Union Of India (Uoi) vs Kundra Shoes
2007 Latest Caselaw 873 Del

JUDGMENT

Anil Kumar, J.

Page 1461

1. This order shall dispose of objections by the plaintiff, Union of India under Sections 30 and 33 of Arbitration Act, 1940 against the arbitral award dated 29th December, 1999 passed by the learned Arbitrator which was filed by the Arbitrator and which was registered as CS(OS) 1257-A of 2000 and the petition which was filed by M/s Kundra Shoes under Section 14, 17 and 29 of the Arbitration Act, 1940 before the Award was filed by the Arbitrator, seeking direction to the Arbitrator to file the award and to make the award rule of the Court.

2. Brief facts to appreciate the controversies are that the plaintiff floated a tender enquiry and in response defendant offered to supply the stores, namely, shoe canvas, brown rubber soles of different size by an advance acceptance of tender on 30th July, 1984 followed by a formal AT bearing No. WL-3/101/208/2-6-81/63/II/776/RP/110/COAD dated 9th August, 1984. The plaintiff had conveyed his acceptance of tender by letter dated 16th August, 1984 except the Bank guarantee which was furnished on 31st January, 1985.

3. That despite the acceptance of the tender, the defendant could not deliver the stores in accordance with the schedule as set out in Clause 10 of ender and therefore, by letter dated 12th March, 1985 referring to an earlier letter dated 5th February, 1985, the defendant requested for an extension of delivery period. Consequent to the request made by the defendant, the delivery period was extended up to 31st March, 1985 which was agreeable by the defendant unconditionally.

4. Defendant thereafter sought further extension of time which were allowed up to 24th July, 1987. Extension thereafter, sought on 18th September, 1987 was, however, was not considered. As the defendant had failed to supply the stores, a quantity of 89,542 pairs, the contract was cancelled by the plaintiff on 29th December, 1987 treating the date of breach as 30th September, 1987. Consequent to the cancellation of the contract, the bank guarantee was also sought to be invoked by the plaintiff on 30th December, 1987.

5. That in accordance with the terms of the agreement, a communication dated 11/13th January, 1988 was sent to be the defendant regarding effecting a risk/purchase.

6. That pursuant to the notice of the risk/purchase, the plaintiff carried out risk/purchase and claimed amounts from the defendants leading to disputes Page 1462 between the parties. The defendant claimed that the risk/purchase was not carried out within a period of six months from the cancellation of the contract, in accordance with the terms of the agreement. It seems that the defects appeared in the soles of shoes which were supplied by the defendant. The defendant was served notice to remove the defects after about seven years of supply which the defendant failed to do, leading to auction of the same after about 7 years and thus more disputes arose between the parties.

7. That since the disputes had arisen on account of demands raised by the plaintiff, the arbitration agreement in terms of arbitration clause was invoked and matter was referred for adjudication of the sole arbitrator before whom plaintiff made six claims and the defendant also made counter claims. Shri Ram Bahadur, Addl. Legal Advisor to the Government of India, Ministry of Law was appointed as Sole Arbitrator and on his resignation, Mr. B.L.Nishad, Addl. Legal Advisor to the Government of India was appointed the sole Arbitrator who gave an award.

8. The learned arbitrator gave an award dated 29th December, 1999 and rejected the claims of the plaintiff and allowed some of the claims of the defendant, the details of which are as under:

