National Building Construction ... vs Municipal Corporation Of Delhi
1994 Latest Caselaw 190 Del

JUDGMENT

Mr. J. K. Mehra, J.

1. These are the objections to the award of Mr. V. R. Vaish and S. C. Jain, Arbitrators dated October 31, 1991. The Arbitrators dealt with both the claims of the objections as also counter-claims of the respondents. It is further noticed that the award is a non-speaking award. The objections are mainly taken to the findings of the Arbitrator on claims No. 2, 13, 15 and 23 and the findings on counter-claim No. 19 Item No. 12 of Sub-Head (ii) and 22.

2. Before considering various claims, I think it appropriate to state the legal position, which is as follows :

3. Even when an Arbitrator is required to give reasons, according to the settled law, it is not for the court to examine the reasonableness of the reasons given by the Arbitrator and it is also not necessary for the Arbitrator to discuss in detail the evidence placed before him. A reference in this behalf may be made to the case of Sudarshan Trading Company v. Government of Kerala and Another , and College of Vocational Studies v. S. S. Jaitley (Rep. as AIR 1987 Delhi 134). It is also settled law that it will not be for the court to take by itself the task of being a Judge of the evidence before the Arbitrator and appraisement of evidence by the Arbitrator is never a matter which the Court questions. The jurisdiction of the court when it is called up to to decide objections raised by a party against an arbitration award, is limited, as expressly indicated in the Arbitration Act and it has no jurisdiction to sit in appeal and examine the correctness of award on merits. In this behalf, the cases of Puri Construction Private Limited v. Union of India , and Municipal Corporation of Delhi v. Jagannath Ashok Kumar , may be referred. In the case of K. P. Poulose v. State of Kerala and another , the Hon'ble Supreme Court had clearly laid down that it is the legal misconduct which can be interfered with and not every misconduct. Again in the case of Coimbatore District Podu Thozillar Sangam v. Bala subrammania Foundary and others , it was laid down that it is only the errors of law apparent on the face of the award and not the factual errors that are open to correction and interference by the court. The above principles of law in addition to what is discussed under objection to Claim No. 15 hereunder will have to be born in mind while deciding the objections. My findings on the various objections are as under.

4. Claim No. 2. Coming to the said claims, I find that the Arbitrators have returned their findings on the basis of the material placed before them. It is not open to the court to interfere with such findings nor this court can interfere with the award on the plea that it would have decided the matter differently. This objection is, therefore, rejected.

5. Claim No. 13. With regard to Claim No. 13, the only objection is that there is a totalling error in the award when all the items are added up, they read up to Rs. 7,54,779/- instead of Rs. 7,51,282.50 paise. This error is not disputed. This is only an arithmatical error, which can be corrected by the court and accordingly, I modify the award to the extent that the award on this claim will be deemed to be for Rs. 7,54,779/-.

6. Claim No. 15 Counsel for the objectors has very vehemently pressed his objections to claim No. 15, which relates to claim for a sum of Rs. 51 lakhs on account of compensation for causing delay in the execution of the work. It is admitted that both the parties had referred all their respective claims and counter-claims to the arbitration and had invited findings of the Arbitrators thereon. It is only after the judgment in the case of Vishwanath Sood , that the claimants for the first time wrote to the Arbitrators not to order on this claim. It may be pointed out that by that time, the arbitration was already more than five years old and various extensions of time had already been granted by the parties and they have proceeded to invite the decision of the Arbitrators without any objection to the jurisdiction of the Arbitrators. On the letter of the claimants, no orders were passed by the Arbitrators nor did the claimants move the court against the Arbitrators proceeding with the determination of the claims inspite of that letter. Despite that, this claim had already been argued and the entire material in respect thereof had already been examined by the Arbitrators in the year 1988 prior to the letter. The parties continued to agree to extension of time for making the award even after the said application.

7. It is further contended by the respondents that no personal hearing or proper scrutiny with regard to this imposition of any compensation or penalty was ever granted nor are they aware of any exercise in the nature of determination of the exact amount by taking into consideration the litigating circumstance, having been carried out on record. It is conceded that no recovery pursuant to such determination was affected. Instead the said claim was referred by the objector to the Arbitral ors. Assuming that the amount had already been determined as is sought to be pointed out by Counsel for the objectors, the only object of making a reference of this claim could be to invite a finding by the Arbitrators in respect thereof before affecting the recovery. It was open to the claimants not to have claimed this amount, but having done of their own volition and having pressed their claim after leading evidence and concluding arguments, it was not open to the objectors themselves to ask the Arbitrators not to go ahead and make their award. Having themselves invoked the arbitration on this claim and both parties having lead evidence and concluded evidence, the objectors are estopped (particularly in the absence of any objection to jurisdiction of Arbitrators) from challenging the award on the plea of jurisdiction of Arbitrators. The following decisions of the Hon'ble Supreme Court be referred to in this connection :

