtu and Ms. Shyama Dogra, Advocates in the Registry office on 23rd April, 1991 but none of them had appeared before the Court on 24.04.1991 as it was clear from the order extracted herein-above and in these circumstances the issuance of a notice under Section 14(2) of the Act by the Court was mandatory requirement and once it is established that a notice or communication or information of the filing of the Award has not been issued by the Court and served on plaintiff-contractor or his pleaders who were not present before the Court on 24.04.1991, the statutory requirement of Section 14(2) of the Act would not stand satisfied. Thus, the first contention of the learned counsel for the defendant-corporation that the objections filed by the plaintiff-contractor were time barred is not sustainable.
15. The learned counsel for the defendant-corporation next contended that where Arbitrator has applied his mind to the pleadings, evidence adduced before him and the terms of the contract, the learned Single Judge has erred in re-appreciating the evidence and set aside the Award on mere surmises and conjectures.
16. Per contra, Mr. Chandernarayan Singh, learned counsel for the plaintiff-contractor contended that the Award passed by the Arbitrator was the product of non-application of mind and the Court under Section 30 of the Act is competent to interfere with the Award and therefore, the reasoning for setting aside the Award and conclusion arrived at by the learned Single Judge were based upon the facts and circumstances of the case in hand and in accordance with the settled position of law.
17. In order to appreciate this contention of the learned counsel for the parties, we have gone through the judgment of the learned Single Judge. The plaintiff-contractor has challenged the Award on the ground, inter alia, that the Arbitrator has mis-conducted the proceedings by not appreciating the evidence on record with the result that the efforts made by the plaintiff-contractor in the execution of the contract has not been appreciated. It was the case of the plaintiff-contractor that he was to execute the contract by February 22, 1981. The plaintiff-contractor managed to carry the 'Ghall' to its boom head at Ichhari from where it was to be transported to the sale depot of the defendant-corporation at Mantaruwal. On February 15, 1982, total timber measuring 11,800 cubic metres had already reached the Mantaruwal sale depot in respect of which a running bill for Rs. 15,732.91 was passed by D.O. Mantaruwala. The bill was handed over to Divisional Manager, Sawra for payment who did not make the payment and as such the plaintiff-contractor filed claim of Rs. 15,732.91 together with interest at the rate of 18% per annum till the date of full and final payment. It was also the case of the plaintiff-contractor that the remaining timber was handed over to the defendant-corporation after February 15, 1982 and the plaintiff-contractor was entitled to claim a sum of Rs. 75,000 with interest at the rate of 18% per annum from the date of completion of work till its full and final payment. The plaintiff-contractor has further claimed a sum of Rs. 88,464.24 on account of 10% deductions made by the defendant-corporation on the running bill dated February 16, 1982 and another sum of Rs. 18,053.90 deducted from the running bill of the plaintiff-contractor at the rate of 2% towards income tax etc., along with interest at the same rate. A sum of Rs. 81,500 was claimable since it was lying with the defendant-corporation by way of security, with interest at the rate of 18% per annum. Similarly, the defendant-corporation deducted a sum of Rs. 15,500 arbitrarily on account of charges towards Winch Machine as against Rs. 5,000 "which could be the normal charges of the Winch Machine.
18. The plaintiff-contractor further asserted that the defendant-corporation had charged Rs. 5 per quintal for transportation of Chhanda Timber from Dak Pathar to Mantaruwala for about 7,155 quintals whereas it should not have been more than Rs. 2 per quintal. In this way, the deduction being excessive, a claim for Rs. 21,465 with interest at the rate of 18% per annum had been set up by him. It was further claimed by the plaintiff-contractor that as per terms and conditions of the tender of the agreement between the parties, the defendant-corporation was to provide about 15,000 cubic metres for launching but only 13061.2659 cubic metres were handed over with the result that the plaintiff-contractor suffered a loss of Rs. 1,50,000 since the rate given in the tender was offered keeping in view 15,000 cubic metres and in case the plaintiff-contractor knew that the defendant-corporation had only 13061.2659 cubic metres timber for launching, higher rate would have been offered by the plaintiff-contractor. The plaintiff-contractor also made claim of Rs. 6,000 towards legal charges and Rs. 20,000 towards expenses incurred on visits paid by the Director to the offices of the defendant-corporation.
