K.C. Bhatia & Associate vs Urban Improvements Co. (P) Ltd.
1989 Latest Caselaw 320 Del

JUDGMENT

Y.K. Sabharwal, J.

(1) The sewerage work: in Sector 'C' of Green Fields Colony, Faridabad (Haryana) was awarded by the respondent/to the petitioner. Disputes and differences between the parties were objector referred to the sole arbitration of Brig. Harish Chandra (Retired) inaccordance with the arbitration agreement. The arbitrator has filed theaward and the proceedings in this Court The respondent has challenged the validity of award and has filed objections thereto (I.A.766/88). On pleadings of the parlies, following issues are framed :

(1)Whether there is any error apparent on the face of the award ?(2) Whether the award has been improperly procured ?(3) Whether the arbitrator is guilty of misconduct as alleged in the objection petition ?(4) Whether the award is liable to be set aside ?(5) Relief.

(2) Parties have filed evidence in the form of affidavits. As all the issues are inter-connected, it will be convenient to take them up together.

(3) The main objection raised by the respondent is that the arbitrator had made and signed his award on 6th August, 7987 but it was typed on anon-judicial stamp paper purchased on 22/08/1987 which is an inconceivable proposition. The inference drawn by the objector is that theaward which was made and written on 6/08/1987 was changed later on by the arbitrator who had become functus officio after making and signing the award on 6/08/1987. The objector contends that only award dated 6/08/1987 is the original award and the award filed in the Court is apparently that which was written on or after 22/08/1987.It has also been contended that facts show that the arbitrator has changed the first page of the award. On the basis of these facts, it is contended that there is an error apparent on the fact of the award which has been improperly procured and the arbitrator is guilty of misconduct.

(4) In order to appreciate the objection I may notice that the date given on the award as filed in Court is 6/08/1987. The award consists of two pages The date 6/08/1987 is typed on the second page of the award The second page is signed by the arbitrator and by one Avinash Bhasin as a witness to the award. The first page is on non-judicial stamp paper of Rs75.00.The first page also bears the initials of the arbitrator under the date 6th August. A small correction has also been made on the first page under the initials of the arbitrator. The date given there also is 6th August, The first page does not bear signatures or initials of the witness Avinash Bhisin.

(5) Mr. Wadhwani, learned counsel for the objector, contends that after making and signing of the award on 6/08/1987, the arbitrator had become functus officio and thereafter had no authority to change ore-write the award. As the stamp paper was purchased on 22/08/1987, learned counsel contends, it is apparent that at least the first page of the award was written on or after 22/08/1987.

(6) It is common case of the parties that the arbitrator had sent to the objector a notice dated 6/08/1987 which reads as under : "BEit known that I have this sixth day of August, 1987 finalisedthe award in above matter.You are required to remit an amount of Rupees ten thousandonly towards cost of award to enable the arbitrator to publish theaward. The costs shall be shared by both parties equally."

(7) A copy of the aforesaid notice was also sent by the arbitrator to the petitioner M/s. K.C. Bhatia and Associates. The contention of theobjector is that this notice shows that the arbitrator had made and signedthe award as required by section 14(1) of the Arbitration Act on 6/08/1987. Section 14(1) provides that when the arbitrators or Umpirehave made their award, they shall sign it and shall give notice in writing to the parties of the making and signing there of and of the amount of fees andcharges payable in respect of the arbitration and the award. Three stagesare contemplated by section 14(1) of the Act. The first stage is making of the award. The second stage is of signing it and the third stage is of givingnotice in writing to the parties intimating them of making and signing of theaward and the amount of fees and charges payable in respect of arbitrationand award. The making and signing of the award has to precede theintimation it to the parties. The objector contends that after making and signing of the award, as required by section 14(1) of the Act, the aforesaidnotice dated 6/08/1987 was sent to it and thereafter the arbitrator had no competence or authority to change the award in any mannerwhatsoever.

