Vaish Brothers vs Uoi
2009 Latest Caselaw 1892 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+              FAO(OS) 163/2009

                                Reserved on : May 01, 2009
                                Date of Decision : May 06, 2009

VAISH BROTHERS                                        ..... Appellant
                      Through :      Mr. Sandeep Sharma, Advocate.

                      versus

UOI                                              ..... Respondent
                               Through

CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE VALMIKI J. MEHTA

1. Whether the Reporters of local papers may be allowed to see
   the judgment?                     No.

2. To be referred to the Reporter or not? Yes.
3. Whether the judgment should be reported in the Digest? Yes.


%                              JUDGMENT

: MUKUL MUDGAL,J.

1. This is an appeal filed under Section 39 of the Arbitration

Act, 1940 (hereinafter referred to as „the Act‟) read with Section

10 of the Delhi High Court Act against order dated 10 th

September, 2007 and 26th March, 2009 passed by the learned

Single Judge in Suit No. 340/1993. The order dated 26th March,

2009 arose from IA No. 11993/2007 which sought the

appointment of any person as an Arbitrator for adjudication of the

claims set aside by the learned Single Judge on the objections

filed by the respondent-Union of India in respect of the Award

dated 19th January, 1993.

2. The learned Single Judge noted the following facts: -

a. Upon a reference of disputes, an arbitration award dated

19th January, 1993 was passed.

b. In respect of the said award, objections under Section 30

and 33 of the Arbitration Act, 1940 were filed by the respondent

and which were partly allowed by a judgment dated 10th

September, 2007, also belatedly challenged in this appeal, claims

no.1, 2, 9 and 10 were made rule of the Court whereas award in

respect of claims no.6 and 7 were set aside and the objections in

respect of the said claims by the respondent were sustained.

3. Before the learned Single Judge, reliance was placed on

Section 16 of the Act which reads as under: -

"16. Power to remit award.- The Court may from time to time remit the award or any matter referred to arbitration to the arbitrators or umpire for reconsideration upon such terms as it thinks fit-

(a) Where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting the determination of the matters referred; or

(b) Where the award is so indefinite as to be incapable of execution; or

(c) Where an objection to the legality of the award is apparent upon the face of it.

(2) Where an award is remitted under sub-section (1) the Court shall fix the time within which the arbitrator or umpire shall submit his decision to the court;

Provided that any time so fixed may be extended by subsequent order of the Court.

(3) An award remitted under sub-section (1) shall become void on the failure of the arbitrator or umpire to reconsider it and submit his decision within the time fixed."

4. The learned Single Judge has held that the Award in respect

of claims no.6 and 7 having been set aside upon objections by the

respondent, there was no scope for application of Section 16 and

17 of the Act.

5. The learned Single Judge also held that by the said

application, the appellant was in effect seeking the review of the

judgment dated 10th September, 2007 qua claims no.6 and 7. It

was also noted that the decree had already been passed in terms of

the judgment dated 10th September, 2007 and there was no warrant

for modifying the decree.

6. The learned counsel for the appellant, Mr. Sandeep Sharma,

has again relied upon Section 16 to contend that the award with

respect to claims no.6 and 7 ought to have been remitted back to

the Arbitrator.

7. The only relevant portion of the application which can said

to be containing the cause of action under Section 16 is paragraph

4 of the application which reads as under :

"The petitioner submits that this Hon‟ble Court vide order dated 10th September, 2007 set aside claims No.6 & 7. However the same were not remanded and no arbitrator was appointed for fresh consideration of those claims. The petitioner submits that as the Ld. Arbitrator has misconducted in view of the findings recorded by this Hon‟ble Court and it is respectfully prayed that the Arbitrator may be appointed for adjudication of those claims."

There is therefore absolutely no cause of action pleaded for

seeking remission of the matter back to the Arbitrator for fresh

adjudication, even assuming such application could have been

filed.

8. Furthermore, the plea of the appellant is wholly fallacious

as it was not as if the award had left any of the matters referred to

the Arbitrator undetermined, as required by Section 16, sub-

Section (a), but in fact, the decision was rendered and the claims

based on the said award were set aside by a learned Single Judge

of this Court. Similarly, the objections in respect of the award

being indefinite and incapable of execution and ex facie illegality

of the award cannot be applied in the present case.

