Kalyan Chand Goel & Co. & Another vs D.D.A. & Another
2000 Latest Caselaw 218 Del

ORDER

Mukul Mudgal, J.

1. The brief facts of the case are that the petitioner is a Contractor and is carrying on the business of construction works for the Delhi Development Authority. The petitioner was awarded Contract No. 7/A/RPD-IX/DDA/87-88 by respondent No. 1/DDA for the development of land at Rohini, Phase -II, S.H. Construction of SW Drains in Sector -IX. That certain differences and disputes had arisen between the parties and as per the Arbitration Clause in the agreement between the parties, Mr. V. D. Tiwari, respondent No. 2 herein, was appointed as Sole Arbitrator by the Engineer Member of respondent No. 1/DDA. The Arbitrator made and announced his award by granting a sum of Rs. 11,50,896/- to the petitioner on 14th May, 1993 after giving full opportunity of hearing to both the parties.

2. The present suit is filed by the petitioner for making the said Award a Rule of the Court. Thereafter, the Objections were filed by the Delhi Development Authority/respondent No. 1 herein, by IA. 10505/93 to the Award dated 14th May, 1993.

3. Insofar as the challenge to an arbitration award is concerned in Union of India Vs. Rallia Ram it was held :

"The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts, which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement."

4. It has been observed by the Hon'ble Supreme Court that if there is error of fact, the court cannot go into it. In Coimbatore District Podu Thozillar Vs. Balasubramania Foundary the Court observed :

"It is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the Court. If there is no legal proposition either in the award or in any document annexed with the award which is erroneous and the alleged mistakes or alleged errors, are only mistakes of fact and if the award is made fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement, the award is not amenable to corrections by the Court."

5. In M/s. Sudarshan Trading Co. Vs. Government of Kerala, , it has been observed that :

"This is our opinion, the Court had no jurisdiction to do, namely, substitution of its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. p> It may be stated that if on a view taken of a contract, the decision of the arbitrator on certain amounts awarded, is a possible view though perhaps not the only correct view, the award cannot be examined by the court in the manner done by the High Court in the instant case."

6. A similar view has been taken by the Supreme Court in Food Corporation f India Vs. Joginderpal Mohinderpal while holding that :

"It cannot be said that such a construction is a construction which is not conceivable or possible. If that is the position assuming even for the sake of argument that there was some misake in the construction, such a mistake is not amendable to be corrected in respect of the award by the Court. This was a fair rder after considering all the records. The construction arrived at by the arbitrator is a plausible conclusion."

7. It has further been held in Hind Builders Vs. Union of India :

"In a matter on which the contract is open to two equally plausible interpretations, it is legitimate for the arbitrators to accept one or the other of the available interpretations and, if the Court may think that the other view is preferable, the Court will not and shoul not interfere."

8. In Jawahar Lal Wadhwa Vs. Haripada Chakrobety , it has been observed :

"The Court reiterated that it was now firmly established that an award was bad on the ground of error of law on the face of it only when it the award itself or in a document actually incorporated in it, there was found some legal proposition which was the basis of the award and which was erroneous.

9. In Bijendra Nath Srivastava Vs. Mayank Srivastava , it has been held that

".....Merely because the arbitrator has mentioned the municipal annual rental value of the property before indicating the market value of the property before indicating the market value of the same does not mean that the value is fixed on the basis of he ental value and the award is a reasoned award justifying the court to examine whether the award suffers from an error. It is settled law that it is not open to the Court to deduce reasons in the award or in the record accompanying the award and proceed to examine whether those reasons were right or erroneous. This is what appears to have been done by the High Court in the present case. This was impermissible. We are therefore, of the opinion that the High Court was in error in going into the question of aluation of immovable properties by the arbitrator in the award."

10. It has further been held by the Hon'ble Supreme Court in Hindustan Construction Co. Vs. Governor of Orissa :

"It is well known that the court while considering the question whether the award should be set aside, does not examine that question as an appellate court. While exercising the said power, the court cannot reappreciate all the materials on the record for he purpose of recording a finding whether in the facts and circumstances of a particular case the award in question could have been made. Such award can be set aside on any of the grounds specified in Section 30 of the Act. According to us no ground has been made out on behalf of respondents to set aside the award holding it to be invalid."

11. In a recent judgment of the Hon'ble Supreme Court reported as B.V. adhakrishna Vs. Sponge Iron India Ltd. it has been held that the court cannot sit in appeal and cannot re-appraise or re-assess the evidence in respect of an award.

12. The same view is taken in State of Orissa Vs. Kalinga Construction ; Municipal Corporation of Delhi Vs. Jagannath Ashok Kumar ; Indian Oil Corporation Vs. Indian Carbon Ltd. ; Puri Construction Pvt. Ltd. Vs. Union of India ; Food Corporation of India Vs. Joginderpaln Mohinderpall .

13. The Hon'ble Supreme Court in Army Welfare Housing Organisation Vs. M/s. Gautam Construction & Fisheries Ltd. 1998 (7) AD (S.C.) 184 = 1998 (5) Scale 296 has held that:-

"...... it is not possible for the Court to reappreciate the evidence produced before the Arbitrator and thus come to a conlusion whether a certain amount claimed was towards one head or the other."

14. In Trustees of the Port of Madras Vs. Engineering Construction Corporation Ltd. , it has been held as follows;

"The above decisions make it clear that the error apparent on the face of the award contemplated by Section 16(1)(c) as well as Section 30(c) of the Arbitration Act is an error of law apparent on the face of the award and not an error of fact."

15. This position of law has also been applied in a recent judgment of this Court in Suit No. 1993 of 1992 entitled M/s. Ultra Builders Vs. MCD (DWS & SDU).

16. I have gone through the award as well as the objections filed by the respondent-DDA. The Objections (IA. 10505/93), filed by DDA/respondent No. 1 fall within the ambit of law laid down by the Hon'ble Supreme Court in the foregoing paragraphs of this judgment restricting the scope of the challenge to the award of the arbitrator by a court.

17. I have gone through the Award and the Objections. The Award is a reasoned one and gives cogent reasons for the amount awarded to the petitioner and moreover in view of the above position of law, I am therefore, satisfied that the Objections (IA. 10505/93), filed on behalf of respondent No. 1/DDA have no merits and are accordingly dismissed. The Award dated 14th May, 1993 is made a Rule of the Court. If the amount due under the ward is paid within 3 months from today, the award shall not carry any future interest. However, if the payment is not made within three months from today the awarded amount shall carry interest at the rate of 12 per cent per annum from the date of decree till realization. There shall be no orders as to costs. Decree sheet be drawn up accordingly.

18. Suit & IA stand disposed of.