19. According to the counter claim of the defendant-corporation the loss was caused mainly because of the negligence on the part of the plaintiff-contractor as the progress of the work was not in terms of the conditions of the agreement. In fact, the plaintiff-contractor was required to engage minimum strength of 260 labourers for launching and floating the timber measuring 13161.2659 cubic metres delivered and accepted by the plaintiff-contractor. It was found that the plaintiff-contractor had engaged about 21 to 142 labourers during the course of the execution of the work and despite numerous communications addressed to the plaintiff-contractor no attention was paid by him with the result that the Ghall could reach the boom only in the month of May, 1981 when according to the schedule, the plaintiff-contractor was required to float the entire timber upto boom by February 22, 1981. It was the case of the defendant-corporation that when the Ghall reached Ichhari boom, plaintiff-contractor was asked time and again to engage more labour to collect the timber from the boom, but he failed to accept the advice with the result that the timber remained there for a period of about two months causing threat to the very existence of the dam. The Executive Engineer Hydle Project asked the defendant-corporation time and again to take out the entire timber from the lake as it was causing great disruption in the flow of water and danger to the channel Jali of the dam. He was further informed that in case logs were not collected and taken out of the lake before the rising of the water in the river, the dam authority will have to open the spill way gates to discharge the excessive water, in view of the approaching rainy season and in that event, the timber would be washed down. The defendant-corporation issued directions to the plaintiff-contractor in this regard and he was also supplied Winches etc. in order to take out the logs from the dam, but the plaintiff failed to engage sufficient labour and to take out the logs from the dam as a result of which the timber was washed away when the flood gates were opened by the dam authorities. All this happened on account of the negligence of the plaintiff-contractor. For transportation by trucks, departmental trucks had to be provided at the risk and cost of the plaintiff, whereby expenditure of Rs. 4,011.35 remained recoverable from the plaintiff-contractor.
20. The defendant-corporation also claimed that when the timber was measured at Mantaruwala sale depot, it was found less then the quantity, launched/handed over the plaintiff-contractor. As per Clauses 10 and 11 of the agreement, the plaintiff-contractor was liable to pay for the loss beyond the permissible limit of 5.5%. The loss on five various heads was calculated of Rs. 12,20,160.30 recoverable from the plaintiff-contractor by way of counter claim along with interest at the rate of 18% from 1982 till February 28, 1989 besides, costs of Arbitration proceedings amounting to Rs. 10,000 on the basis of the claim and counter claims. The Arbitrator framed the following issues :
"(1) Whether the claimants M/s. Charan Singh & Co., were entitled for the claim and other relief made in the petition filed by them ?
(2) Whether the respondent corporation is entitled to the claim and other relief mentioned in the claim petition filed by them ?
(3) Relief."
21. The parties led their oral and documentary evidence before the Arbitrator and passed the Award as aforesaid.
22. The learned Single Judge while setting aside the Award of the Arbitrator and remitting the proceedings for fresh decision to him held as follow :
"After perusing the case file, I am of the considered opinion that this Award deserves to be set aside. It is a speaking Award. Perusal of Clause 23 of the agreement demonstrates that the carriage charges of the timber from Echhari to sale depot Mantaruwala are Rs. 5 per quintal. The case of the plaintiff is that the distance from Dakpathar to Mantaruwala is half of the distance from Echhari to Mantaruwala, but the defendant has realised Rs. 5 per quintal from the plaintiff. This contention of the plaintiff is not rebutted by the defendant in the evidence. However, the claim of the defendant has been allowed by the Arbitrator. This is a patent mistake in the Award.
