Punjab-Haryana High Court
Haryana State Electricity Board And ... vs Universal Fasteners Pvt. Limited on 2 November, 1999
Equivalent citations: (2000)124PLR565
Author: R.L. Anand
Bench: R.L. Anand
JUDGMENT R.L. Anand, J.
1. The Haryana State Electricity Board (hereinafter referred to as 'the Board') has filed the present civil revision and it has been direct against the judgment dated 27.2.1998 passed by the Court of Additional District Judge, Faridabad, who accepted the appeal of the respondent and set aside the judgment and decree dated 13.6.1996, passed by the Court of Additional Civil-Judge (Senior Division), Faridabad, who allowed, the application under Sections 14 and 16 of the Indian Arbitration Act and made the award dated 19.6.1990 rule of the Court.
2. The brief facts of the case are that the Board filed an application Under Sections 14 and 16 of the Act for making the award dated 19.6.1990 rule of the court. The award was passed by the Arbitrator-Superintending Engineer (Operations) of the Board, Faridabad. On appearance, M/s Universal Fastners (P) Ltd. (respondent) filed the objections Under Section 30 of the Act and pleaded that the award was illegal and contrary to the law, the award was time barred and there was no provision contained in the Arbitration Act whereby the Arbitrator could extend the time for making the award. The Arbitrator had entered into the reference on 30.8.1988 and the award was given by him on 19.6.1990 and, thus, the award was clearly barred by time as the same has been passed beyond four months. Clause-29 of the Arbitration Agreement does not permit extension of time either by consent of the parties or by the Arbitrator. Extension of time by the Arbitrator is a legal misconduct. It was further alleged by the respondent that the Arbitrator had not applied his mind to give grounds or reasons for making the award and the award does not disclose any application of mind. The Arbitrator is guilty of legal and profession misconduct. Moreover, the Arbitrator had no jurisdiction to pass the impugned award. In fact, the dispute was between the Board and the consumer of account No. 2SP 441 of M/s Ashok Mehal. The amount of the said account cannot be charged from the objector. The inclusion of the said amount to the account of the Objector was without jurisdiction. It cannot be termed to a dispute between the Objector and the Board regarding the supply of power. Jurisdiction has been wrongly assumed by the Arbitrator. It was also alleged that no requisite opportunity of hearing was provided to the Objector before passing the award and on the above grounds, the award is liable to be set aside.
3. The Board filed reply to the objections and raised a preliminary plea that the objections of the respondent against the award dated 19.6.1990 have not been submitted by the Objector within the period of limitation. On merits, it was the stand of the Board that the award in question was legal and the objections are wrong. The Objector was the petitioner before the Arbitrator and the time was extended by the Arbitrator on the request of the Objector who has always given his consent for the enlargement of the time for the passing of the award. The Arbitrator granted adjournments on the asking of the Objector in the interest of justice to enable the parties to present their case effectively. The Arbitrator passed the award after going through the documents and other evidence and submissions and after applying the judicial mind. He did not act as a tool in the hands of the Board. The Arbitrator had jurisdiction to pass the impugned award. The Objector was granted numerous opportunities by the Arbitrator to produce the evidence and present his case. The objections are not maintainable and are liable to be dismissed.
4. The Objector filed a rejoinder to the written reply of the Board, controverting the allegations of the written statement by re-iterating those made in the objection petition and on the above pleadings of the parties. The learned trial Court framed the following issues:-