  S. No.   Claims                            Amount claimed    Amount awarded in Rs.
1        UOI claimed the sum towards        3,09,144.40       NIL
         Risk Purchase loss. Claim
         was disallowed.
2        UOI claimed the sum due to         2,50,068.00       NIL
         non-replacement of stores.
         Arbitrator dis-allowed the
         claim.
3        UOI claimed the sum towards        300.00            NIL
         amount deducted by the
         consignee from the various
         consignment. Claim was
         disallowed on the ground not
         proved.
4        UOI claimed the sum towards        21.00             NIL
         deduction by the consignees.
         Claim was disallowed.
5        UOI claimed interest on             18%              NIL
         amounts of Claims 1 to 4
         @ 18%. Claim was disallowed
         as the claims No.1 to 4 were
         disallowed.
6        UOI claimed the cost of             ---              NIL
         proceedings. Arbitrator
         Disallowed the same. 
COUNTER CLAIMS
1        Defendant prayed for dropping       ---              ---
         of the proceedings. The same
         was rejected.
2        Defendant claimed rejection of       ---             ---
         all the claims of the plaintiff.
         Prayer was allowed as the claims
         of the plaintiffs were
         disallowed.
3        Defendant claimed amounts
         withheld on account of demand
         raised in the contract. All
         the amounts withheld on account
         of Claim No. 1 were allowed. Page 1463
         Amounts withheld by the
         plaintiff.
         All the amounts withheld were
         allowed
4        Defendant claimed sum towards        5,10,000.00       NIL
         damages. Claim of damages was
         disallowed as not proved.
5        Defendant claimed the sum             2,21,695.00      2,21,695.00
         towards balance price. The same
         was allowed.
6        Defendant claimed the sum             7,24,954.00       ---
         towards release of withheld due
         to demand in the contract. 
         Already allowed in C.Claim No. 3.       21%             12%
7        Defendant claimed interest @ 21%
         per annum on a sum of Rs. 5.00 lakh.
         12% interest per annum in respect
         of claim No. 5, Rs. 2,21,695/- was
         awarded from the date of the
         publishing of the award till the
         actual realisation. 
8        Defendant claimed cost of the           ---             NIL
         proceedings.
         The same was disallowed.

 

9. The award was filed in the court for making it rule of the Court. On the objections filed by the plaintiff, reply was filed and on the pleadings of the parties, the Court framed the following issues:
  

1. Whether the award dated 21st December, 1999 is liable to be set aside as prayed?
 

2.Relief.
 

10. During the arguments, the Learned Counsel for the parties have confined their submissions to the claims No. 1 and 2 only of the plaintiff/ UOI which were disallowed.
 

11. The counsel for the plaintiff, Ms. Rekha Palli, contended regarding claim No. 1 that the agreement was breached on 30th September, 1987 and since the risk/purchase could be carried out till 31st March, 1988, therefore, a detailed telegram given on 2nd March, 1988 for risk/purchase makes the risk/purchase made by the plaintiff within time. Relying on the formal order made regarding risk/purchase stipulating that the risk/purchase was in continuance of office advertisement AT telegram of even number dated 2nd March, 1988, makes it within time and the findings of the arbitrator that the risk/purchase was not made within time is ex facie incorrect. She also relied on contract, definition of acceptance of tender to contend that acceptance of tender includes an advance acceptance of his tender. The relevant definition of acceptance of tender is extracted as under for reference:

1(a) "Acceptance of tender" means the letter of memorandum communicated to the contractor, the acceptance of his tender includes an advance acceptance of his tender.

12. The Learned Counsel for the plaintiff, therefore, contended that the arbitrator has mis-conducted in disregarding the telegram dated 2nd March, 1988 and the definition of `acceptance' of tender and thus holding that the risk purchase was not made within time under the agreement, is erroneous.

Page 1464

13. Regarding the second claim, it was contended that the arbitrator exceeded his jurisdiction by holding that timely action of return of disposal as per notice dated 15/19th May, 1987 would have given the full price and has thus mis-conducted and therefore, setting aside of the award on account of these claims was prayed.

