Apex Sales Agency vs Union Of India And Anr.
1994 Latest Caselaw 501 Del

JUDGMENT

Usha Mehra, J.

(1) M/S. Apex Sales Agency, a partnership concern entered into an agreement with respondent No. 1 /Union of India through Secretary,Ministry of defense, Department of defense Production and Supplies, New Delhi for supply of Blankets Barrack Type 'A' Natural Grey as per the supply order. The said supply order was subject to the condition that Contract Form Schedule 'B'(Revised 1965). Clause 16 of the said contract provided for reference of disputes and differences arisen under the Contract to the sole arbitration of the Secretary,Department of defense Production and Supplies or any other person appointed byhim.

(2) Disputes and differences arose between the parties. Consequently, Secretary, Ministry of defense, Department of defense Production and Supplies was approached, who appointed Commodore C.P.George Vsm, respondent No. 2 as the sole Arbitrator vide his letter dated 5/04/1989. The respondent No. 2, the sole arbitrator made and published his award on 21/06/1991. Pursuance to the application filed by the petitioner, the said award was ordered to be filed in theCourt. The arbitrator filed the award in Court, thereafter notice of the filing of the award was issued to the parties. The petitioner herein wanted the award to be made rule of the Court but the Union of India, respondent No. 1 has filed the objections which are listed as IA. No. 2196/92.

(3) The main objection raised by the respondent No. 1/Union of India is that the Arbitrator without giving any reason, arbitrarily awarded Rs.75,000.00 as against the claim of the Union of India to the tune of Rs.9,08,766.00. The objector had claimed general damages against claim No.1. The contract was for supply of1,20,000 Blankets Barracks, which was to be supplied in different lots between July to September,1985. At the asking of the petitioner, these delivery dates were refixed from August to October,l 985. Again on the request of the petitioner, the time was extended up to 3 1/12/1985 and then to 28/02/1986. Inspite of the time having been extended, the petitioner could supply only 19,026 Blanketsup to 28/02/1986 and failed to supply balance quantity. Thus, the breach having been committed by the petitioner herein, the objector automatically became entitled to compensation as the contract was cancelled and the balance material was purchased at the risk and cost of the petitioner. The Arbitrator appredated that breach had been committed by the petitioner herein, inspite of that he allowed only part claim and Arbitrarily disallowed the remaining. Counsel for the petitioner on the other hand contended that Arbitrator was not required to givereasons. Clause 16 of the contract does not stipulates that the Arbitrator will give reasoned award. Hence, for not giving any reason no mis-conduct can be attributed nor pointed out. In fact no error can be found on the face of the award.This Court cannot substitute its decision in place of the Arbitrator. What weighed with the Arbitrator while awarding Rs. 75,000.00 cannot be re-appreciated and examined by this Court. This Court is not sitting as a Court of appeal. The Arbitrator is the best Judge of facts and of law as that Forum is chosen by the parties for settlement of their disputes. In this case, the Arbitrator has mentioned that he took into consideration the pleadings, the evidence oral as well as documentary and then came to that conclusion. Hence, it cannot be said that he did not take into account the facts and law pleaded before him or that he Arbitrarily given the award. According to Counsel for the petitioner, numerous breaches at different stages committed by Union of India were pointed out before the Arbitrator. He took into consideration the same while deciding this claim. The breaches were also narrated in the reply and rejoinder as well as in the documentary evidence filed by the present petitioner before the Arbitrator. Arbitrator took intoconsideration, the breaches alleged against the present petitioner and the lapses and defaults pointed out on the part of the Union of India, whatever he found justified he awarded.

(4) The objection that the Arbitrator ought to have given reason, to my mind,is without force and not sustainable. Clause 16 of the Agreement does not stipulate that the Arbitrator will give reasons. In the absence of such stipulation the Arbitrator is under no obligation to give reasons. In the absence of any reasons having been given this Court cannot furnish the reasons for the Arbitrator.Moreover, this Court is not sitting as a Court of appeal nor the law permits to assign reasons when not given by the Arbitrator. The parties lead evidence as pointed out by the Arbitrator and not disputed by the objector. The Arbitrator examined,assessed and appreciated the same. This Court while considering the objection cannot go behind the award to find out whether the Arbitrator rightly appreciated the evidence or not. How much was the breach committed by the petitioner herein and what were the defaults and breaches on the part of the objector cannot be gone into by this Court. In fact, the Arbitrator is the Forum chosen by the parties for deciding their case on facts as well as on law and this Court cannot substitute his decision by giving its own reasoning. The only argument advanced by Counsel for the Union of India is that this Court must re-appreciate the evidence lead before the Arbitrator, to my mind, this cannot be done nor it is permissible under law. On the face of the award, no error can be found, therefore, this objection is without merits and hence rejected.

(5) The other objection taken by the Union of lndia/objector is regarding the award against counter claim awarded in favor of the present petitioner,respondent before the Arbitraror. The contention of the objector is that the award is vague as the Arbitrator failed to quantify the amount due to be recovered against this claim. So far as the award of counter claim is concerned, the con.tention of the Counsel for the objector appears to be justified. The award of Rs.14,954.27 paise is subject to recovery of liquidated damages, if any. The award against this counterclaim appears to be vague. The Arbitrator was under legal obligation to indicate as to what are the liquidated damages recoverable by the objector. It is only after deducting the same, the award should have been given. He has left it open as to what are those liquidated damages recoverable by objector hence award in this regard is undetermined and not definite. Since, the award against counter claim isvague, indefinite, therefore, is liable to be remanded back to the Arbitrator for clarifying and quantifying the liquidated damages, if any. What are the liquidated damages which are to be deducted from the amount of Rs. 14,954.27. According to the objector, the liquidated damages came to Rs.23,248.00. This has to be taken into account while awarding any amount against counter claim. If this amount had been taken into account by the Arbitrator then award against counter claim would have been Nil and the Union of India would have been entitled to recoverRs.8,294.00. But the Arbitrator left it open hence there is vagueness in the award against counter claim No. 1. I accordingly remand the award to the extent of this counter claim to the Arbitrator for quantifying the liquidated damages, if any.

(6) Since, the award against the claim No. 1 as well as against counter claimNo.1 are separable, therefore, award against claim No. 1 is made rule of the Court but so far as the award against counter claim is concerned, that is remanded back to the Arbitrator with the above observation to quantify the liquidated damages,if any.