Rishi Economics & Housing (P) Ltd. vs D.D.A
1997 Latest Caselaw 926 Del

JUDGMENT

Lokeshwar Prasad, J.

1. Smt. Nirmala Rishi, in her capacity as Director of the Petitioner Company, has filed the present petition under Section 14 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') with the prayer to direct the Arbitrator (respondent No. 2) to file the award alongwith the proceedings in this Court and thereafter to make the same a rule of the Court in accordance with law.

On petitioner's filing the above petition a notice was issued to respondent No. 2, the Arbitrator, directing the Arbitrator to the award alongwith the proceedings in the Court. In pursuance of the notice issued by the Registry of this Court, Shri K.S. Gangadharan (respondent No. 2) filed the award alongwith the proceedings' vide letter dated the 20th August, 1992.

2. After the filing of the award alongwith the proceedings by respondent No.2, a statutory notice was given to the parties directing the parties to file objections, if any, within the prescribed time limit. No objections to the award have been filed on behalf of the petitioner. However, the respondent DDA has filed objections (IA 10197/93) to the award. A copy of the objections was given to the Counsel for the petitioner who has filed reply to the objections on behalf of the petitioner.

3. On the pleadings of the parties the learned predecessor of this Court vide order dated 9.3.95 has framed the following issues:

1. Whether the award rendered by respondent No. 2 on 11.9.1991 could be made rule of the Court (decree) in, view of the objections raised by respondent No.1 under Sections 30 & 33 of the Arbitration Act?

2. Whether the plaintiff is entitled to the relief prayed?

3. What order?

The parties have not adduced any evidence and have chosen to rely upon the proceedings before the Arbitrator and the documents/material on record for the purpose of deciding the above mentioned issues.

I have heard the learned Counsel for the parties at length and have also carefully gone through the documents/material on record and my findings are as under:

Issue No. 1:

4. Before going into the merits of the matter I would like to discuss the scope and limit of correction by the Court of an award made by the Arbitrator. The Supreme Court in case Food Corporation of India Vs. Joginder Pal Mohinder Pal & Another, have observed that arbitration, as a mode for settlement of disputes between the parties, has a tradition in India. It has a social purpose to fulfill. It has a great urgency today when there has been an explosion of litigations in the Courts of Law established by the sovereign power. It is, therefore, the function of the Courts of Law to oversee that the Arbitrators act within the norms of justice. Once they do so and the award is clear, just and fair, the Courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. The Supreme Court in the above said case has further observed that it is in this perspective that one should view the scope and limit of correction by the Court of an award made by the Arbitrator. In case Raipur Development Authority & Ors. Vs. Chokhamal Contractors & Ors., the Supreme Court observed that the two well recognised principles of natural justice are (i) that a Judge or an Arbitrator who is entrusted with the duty to decide a dispute should be disinterested and unbiased (nemo judex in causa sua); and (ii) that the parties to dispute should be given adequate notice and opportunity to be heard by the authority (audi alteram partem). Giving reasons in support of a decision was not considered to be a rule of natural justice either under the law of arbitration or under administrative law. What applies generally to the settlement of disputes by the authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settlement of private disputes.

5. The Supreme Court in another case Municipal Corporation of Delhi Vs. M/s. Jagannath Ashok Kumar & Another, , have held in clear cut terms that appraisement of evidence by the Arbitrator is ordinarily never a matter which the Court questions and considers. Section 1 of the Evidence Act, 1872 in its rigor is not intended to apply to proceedings before an Arbitrator. The parties have selected their own Forum and the deciding Forum must be conceded the power of appraisement of the evidence. The Arbitrator, therefore, is the sole Judge of the quality as well as quantity of evidence and it is not for the Court to take upon itself the task of being a Judge of the evidence before the 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 by itself is no ground for setting aside the award of an Arbitrator. The Supreme Court in the above said decision have further observed:

"It would be unreasonable to expect an exact definition of the word "reasonable". Reason varies in its conclusions according to the idiosyncrasy of the individual, and the times and circumstances in which he thinks. The reasoning which built up the old scholastic logic sounds now like the jingling of a child's toy. But mankind must be satisfied with the reasonableness within reach; and in cases not covered by authority, the verdict of a Jury or the decision of a Judge sitting as a jury usually determines what is "reasonable" in each particular case. The word "reasonable" has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know."

6. In the case of Sudershan Trading Co. Vs. Government of Kerala, , the following principles have been laid down by the Apex Court:

"Only in a speaking award the Court can look into the reasoning of the award. It is not open to the Court to probe the mental process of the Arbitrator and speculate, where no reasons are given by the Arbitrator, as to what impelled the Arbitrator to arrive at his conclusion. See the observations of this Court in Hindustan Steel Works Construction Ltd. Vs. C. Rajashekhar Rao. In the instant case the Arbitrator has merely set out the claims and given the history of the claims and then awarded certain amount. He has not spoken his mind indicating why he has done, what he has done; he has narrated only how he came to make the award. In absence of any reasons for making the award, it is not open to the Court to interfere with the award. Furthermore, in any event, reasonableness of the reasons given by the Arbitrator, cannot by challenged. Appraisement of evidence by the Arbitrator is never a matter which the Court questions and considers. If the parties have selected their own Forum, the deciding Forum must be conceded the power of appraisement of evidence. The Arbitrator is the Sole Judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the Arbitrator."

