M/S Nav Nirman Engg. & Contractors ... vs Vivekanand Mahila College & Ors.
2009 Latest Caselaw 1539 Del

                  * IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                                   Date of Reserve: 6.4.2009
                                                                 Date of Order: April 21, 2009

CS(OS) No. 1907A/1988
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        M/s Nav Nirman Engg. &
        Contractors & Ors.                ... Plaintiff/Petitioner
                        Through: Ms. Manjula Gandhi, Advocate

                 Versus

        Vivekanand Mahila College
        & Ors.                            ... Defendants/Respondents
                       Through: Mr. Atul Kumar, Advocate

IA no. 5205/89 in CS(OS) No. 1160/1989 (Objections)
%

        M/s Nav Nirman Engg. &
        Contractors & Ors.                ... Plaintiff/Petitioner
                        Through: Ms. Manjula Gandhi, Advocate

                 Versus

        Vivekanand Mahila College
        & Ors.                            ... Defendants/Respondents
                       Through: Mr. Atul Kumar, Advocate


JUSTICE SHIV NARAYAN DHINGRA

1. Whether reporters of local papers may be allowed to see the judgment?                Yes.

2. To be referred to the reporter or not?                                               Yes.

3. Whether judgment should be reported in Digest?                                       Yes.

JUDGMENT

By this order, I shall dispose of an application under Section 14/17 of the

Indian Arbitration Act 1940 for making the award as Rule of the Court and the petition

under Section 30/33 made by the respondent/objector raising objections against the

award.

2. The parties had entered into a contract for construction of Vivekanand

College building. After construction of the building a dispute arose between the parties

and an OMP 51/1984 was filed in this Court whereby the petitioner challenged

appointment of Shri Swami Dyal as the Sole Arbitrator to decide the dispute. The said

petition was compromised and the parties agreed that Shri Swami Dyal should cease to

act as Arbitrator and the Vice Chancellor of Delhi University should appoint an

independent Arbitrator to adjudicate the dispute. The Vice Chancellor of the Delhi

University vide letter dated 15.5.1986 appointed Prof. M.P.Singh as the Arbitrator. Both

the parties filed their claims, counter claims before the Arbitrator and ultimately the

Arbitrator concluded the hearing and gave an award dated 5.12.1987. The petitioner

filed an application under Section 14/17 on 16/27.7.1988 praying that the Court should

direct the Arbitrator to file award in the Court and the award should be made Rule of the

Court. Notice of the petition was served upon the parties and ultimately the award was

got filed in the Court by Delhi University through an advocate and the notice of the award

was sent to the parties. It transpires from the record that the Arbitrator after giving the

award had sent it to the Vice Chancellor and later on Vice Chancellor told the parties

that arrangement was being made for filing of award in the Court. After notice was sent

to the parties respondent filed objections against the award and assailed it on the ground

that there was an error apparent on the face of the award as the learned Arbitrator had

not published the award within the period prescribed under law. The Arbitrator entered

reference on 3.5.1986 and the award was purportedly made on 5.4.1989. The other

ground taken was that the Arbitrator had not issued a notice of making and publishing of

the award to the parties. The award was not filed in the Court properly, it should have

been filed by the Arbitrator but it was got filed through advocate. The other objections

taken are regarding those claims which have been allowed by the learned Arbitrator

stating that the Arbitrator allowed these claims on the basis of mere conjectures and

surmises. The petitioner/contractor never submitted running account bills and the bills

were not certified and checked by the architect. The Arbitrator wrongly allowed claim

against the additional items, no payment against additional items could have been made

by the Objector unless they were certified by the architect. There was no certification of

architect in respect of the additional items. The Objector also raised objection against

grant of 9% interest by the Arbitrator stating that there was no provision for awarding of

interest in the agreement between the parties.

3. A prayer was made that the award be set aside. All the objections raised

by the objector were refuted by the petitioner, who supported the award. On the basis of

objections and response, following issues was framed by this Court:

1. Whether the award submitted by Shri M.P.Singh, sole arbitrator, filed in Court on 5.4.1989 is liable to be set aside/modified for the objections raised by the respondent in IA No. 5205/89 ? - OPO

2. Whether the objections filed by the respondent are within time? - OPO

3. Whether the objections have been signed by a duly authorized person? - OPO

4. Relief.

4. A perusal of award shows that out of nine claims made by the claimant,

the learned Arbitrator rejected claim no.2, 3, 6 & 8. Claim no. 5 was waived off by the

claimant himself and was rejected on this ground. The Arbitrator only allowed claim no.1

for Rs.35,377.21, claim no.4 for Rs.11,429.66, claim no.9 to the extent of Rs.15,000/-

and claim no.7, regarding interest. The learned Arbitrator held that claimant would be

entitled to 9% simple interest from the date amount became due till the amount was

paid. The learned Arbitrator ruled that cost of the arbitration shall be borne by both the

parties 50% each.