(8) Learned counsel for the petitioner, on the other hand, submitsthat writing of the award on stamp paper is merely a ministerial act andassuming that the arbitrator had made and signed the award on 6/08/1987, he was competent in law to have it typed on a stamp paper on anydate thereafter but the said ministerial act had to be performed before thefiling of the award in Court. Mr. Kaura learned counsel for the petitioneralso contends that in the aforesaid notice the arbitrator has not stated thathe has made and signed the award but has only stated that he finalised theaward. The argument is that finalisation is not same thing as making and signing of the award. Another argument is that the finalisation may havebeen in mind of the arbitrator and it is possible that the arbitrator mightnot have even written the award on 6/08/1987. As the arbitrator had given notice dated 6/08/1987, he must have thought of puttingthe same date on the award as filed in the Court. The contention is that atbest it is a case of wrong date on the award and as such is of noconsequence.

(9) The meaning of word finalise' as per Webster's Third New International Dictionary is 'to put in final and finish form, give final approval; tobring something to completion.' In my opinion, it cannot be said that theaward was put in final & finish form or that it was completed or finalisedonly in the mind of the arbitrator. The use of the word 'finalise' instead of'made & signed' in notice dated 6/08/1987, will not make anydifference The intention remains the same A reading of the notice as awhole makes it abundantly clear that the award must have been made on 6/08/1987. When the award says that it is dated 6/08/1987,it cannot be said that it bears any date other than that. The notice alsorequires the objector to remit an amount of Rupees ten thous and towardscost of award .to enable the arbitrator to publish it. That is also inconsonance with section 14(1) of the Act. Under section 14(1) of the Act IT is only after signing of the award that is, its execution, that the arbitratorsare required to supply the information about the fees and charges (See:Rikhabdass v. Ballabhdas and others. ). Thus it is notpossible to accept the contention of the petitioner that the award wasfinalised only in the mind of the arbitrator but may not have been writtenand signed on 6/08/1987.

(10) In support of the contention that the arbitrator was competentto have the award typed on stamp paper and that the act of getting it typedon a stamp paper is merely a ministerial act, reliance has been placed bycounsel for the petitioner on judgment of D.K. Kapur, J. in Suit No.330-A/74 Johri Mal Gupta and Company v. M.C.D. and others decided on 9/04/1979 holding that once an award has been made, it can bewritten out on a stamp paper. In the said case there was an order on thecopy of the award in the following words : "ITbe typed again on receipt of stamp paper."

(11) It appears from the said order that the award made on 30thApril, 1974 was treated as a draft and that is why it was ordered to betyped again on receipt of stamp paper. In context of these facts, the learnedJudge came to conclusion that after the award has been made the arbitratorhas still got some powers such as writing it on a stamp paper or makingcertain corrections etc. The facts of Johri Mat Gupta's case further showthat award dated 30/04/1974 had been partly typed out on stamp paperwhich was purchased on 8/05/1974. It is clear that the judgment inJohri Mat Gupta's case proceeded on the peculiar facts and circumstancesof that case and as such the said judgment does not advance the case of the petitioner any further.

(12) The question whether the arbitrator becomes functus officioafter making the award stands concluded by judgment of Supreme Court inRikhabdass supra holding that after making his award the arbitrator isfunctus officio. The Supreme Court cited with approval the observations ofMellishL. J. In ordue. v. Palmer, (1870) 6 Ch.A22 at page 31 , think The result of the cases at law is that when an arbitrator has signed a documentand for his award, he is functus officio and he cannot of his own authorityremedy any mistake" The appeal in Supreme Court was filed against thejudgment of the Division Bench of High Court holding that copying of theaward on a stamped paper was purely ministerial and making of the awarddid not deprive the arbitrator of the authority to copy an award on therequisite stamp paper. Reversing the decision of the Division Bench of theHigh Court, the Supreme Court held that award could not have beenremitted to arbitration for being re-written on stamp paper and under section 16 an award can be remitted to the arbitrators only for re-considerationand when it remitted for re-writing on a stamped paper, it is not remittedfor reconsideration. The arbitrators re-consider nothing when they re-writethe award on stamp paper. The Supreme Court did not approve the judgment of High Court holding that re-writing of award on stamp paper was aministerial act. Justice Sarkar, speaking for the Supreme Court, held that after making the award, the arbitrator becomes functus officio.