Turning to the other aspects of the case it is noticeable that the total quantity of the timber notified for Ghall in the tender was approximately 15000M 3 logs, sawn timber and hakries. However, the defendant states that total timber entrusted to the plaintiff was to the extent of 13047.2639. For this the defendant depends upon the launching documents signed by the representative of the plaintiff and the shortage is taken on the basis of the total timber stacked at the sale depot. There is no satisfactory evidence on this aspect. The timber was in stacked condition at the launching spot. It was not actually counted. Launching started by" throwing it into the river. The launching documents appear to have been signed casually and routinely. This conclusion is supportable by the fact that there is no evidence of particular quantity subjected to theft or loss on account of floods. Therefore, whatever quantity was launched at the launching depot, has to be accepted having reached at the receiving end in view of completely unsatisfactory evidence on this aspect.
The second aspect of this question is, whether the plaintiff was negligent in the execution of the contract ? It was contended by Shri Prem Goel that the contractor did not engage sufficient labour to carry the Ghall, although, he was warned on occasions. As a result of the delay, there contract was not executed within time and due to opening of gates by the dam authorities, lot of timber was washed away. This would not have happened in case the plaintiff had engaged sufficient labour to carry the Ghall to the destination in time.
This contention has been seriously disputed by the plaintiff. It has been contended that sufficient labour was engaged and all efforts were made to complete the Ghall at the earliest, it was on account of the non-co-operative attitude of the defendant that the delay had taken place.
While examining this question, the Arbitrator has not taken into consideration some of the material parts of the documents like Exts. P/21, P/22, P/24, P/25, P/27, P/31 and P/32 which clearly point out that the defendant did not engage more labour and Chowkidars to carry the Ghall speedily at the cost of the plaintiff, in case the latter was not doing the same as per agreement or directions of the defendant. It should have done so and the costs could be realised from the contractor. Inaction plainly points out that the complaint of the defendant was not correct and the contractor was carrying on the Ghall operation with reasonable speed. The plaintiff may have failed to execute the contract within the stipulated period, however, it cannot be said that it was negligent in the execution of the contract resulting in any kind of loss to the defendant. In case the timber was being subjected to thefts, the defendant should have engaged more Chowkidars to look-after it at the cost of the contractor, but mis was not done. Therefore, the allegation that the timber was subjected to theft for lack of sufficient Chowkidars, is without any basis.
There is also no evidence of negligence on the part of the plaintiff in carrying away the timber by not engaging sufficient labour. It has been stated by the plaintiff that it had been engaging sufficient labour. However, the defendant could engage more labour at the cost of the contractor in case it found that the labour engaged by the contractor was less and the carriage of Ghall was likely to be delayed and affected by the approaching rainy season. All these facts have not been carefully scrutinised by the Arbitrator, although they are considerably material for the determination of the matter between the parties."
23. On the above-said reasoning the objections of the plaintiff-contractor filed under Section 30 of the Act were allowed.
