Delhi High Court
Driplex Water Engineering vs Dsidc on 25 April, 2006
Author: S K Kaul
Bench: S K Kaul
JUDGMENT
Sanjay Kishan Kaul, J.
IA No. 8702/1999 (Objections Under Section 30 and 33 of the Arbitration Act, 1940)
1. The respondent aggrieved by the award dated 27.3.1999 of Justice T.P.S. Chawla (Retired) who acted as the Sole Arbitrator in respect of the disputes between the parties has filed the present objections under Sections 30 and 33 of the Arbitration Act, 1940 (hereinafter referred to as the said Act).
2. The disputes relate to the notice inviting tender dated 9.10.1987 for the work of designing, construction and commissioning of a Waste Water Treatment Plant for Narela Industrial Complex. The petitioner's tender was accepted and the formal contract was executed on 2.5.1989. The initial period contemplated for completion of work under the Letter of Intent was 15 months but a further three months period was granted for testing and commissioning. The Contract was thus to be completed within 18 months on or before 10.7.1990.
3. The Contract did not make due progress and only small portion of the work was done during the stipulated period of time for which the parties are putting blame on each other. In view of the disputes even the work was apparently given up by the petitioner and finally vide letter dated 3.6.1992, the petitioner invoked the Arbitration Clause, requiring the Managing Director of the respondent to appoint the nominee Arbitrator. Even thereafter there was considerable delay resulting in proceedings before the Court and finally Justice T.P.S. Chawla (Retired) was appointed as the Sole Arbitrator by the High Court of Delhi.
4. The Arbitrator framed 15 issues but in order to appreciate the controversy it has to be kept in mind that the fundamental issue was as to which of the parties was to be blamed for the delay. The Arbitrator on this account has put the burden solely on the respondent.
5. A perusal of the objections would show that the respondent appears to be under a misconception that the present Court is a Court of first appeal. The objections have been framed in the form of grounds seeking to raise the issue as to whether the finding arrived at by the Arbitrator on the given facts was incorrect. In my considered view this is not the scope of enquiry under Sections 30 and 33 of the said Act.
6. Learned counsel for the respondent referred to the various grounds but could not seriously dispute that there is no scope of scrutiny of this Court to reappraise the evidence before the Arbitrator. Thus to the extent that the claims are based on the appreciation of evidence, the same cannot be re- scrutinized by this Court. This would amount to this Court sitting as a court of appeal, which is not permissible. It is not for this Court to interfere with an award merely on the basis that the Court would come to a different conclusion on the material available before the Arbitrator. It is only in the eventuality of an award being totally perverse that such inference is called for as held by the Division Bench of this Court in DDA v. Bhagat Construction Co. (P) Ltd. 2004 (3) Arb. LR 481. The Supreme Court has, in fact, taken the view that in the absence of an award being absurd, reasonableness is not the matter to be considered by the Court as appraisement of evidence by an Arbitrator is not ordinarily a matter for the Court. In this behalf the judgment of the Apex Court in Food Corporation of India v. Joginderpal Mohinderpal and Anr. may be referred to.
7. The Arbitrator is the final interpreter of an Contract and the Court is not to substitute its own decision in that behalf as held in M/s. Sudarsan Trading Company v. Government of Kerala AIR 1989 Supreme Court 890. In scrutinising the clauses of Contract all that is to be seen is that something that is not provided for at all in the Contract, is not awarded by the Arbitrator. So long as the view taken by the Arbitrator is plausible, though perhaps not the only correct view, the award cannot be examined by the Court. In such a situation the High Court was held to have no jurisdiction to examine different items clause by clause as dealt by the Arbitrator and to hold that under the Contract these were not sustainable in the facts found by the Arbitrator.
8. The Apex Court in Arosan Enterprises Ltd. v. Union of India and Anr. 1999(3) Arbitration Law Reporter 310 examined the scope of the scrutiny by the Court under Sections 30 and 33 of the said Act. It was held that the use of the expression 'shall' in the body of the Section 30 makes it mandatory that the award of an Arbitrator should not be set aside except for the grounds as mentioned therein. The common phraseology 'error apparent on the fact of the record' was thus held not to mean and imply closer scrutiny of merits of the documents and material on record. It has been observed in State of UP v. Allied Constructions that an Arbitrator is a Judge chosen by the parties and his decision is final and thus the Court is precluded from reappraising the evidence.
9. Learned counsel for the respondent faced with the aforesaid legal position sought to contend that the final bill has not been appreciated by the Arbitrator and amounts have been awarded for work done which were actually never done by the petitioner. I am afraid both the aspects, in view of the aforesaid pronouncements, are not subject matter of scrutiny by this Court in exercising the jurisdiction under Section 30 and 33 of the said Act.
10. Learned counsel for the respondent at this stage thus submits that at least the aspect of rate of interest awarded by the Arbitrator be examined since 18 per cent interest is extremely high. There is some force in the contention of the learned Counsel for the respondent. Moreover this Court in numerous matters for similar period of time has been granting interest @ 12 per cent per annum simple interest. Learned counsel for the petitioner does not object to this reduction of interest.
11. In view of the aforesaid the application is disposed of and the objections are allowed to the limited extent that the petitioner is held entitled to interest from 20.4.1993 till date of decree @ 12 per cent per annum instead of 18 per cent per annum on the principal amount of Rs. 22,59,344.47.
CS (OS) No. 983/1999
1. The objections having been disposed of the award dated 27.3.1999 of the Sole Arbitrator, Justice T.P.S. Chawla (Retired) is made rule of the Court with the modifications that the petitioner is held entitled to the principal amount of Rs. 22,59,344.47 along with interest @ 12 per cent per annum from 20.4.1993 till date of decree. The petitioner shall also be entitled to future interest from the date of decree till the date of realisation @ 9 per cent simple interest on the principal amount. In case the respondent pays the decretal amount within 60 days, the respondent shall be exempted from payment of future interest.
2. Parties are left to bear their own costs.
3. Decree sheet be drawn up accordingly.