"1. Whether the award dated 19.6.1990 is liable to be set aside as alleged? OPA
2. Relief."
5. The parties led evidence in support of their case and the learned Additional Civil Judge (Senior Division) vide judgment dated 13.6.1996 dismissed the objections of the respondent and made the award rule of the Court, for the reasons given in paras 10 and 11, which read as under:-
"10. The first objection of the Objector is that the matter was referred for Arbitrator on 30.8.1988 and then the award was made on 19.6.1990 i.e. after the period of more than 2 years, therefore, award is liable to the set aside and in support of his contention counsel for the respondent/Objector referred to a decision in Swaran Singh v. Pathankot. But to my mind this objection of the Objector is not tenable in view of the fact that the Objector himself has given the consent on different occasions before the Arbitrator for the extension of time and as the Objector himself has given the consent for extension of time, therefore, it does not lip in his mouth now to say that the Arbitrator has given the award after the expiry of four months period prescribed and thus the award is time barred. It is well established principle of law that the award made beyond the period of four months is neither invalid nor void merely on that account. If either of the parties raises any objection for continue to participate in the period before four months under provisions then only the Arbitrator be held to be functus officio. In the case in hand there was no objecting on behalf of either of the parties and on the contrary both the parties have given their consent for the extension of time, therefore, the award cannot be said to be invalid. Further it is also well settled that an award given within time by the letter of parties could not be said to be bad and set aside even if the letter was not mentioned in the minutes of the Arbitrator or in his award. When the award was announced in his own speaking order. In the case in hand as the parties themselves and given consent for extension of time and there are written consent available on behalf of the parties in the proceedings before the Arbitrator, therefore, to my mind the award cannot be rejected on this ground.
11. The learned counsel for the Objector submitted that the Arbitrator has not given reasons for the award, therefore, the award is liable to be set aside but to my mind this objection of the Objector is also not tenable because an Arbitrator is not bound to give any reason for an award that it is well established that merely because the award made by the Arbitrator does not mention even leading to the making of the award could not be held bad in law and it is also well settled that an award assigning no reason for the conclusion reached and has not made a reference of the evidence adduced it cannot be set aside and as the Arbitrator has determined the amount awarded after hearing the parties and making estimation of loss of the claimant the award cannot be set aside. The learned counsel for the Objector referred to a decision in Food Corporation of India Limited v. Great Eastern Shipping Company, A.I.R. 1988 S.C. 1198 and the decision in Rati Lal B. Soni v. State of Gujarat, A.I.R. 1990 S.C. 1132 but in view of my aforesaid discussion the decision in the aforesaid cases is not of any help to the Objector. The learned counsel for the Objector further contended that there is no rule of law under which the amount of one consumer can be adjusted towards the account of another consumer but I am afraid this objection cannot be raised now as the Arbitrator has already given his award after considering the objections on behalf of the Objector. Therefore, there being no force in any of the objections raised on behalf of the Objector this issue is decided against the Objector and the award dated 19.6.1990 cannot be set aside."
6. Aggrieved by the judgment dated 13.6.1996, the respondent filed the appeal before the Court of the Additional District Judge, Faridabad, who vide judgment dated 27.2.1998 allowed the appeal and set aside the judgment of the trial Court and allowed the objections under Section 30 of the Act and set aside the award dated 19.6.1990. This time the Board is aggrieved by the judgment of the Additional District Judge, Faridabad, and hence the present revision.
7. I have heard Mr. Hemant Gupta, Advocate, on behalf of the petitioner and Mr. S.K. Mittal, counsel for the respondent and with their assistance have gone through the record of this case.
8. Counsel for the petitioner submitted that the Arbitrator is a master of law and facts and the civil court could not sit as a Court of appeal over the award. It is not obligatory on the part of the Arbitrator to give reasons in the award unless there is an agreement to the contrary and that the award could not be even set aside by the first appellate Court on the ground that the same has not been passed within four months from the date of entering upon the reference. Mr. Hemant submitted that the parties willingly referred the matter to the Arbitrator in order to find out whether the bill of M/s Ashok Mehal can be clubbed with the energy bill of the respondent and the Arbitrator has taken note of this fact. The parties had been participating in the arbitration proceedings. They have never objected to before the Arbitrator that four months had already elapsed. They had given their approval for the extension of time and, in these circumstances, the award dated 19.6.1990 could not be set aside on the ground that it was beyond limitation.
9. On the contrary, the counsel for the respondent has supported the reasons of the first appellate Court.
10. After considering the rival contentions of the parties, I am of the considered opinion that there is no wrong with the impugned judgment dated 27.2.1998. There is no dispute with the proposition of law that the Arbitrator is a master of law and facts. The award can be set aside if the Arbitrator has misconducted himself or with the proceedings. In this case, the Arbitrator had entered upon the reference, on 11.5.1988 as is clear from the bare perusal of the award. Ex.O1. In these circumstances, it was obligatory on the part of the Arbitrator to give the award on or before 11.9.1988, the award, admittedly, was made on 19.6.1990 after the expiry of the period of more than 2 years from the date of entering upon the reference. Only the court has the power to extend the time Under Section 28 of the Act. It is the common case of the parties that neither the Arbitrator nor the Board of the respondent ever made an application for the extension of time. Even if it is assumed for the sake of arguments that the respondent had been participating in the Arbitration proceedings, still it does not confer any jurisdiction upon the Arbitrator to give the award beyond the statutory period of 4 months.