ISSUE No.1

5. It is submitted by the Objector/Respondent that the period of limitation for

publishing the award was four months from the date of entering the reference. The

award was neither published nor made within this statutory period of four months. None

of the parties had asked for extension of time. The proceedings were concluded in

October, 1987 however, the award published was on 5.4.1989 therefore, the award was

liable to be set aside. It is also argued that the learned Arbitrator did not issue notice of

making the award or publishing of the award to the parties and the award was not filed in

the Court by the duly authorized person. The other ground for assailing the award is that

the learned Arbitrator has not given reasons for allowing claims no. 1, 4, 7 & 9. Claim

No.4 was based on some items of work which were outside the terms of the contract, the

Objector had never asked the contractor to do these works and never agreed to pay for

the same. It is submitted that payment of bills was to be made to the petitioner only after

approval/certification of those bills by the architect, no payment was permissible in

absence of certificate by the architect. The petitioner never submitted the running

account bills in respect of items of work mentioned in claims no. 4 & 9 to the Objector

and therefore no payment was liable to be made, the award passed by the Arbitrator

was therefore invalid. It is also stated that the award in respect of claim no.9 was

without any basis and was not based on evidence. The petitioner had failed to rectify

the defects in the building within the specified period of 15 days and the Objector had to

get the defects removed on its own; under these circumstances, the award under claim

no. 9 was bad in law.

6. There is no doubt that the Arbitrator had not given its award within the

period of four months which is the period prescribed for making an award however, the

petitioner and the respondent both had been participating in the proceedings before the

Arbitrator even after expiry of the prescribed period of four months. It is not the case of

Objector that it stopped participating in the proceedings or raised objection before the

Arbitrator that four months had expired and it was not prepared to extend the period

beyond it. Where the parties keep on participating in the arbitration proceedings without

raising any objection of expiry of period of four months, a presumption is there that both

the parties have given tacit consent to continue with the proceedings of the arbitration

and the period of four months stand extended due to this tacit consent of the parties.

The objection regarding delay in giving the award in such case cannot be entertained. I

get support for this view from decision given in State of Punjab v. Hardyal (1985) 2 SCC

629. This objection of the respondent/objector is therefore liable to be rejected and is

hereby rejected.

7. A perusal of the arbitration proceedings would show that the Arbitrator

had given full opportunity to the parties to lead evidence and to place before it all the

record. The learned Arbitrator after going through the record and the evidence of both

the sides gave its award in respect of each claim. There is no doubt that the award is a

non-speaking award but that cannot be a ground for setting aside of an award. There

was no binding on the Arbitrator to give a speaking award. The Arbitrator had given its

award based on the evidence. Where the award is a non-speaking award, the Court

cannot enter into the mind of the Arbitrator and speculate as to what would have been

the reasons with the arbitrator for giving the award and Court cannot determine whether

the conclusions are right or wrong. It is not open to the Court to attempt to probe the

mental process of the arbitrator by which the arbitrator reached conclusions. Giving of

non-speaking award in itself is not a ground for setting aside of the award neither it

amounts to misconduct on the part of the Arbitrator. I, therefore find that this objection

raised by the respondent/objector is not tenable.

8. This Court while considering the objections raised against an award does

not act as a Court of appeal and cannot re-appreciate the evidence adduced before the

Arbitrator. The Arbitrator is the final judge of the facts and law and unless it is shown

that the Arbitrator mis-conducted himself, the award cannot be set aside. The

misconduct should be of such nature as the award was given under extraneous

influence or the arbitrator totally ignored the evidence and award was without any basis

or he ignored the law of land and passed its award contrary to settled law. It is not the

case of the respondent that the arbitrator had not given full opportunity to the respondent

of hearing or that the award of the arbitrator was not based on evidence.

9. The plea of the respondent that it had not asked for extra items to be

done by the contractor is belied from the agreement entered into between the parties. A

perusal of agreement would show that agreement itself provided that the contractor

would execute all such extra items as are told to him from time to time and the payment

in respect of extra item would be made at CPWD rates plus profit of the contractor.

There is no provision in the contract between the parties that the payment in respect of

extra items is not to be made unless it is approved by the architect. The dispute in fact

arose only because extra items executed by the contractor at the instance of the

architect/respondent were not paid for. The arbitrator has considered the material

produced before it and taken a conscious and reasonable decision regarding all the

claims. I find no merits in the objections raised by the petitioner on this count. In view of

my above discussion the issue is decided in favour of the petitioner and against the

objector/respondent.

ISSUE NO.2

10. It is not disputed that notice of filing of the award was directed to be

issued by this Court to the parties on 4.5.1989. This notice was received by the Objector

on 18.5.1989. The period of 30 days for filing objections expired on 17th June, 1989.

The Courts were closed for summer vacation from 29.5.1989 to 1.7.1989. The limitation

period was not to run for the purposes of institution of Civil Suits and Criminal Cases

during the summer vacation. 2nd July, 1989 was a Sunday and objections were filed on

3.7.1989. The objections filed by the respondent were thus within time. The issue is

decided accordingly.

11. The objections were filed by the respondent through Mr. J.R.Jindal the

then 'Treasure' of respondent college. Under the rules of society and under

memorandum of association 'Treasure' of society was a duly authorized person to sign

and verify the proceedings on behalf of the society. The objector proved rules of the

society and Memorandum of Association as Exh. RW1/4 and RW1/5. Appointment of

Mr. J.R.Jindal who signed the petition as 'Treasurer' was approved by the governing

body in its minutes of meeting dated 31.5.1989 (RW1/3). I, therefore, hold that the

objections were filed by the authorized person.

12. In view of above discussion I find that this petition under Section 30/33

made by the respondent/objector is liable to be dismissed and is hereby dismissed. The

petition made by the petitioner under Section 14/17 of the Arbitration Act is hereby

allowed. The award is made rule of the Court. The petitioner shall be entitled to costs of

its petition. I consider that respondent has filed frivolous objections against the petition.

A cost of Rs.25,000/- is awarded to the petitioner.

April 21, 2009                                       SHIV NARAYAN DHINGRA, J.
vn