14. Per contra the defendant contends that claim No. 1 has not been rejected merely on account of risk/purchase being not made within time but also on account of deviations between the terms of the contract awarded to the defendant and the terms in the risk/purchase contract entered by the claimant. The arbitrator relied on different deviations categorically stipulated by the defendant in his reply which are extracted as under for reference:

  Contract of Kundra Shoes             Alleged R/P to Dawer
1. Under Clause 7 of the          Under Clause 7 DGS&D-229
   DGS&D-68.... (Revised) alone   was alone made applicable.
   was made applicable 
2. DGS&D-68, up to 9-8-89,         up to 4-4-88, also was made
   was made applicable.           applicable.
3. Under Clause 9 the term for    There is no term security
   security deposit is imposed    Deposit imposed.
4. The delivery was to be made    It was forty thousand per
   at 50 to 60 thousand per       month.
   month. 
5. For Delhi/Sonepat              For Amritsar
6. Supply of 2,20,192 pairs       It was for 89,542 pairs.
   (3 times more)
 

15. The defendant contended that the order for risk/purchase was not accepted unconditionally and on account of various variation, the delivery period was re-fixed and communicated to the plaintiff vide letter dated 9th April, 1988 and the Arbitrator has taken all these aspects into consideration before rejecting the claim No. 1 of the plaintiff. The respondent relied on 1992(2) RAJ 162 (SC) Himachal Pradesh Electricity Board v. R.J. Shah and Co. , Hind Builders v. Union of India , Sudharshan Trading Co. v. Government of Kerala and Anr , Food Corporation of India v. Joginder Pal Mohinder Lal and Anr. , Union of India v. Kalinga Construction Co. AIR 1999 (3) SC 3869, Arosan Enterprises v. Union of India, to contend that the Court cannot substitute its own decision and conclusion in interpretation of a contract which is a matter for an arbitrator to decide. As appraisement of evidence by arbitrator is never a matter which the Court questions and considers because Page 1465 the parties have selected their own forum and the deciding forum must be conceded the power of the appraisement of the evidence. The defendant contended that there is no error in exercise of jurisdiction and highlighted the distinction between an error within the jurisdiction and an error in exercise of the jurisdiction. It was also contended that mitigation of damages relates to question of facts to which the decision of the Arbitrator is final. Regarding the plea of the plaintiff that sale of rejected goods could not be a justification for rejecting the claim of the plaintiff for non-replacement of the store, it was contended by the defendant that if he had refused to take delivery of the rejected goods, the plaintiff could dispose of the same and while doing it, plaintiff was bound to follow the principle of mitigation of damages. Instead of disposing of the goods within seven days as contemplated under the contract, the plaintiff took seven years and is still could get such a good price and therefore the conclusion of the arbitrator that the plaintiff could not take advantage of his own delays, cannot be faulted by the plaintiff.

16. I have considered the objections, reply and have heard the counsel for the parties at length. Under claim No. 1, the plaintiff has claimed a sum of Rs. 3,09,144.40 on account of risk/purchase clause which has been disallowed by the arbitrator. The Arbitrator has considered that the date of breach was 30th September, 1987 and risk/purchase had to be made by 31st March, 1988. The Arbitrator who was an additional Legal Advisor under the Ministry of Law & Justice and DGS&G has noted that there were deviations between the terms awarded to the defendant and in the risk/purchase contract. The Arbitrator has also noted that UOI had ignored low rates for risk/purchase which were available. The low rates for the risk/purchase were noted on the basis of official noting of the comparative chart dated 11th August, 1999 filed by the plaintiff. The learned Arbitrator also reached his decision on the ground that the agreement for risk/purchase was not solely based on advance order dated 2nd March, 1988 as the same was not accepted and the formal order was in terms of the letter dated 9th April, 1988, copy of which was filed by the UOI himself and the delivery as offered was required to be re-fixed.

17. The submission of the Learned Counsel, Ms. Rekha Palli is mainly based on the telegram dated 2nd March, 1988 which is extracted as under:

EXPRESS DAWAR RUBBER INDUSTRIES AMRIT

OFFICE ACCEPTANCE NO. WL.6/101/208/2-6-81/63/67/776/RP/1110/RP/217/COAD D. 2-3-88(.) YOUR OFFER OF 8TH FEB 88 AND LETTER DATE 24TH FEB 88 AGAINST THIS OFFICE NO. WL/101/208/2-6-81/63/67/776/RP/110 RP OPENED ON 9.2.88 FOR SHOES CANVAS BROWN IS HEREBY ACCEPTED FOR 89542. PAIRS @ RS. 19.36 PER PAIR (.) FOR VARKA AMRITSAR(.) DELIVERY AS PER YOUR OFFER ST @ 40% EXTRA. OTHER TERMS AS PER TE AND YOUR OFFER(.) CONTRACT IS HEREBY CONCLUDED (.) FORMAL AT FOLLOW (.)