(13) Learned counsel for the petitioner has placed reliance onHarbhajan Singh and others v. Meva Singh and others, Air 1928 Lahore 753,Parshottamdas Narottamdas Patel and others v. Kekhushru Bapuji and others AIR 1934 Bombay 6, Chatti Lal v. Ram Chanter Sahu and others, Air 19' IPatna 215, Banwari Lal Garodia v. Joylal Hargulal. R. Dasratha Rao and others v. K. Ramaswamy Iyenger and others, AIR1956 Madras 134 holding that the arbitrators cannot be deemed to havebecome functus officio with regard to carrying out of ministerial acts such asengrossing of the award on stamp paper. In view of judgment of SupremeCourt in Rikhabdass case it is not necessary to elaborately deal with theaforesaid cases relied upon by the counsel for the petitioner but I may noticethat the aforesaid cases proceeded on their peculiar facts. In Calcutta casethe award was dated 31/03/1954 but the stamp paper on which the award was written had been purchased on 1/04/1954. On these facts,P.B. Mukharji, J. came to the conclusion that the error was not such as canat all make the award had and illegal and noticed that the arbitrator mayhave dictated the award on 31/03/1954 to a stenographer and thestenographer might have finally transcribed it on a stamp paper on thefollowing day, 1/04/1954. In Madras case reliance was placed on judgments of Bombay and Patna High Courts. The judgment of the MadrasHigh Court in R Dasartha Rao's case was considered by the Andhra PradeshHigh Court in Ariyur Mohammad Habeer Rahman and others v. AnsuriVaramma (died) and another, 1974 Andhra Pradesh 113 and it was held thatthe decision of the Madras High Court runs contrary to the decision of theSupreme Court in and it cannot therefore, be said thatthe decision in Air 1956 Madras 134 lays down good law. A division Benchof Calcutta High Court in Nalini RanJan Guha v. Union of India, expressed doubts about the correctness of law laid down byLahore High Court in Harbhajan Singh's case and also noticed that judgmentof Lahore High Court was based on admission of the parties.

(14) In view of the above discussion, the arbitrator had becomefunctus officio on making and signing of the award on 6/08/1987 andhe could not re-write it thereafter.

(15) I may also notice another somewhat peculiar aspect of this case.Unlike some other documents there is no legal requirement that an awardshould bs witnessed by some other person. Generally the awards are notwitnessed by other persons. In this case, however, the award is witnessedand besides the arbitrator the witness Avinash Bhasin has also signed it.The date typed on the page signed by Mr. Bhasin is 6/08/1987.There is nothing on the record to suggest that Mr. Bhasin signed the awardon any date other than 6/08/1987. If the award was made known toMr. Bhasin on 6/08/1987, it could not be changed, or substituted,altered or transcribed on stamp paper after 6/08/1987 and the arbitrator became functus officio after the said date. I am inclined to agree with thecontention of the objector that the first page of the award appears to havebeen changed on or afier 22/08/1987. How could the first page besigned on 6/08/1987 when the stamp paper itself was purshased on22nd Augst, 1987. The date 6th August on that page has been written bythe arbitrator himself It is not possible on the facts & circumstances of thecase to accept the contention of the petitioner that it is a case of wrong dateon the award. The law that the Court should lean in favor of upholdingthe award does not mean that on such glaring infirmities being found stillthe award should be upheld.

(16) Mr. Wadhwani has also contended that the award is typed ontwo pages but the said pages have been typed on different type-writers. I have carefully perused both the pages of the award but find myself unable tocome to final opinion whether two pages have been typed on the same type-writer or on different type-writers, though the type of first page is in singlespace and second page has been typed in double spacing. In any case thisis not a very material fact.

(17) I may also notice the contention of the objector that the awardunder claim No. 2 is very abnormally excessive The arbitrator is the finalauthority both on facts and law and it is not open to me to go into themerits of the case and evidence on record to find out whether the amountis abnormally excessive or not. Thare is nothing on the face of the award tosuggest that amount awarded under claim No. 2 is abnormally excessive. IT is a non-speaking award. I cannot delve into the mental process of the arbitrator to find out alleged excessiveness. On this aspect there is no errorapparent on the face of the award.

(18) In view of the above discussions, I answer the issues in favor of the objector and hold that after 6/08/1987 the arbitrator had becomefunctus officio. The objections ( I.A. 766/88) are allowed and the awarddated 6/08/1987 made by Brig. Harish Chandra (Retired) is setaside leaving the parties to bear their own costs.