Delhi High Court
C.L. Misra vs Nehru Bhawan Trust on 27 July, 1990
Equivalent citations: AIR1991DELHI39, 1990(2)ARBLR370(DELHI), 42(1990)DLT290, ILR1990DELHI142, 1990RLR370, AIR 1991 DELHI 39, ILR(DEL) 1990 (2)DEL142, 1990 (2)ARBI LR370, (1990) ILR 2 DEL 142, (1990) 2 ARBILR 370
ORDER
1. C. L. Misra, sole proprietor of M/ s. C. L. Misra & Associates, had entered into a contract with Nehru Bhawan Trust. Certain disputes having arisen between the parties with regard to the said contract, the petitioner had filed a petition under Section 20 of the Arbitration Act for appointment of arbitrator and for reference of the claims of the petitioner for decision to such arbitrator. The Court had allowed the petition on March 12, 1980 and had made reference to the arbitrators to be nominated by the respondent. The two arbitrators, namely, S/Shri K. P. Sharma and S. G. Pradhan had given the non-speaking award dated August 12, 1985, awarding Rs. 77,290/43 p. to the petitioner against the respondent with the directions that the amount be paid within one month failing which the respondent will be required to pay interest @ 12% per annum till payment or on decree whichever is earlier. The petitioner filed the application for filing of the award and for making the award rule of the court.
2. On notice being issued to the arbitrators, the arbitrators have filed the award and the proceedings in this Court of which due notice was given to the parties and the respondent has filed objection petition i.e. 2309/86 under Sections 30 & 33 of the Arbitration Act. Various objections have been taken in the petition in challenging the award. The petitioner has filed the reply to these objections and following issues were framed:
1. Whether the award is liable to be set aside on any one of the grounds taken in the objection petition?
2. Relief.
ISSUE NO. 1:
3. The matter was required to be decided by affidavits and the affidavits were filed. However, the learned counsel for the objector has raised his contentions based on the contents of the award and the evidence led before the arbitrator.
4. The first contention raised by the learned counsel for the objector is that a counter-claim had been filed by the objector but it appears from the award that the arbitrators have not at all taken into consideration the said counter-claim and had not given any decision on the counter-claim and thus, the award stands vitiated and the matter is required to be remanded back to the arbitrators for deciding the counter-claim of the objector.
5. In reply to this objection it was pleaded by the petitioner that in fact, the counterclaim was not referred for decision to the arbitrators and in the alternative a plea has been raised that the counter-claim and the evidence led in that connection were duly considered by the arbitrators. In Laminated Packings v. Union of India, 1983 Rajdhani Law Reporter (Note) 8, a single Judge of this Court had held that Once the disputes are referred to arbitrator under a petition filed by one of the parties under Section 20 of the Arbitration Act the opposite party has a right to file the counter-claim before the arbitrator. So, there is no merit-in this contention that the counter-claim put forward by the objector before the arbitrators could not have been entertained by the arbitrators.
6. The short question which, thus, arises for decision on this point is whether the arbitrators would be deemed to have considered the counter-claim of the objector and rejected the same or not ? The award given in the present case is a non-speaking and brief one. It is mentioned in the award that these arbitrators have been constituted under powers vested vide agreement dated January 20, 1976, made between the parties and after having deliberations in the matter during number of meetings and concluding sittings held on August 12, 1985, pronounced the award unanimously. It was recited in the award that after hearing the claimants and the respondents on (1) the claims (2) reply to the claims,and (3) rejoinder by the claimants and examining of the materials and factual evidence including statements and records produced before them by the parties concerned and having allowed arguments, cross-questions during the arbitration sittings, they jointly and unanimously awarded the said sum to the claimant.