POORNIMIP THEKA NEW DELHI SECTION OFFICER

Page 1466

According to her, the formal order dated 4th April 1988 was in continuation of this office telegram and as under the terms and under the definition of acceptance of tender, the advance acceptance of tender is also included, therefore, the acceptance of same was deemed to have been effected on 2nd March, 1988 and well before the 31st March, 1988.

18. The learned Arbitrator has considered the terms of the contract and the telegram dated 2nd March, 1988, formal order dated 4th April, 1988 and deviations between the contract of defendant and the contract to risk/purchase as well as other low rates which were not considered by the plaintiff and after due consideration has disallowed the claim. In the circumstances it cannot be inferred that the arbitrator has not considered the telegram relied on by the plaintiffs and the definition of acceptance as referred to by the plaintiff. The Learned Counsel for the plaintiff is unable to show any legal proposition considered by the arbitrator being erroneous. An award may be set aside on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. 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 the 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. The Supreme Court in Sudarsan Trading v. Govt. of Kerala had held at page 54:

29...Furthermore, in any event, reasonableness of the reasons given by the arbitrator, cannot be 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 the 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. See the observations of this Court in MCD v. Jagan Nath Ashok Kuma.

30. The same principle has been stated in Alopi Parshad and Sons, Ltd. v. Union of India. There this Court held that the award was liable to be set aside because of an error apparent on the face of the award. An arbitration award might be set aside on the ground of an error on the face of it when the reasons given for the decision, either in the award or in any document incorporated with it, are based upon a legal proposition which is erroneous. But where a specific question is referred, the award is not liable to be set aside on the ground of an error on the face of the award even if the answer to the question involves an erroneous decision on a point of law. But an award which ignores express terms of the contract, is bad.

Page 1467

In Jivarajbhai Ujamshi Sheth v. Chintamanrao Balaji this Court reiterated that an award by an arbitrator is conclusive as a judgment between the parties and the court is entitled to set aside an award if the arbitrator has mis-conducted himself in the proceeding or when the award has been made after the issue of an order by the court superseding the arbitration or after arbitration proceedings have become invalid under Section 35 of the Arbitration Act or where an award has been improperly procured or is otherwise invalid under Section 30 of the Act. An award may be set aside on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. The court, however, went into the question whether the arbitrator had included depreciation and appreciation of certain assets in the value of the goodwill which he was incompetent to include by virtue of the limits placed upon his authority by the deed of reference. The court found that that was not a case in which the arbitrator had committed an error of fact or law in reaching his conclusions on the disputed questions submitted for adjudication. It was a case of assumption of jurisdiction not possessed by him and that rendered the award to the extent to which it was beyond the arbitrators' jurisdiction, invalid. This was reiterated by Justice Hidayatullah that if the parties set limits to action by the arbitrator, then the arbitrator had to follow the limits set for him and the court can find that he exceeded his jurisdiction on proof of such excess. In that case the arbitrator in working out net profits for four years took into account depreciation of immovable property. For this reason he must be held to have exceeded his jurisdiction and it is not a question of his having merely interpreted the partnership agreement for himself as to which the civil court could have had no say, unless there was an error of law on the face of the award. Therefore, it appears to us that there are two different and distinct grounds involved in many of the cases. One is the error apparent on the face of the award, and the other is that the arbitrator exceeded his jurisdiction. In the latter case, the courts can look into the arbitration agreement but in the former, it cannot, unless the agreement was incorporated or recited in the award.