24. On examination of the Award, we find that as many as four witnesses were produced by the defendant-corporation and in addition to their deposition, numerous documents were also produced on record. The plaintiff-contractor produced Sant Ram one of the partner in support of the claim who has refused to admit the communication issued to the plaintiffs firm from time to time by the defendant-corporation. The Arbitrator on consideration of the entire oral and documentary evidence on record found that launching, floating and delivery of 'Ghall' upto boom head had remained very unsatisfactory on the part of the Contractor(s) mainly due to less engagement of labour and the various progress reports submitted by the 'Ghall' staff to the office of D.M. Sawra, clearly indicate that the Contractor(s) had never maintained the required strength of 'Ghall' labour/workers to expedite the work in accordance with the various operational schedules of 'Ghall' work. He found that the strength of labour for the various corresponding period to the submission of weekly progress report remained unsatisfactory as it was reduced several times even upto the number of 21 or so and the out-put of small number of labourers was not possible to achieve the conclusion of contract within stipulated period. The contractor(s) was to engage about 260 labourers as was specified in the agreement, but no efforts were made by him to engage more labourers to complete the work. The Arbitrator also noticed that the Corporation authorities had time and again served the Contractor with number of notices as per Exhibits P-19 to P-27, P-31 to P-37 etc. and reminders to increase the strength of labour and speed up the progress of 'Ghall' work. All these facts have also been mentioned by the various witnesses produced by the plaintiff-contractor. The Arbitrator also found that the late arrival or 'Ghall' caused danger to the existence of Dam but despite having clear cut directions from the Dam Authorities about it and also providing all the possible assistance by the Forest Corporation to the Contractor, by supplying Winch-Machine to take out the timber from lake/Dam, the Contractor still remained negligent towards his contractual obligations and as a result the Dam Authorities opened the gates of Dam after affording sufficient opportunity to the Contractor which resulted in the flooding away of timber in 'Chhanda' which ultimately caused such high extent of loss. It was also noticed that the launching lists for 13161.2659 M3 also stand verified by one of the partner Shri Sant Ram vide Ext. P-18 and the launching was started on 12.11.1980 as against 02.11.1980 as per Ext. P.-25 and as such there was no delay in delivery of timber to the Contractor for launching. From the perusal of the record placed before the Arbitrator it was found that as per the calculation of the actual volume of the timber in terms of number of Nugs received at the depot, the same was entered into the relevant register/record to prepare the depot account. Once the timber was handed over to the Contractor under proper receipt (for which the launching list was a basic record Ext. P-18), it was the sole responsibility of the Contractor to deliver the timber in safe and sound condition at the required destination as per Clauses No. 7, 10 and 11(b) of the Agreement Deed (Ext. P-17). The Arbitrator also found that the loss could be kept within some reasonable limit, had the Contractor taken serious steps towards the alarming notices/requests made by the Corporation to increase the labour at a very primary stage for which documents Exts. P-19, P-21, to P-25 were relied upon being relevant and in such circumstances the responsibility of high loss crossing the permissible limit of 5.5% was found to be borne by the Contractor. On the facts and in the circumstances of the case, we, therefore, have no hesitation in holding that the Award of the Arbitrator was based on proper appreciation of entire oral as well as documentary evidence adduced before him by the parties and it was well reasoned Award which could not be or ought not to have been interfered with by the learned Single Judge.
25. The Supreme Court in U.P. State Electricity Board v. Searsole Chemicals Ltd., (2001) 3 SCC 397=2001(1) Arb. LR 531 (SC) while dealing with the scope and ambit of the interference of the Court under Sections 30 and 33 of the Act observed that when the Arbitrators have applied their mind to the pleadings, the evidence adduced before them and the terms of the contract, there is no scope for the Court, including the Supreme Court to reappraise the matter as if this were an appeal, and it is clear that where two views are possible, the view taken by the Arbitrator would prevail.
26. On bare reading of the provision of Section 30 of the Act we are of the view that the scope for interference by the Court with an Award passed by the Arbitrator is limited. Section 30 provides in somewhat mandatory terms that an Award shall not be set aside except on one or more of the grounds enumerated in the provision. In Indu Engineering and Textiles Ltd. v. Delhi Development Authority, (2001) 5 SCC 691=2001(2) Arb. LR 486 (SC) it is held 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. The Court further proceeded to hold that interpreting the statutory provision numerated in Section 30 of the Act by the Court for setting aside or interfering with an Award in umpteen cases. Some of the well-recognised grounds on which interference is permissible are :
(1) Violation of the principle of natural justice in passed the Award;
(2) Error apparent on the face of the Award ;
(3) The Arbitrator has ignored or deliberately violated a clause in the agreement prohibiting dispute of the nature entertained ;
(4) The Award on the face of it is based on a proposition of law which is erroneous, etc.