7. The learned counsel for the objector has vehemently argued that it is not recorded in the award as to whether the counter-claim of the objector was at all considered and if so, what decision has been given by the arbitrators in respect of the said counter-claim. I have gone through the various proceedings held by the arbitrators which do indicate that the parties had not only led evidence with regard to the counter-claim of the objector but submissions were also made in respect of the counter-claim which were reduced into writing and thereafter the award was given. So, there is no grievance of the objector that necessary hearing was not given by the arbitrators with regard to the counter-claim set up by the objector before the arbitrators. It is also to be seen from the arbitration proceedings that the petitioner had set up seven claims arising out of the said contract between the parties. The first claim pertains to a sum of Rs. 39,651/ 34 p. with regard to payment due on the basis of final measurements made in presence of the parties in accordance with the orders of the court dated June 8, 1977. Claim No. 2 pertains to interest amount on account of delayed payments and delayed issuance of certificates by the architect and also interest on the amount unauthorisedly deducted by the objectors. These amounts were Rs. 1, 12349 p., Rs. 2,192/ 39 p., Rs. 41,822/ 64 p. and Rs. 2,271/ 98 p. The third claim pertains to refund of the earnest money to the tune of Rs.6,000/-. The fourth claim pertains to claimant having been forced to leave the site after wrongful rescission of the contract and his material having been taken over by the objector and the total amount claimed in respect of the same was Rs. 13,826/ -. The fifth claim pertains to damages occurring to the claimant on account of claimant having been forced to retain the staff after expiry of the contract period and had to incur charges for maintenance of the office and for payment of charges for varios material of shuttering and the loss of profit on unexecuted work which he totalled at Rs. 1,10,335/-. Claim No. 6 pertains to compensation loss of business due to wrongful withholding of money due to the claimant which was to the tune of Rs. 30,000/-. Last claim pertains to expenses incurred on legal proceedings to the tune of Rs. 10,000/-. So, the total amount claimed by the claimant was Rs. 2,57,419/ 84 p. Out of these seven claims only claim No. 5 appears to be connected with the damages incurred by the claimant on account of fault of the objector regarding the performance of the contract.
8. The objector had filed reply to this claim petition and along with reply simultaneously respondent-objector filed the counter-claim. In the counter-claim the respondent claimed Rs. 4,61,036/ 25 p. and these amounts were so claimed on account of delay made by the contractor in completing the construction work. So, one of the issues arising between the parties was whether the contractor had been at fault for the delay occurring in completion of the construction work or the objector was at fault in this connection. The petitioner had claimed damages on account of this item, as referred above, whereas in the counter-claim the objector claimed damages. So, in a way the counter-claim was inter-linked with the question of fact which has to be established before the arbitrators as to which party was at fault in the delayed execution of the construction work.
9. The learned counsel for the objector has argued that as there is no specific men ion made in the contents of the award that the arbitrators had considered the counter-claim of the objector, so it should be held that the counter-claim of the objector remained undecided by the arbitrators. He has placed reliance on K. V. George v. The Secretary to Govt., Water and power Department, Trivandrum and another, and Dandasi Sahu v. State of Orissa, . In the case of K. V. George (supra) the brief facts were that the arbitrator had made an award on the basis of the claim of one party and the counter-claim of the other party was kept for consideration subsequently. The Supreme Court held that undoubtedly such an award made by the arbitrator is not sustainable in law and the arbitrator has misconducted himself and in the proceedings by making such an award as it is the duty of the arbitrator while considering the claims of the appellant to consider also the counter-claims made on behalf of the respondents and to make the award after considering both the claims and the counter-claims. The Supreme Court held that the award given by the arbitrator without considering the counterclaim of the opposite party is wholly illegal and unwarranted.
