Patna High Court
Pioneer Engineering Works vs Union Of India (Uoi) on 25 September, 1958
Equivalent citations: AIR1959PAT374, AIR 1959 PATNA 374, ILR 38 PAT 88
Author: V. Ramaswami
Bench: V. Ramaswami
JUDGMENT
1. This appeal is brought on behalf of a firm called Pioneer Engineering Works against the order of the Additional Subordinate Judge Rancbi, dated 22-2-1955, rejecting an application for settling aside an award and granting a decree in terms of the award with regard to the claim made by the appellant.
2. It appears that the appellant entered into two contracts namely, contract No. P/256 of 1943/44 and contract No. PAN/26 of 1944/45, with the Governor General in Council through the Chief Engineer, Eastern Command, Ranchi, in order to make certain constructions for the mili-
tary department. The work completed in the year 1945 and the final bills were also paid to the appellant near about the same time. The appellant, however raised certain objections regarding payment alleging that it had been underpaid with regard to certain items. The military department disputed the claim of the appellant and stated in their turn that the appellant had been overpaid with regard to certain items.
The dispute was ultimately referred to sole arbitration of Brigadier Bikram Singh, who was Brigadier in charge of Administration, Eastern Command. He accepted the reference, and on 25-11- 1953, he wrote to the parties asking them to submit their statements. In pursuance of that tetter the appellant submitted its claim on 26-12-1953, and the Government filed their Statement on 18-2- 1954. In the reply of the Government dated 18-2-1954, they also made a counter-claim with regard to over payment to the contractor. The arbitrator gave a hearing to the parties on 14-4-1954, and published the award on 24-4-1954. The relevant portion of the award of the arbitrator is as follows :
"I award and direct that :
Firstly, The Claimants' claims after adjusting the Respondents Counter-claims are rejected.
Secondly, Each party shall bear its own cost of reference.
Thirdly, Stamp duty shall be paid by the Respondent."
3. The appellant made an application before the Additional Subordinate Judge for setting aside the award.
4. The Additional Subordinate Judge rejected the application of the appellant and ordered that judgment should be pronounced in terms of the award under the provisions of Section 17 of the Arbitration Act.
5. The main submissions made on behalf of the appellant in this Court are (1) that the arbitrator has gone beyond the subject-matter of the reference, and so the award is illegal and should be set aside, (2) that the award has not been given within the period of four months as provided in Schedule 1, Article 3 of the Arbitration Act, and (3) that the arbitrator has misconducted himself in entertaining the counter-claim on behalf of the respondent.
6. During the course of the argument the learned Government Advocate said that he would not press the first two points. He concentrated his argument only on the third point namely, that the arbitrator should not have entertained the counter-claim made on behalf of the respondent with regard to over payment for the work done by the appellant. In support of his submission learned Counsel referred to the letter of the arbitrator (exbbit 2) date 25-11-1953, in course of which he stated as follows :
"Respondent's pleading.
7. If you are the respondent then, when you have received a copy of the claimant's statement and particulars of claim, please prepare your pleading in writing and state therein your defence in reply to the claim and forward the same to me.
8. You must send a copy of your pleading to the claimant to reach him not later than 22-2-1954."
It appears that the appellant filed its claim before the arbitrator on 26-12-1953, and the Union of India filed a reply to the claim of the appellant and also put forward a counter-claim on 18-2-1954. The arbitrator fixed 8-3-1954, for hearing the parties but subsequently postponed the date of hearing and on 22-3-1954, the time of publication of the award was extended by four months. The arbitrator actually heard the parties on 14-4-1954, and gave his award on 24-4-1954, and published it on the same date.
The argument of the learned Government Advocate on behalf of the appellant is that the claim of the respondent with regard to over payment have been made on 7-1-1954, and not 18-2-1954, and that the counter-claim of the respondent with regard to over payment was barred by time. We do not accept the submission of the learned Government advocate as right. It appears from the record of the case that the appellant tcok no objection before the arbitrator that the counterclaim was made by the respondent beyond the time granted by the arbitrator nor did it make any complaint before him, whether any prejudice was caused to it because of the delay made by the respondent in making their claim.