27. Again in Ispat Engineering & Foundry Works v. Steel Authority of India Ltd., (2001) 6 SCC 347=2001(2) Arb. LR 650 (SC) it is held as under : (Para 4 P. 350):
"(4) Needless to record that there exists a long catena of cases through which the law seems to be rather well settled that the reappraisal of evidence by the Court is not permissible. This Court in one of its latest decisions Arosan Enterprises Ltd. v. Union of India, (1999) 9 SCC 449=1999(3) Arb. LR 310 (SC), upon consideration of decisions in Champsey Bhara & Co. v. Jivraj Balloo Spg. and Wvg. Co. Ltd., AIR 1923 PC 66, Union of India v. Bungo Steel Furniture (P) Ltd., AIR 1967 SC 1032=(1967) 1 SCR 324 and N. Chellapan v. Secy., Kerala SEB, (1975) 1 SCC 289, etc., has stated that reappraisal of evidence by the Court is not permissible."
28. In Maharashtra State Electricity Board v. Sterilite Industries (India) and Anr., (2001) 8 SCC 482=2001(3) Arb. LR 532 (SC) again it is re-asserted by the Apex Court that unless the error of law is patent on the face of the Award, neither the High Court nor the Supreme Court can interfere with the Award. In the present case as discussed hereinabove, we do not find any violation of principles of natural justice in passing the Award, nor any error apparent on the face of the Award passed by the Arbitrator. Similarly, the Arbitrator has not ignored or deliberately violated the clauses in the agreement prohibiting dispute of the nature entertained nor the Award on the face of it is erroneous and therefore, we find no perversity or infirmity in the Award based on wrong proposition of law and therefore, the learned Single Judge was not justified in interfering with the Award of the Arbitrator as the view taken by the Arbitrator was a possible view based upon the sound scrutiny of the evidence on record.
29. The ratio of the judgment in K.P. Poulose v. State of Kerala and Anr., AIR 1975 SC 1259 relied upon by the learned counsel for the plaintiff is of no help to the plaintiff-contractor in the facts and circumstances of the case in hand. In that case, the Arbitrator had misconducted the proceedings by ignoring two material documents to arrive at a just decision to resolve the controversy between the Department and the Contractor. It was noticed that if the department did not produce those documents before the Arbitrator and it was incumbent upon him to get hold of all the relevant documents including the two documents in question for the purpose of a just decision. Further, the Arbitrator arrived at an inconsistent conclusion even on his own finding and in such circumstances the Award was held suffering from a manifest error apparent ex facie.
30. In Fertilizer Corporation of India Ltd. v. Bharat Painters, it was found by the learned Single Judge of the Orissa High Court that non-application of mind to the materials on record would suggest absence of fair play and indicates that the Arbitrator did not function in a manner befitting his role. On perusal of the record it was noticed that the Arbitrator indicated that he had gone through the documents produced before him when in fact no documents were produced before him by either party, the Award was held to be invalid and accordingly set aside. In Dandasi Sahu v. State of Orissa, it is held that though the Arbitrator was not bound to disclose as to what interpretation he has made and what inference he has derived from the documentary evidence, he is bound to refer in the Award that he had considered all the documents placed before him no matter whether he relies on them or discards them from consideration. The Arbitrator in his Award in that case ex facie did not mention that he had referred to or considered the documents placed before him in respect of the original claim and for that reason the Award was held vitiated by non-application of mind of the Arbitrator. Both these decisions are also of no assistance to the learned counsel for the plaintiff-contractor to hold the Award in the present case vitiated or illegal on any sound and justiciable, ground.
31. No other point was urged before us by the learned counsel for the parties.
32. For the aforesaid reasons, the judgment under challenge is set aside. The appeal is allowed. The Award of the Arbitrator is made rule of the Court. However, there shall be no order as to costs.