J.S. Construction vs D.D.A.
2004 Latest Caselaw 388 Del

JUDGMENT

H.R. Malhotra, J.

1.These are the objections preferred by the respondent/ DDA under Section 30 and 33 of the Arbitration Act, 1940 against the award dated 27.11.1997. It is the case of the objector/respondent that earlier to this award, another award relating to the same dispute as in the present award was filed by the same Arbitrator which too was assailed by the respondent by way of preferring objections to that award in S.No.2434-A/1994. The objections so filed by the respondent in that award were dealt with by this Court and vide judgment dated 1.11.1996, award relating to claim No.2 and 3 was set aside and directions were issued to the Arbitrator to give his decision afresh in respect of claim No. 2 and 3 within four months from the date of receipt of copy o that order as the Arbitrator had failed to give reasoned award on these claims.

2.According to the respondent/objector the Arbitrator again committed an error by not calling the parties for further hearing but simply justified the amounts already awarded by him in the earlier award. It is the grievance of the respondent that in claim No.2 the Arbitrator allowed the rates claimed by the petitioner without any justification and without any evidence to support the same. Similarly, in claim No.3 the Arbitrator, according to the respondent totally overlooked the fact that this c aim pertains to additional costs for the work done beyond the stipulated date of completion and were subjected to adjustment of claim under Clause 10 (CC) and as a matter of fact, this amount had already been awarded to the petitioner while determining the claim No.6 and 7 of the petitioner and, therefore, it was obligatory on the part of the Arbitrator to adjust amount against the amount awarded under claim No.3

3. For these reasons, the respondents in their objections have prayed that republished award being not in consonance with the directions of the court be set aside

4.Petitioner has filed reply to these objections and termed them as false and frivolous having no basis in law. It has been pleaded in the reply that the award was earlier remitted in respect of claim No.2 and 3 with the directions that the Arbitration or would give reasons in respect of finding on claim No.2 and 3 and, therefore, according to the petitioner, the Arbitrator was not required to give a fresh hearing to either of the parties as he was only directed to give reasons on claim No.2 and 3 which he did and filed his award afresh after rectifying the mistake appearing in earlier award. It is stated in the reply that though the Arbitrator was ordered to give his decision afresh but since the process of reasoning adopted by learned Arbitrator was missing in the earlier award, therefore, the term "decision afresh" was rightly interpreted by the Arbitrator that he was only required to give his process of reasoning and there was no need to recall the parties for further hearing

5.The respondent filed rejoinder to the reply of the petitioner reasserting what was stated by them in their objections and refuting the averments made in the reply by the petitioner. Though the objectors did not take specific pleas regarding republic action of the award within the stipulated period as fixed by the court i.e. four months but they did take this plea while filing rejoinder stating that learned Arbitrator had not published the fresh award within the time frame as fixed by this court on .11.1996

6.I have heard learned counsel appearing for both the parties and have also considered the pleadings. The short question which arises for consideration in this petition is whether the Arbitrator, after the award was remitted back to him for decision afresh on claim No.2 and 3 was required to afford an opportunity to the parties once again or he was simply to assign reasons for accepting the claim No.2 and 3 of the petitioner. For that it is necessary to peruse the judgment rendered on 1.11.1996. The learned judge while dealing with claim No.2 given his conclusion which is not substantiated by any reason and it is imperative on the part of the arbitrator to give reasons for his conclusion but he failed to indicate his thought process in arriving at the conclusion that the extra amount pa able works out to

7.Similarly, on claim No.3 learned judge found that the Arbitrator had failed to indicate his thought process and give reasons in arriving at the amount towards extra expenditure. The court while setting aside that part of the award remitted the same to the Arbitrator to decide these claims afresh on merits in accordance with law. Reading of the judgment clearly indicates that Arbitrator was given specific directions to give his decision afresh on claim No.2 and 3. How could he make decision af esh on these two claims without hearing the parties afresh? Had the court asked the Arbitrator to incorporate reasons only on these two claims, the legal position would have been different

8.True, award was remitted back to the Arbitrator as it lacked reasoning but equity demanded that when the Arbitrator was to make decision afresh, he ought to have afforded an opportunity to both the parties to enable them to urge there respective points on these two claims. Even otherwise, the Arbitrator should not have proceeded to hold trial in absentia. This is totally against the jurisprudence of law. Reading of Section 16 of the Arbitration Act would show that the court may from time to time remit the award to the Arbitrator for re-consideration. Clause 3 of the said provision further confirms that the award remitted under sub-section (1) shall become void on the failure of the arbitrator but reconsider it and submit his decision with in the time fixed. How can the Arbitrator reconsider the award unless he gives an opportunity of hearing to both the parties? In this particular case, claim No.2 and 3 were passed in favor of the petitioner and that too without giving any reasons, therefore, necessity arose for remitting back the award to the Arbitrator for reconsideration. The Arbitrator again put his seal on the award in stereo type without even calling opposite party against whom these claims were passed. The whole purpose of r matting the award to the Arbitrator became in fact frustrated as other party against whom the award was made was not heard at all while reconsidering claim No.2 and 3. In my opinion this award again cannot stand scrutiny of the law, it being against judicial conscience

9.More so, the award was not given within the stipulated period as fixed by the court on 1.11.1996 where four months period was fixed for making the award. Though, the Arbitrator was under legal obligation to seek extension for making the award as provided under Section 16(2) proviso which empowers the court to extend the time so fixed initially but it is seen that not even an application was made before the court seeking extension of time, therefore, this is yet another fallacy in the award, it being not made within the stipulated period as directed by the court. For all these reasons, this award is again liable to be set aside

10.Since opportunity was denied to the respondent, therefore, once again the award is remitted back to the Arbitrator to give hearing to the respondent as well as to the petitioner and make his decision afresh on claim No.2 and 3 and return the findings on these two claims within four months

11. With these observations the award is set aside resulting in allowing the petition

12. Parties to bear their own costs.