Chaudhary Construction Co. vs Municipal Corporation Of Delhi ...
1995 Latest Caselaw 595 Del

JUDGMENT

S.K. Mahajan, J.

1. Under contract No. 40(1977-78)Old-New No.5/1978-79, awarded by respondent No. 1 to the petitioner, certain disputes had arisen during its execution and the same were accordingly referred to the arbitration of respondent No. 2 in terms of the arbitration agreement as contained in the contract. The arbitrator after entering upon reference and hearing the parties made and published his award on 25th October, 1985. On the said award having been filed in Court, notice was issued to the parties and respondent No. 1 has filed objections to the same.

2. In short, the objections are that the arbitrator has not given a speaking award as stipulated in terms of the reference nor the award is supportable by any evidence on record. It is also alleged that the arbitrator has allowed various claims of the petitioner company and awarded amount thereunder without any material on record nor it had been shown by the petitioner company that it had suffered any loss and, therefore, according to the objector, the arbitrator could not have awarded any amount in favor of the petitioner. It is also alleged that the arbitrator has awarded claim of the petitioner twice and thus there is alleged to be an error apparent on the face of the record. Allegations that the claims of the petitioner have been awarded twice are in relation to claim No.7 given in statement S. 3, which was a claim for payment of compensation to cover the additional expenditure alleged to have been incurred by the contractor during the extended period of contract which extension was alleged to be due to the failure of respondents in fulfillling its reciprocal obligations under the contract. It is, therefore, submitted in the objection petition that the arbitrator has misconducted himself and the proceedings by making and publishing his award awarding a sum of Rs.7,72,045/- in favor of the petitioner. Reply to the objections petition has been filed refuting the allegations made by the objector. On the pleadings of the parties, the following issues were framed : -

1. Whether the objections are within time?

2. Whether the award is liable to be set aside on the ground stated in para No. 12 of the objection petition?

3. Relief.

I have heard learned counsel for the parties on these issues.

3. Notice of filing of the award was served upon respondent No. 1 on 15.1.1986. The objections to the award were originally filed on 11.2.1986. However, the same were returned on 17.2.1986 with the objection that Court fee on the power of attorney was deficient. Deficiency in the Court fee on Vakalatnama was made on 18.2.1986 when it was refiled. Objections to the award can be filed within 30 days of the service of the notice of filing of the award. In this case, the objections have been filed on 11.2.1986 i.e. within 30 days of the notice served upon the MCD on 15.1.1986. Refiling of the objection petition on 18.2.1986 after removing the objections raised by the registry will not mean that objections were for the first time filed on 18.2.1986. I, therefore, hold that the objection petition is within time.

4. The learned counsel for the petitioner has laid stress oh two points. (1) that the arbitrator though was required to make and publish a speaking award, he has not given any reason in the award; (2) that the arbitrator has considered the claims of the petitioner twice and thus there is an error apparent on the face of the award. Consequently, it is submitted that the award is liable to be set aside.

5. To appreciate the contention of the learned counsel for the objector that though the arbitrator was required to give reasons for his award, he has not done so in the present case, it will be useful to refer to the award. The arbitrator, in the award, has first given a brief history of the case and has noticed the contentions of the parties in respect of each claim. He has then mentioned the claims which have been made by the contractor and while considering each claim on its own merits, the arbitrator has not only given reasons in the main body of the award but has mentioned therein that details as to how the amount has been worked out had been given in the compilation which forms part of the award. The compilation to the award giving reasons for each claim runs into 29 pages. Detailed reasons have been given for each and every claim considered by the arbitrator. The arbitrator is not required to give a detailed judgment as courts give and is only to indicate his mind as to how he has arrived at the decision in the award. As held by the Supreme Court in Indian Oil Corporation v. Indian Carbon Limited , it is not obligatory "to give a detailed judgment. Short intelligible indications of the grounds should be available to find out the mind of the arbitrator for his action. The reasons should not only be intelligible but also deal with the substantial points that have been raised. When the arbitration clause required the arbitrator to give reasons and the arbitrator does give his reasons in the award, the sufficiency of the reasons depends upon the facts of the particular case. The Court does not sit in appeal over the award and review the reasons. The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusions or if the award is based upon any legal proposition which is erroneous."

6. The arbitrator has after setting out the history of the case mentioned various factors on the basis of which he has drawn his conclusions in the award. Thus, the reasons for the conclusions are those factors mentioned in the award which indicated how the arbitrator acted and why he acted in that manner. This is sufficient, as held by the Supreme Court, to meet the requirements, even if it be that reasons should be stated in the award. The learned counsel for the objector has not pointed out any error in those reasons. The only argument is that the reasons have not been given. On the facts I do not agree with the submissions of learned counsel for the objector. Indeed no proposition of law was stated in the reasons. However, the arbitrator was not required to so state propositions of law. In my view, the objections that no reasons have been given are without any substance.

7. Claim No. 7 which is stated to be the claim made twice by the contractor is in two parts. One is in respect of infructuous expenditure on idle labour and pumping amounting to Rs. 65,675/- and the other was for compensation to cover the additional expenditure alleged to have been incurred by the contractor during the extended period of contract of almost a year which extension according to the contractor was entirely due to the failure of objectors in its fulfillling reciprocal obligations under the contract. While the first part of the claim under infructuous expenditure has been rejected by the arbitrator, he has awarded a sum of Rs. 1,02,500/- against the second part of the claim. The contention of the objector is that the contractor had already claimed escalation in the statutory increase as well as labour escalation under claim No. 2 and, therefore, he could not claim compensation under claim No. 7. To my mind, the argument has no basis. While in claim No. 2 the contractor had claimed escalation due to statutory increase in the rates of material as well as labour which included escalation even during the period of extension, under claim No. 7, the claim was for the compensation for delay in the execution of work. The arbitrator had taken care of the escalation in material as well as labour and had so mentioned while dealing with claim No. 7 and has deducted the escalation which has already been given to the contractor under the aforesaid two items of material and labour while calculating compensation for delay in the execution of work. It cannot, therefore, be said that the arbitrator had considered the claims of the contractor in respect of the same item twice.