31. An award may be remitted or set aside on the ground that the arbitrator in making it, had exceeded his jurisdiction and evidence of matters not appearing on the face of it, will be admitted in order to establish whether the jurisdiction had been exceeded or not, because the nature of the dispute is something which has to be determined outside the award - whatever might be said about it in the award or by the arbitrator. See in this connection, the observations of Russell on The Law of Arbitration, 20th Edn., p. 427. Also see the observations of Christopher Brown Ld. v. Genossenschaft Oesterreichischer and Dalmia Dairy Industries Ltd. v. National Bank of Pakistan. It has to be reiterated that an arbitrator acting beyond his jurisdiction - is a different ground from the error apparent on the face of the award. In Halsbury's Laws of England II, 4th Edn., Vol. 2, para 622 one of the misconducts enumerated, Page 1468 is the decision by the arbitrator on a matter which is not included in the agreement or reference. But in such a case one has to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. See the observations in Anisminic Ltd. v. Foreign Compensation Commission and Regina v. Noseda, Field, Knight and Fitzpatrick. But, in the instant case the court had examined the different claims not to find out whether these claims were within the disputes referable to the arbitrator, but to find out whether in arriving at the decision, the arbitrator had acted correctly or incorrectly. This, in 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. Whether a particular amount was liable to be paid or damages liable to be sustained, was a decision within the competency of the arbitrator in this case. By purporting to construe the contract the court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiction. It has to be determined that there is a distinction between disputes as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised. There may be a conflict as to the power of the arbitrator to grant a particular remedy. See Commercial Arbitration by Sir N.J. Mustill and Stewart C. Boyd, p 84.

In , S. Harcharan Singh v. Union of India , Hindustan Construction Co Ltd. v. State of J and K and , Continental Construction Ltd. v. State of U.P. it was held by the Apex Court regarding interpretation of the terms of the contract that the Court can not substitute its own interpretation with that of the arbitrator so long as the interpretation of the arbitrator is a possible one. If an interpretation to a particular clause of agreement is given by the Arbitrator, such an interpretation although may be erroneous, is final and binding and Court does not have power to upset the findings. However, if Arbitrator passes an award by ignoring the stipulation and prohibition contained in the agreement, then Arbitrator travels beyond his jurisdiction. The arbitrator has considered the telegram and the definition of acceptance. The claim 1 of the plaintiff has also been declined on account deviations between the contract of defendant and the contract of risk/purchase as well as other ground of low rates which were not considered by the plaintiff. There are limits for judicial reviewability and the Courts exercise limited jurisdiction in the proceeding for setting aside an award under Section 30 of the Act. The Courts do not exercise appellate jurisdiction over the verdict of an arbitrator and as such cannot go into the merits of the case nor the court can re-appraise and re-examine the evidence led before the arbitrator. The arbitrator has given sufficient and cogent reasons for declining Page 1469 the claim 1 of the plaintiff in the present facts and circumstances. In the circumstances, it cannot be said that the Arbitrator has exceeded in his jurisdiction. There does not seem to be an error in his inferences. Even if it is presumed that there is an error in his inference, the same shall be error within his jurisdiction and this Court will not substitute its decision with the decision of an Arbitrator who has considered all the material which is also relied on by the plaintiff. Consequently, the objection of the claimant/plaintiff in respect of claim No. 1 is rejected.

