United Engineering Co. vs Union Of India And Ors.
1992 Latest Caselaw 599 Del

JUDGMENT

S.C. Jain, J.

(1) The facts giving rise to this suit are that M/s United Engineering Company petitioner herein entered into Rate Contract with respondent Union of India by offer and acceptance evidenced by rate contract No. HW-4/RC-0356/HD&LD polyethylene pipe/81/82/PAOD/289 dated 10.11.1981 for the supply of high density and low density polyethylene pipes for potable water supplies for the period 20.6.81 to 19.6.82, which period was further extended with the @43 mutual consent of the parties up to 30.9.82. The 33 33 said rate contract was governed by the General 33 Conditions of contract as detailed in form DGS&D-68 33 (Revised), as modified up to date including clause 24 (which provides for adjudication of disputes by arbitration) in pamphlet entitled "Government of India, Department of Supply, Conditions of Contract governing contracts placed by the Central Purchase organisation and the specific conditions relating to the rate contract detailed in DGS&D-69 as amended up to date. It is alleged that during the extended validity period of the rate contract up to 30.9.82, three orders No.1608 dated 13.9.82, 1661 dated 23.9.82 and 1662 dated 23.9.1982 were placed on the the petitioner by a duly nominated Ddo for the supply of high density polyethylene pipes.

(2) Disputes and differences arose between the parties and the same were referred for adjudication to Shri B.N.Mani, sole Arbitrator, respondent No.2, in terms of the conditions of the contract detailed in DGS&D-68 (revised). The Arbitrator entered upon the reference. Time for making the award was mutually extended by the parties up to 31.8.88. The Arbitrator made and published his award dated 31.8.88, notice whereof was received by the petitioner on 7.9.88.

(3) On a petition moved by the petitioner, the Arbitrator filed the award and the arbitration proceedings in the court, notice of which was went to the parties inviting objections within the statutory period.

(4) Union of India filed objections under Sections 30 and 33 of the Arbitration Act beyond time only to the effect that the award may be modified that no liability can be attached to union of India. The contract was signed by the Govt of Bihar on behalf of the State of Bihar and there is no liability on behalf of defendant No. 1. As the objections were filed beyond time, an application under Section 5 of the Limitation Act for condensation of delay has been filed. There are no sufficient grounds for NN condoning the delay and therefore, I am not inclined to allow the application under Section 5 of the Limitation Act. Same is hereby dismissed.

(5) However, the State of Bihar and the Superintending Engineer, Building Construction Department, Building Circle, Muzaffarpur, Bihar filed objections under Section 30 and 33 of the Arbitration Act against the said award pleading, inter alia, that the Arbitrator has given no finding and no reasons for allowing the claims and disallowing the counter claims of defendants 2 and 3. The Arbitrator misconducted the proceedings inasmuch as there was no valid and binding contract between the petitioner and respondents 2 and 3. The very existence and the validity of the alleged contract which goes to the very root of the matter was challenged by respondent No.2 and 3 but no finding of the same has been recorded by the petitioner. There is no basis and no foundation on which the conclusion has been drawn by the arbitrator. It is alleged that the award is only ipse-dixit and has not considered .the plethora of evidence given by the respondents about the existence of the alleged supply order. The award is invalid as the documentary and oral evidence was to ally ignored by the arbitrator. It has been further alleged that the alleged supply order was fabricated and forged, ..one. The Arbitrator misconducted himself and the proceedings inasmuch as the respondent led evidence to show that the building construction Department came into existence only on 1.4.82 and the alleged supply orders showed the stamp of Pwd Deptt which was not in existence and had ceased to exist. The Superintending Engineer was not authorised nor competent to place any indents for supply as only the Engineer in Chief was the authorised person to send supply order from 30.8.83. That during the period 1.4.82 to 30.8.83 there was no Direct Demanding officer to place any orders and thus the alleged supply orders were fabricated and were illegal. It has been further alleged that evidence has not been properly appreciated by the Arbitrator and that the Arbitrator ignored the evidence led by the objector in this regard. It has been alleged that the Union of India has wrongly paid Rs. 4,39,382.50 to the plaintiff. The respondents are entitled to receive back the same. The award of the Arbitrator regarding payment of further amount of Rs.2,78,225.00 and Rs.l4,645.00 as 100% and 2% balance paying respectively of the stores supplied is sought to be set aside claiming the refund of Rs.4,39,382.50.