8. The next argument of the objector is that there was no evidence before the arbitrator to come to the findings arrived at by him in his award and the award is, therefore, liable to be set aside. It is the consistent view of the High Courts as well as of the Supreme Court that the Courts are not to sit as Courts of appeal over the award and review the reasons. The Court can set aside the award only if it is apparent from the award itself that there was no evidence to support the conclusions. The quality and quantity of evidence is not to be gone into by the Courts. In a judgment reported as Delhi Development Authority v. Alkaram, New Delhi it was held :-

"My conclusion in this case is that the arbitrator was the final judge of fact. The Court is bound by the arbitrator's findings of fact and cannot review them unless they are unsupported by evidence and unless it appears from the award itself that there was no evidence to support the finding. It is not open to the court to examine the adequacy of evidence which led the arbitrator to his findings of fact. His findings are final.

Nor do we find in this award any legal, proposition which is the basis of the award and which is erroneous. It is not possible to say from the award that the arbitrator was under a misconception of law. There is no error in point of law on the fact of the award. We cannot say that his reasons are good or bad unless on the face of the award it appears that he has tied himself down to some special legal proposition which is unsound.

Where the arbitrator indicates his reasons for coming to a conclusion and the award is challenged on the basis of its not being supported by evidence, the party so doing must in the words of Lord Tomlin. "show that it is patent upon the face of the award that there was no evidence at all on which the arbitrator could have come to his conclusion". (Nana Kawaku Amab v. Nana Sir Oforiatta AIR 1933 P. C 469

9. However, sufficiency and quality of evidence is a matter for the arbitrator. The Court is not permitted to reappraise the evidence and sit as a Court of appeal over the arbitrator's award. P.B. Mukharji, J.(as he then was) has expressed this very succinctly in Ebrahim Kassam Cochinwalla v. Northern Indian Oil Industries Ltd., as follows:-

"In my opinion appraisement of evidence by the Arbitrator is ordinarily never a matter which this Court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of evidence. It is not a question here in this case of any violation of natural principles of justice in refusing to give a hearing to any party or in refusing to have the evidence of a particular party. The Arbitrator in my opinion is the only Judge of the quality or the quantity of evidence and it will not be for this Court to take upon itself the task of being a Judge of the evidence before the Arbitrator. It may be possible that oh the same evidence the Court might have arrived at a different conclusion than the Arbitrator but that by itself is no ground in my view of setting aside an award of an Arbitrator. It is familiar learning but requires emphasis that by Section 1, Evidence Act the Evidence Act in its rigor is not intended to apply to proceedings before an Arbitrator."

10. The Court has, therefore, further held that the question whether the Court would have come to the same conclusions or arrived at the same figures, as have been arrived at by the arbitrator, was not material. Once there was evidence, there is no apparent error and/or misconduct. The Court cannot go to the sufficiency of the evidence nor is it necessary for the arbitrator to set out actual calculation figures as worked out by him. His reasons, as mentioned, are adequate and clear and it is not essential for him to give detailed reasons and decisions indicating each step of his meandring.

11. Moreover, the arbitrator in this case is an expert. He is an engineer selected by the parties. The Courts are, therefore, very reluctant in setting aside the decision of the expert who has been chosen as an arbitrator. In Jagdish Chander v. Hindustan Vegetable Oils Corporation and Anr. it has been held :-

"The jurisdiction of the Court hearing objections under Section 30 of the Arbitration Act is not an appeallate jurisdiction. An award can be set aside only for the reasons specified in Section 30 of the Arbitration Act. When the parties, by agreement, refer the disputes to an arbitrator then the decision of the arbitrator is not to be lightly interfered with by the Court. Where an arbitrator appointed under agreement of parties was serving officer of the Government of India holding a very high rank, namely, he was a Chief Engineer of the PWD and he was, presumably, an expert or well versed in civil engineering, an award made by such a person should not, therefore, be lightly interfered with."

12. The arbitrator in the present case, in my opinion, has given a well reasoned award. On the basis of the evidence before him, he has calculated the amount which according to him was due to the contractor and has, accordingly, made and published his award. It is not the case of the objector that there was no evidence before the arbitrator, however, the argument is that on the basis of the evidence which was there before him, he could not have awarded the amount to the petitioner. As already stated it is not for this Court to go into this question. The arbitrator is the best Judge of the quality and sufficiency of evidence: I do not find that there is any error apparent on the face of the award. There was material before the arbitrator to come to the conclusion at which he has arrived. The arbitrator was not required to write a detailed judgment as is written by a Court setting out each logical step of his reasoning but it was sufficient if he indicated the trends of his thought process, so that errors can be eliminated and arbitrariness avoided. As held by this Court in the Court function remains restricted and it does not permit review ability of the reasons nor the combing through as an appellate forum would be advised to do as this would amount to an 'impeachment' of the award, which is not permissible. The Court can set aside the award if it is apparent there from that the reasons referred to therein are based on no evidence and/or on an erroneous proposition of law. I do not find any infirmity in the award of the arbitrator nor there are any reasons to set aside the same.

13. The objections have no merits and are accordingly dismissed. The award dated 25th October, 1985 made and published by the arbitrator is made a rule of the court and a decree in terms of the award is passed. The petitioner shall be entitled to interest at the rate of 12% per annum from the date of the decree till its realisation. In the circumstances of the case, however I leave the parties to bear their own costs.