19. In respect of claim No. 2 of the plaintiff, the learned Arbitrator has held as under:

I disallow this claim of the claimant for the following reasons:

i) The claimant had withheld the bills of the defendant and defendant had filed several letters for return of rejected goods and defendant also has filed letter dt. 15/19.5.87 (R-13) demanding a sum of Rs. 2,54,489.40 with advice in Clause No. 4 of it that rejected goods are lying at depot at risk and cost of the defendant and defendant may remove or give instructions for its disposal within two weeks, failing which these will be returned to defendant on freight to pay basis or dispose of it at contractor risk on this account. The claimant had not returned it to the defendant on freight to pay basis. The defendant has themselves produced letter dt. 18.3.88 and 19.12.88, that they were not allowed to lift the rejected stores according to claimant they after 7 years of letter dt.15/19.5.87 without any prior notice auctioned 14,957 pairs out of 15,000 on 19.4.94 for Rs. 1,42,100.00.

ii) The failure to act as per notice dt.15/19.5.87 and refusal to return the rejected goods and selling it in April, 1994 without notice in 1994 and of delay in taking prior action by claimant for 7 years after notice of 15/19.5.87 is unexplained.

I find that even in auction made after 7 years, shoes still fetched Rs. 1,42,100.00 which is over 50% of price and the timely action by return of disposal as per notice dt.15/19.5.87 would have given the full price.

iii) The claimant did not take steps as required under Clause 4(2) and 17 of DGS&D-68 (Revised) within proper time.

The learned Arbitrator has relied on the notice dated 14/19th May, 1987 and the letters dated 18th March, 1988 and 19th December, 1988.

20. The counsel for the plaintiff has relied on Clause 13(b) of the agreement which is extracted as under:

13(b) All rejected stores shall in any event and circumstances remain and always be at the risk of the contractor immediately on such rejection. If such stores are not removed by the contractor within the periods aforementioned, the Inspector may remove the rejected stores and either return the same to the contractor at his risk and cost by such mode of transport as the Secretary or Inspector may decide, or dispose of such Page 1470 stores at the contractor's risk and on his account and retain such portion of the proceeds if any from such disposals as may be necessary to recover any expense incurred in connection with such disposals (or any price refundable as a consequence of such rejection). The purchaser shall, in addition, be entitled to recover from the contractor handling and storage charges for the period during which the rejected stores are not removed/disposed of in accordance with the provisions hereof.

21. To contend that once the notice had been given to remove the defective stores and still the plaintiff did not allow the defendant to remove the stores, it was at the risk and cost of the defendant and in any case, under 13(a), the plaintiff was entitled to retain the rejected stores till the price paid for such stores was refunded by the contractor, is not tenable in the facts and circumstances. The relevant portion of 13(a) is extracted for reference:

13(a) On rejection of all stores submitted for inspection at a place other than the premises of the contractor, such stores shall be removed by the contractor at his own cost, subject as hereinafter stipulated, within 14 days of the date of intimation of such rejection. If the concerned communication is addressed and posted to the contractor at the address mentioned in the schedule, it will be deemed to have been served on him at the time when such communication would in the course of ordinary post reach the contractor. Provided that the Inspector may call upon the contractor to remove dangerous, infected or perishable stores within 48 hours of the receipt of such communication and the decision of the Inspector in this behalf shall be final in all respects. Provided further that where the price or part thereof has been paid the consignee is entitled without prejudice to his other rights to retain the rejected stores till the price paid for such stores is refunded by the contractor say that such retention shall not in any circumstances be deemed to be acceptance of the stores or waiver of rejection thereof.

The failure to act as per notice dt.15/19.5.87 and refusal to return the rejected goods and selling it in April, 1994 without notice in 1994 and of delay in taking prior action by claimant for 7 years after notice of 15/19.5.87 is unexplained and the Learned Arbitrator on this basis has rejected the claim of the plaintiff/UOI.

22. The plaintiff has also relied on , Union of India v. U.P. Upbhokta Sahkari Sangh Limited, Lucknow to contend that if an arbitrator arrives at a finding which is contrary to the material before him and has arrived at a conclusion which is capricious on the face of it, the award would be totally perverse, capricious and contrary to the material available to the Arbitrator and award is liable to be set aside. Ms. Rekha Palli, Learned Counsel, contended that in the matter of U.P. Upbhokta Sahkari Sangh Ltd. (supra), the Arbitrator had recorded a finding that the goods were accepted with price variation and were not of the same specification which the Arbitrator could not have done nor the arbitrator could ask for the proof of market value because the claimant had not given the proof of market value and thus the award was set aside, is akin to the present case as merely on Page 1471 the basis of alleged deviations and all the goods available at low price, the claim could not be disallowed. Perusal of the judgment shows that the facts are clearly distinguishable as in the case of the plaintiff, the deviations were categorically stipulated in reply and even the lower rates of the risk/purchase goods were inferred from the office noting produced by the claimant himself whereas in the case relied on by the plaintiff such evidence was not available.

