The Punjab Paint Colour & Varnish ... vs Union Of India (Uoi) And Ors.
1999 Latest Caselaw 397 Del

JUDGMENT

M.K. Sharma, J.

1. A contract for supply of enamel brushing interior of specifications was executed, in terms of which the petitioners were to make supply of the quantified goods to respondent No.1. During execution of the aforesaid contract disputes and differences arose between the parties and the same were referred to the sole arbitrator in accordance with the arbitration agreement. The respondent No.2 was appointed as the arbitrator, who upon entering into the reference and upon receiving evidence adduced by the parties made and signed the award on 31.7.1991.

2. The aforesaid award was filed in this court pursuant to which objections were filed by the parties which are registered as LA. 4555/1993 i.e. objections filed by the respondent/Union of India and the objections filed by the petitioner were registered as I.A. No.8664/1993. When the matter was called out none appeared for the petitioner to press the objections. Even on the previous date none appeared for the petitioner. Accordingly, I heard the learned counsel appearing for the respondent who has strenuously taken me through the award passed by the arbitrator and also the records of the arbitration proceedings.

3. Since none appears on behalf of the petitioner to press the objections (I.A.8664/1993) filed by the petitioner the same stand dismissed in default. Thus I am left with the responsibility of considering the objections (I.A.4555/1993) filed by Union of India.

4. Before the Arbitrator the respondent put up a claim of Rs.11,712.60 payable by the petitioners on account of excess excise duty paid by the respondent to the petitioner. The arbitrator rejected the said claim holding that the respondents failed to substantiate their claim based on their statement that the claimant did not pay any excise duty on 3960 Litres of stores supplied on the said consignment. The aforesaid claim was rejected by the arbitrator further holding that there is nothing on record to show that the respondents are entitled to receive the aforesaid amount

of Rs.11,712.60 from the petitioner on account of excess excise duty paid by the respondent to the petitioner. Counsel appearing for the respondent submitted that there is an error apparent on the face of the record in arriving at the aforesaid conclusions in view of categorical reference and recording of observation by the arbitrator himself in the award itself to the effect that the 10th consignment of 3960 litres of stores was supplied by the petitioner vide R.R. dated 9,5.1986. It was also recorded by the arbitrator that though the statutory variation in the excise duty had taken place w.e.f. 1.4.1986, according to the petitioner they did not pay any excise duty on the last consignment. My attention is also drawn to the letter of the petitioner dated 21.5.1986 which is a part of the record which encloses a chart indicating that no excise duty was paid by the petitioner in respect of the 10th consignment.

5. On consideration of the aforesaid document which exists on record read with the statement recorded by the arbitrator himself in the award that the petitioner did not pay any excise duty on the last consignment. I agree with the submission of the learned counsel for the respondent that the arbitrator committed an error apparent on the face of the record in holding that there is nothing on record to show that the respondent is entitled to receive Rs.11,712.60 from the petitioner on account of excess excise duty paid by the respondent to the petitioner. The arbitrator has committed an error apparent on the face of the records in holding that the respondent has failed to substantiate their claim that the petitioner did not pay any excise duty on 3960 litres of stores supplied in the 10th consignment. The said conclusion is erroneous on the face of the records, when a reference is made to the aforesaid chart as also on the own showing of the arbitrator himself. That part of the award passed by the arbitrator is, therefore, set aside and the same is remitted back to the arbitrator for reconsideration in accordance with law.

6. The award passed by the arbitrator rejecting the claim of the petitioner for payment of Rs.54,645/- is upheld, after having rejected the objections filed by the petitioner in default, and the award rejecting the claim for payment of Rs.11,712.60 stands set aside and remitted back to the arbitrator for fresh consideration. The award made by the arbitrator is made a rule of the court to the aforesaid extent. The arbitrator shall re-consider the part of the award remitted to him as expeditiously as possible. It is also made clear that in the event of non-availability of the arbitrator who decided the aforesaid proceedings it would be open to the respondent to appoint a new arbitrator, who would proceed in the matter on the basis of the evidence already adduced by the parties after issuing notice to the parties. The objections filed by the parties stand disposed of in the aforesaid manner. Consequently, the suit also stands disposed of.