It also appears that the appellant was aware of the counter-claim even before matter was referred to the arbitrator. The letter dated 14-12-1948, printed at p. 39 of the paper book shows that the appellant made a complaint before the Government authorities that when it first pressed for payment it was "confronted with an alleged counter-claim by the department concerned." It also appears from paragraphs 5 and 6 of the written statement filed by the respondent that the appellant had been intimated in 1947 that it had been over-paid to the extent of Rs. 31,834/- even after having allowed the amount for dressing to drain in the bill, as decided by the Chief Engineer. Paragraphs 5 and 6 of the written statement run as follows :
"The Claimant in this paragraph is referring to C. E. E. C. No. 6601/4/71/ES dated 11-9-47. This letter pertains to C. A. No. P/256 of 43-44 only and is a reply to the Claimant's letter regarding dressing sides of drains intimating him that the payment for the items was being allowed in the bill. Copy of the letter in question' is attached as exhibit 1 for perusal of the arbitrator. G. E. Panagar No. 8107/RDW/E8 D/- 23/24 Sept. 47 also referred only to C. A. No. P/256 of 43-44 and in that he not only intimated the Claimant that Rs. 23,481/- were outstanding against him in the contractors ledger but also intimated him that in addition, he had been over-paid to the extent of Rs. 31,834/- even after having allowed the amount for dressing to drain in the bill, as decided by the C. E."
7. Paragraph 22 of the written statement runs as follows :
''The amounts mentioned in Para. 21 above were under reference with the Claimant since their discovery and that against Items 21 (a) and (b) was accepted by the Claimant while signing the supplementary bill for C. A. No. P/256 of 43-44 on 13-7-50 and tbat against 21 (c) above was virtually accepted by the Claimant as this was never chal lenged/objected to while signing the said supple-
mentary bill. Despite this, the Claimant has failed and neglected to reimburse the said overpaid amounts and the Respondent therefore requests for those to be upheld against the Claimant."
It also appears from the proceedings before the arbitrator that no objection Was raised by the appellant that the counter claim should not be entertained by the arbitrator. It is alleged in paragraph 6 of the petition of the defendant dated 21-9-1954, that on 24-2-1954, the appellant wrote to the arbitrator "requesting hurt to ensure the attendance of the witnesses mentioned therein on the date of hearing and also wrote a letter to the Chief Engineer giving him notice to cause to be produced at the hearing a large number of document's serials 1 to 66, referring to the claim of the plaintiffs and the counter claim of the defendant the Union of India." It appears to us, therefore that the appellant was full aware of the counter claim made by the respondent and it sought to lead evidence before the arbitrator to show that the counter-claim was not substantiated. It appears to us that the irregularity, if any, made by the arbitrator in accepting the counter claim beyond the time fixed by him in Ex. 2 has been waived by the appellant who took part in the proceedings before the arbitrator with full knowledge of the irregularity and without protest.
It is well settled that in such a case the Court will not permit any of the parties to lie by or act in an indecisive manner so as to obtain the benefit of the award if it is in his favour and endeavour to set it aside if it is not. That is the view taken by Tinddal, C, J., in Bignall v. Gale, (1841) 10 LJCP 169 at p. 171, where he says as follows :
''In coming to a determination upon this case, I cannot get rid of what makes a great impression upon my mind, that the defendant for three weeks knew of every objection which has now been urged to this award, and gave no notice of his intention to dispute it on those grounds. He knew on the 17th of December, these witnesses had been examined in his absence.
What right had he then to lie by with his grievance dormant in his own bosom, and now dispute for the first time, the validity of the authority which has been exercised? He ought at the time to have made his election, and to have insisted on another meeting at which he might have been confronted with the witnesses and given his ex-
p lanation of their testimony. But this case may e decided on another ground."
The same view has been expressed by the Judicial Committee in Chowdhri Murtaza Hossain v. Mt. Bibi Bechunnisa 3 Ind App 209, in which it was alleged by the defendant that the award which determined the succession to a talookidary registered under Act, 1 of 1869, having been based upon a certain will produced which in terms referred to another will of the same testator not produced, there was miscarriage on the part of the arbitrators in making their award.
It appears that in that case the defendant, in the proceedings before the arbitrators notwithstand-ing the knowledge that the document was withheld, submitted nevertheless, to take his chances of the arbitrators. It was held by the Judicial Committee in the circumstances, that the award could not be set aside on the ground of the objection taken. It was pointed out by the Judicial Committee that the defendant having a clear knowledge of the circumstances on which he might have founded an objection to the arbitrators proceeding to make their award did submit to the arbitration going on, and that he allowed the arbitrators to deal with the case as it stood before them, taking his chance of the decision being more or less favourable to himself and therefore, it was too late for him, after the award has been made, and on the application to file the award to insist on the objection to the filing of the award.
In view of this principle, we hold that the appellant cannot be permitted to raise the objection in the present appeal, and the objection must be overruled. In our opinion, the lower Court was right in dismissing the application of the appellant and passing a decree in terms of the award. We do hold that there is no substance in this appeal. It is accordingly dismissed with costs.