(6) These objections have been contested by the petitioner on the ground that the objections are false and frivolous and have been filed to delay and to deprive the petitioner from getting the amount of the award. It is stated that there is no privity of contract between the petitioner and objector. It is stated that the delivery of goods ordered has already been received by the concerned authorities and the same are lying with them. They cannot deprive the plaintiff of the price of the goods already supplied. The goods have been supplied as per the orders placed on the petitioner as per the contract entered into between the Union of India and the petitioner for supply to the State of Bihar. Earlier supplies were made and payment of which has been received by the petitioner. It is denied that the supply orders were forged and fabricated. The Arbitrator has duly considered all the evidence on record and came to correct finding which cannot be challenged by filing these objections.

(7) I have heard the counsel for the parties and gone through the record. The Arbitrator gave opportunities to the parties to file their respective claims and to lead evidence by affidavit and submit their documents. He also gave opportunity to the parties of hearing. After all this, he made and published his award on 31.8.88. The claim of Rs.2,78,225/ and Rs.l4,645.00 as 100% and 2% balance payment of the stores supplied was allowed by the Arbitrator on the reasons that the stores were supplied in pursuance of the valid and binding contract and the same were accepted by the consignee. However, the claim of Rsl,19,310.00 on account of damages was disallowed by the arbitrator as unsubstantiated. The claim for interest on this amount was also disallowed.

(8) The claim of the State of Bihar for refund of Rs. 4,39,382.50 as the price paid was disallowed for the reasons that the goods were supplied in pursuance to the valid and binding contract and the goods were accepted by the consignee.

(9) It is settled principle of law that unless the award is per se preposterous or absurd, it is not for the court to consider the reasons of the award. This law has been laid down by the Supreme Court in Gujarat Water And Sewage Board vs. Unique Electors- . Reasonableness of reasons given by an arbitrator in making an award cannot be challenged. The arbitrator is the sole judge of the quality as well as quantity of evidence and it will not be for the court to take upon itself the task of being a judge of the evidence before an Arbitrator. It may be possible that on the same evidence the court might have arrived at a different conclusion than the one arrived at by the arbitrator but that is by itself no ground for setting aside the award of an arbitrator.

(10) In this case the arbitrator Shri B N.Mani is Addl Legal Adviser to the Govt of India, Ministry of Law & Justice and is senior officer of the Govt and is expert in the line as such his award is not to be lightly interfered with. The Supreme Court in a decision has observed that when Arbitrator is an expert like a senior Govt. Officer his award is not to be lightly interfered with.

(11) The court is not required to examine the correctness of the claim awarded with reference to the materials produced before the arbitrator and the court cannot sit in appeal over the views of the arbitrator by re-examining and reassessing the materials on record. Scope for setting aside an award is limited to the grounds available under the arbitration Act. It is not misconduct to come to an erroneous decision, whether his error is one of the fact or of law and whether or not his findings of fact are supported by evidence. When an award is to be reasoned award, it need not be a judgment like that of a court of law. Detailed reasons are not necessary to be given. The arbitrator is the sole Judge of the quality and quantity of evidence and it will not be for the court to take upon itself the task of being a judge of the evidence before the arbitrator.

(12) In this case the existence of the contract is not in dispute. It is not disputed that the earlier supplies made by the plaintiff under this contract were dully accepted by the State of Bihar and payment was made by Union of India on behalf of State of Bihar. It is not in dispute that the plaintiff also supplied goods against three orders and the goods were duly received by the concerned authorities i.e. State of Bihar and goods are still lying there. It does not seem to reason as to how the petitioner can be deprived of the price of the goods at the rate duly settled between the Union of India and the petitioner at DGS&D contract rate. I do not find any reason to hold that the Arbitrator has misconducted himself or the proceedings or the award is liable to be set aside on the objections raised by respondents 2 and 3. These objections are dismissed. The award is made a rule of the court. Decree-sheet be prepared accordingly. There is no order as to costs of these proceedings.