M/S Pearl Woollen Mills (I) vs Union Of India & Anr.
2009 Latest Caselaw 2631 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   CS(OS)1175A/1982

%                                   Date of decision: 15.07.2009

M/S PEARL WOOLLEN MILLS (I)                       ....... Petitioner
                           Through: Mr. Vivekanand, Advocate

                                  Versus

UNION OF INDIA & ANR.                          ....... Respondents
                           Through: None

                                   AND

                          CS(OS)1192A/1982

UNION OF INDIA                               .......        Petitioner
                           Through: None

                                  Versus

M/S PEARL WOOLLEN MILLS (I)                     ....... Respondent
                           Through: Mr. Vivekanand, Advocate


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?       No

2.    To be referred to the reporter or not?      No

3.    Whether the judgment should be reported
      in the Digest?                                    No


RAJIV SAHAI ENDLAW, J.

1 Both arbitration suits u/s.14 of the Arbitration Act, 1940 have

been filed by the respective parties to the arbitration with respect to

the same arbitral award. IA No.354/1983 u/s.30 and 33 of the Act in

CS(OS) No.1175A/1982 came to be filed by M/s. Pearl Woollen Mills

Ludhiana.

2 The arbitral award dated 27th July, 1982 subject matter of

these proceedings directs payment by the said M/s. Pearl Woollen

Mills Ludhiana (Objector) to the Union of India (U.O.I) of a sum of

Rs.2,62,026.70 p. U.O.I though had preferred claims before

arbitrator for much larger amount, has not filed any objections to the

award.

3 The counsel for the Objector has fairly conceded that the

arbitral award being non-speaking, in view of the law recently

reiterated in Engineer Syndicate Vs. State of Bihar (2007) 3 SCC

99 and Markfed Vanaspati & Allied Industries Vs. Union of

India (U.O.I) 2007 (11) SCALE 138, the scope of interference

therewith is very limited.

4 The counsel for Objector at the outset sought adjournment to

trace out a letter by which it was contended, both the parties had

requested the arbitrator to give a reasoned award. However, in view

of the suits being very old, adjournment was declined. The files of

the suits including the arbitral record received in this court were

handed over to the counsel to find such letter if any on record. None

has been found.

5 I have perused the objections filed. Only in ground No.2, it is

stated that on 9th March, 1982 the arbitrator had inquired from the

parties' counsel whether he should make a speaking award or a non-

speaking award and that the counsel for both the parties had

instructed the arbitrator to give a speaking award. It is further

pleaded that subsequently on one of the dates of hearing, the

arbitrator had started dictating facts to his stenographer in the

presence of the counsel for the parties but had subsequently stated

that he would complete the award later on; the award made does not

contain any such statement of facts which are alleged to have been

dictated.

6 It is significant that in the objections no mention whatsoever is

made to any letter having been given by the parties to the arbitrator

requesting him to give a reasoned award. The objections were

drafted and filed under the signatures of an eminent counsel of this

court and I find it difficult to fathom that if there had been any such

letter, reference thereto would not have been made in the objections.

For this reason also it is not deemed necessary to grant any further

time to enable the counsel to trace the letter. Even if the letter

exists the same having not been filed for the last 26 years, no further

time can be given for tracing out the same today.

7 U.O.I. in its reply to the objections aforesaid controverted what

was stated in the ground No.2 Supra. The Objector filed a rejoinder

thereto wherein also save for controverting the corresponding

paragraph of the reply, no further details / particulars if any of the

instructions if any to the arbitrator to give a reasoned award are

given.

8 I have also perused the order sheet on arbitral record of 9 th

March, 1982. The same in the margin bears two signatures as the

order sheet of other hearings before the arbitrator. Presumably the

said signatures are either of the representatives or counsel of the

parties. There is no mention therein of anything as alleged in

objection petition. Had the arbitrator in the hearing on 9th March,

1982 inquired from the parties as alleged or had an agreement of

giving reasons been reached, the same ought to have been recorded

in the order sheet of that date. Thus, a bare averment in the

objections and of the counsel for the objector of an agreement

between the parties and the arbitrator to give reasons cannot be

believed and the objection on that ground is rejected.