7. In a recent decision in the case of State of Rajasthan Vs. Puri Construction Co. Ltd., (1995) (1) ALR 1, the Apex Court has again taken the same view.

Thus, an Arbitrator, acting as a Judge, has to exercise a discretion informed by tradition methodized by analogy, disciplined by system, and subordinated to "the primordial necessity of order in the social life". Therefore, where reasons germane and relevant for the Arbitrator to hold in the manner he did, have been indicated it cannot be stated that the reasons were 'unreasonable'.

8. In the light of the legal position explained above I will now consider the objections of the respondent DDA. From a perusal of the objections taken by the respondent DDA it is apparent that the respondent/objector DDA has assailed the following findings of the learned arbitrator:

1. Findings in respect of Claim No. 4.

2. Findings in respect of Claim No. 6.

3. Findings in respect of Claim No. 8.

4. Findings in respect of Claim No. 9.

5. Findings in respect of Claim No. 10.

Regarding (1) above:

Claim No. 4 relates to refund of rebates availed of by the respondent/Objector DDA. The petitioner/claimant, as per the award, had initially claimed an amount of Rs. 80,000/-. However, the claim was subsequently reduced to Rs.23,706.73 i.e. the actual amount of rebates availed of by the respondent. The objection of the objector DDA is that the finding of the learned Arbitrator with respect to the above claim are erroneous on the face of it. I have gone through the award. As against the claim of Rs.23,706.73 the Arbitrator has awarded a sum of Rs.12,143.18 only to the petitioner/claimant against this claim. He has given cogent reasons for arriving at the above amount which has been allowed by him. In my opinion, no fault can be found with the above findings of the learned Arbitrator.

Regarding (2) above:

From a perusal of the award it is apparent that the petitioner/claimant had claimed refund of the amount of Rs. 1,28,724/- recovered at penal rate for cement and Rs.2,483/- recovered at penal rate for G.I. Pipes, not returned. Against the above claim of the petitioner/claimant the Arbitrator has allowed an amount of Rs. 94,680/-. The above finding of the Arbitrator in respect of the above claim is also based on sound reasoning and I see no ground to interfere with the same.

Regarding (3) above:

In so far as Claim No. 8 is concerned the respondent/objector, in its objections has filed objections to the findings of the learned Arbitrator with regard to Claim No.8(3) and 8(7) only. In my opinion, the above findings of the learned Arbitrator are also based on sound reasoning and call for no interference by this Court.

Regarding (4) above:

While allowing a sum of Rs.50,548.42 in respect of Claim No.9 the Arbitrator has held that the statutory increase in wages during the progress of the work had to be paid by the claimants to the labourers. He has further held that it is not the respondent's case that the petitioner/claimants have not paid the statutory increase in wages. The learned Arbitrator has held that the petitioners/claimants are, therefore, eligible for escalation under Clause 10C of the agreement and accordingly the learned Arbitrator has allowed a sum of Rs. 50,548.42 against this claim. In view of the reasoning given by the Arbitrator it cannot be stated that the above findings of the learned Arbitrator in so far as the above claim is concerned are unreasonable or perverse in any manner whatsoever.

Regarding (5) above:

The respondent/objector has assailed the findings of the learned Arbitrator under Claim No. 10 for Rs. 10,000/-, allowed by the arbitrator on account of watch and ward charges. The learned Arbitrator has held that it is not disputed that there has been inordinate delay in taking over the possession of the flats by the respondent as a result of which the petitioner/claimant had to maintain skeleton staff for watch and ward and on the above count he has assessed an expenditure of Rs. 10,000/- which he has awarded to the claimant. The above reasoning, given by the arbitrator, for allowing a sum of Rs. 10,000/- on account of watch and ward expenses also calls for no interference by this Court in view of the settled legal position already explained.

In view of the position explained above Issue No.1 is decided against the respondent/objector DDA and in favour of the petitioner.

In view of the above discussion, the objections (IA 10197/93) preferred by the respondent/objector DDA are disallowed and the award dated the 11th September, 1991, given by the Arbitrator Shri K.S. Gangadharan, is made a rule of the Court and a decree in terms thereof is passed. The award Exhibit A-1 shall form part of the decree sheet. The respondent DDA shall make payment of the decretal amount to the petitioner/claimant within eight weeks from the date of the communication of this order otherwise the decretal amount shall carry interest @ 12% per annum from the date of the decree till payment. It is clarified that no interest shall, however be payable in case the decretal amount is paid by the respondent DDA within the above said period of eight weeks.

Decree sheet be drawn up accordingly and thereafter the file be consigned to record room.