10. This judgment is, however, distinguishable on facts. In the present case the arbitrators have not mentioned in the award that they would be considering the counterclaim of the objector subsequently. The question which needs to be decided is whether it could be inferred from the award itself or not that in fact, the arbitrators had considered the counter-claim of the objector or not and rejected the same or not? There is no dispute about the principles of law laid down by the Supreme Court that the arbitrator is bound to consider both the claim and the counter-claim and then to give the award. In th case of Dandasi Sahu (supra) the Supreme Court has laid down that though the arbitrator is 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 has considered all the documents placed before him, no matter whether he relies on them or discards them from consideration. This judgment is also not applicable to the facts of the present case. In the award it is clearly recited by the arbitrators that they have considered all the evidence and the records placed before them. So, it cannot be said that the arbitrators have not taken into consideration any particular document which was filed before them. The arbitrators have not given their findings with regard to claims of the petitioner or the counter-claims of the objector in any detailed manner or on any particular claim. They have awarded a lumpsum amount in favor of the petitioner-claimant. So, it cannot be said as to which particular claim of the petitioner has been allowed and to what extent. The award of lumpsum amount would only mean that it could be referable to all the seven claims of the petitioner on to anyone or more of them. The, contention of the learned counsel for the petitioner that the total amount awarded to the petitioner and also be referable to those claims of the petitioner which were not referable to any fault of the objector in resulting in delay in execution of the contract and thus, the Court should hold that the counter-claim of the objector was not at all considered by the arbitrators. I am afraid it is not possible to countenance this contention. The Court cannot read the mind of the arbitrators in order to pin-point as to which particular claim has been upheld and which particular claim has been negatived. What court has to see is whether the arbitrator have considered the counter-claim of the objector and have rejected the same or not? It is evident that once the arbitrators have awarded a lumpsum amount to the petitioner the natural inference is that they have declined the counter-claim of the objector. The proceedings before the arbitrators clearly highlight that the arbitrators were very much alive to the counter-claim of the respondent. So, the mere fact that in the award the arbitrators have not in so many words made any reference to the counter-claim and their decision on the counter-claim would not lead to any inference that the arbitrators have not considered the counter-claim of the objector and have not given any decision on the counter-claim. From the reading of the award as a whole along with the proceedings, it is evident that the arbitrators would be deemed have considered the counter-claim of the objector and rejected the same once they awarded the lumpsum amount to the petitioner-claimant and did not award any amount to the objector. I, hence, find no force in this contention.
11. The learned counsel for the objector has then pointed out that the arbitrators had ignored the certificate of the architect dated May 2,1977, which negatived all the claims of the petitioner and had held that a sum of Rs. 28,000/- or so due from the petitioner to the objector. He has pointed out that certain measurements were carried out by a commissioner appointed by the court during the proceedings under Section 20 of the Arbitration Act but the Commissioner had died and thus, the report of the Commissioner which was also put up before the arbitrators could not have been relied upon by the arbitrators. So, it is argued that the award of the arbitrators is based on inadmissible evidence ignoring the certificate of the architect which was final in view of clause 37 of the contract and thus, the award stands vitiated.
12. The learned counsel for the petitioner, on the other hand, has pointed out that the award shows that the arbitrators have considered all the documents and the evidence led before them and have awarded a lumpsum amount to the petitioner and the court cannot read the mind of the arbitratore in order to decide as to which particular evidence was believed by the arbitrators and which particular evidence was not relied upon by the arbitrators. The award being non-speaking one cannot be questioned by the court by calling out reasons which are not, there in the award for holding that particular evidence was in fact relied upon by the arbitrators in giving the award. In the alternative he has argued that measurements regarding the work for which no payment had been made, was carried out by a Local Commissioner appointed by the court and the report was also submitted in the court and no objections having been filed to that report in court, the report became binding on the parties and could be relied upon by the arbitrators. He has also pointed out that the petitioner has already invoked the arbitration clause putting up his claims in April 1977 and had raised grievances against the conduct of the architect and later on the architect had given a certificate dated May 2, 1987, which could not be the basis for deciding the disputes between the parties and the court while deciding the petition under Section 20 of the Arbitration Act had clearly held so.
13. It is evident that the award being nonspeaking one the court cannot visualise as to what particular evidence has been believed by the arbitrators and what particular evidence has been not believed. So, it cannot be said that the award is based on any inadmissible evidence. There is also force in the contention of the learned counsel for the petitioner that the architect's certificate given after the petitioner had invoked the arbitration clause is of no value and the report given by the Local, Commissioner to which no objection were filed in the court could be the basis for the arbitrators to uphold the claim of the petitioner with regard to the said item. So that as it may, I am of the firm view that the award cannot be set aside on such an objection when particularly the award is a non-speaking one. I, hence, find no force in this contention as well.
14. No other point has been raised by the learned counsel for the objector.
15. Hence, I hold that the award is not liable to be set aside on the objections raised in the objection petition. Issue is decided against the objector.
RELIEF:
16. The objection petition is liable to dismissed. I dismiss the objection petition I. A. 2309/86. However, I hold that the arbitrators were not entitled to award any interest and thus, I make the award a rule of the court to the extent that the objector is to pay Rs. 77,290/43 p. to the petitioner-claimant. I award interest @ 9% per annum from today a till payment.
17. Order accordingly.