9 The counsel for the objector has next contended that the

proceedings before the arbitrator show that as many as 15 issues

were framed by the arbitrator. It is contended that such detailed

issues having been framed the arbitrator ought to have given

reasons for his findings. It is also contended that while claim of the

U.O.I. was for over Rs.25 lacs award is only for approximately Rs.3

lacs with deductions of amounts found payable to the objector. It is

argued that the same shows the arbitrariness of the award.

10 I am afraid merely because issues are framed does not ipso

facto result in the arbitrator being required to give a speaking

award. Issues are framed for methodical conduct of the proceedings

and framing of the issues before the arbitrator carries no obligation

to deal with each issue individually or to return finding therein. The

arbitrator has in the award recorded that he has heard and examined

and considered the statements of the parties and their evidence and

thereafter made a non-speaking award for the amount aforesaid.

11 The counsel for the objector on inquiry as to whether the

agreement between the parties contained any stipulation for giving a

speaking or reasoned award, contends that the arbitral record does

not contain the DGS&D Contract-1968, then prevalent and as such

he is unable to comment whether the same contained a stipulation

for the arbitrator to give speaking/reasoned award. In fact the

counsel sought adjournment on this ground as well.

12 A perusal of the objections drafted and filed at the

contemporaneous time does not show any objection having been

taken on the ground that the agreement between the parties

provided for a reasoned/speaking award and the arbitrator having

rendered a non-speaking award. In fact if that had been the position,

it was unnecessary for the objector to plead the oral agreement of 9th

March, 1982 Supra. I find it hard to believe that if the then DG&SD

contract which would then have been readily available to the

counsel, provided for reasoned or speaking award by the arbitrator,

objection in that regard would not have been taken. In any case the

objections have to be decided on the pleadings and there is no

pleading to that effect.

13 The counsel for the objector lastly contended that the arbitral

award on the record received from the arbitrator is not properly

stamped. However, it is found that the award with reference where

to objection is taken is of the arbitrator earlier appointed and the

award with respect whereto petitions have been filed is contained in

the part I file of CS(OS) No.1175A/1982 and is duly stamped.

14 Though the objections are lengthy and contain plethora of

grounds against the award, but in view of the nature of the award,

the same are not maintainable. IA No.354/1983 is accordingly

dismissed.

15 I find that the arbitral award does not allow any interest on the

amount awarded. The proceedings have remained pending before

this court alone for over 27 years and the arbitration is found to have

commenced in 1970. The counsel for the objector contends that

U.O.I. has neither filed any objection with respect to the award not

allowing any interest nor have made any such prayer in these

proceedings.

16 This court in Amar Industries Vs. U.O.I. 2006 (2) Arb. LR

253 after examination of law on the subject held that the court in

such proceedings is entitled to also award interest for the period the

proceedings for making the award rule of the court remain pending

in the Court, besides interest u/s.29 of the Act. In that case also

there was no prayer for interest but it was held that since the

proceedings remained pending before court, the court was

empowered to grant interest both pendente lite and future. I also

find that under the 1940 Act there was inherent power in the court

to modify the award. In the present case, specially from the requests

made today for adjournment for a month, the objector is found to

have delayed the proceedings for exceptional long 27 years, perhaps

knowing that no interest was running. The objector then also knew

the award to be non-speaking and scope of interference therewith

being minimal. Still lengthy objections were filed and advantage

taken of paucity of time with the Courts. There is a sea change in

buying power of money, since 1983. In the circumstances, I also

allow interest on award amount @ 12% p.a. pendente lite and future.

17 The arbitral award dated 27th July, 1982 is made the rule of the

court and judgment pronounced in terms of the same and as

modified above, Decree Sheet be drawn up.

RAJIV SAHAI ENDLAW JUDGE July 15, 2009 j