11. In this connection, reliance can be placed upon State of Punjab v. Hardyal, (1985)87 P.L.R. 683, a judgment of the Hon'ble Supreme Court, where it was held as follows:-
"Held, that a perusal of Arbitration Act of Clause 3 First Schedule indicates that it is open to the parties to an arbitration agreement to fix the time within which the arbitration must give award, but it has to be so stated in the agreement itself. If per chance no time has been specified by the parties in the arbitration agreement, then the virtue of operation of section 3 read with clause 3 of the First Schedule the award must be given within four months of the arbitrator entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow. Sub-section(i) of Section 28 is very wide and confers full discretion on the court to enlarge time for making the award at any time. The discretion under sub-section (1) of section 28 should, however, be exercised judiciously. Sub-section (2) of Section 28 also makes it evident that the Court alone has the power to extend time. It further provides that a clause in the arbitration agreement giving the arbitrator power to enlarge time shall be void and of no effect except when all the parties consent to such enlargement. It is not open to arbitrators at their own pleasure without consent of the parties to the agreement to enlarge time for making the award."
Further, it was held as follows:-
"Held that the Act has injuncted the Arbitrator to give an award within the prescribed period of four months unless the same is extended by the Court. The arbitrator has no jurisdiction to make an award after the fixed time. If the award made beyond the time is invalid the parties are not estopped by their conduct from challenging the award on the ground that it was made beyond time merely because of their having participated in the proceedings before the arbitrator after the expiry of the prescribed period."
12. In this view of the matter, it can be safely said that the Arbitrator has misconducted himself as well as the proceedings when he has given the award on 19.6.1990. Resultantly, the reasons adopted by the first appellate Court on this aspect stand confirmed.
13. Even otherwise, the award is liable to be set aside because the Arbitrator had included the electric consumption charges of account No. 2SP 441 of M/s Ashok Mehal in the account of the respondent and this fact can be clearly noted from the award Ex. 01. Both the accounts are separate. It is not proved at all that M/s Ashok Mehal had anything to do with M/s Universal Fastners. There was no Privity of Contract between M/s Universal Fastner and the Board that the former will also bear the bills of other consumer.
14. The contention of the learned counsel for the petitioner that the Arbitrator is the master of law and facts and even if he gives a wrong award, it cannot be set aside by the civil Court which cannot sit as a court of appeal. More so, when the parties have specifically referred the matter to the Arbitrator to adjudicate as to whether the bill of a third person can be included in the electricity bill of M/s Universal Fastners and this aspect has been answered by the Arbitrator in favour of the Board after taking into consideration the requisite rules of the Board.
15. So far the legal aspect of the contention of the counsel for the petitioner is concerned, there is no dispute but in this case if the Arbitrator has not applied his mind to the basic reference itself, then, certainly the civil Court will see to the illegality of the award. As I have stated above, there was no privity of contract between the respondent and the Board to bear the billing of any other consumer. Every consumer has a separate privity of contract and, in these circumstances, the Arbitrator had misconducted himself by holding that the bills of M/s Ashok Mehal can be clubbed in the bills of the respondent. The first appellate Court has rightly taken note of the judgment reported as Fateh Chand Murlidhar v. Maharashtra State Electricity Board, 1985(1) 196.
16. I have further gone through the award, Ex. 01. No reasons have been given by the Arbitrator how the respondent is liable to pay the electricity consumption charges of other electric connection bearing No. 2SP 441. Such an award cannot be endorsed by the Court of law.
17. I have gone through the reasons given by the first appellate Court in the judgment dated 27.2.1998 and do not see any illegality in the same, as a result of which I do not see any merit in this revision and the same is dismissed with not order as to costs.