23. It is settled that this Court should not reverse the findings of facts for the reason that, in the opinion of the Court, the Arbitrator reached wrong conclusions or failed to appreciate the facts. In Hindustan Iron Co. v. K. Shashikant & Co. the Apex Court had held that the award of the Arbitrator ought not to be set aside for the reason that, in the opinion of the Court, the Arbitrator reached wrong conclusions or failed to appreciate the facts. This well settled proposition of law was reiterated in the decision of the Apex Court in Coimbatore District Podu Thozillar Sangam v. Balasubramania Foundary and Ors. it had been opined that it is only an error of law and not a mistake of fact committed by the arbitrator which can be adjudicated in the application/objection 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 of the Court. Similar opinions were expressed in Indian Oil Corporation Ltd. v. Indian Carbon Ltd. ; Jawahar Lal Wadhwa and Anr. v. Haripada Chakroberty ; Puri Construction Pvt. Ltd. v. Union of India ; Food Corporation of India v. Joginderpal Mohinderpal and Anr. holding that a plausible view taken by the Arbitrator was not open to Court interference. In Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar and Anr. the Court held that if the reasons appear per se to be not unreasonable and irrational the Court ought not to re-appreciate the evidence. In Hind Builders v. Union of India the Court cautioned that where two views were possible it could not be predicated that there was an Page 1472 error apparent on the face of the award. In Bijendra Nath Srivastava v. Mayank Srivastava and Ors. the view expressed was that the reasonableness of reasons given by the arbitrator was not open to challenge and that the proper approach would be for the Court to support the award. Similarly, in Hindustan Construction Co. Ltd. v. Governor of Orissa and Ors. it was reiterated that the Court cannot re-appreciate the material on the record. In Trustees of the Port of Madras v. Engineering Constructions Corporation Ltd. the decision of a Division Bench of the High Court of Madras, which had reversed the Award on a question of fact and not on a question of law, was set aside by the Supreme Court. After considering its previous decisions, the Apex Court in B.V. Radha Krishna v. Sponge Iron India Ltd. again held that the Court could not substitute its own view in place of that of the Arbitrator. In Army Welfare Housing Organisation v. Gautam Construction and Fisheries Ltd. the Court declined to vary an award for the reason that without re-appreciating evidence it would not be possible to fault the quantum awarded towards anticipated expenses. In any case, it cannot be said considering all the facts that the Arbitrator has committed error in excess of jurisdiction. If that be so then this Court will not substitute its inferences with that of the Arbitrator.

24. In the circumstances, objections raised by the claimant against the claim No. 1 and 2 are rejected as the Arbitrator has taken the material before him into consideration and has arrived at just inference. The objections are, therefore, without any merit and are dismissed.

25. As no other objections were raised and pressed by the parties against the other claims of the claimant and the counter claims of the defendant, I, therefore dismiss the objections of the claimant and make the award Rule of the Court. Consequently IA No. 293 of 2001 in CS(OS) 1257-A of 2000 being objections of the Union of India under Section 30 and 33 of the Arbitration Act, 1940 are dismissed and the CS (OS) 516-A of 2000 for making the award dated 29.12.1999 rule of the Court under Section 14, 17 and 19 of the Arbitration Act, 1940 is allowed. Consequently, decree sheet be drawn in accordance with the award. The defendant is also awarded interest at the rate of 12% per annum from the date of institution of petition to make the award rule of the Court till the realization of the decreetal amount. Parties are, however, left to bear their own costs.