(1) M/s. Tarapore & Co. v. Cochin Shipyard Ltd., Cochin , wherein Hon'ble Supreme Court laid down that,

"... but of its own it referred a specific question of law to the Arbitrator for his decision, participated in the arbitration proceeding invited the Arbitrator to decide the specific question and took a chance of a decision. It cannot, therefore, now be permitted to turn round and contend to the contrary on the nebulous plea that it had referred the claim/dispute to the sole Arbitrator without prejudice to its right to contend to the contrary."

(2) Prasun Roy v. The Calcutta Metropolitan Development Authority and another , wherein the aforesaid principle was reiterated and it was further laid down that.

"Mr. Kacker submitted that his principle could be invoked only in a situation where the challenge is made only after the making of an award, and not before. We are unable to accept this differentiation. The principle is that a party shall not be allowed to below hot and cold simultaneously. Long participation and acquiescence in the proceeding preclude such a party from contending that the proceedings were without jurisdiction".

"The Judicial Committee in decision in Chowdhury Murtaza Houssein v. Mussumat Bibi Bechunnissa ((1876) 3 Ind App 200), observed :

"On the whole, therefore, their Lordships think that the appellant, having a clear knowledge of the circumstances on which he might have founded an objection to the Arbitrators proceedings to make their awards, did submit to the arbitration going on; that he allowed the Arbitrators to deal with the case as it stood before them, taking his chance of the decision being more or less favorable to himself; and that is too late for him, after the award has been made, and on the application to file the award, to insist on this objection to the filing of the award".

Relying on the aforesaid observations, this court in N. Chellappan v. Secy., Kerala State Electricity Board , acted upon the principle that acquiescence defeated the right of the applicant at a latter stage. In that case, the facts were similar. It was held by conduct there was acquiescence. Even in a case where initial order was not passed by consent of the parties a party by participation and acquiescence can preclude future challenges."

In the case of Vishwanath Sood, mentioned above, the Hon'ble Supreme Court has based its decision on the detained machinery provided therein including that to appeal and duration of the decision of engineer by his superiors including the provision of appellate jurisdiction in reaching the final determination, which is absent in the present contract. In any event, having themselves placed this claim before the Arbitrators for determination, it is not open to the claimants themselves now to challenge the same without any objection from their opponents and after not only the entire evidence on this claim had been lead, but also after arguments had also been addressed and the parties had closed their case on this claim simply on the plea that they were not conscious of the legal position as determined later on Vishwanath Sood's case, which to my mind is inapplicable in the light of the decision in the cases of Tarapore Company and Prasun Roy. I find that Hon'ble Sabyasachi Mukharji was a party to both the decisions, i.e., Prasun Roy's case as also Vishwanath Sood's case. The subsequent decision did not in any manner overrule the former decision and was rendered in the light of the peculiar facts of that case wherein detained machinery for determining the amount had been provided. In the light of the above, I do not find any merit in this objection and reject this objection. The objection in respect of this claim is also rejected.

Claim No. 23. Coming to Claim No. 23, the Arbitrators have already applied their mind and reached a certain figure inclusive of interest at the contractual rate up to the date of the acceptance of their appointment. It is argued that the Arbitrators should have allowed interest up to the date on which they entered upon reference and thereafter it was in their discretion whether to award or not to award pendente lite interest. I am not inclined to interfere with this part of the award.

Counter Claim No. 19. In counter Claim No. 19, I find that the amount, which was claimed under item No. 12 of sub-head (ii) of claim No. 19 was Rs. 5,704.56 paise whereas the Arbitrators have awarded Rs. 16,821.98 paise. In my opinion, the Arbitrators could not award more than what was claimed even if they on the basis of the material placed before them reached a conclusion that a higher amount should have been claimed. Accordingly, I set aside the award on item No. 12 to the extent that the amount awarded shall be Rs. 5,704.56 paise instead of Rs. 16,821.98 paise. The award subject to the above modifications is made Rule of the court. The award shall form part of the decree. No order as to costs.

It is pointed out that the amount awarded has in fact already been paid by the objectors to the petitioner. The same may be adjusted in accordance with the above decision. The bond, after the adjustments are carried out, shall stand discharged. Suit and I.A. stand disposed of.

8. Petition modification.