9. Reliance by the learned counsel for the appellant has been

placed on the judgment reported in Goa, Daman & Diu Housing

Board v. Ramakant v. P. Darvotkar, AIR 1991 SC 2089, and in

particular para 9 which reads as follows:

"9. The learned counsel on behalf of the appellants has contended that the High Court acted illegally in not considering at all that the arbitrator did not record any reasons for making awards allowing the claims each of which exceeds Rs.50,000/- as provided under clause 25 of the arbitration agreement and as such the arbitrator has misconduct himself in the proceedings and instead of sending the awards made by the arbitrator to him for recording his reasons ought to have set aside the awards under section 30 of the Arbitration Act. It has also been contended that the High Court though it held that the arbitrator was guilty of misconduct and the awards made by him were liable to be vitiated on that ground yet in spite of setting aside the awards they were sent to the arbitrator for recording reasons which is totally unwarranted by law."

10. The above judgment far from supporting the appellant‟s

case in fact in para 12 holds as follows:

"12. Section 16 empowers the Court to remit the award to the Arbitrator for reconsideration only in three cases specified therein. Clause (c) of Section 16(1) provides that the award shall be remitted to the Arbitrator by the Court where an objection to the legality of the award is apparent on the face of it. Of course, the High Court has come to a finding that the Arbitrator was guilty of misconduct for his failure to give reasons as required. There is, however, nothing to show that the Arbitrator misconduct himself or the proceedings in any other manner nor there is anything to show that the awards have been improperly procured. There is no allegation, far less, any finding, that the Arbitrator was biased or unfair or he has not heard both the parties or he has not fairly considered the submissions of the parties in making the awards in question. In our opinion, it is evident from the four awards made by the Arbitrator that the Arbitrator has considered all the specific issues raised by the parties in the arbitration proceedings and came to the finding after giving cogent reasons. The above awards cannot under any circumstances be considered to be made by the Arbitrator without recording any reasons for the same. Therefore, in such circumstances, it is not proper to hold that the Arbitrator has misconducted himself or in the proceedings in the matter of giving the awards."

Thus, since none of the sub clauses (a) to (c) of Section 16

are satisfied in the present case, the above judgment in fact is

against the appellant. The facts of the said case before the

Hon‟ble Supreme Court were different in as much as the matter

was remitted under S.16 in the said case as inspite of a contractual

requirement of passing a reasoned award, a non-speaking award

was passed. In the facts before us an award giving reasons not

supportable in law were given by the Arbitrator and thus to the

limited extent the Award on claims no.6 and 7 was set aside on

merits by the learned Single Judge.

11. The counsel for the appellant has also relied on Union of

India vs. M/s. Pampassar Distillery, Bellary and another, AIR

1981 Delhi 399 and The State Electricity Board, Tamil Nadu vs.

The Sree Meenakshi Mills Ltd., Madurai and another AIR 1975

Madras 139. The facts of these cases and the ratio do not apply to

the facts of the present case. These cases do not apply to the

present case as the learned Single Judge in the present case has

after setting aside the findings of the Arbitrator has given his own

reasons for setting aside the claims. It is not that the learned

Single Judge has not given reasons and has made it a case for

remission to the arbitrator. There is, therefore, no scope for

applying Section 16 in the facts of this case. If we accept the plea

of the counsel for the appellant then it will mean repeated

agitations of the claims and repeated remissions under Section 16

till the contractor is successful in getting an Award for his

claims.

12. The only remedy available to the appellant would have been

to file an appeal in respect of the judgment dated 10th September,

2007, which for the reasons best known to it, the appellant did not

file, but in fact chose the circuitous method of filing an application

seeking invocation of Section 16. Section 16 is not a method of

revisiting the determination of claims no.6 and 7 in the present

case, and consequently, no fault whatsoever can be found with the

judgment of the learned Single Judge. The parameters for

applicability of Section 16 of the Act being not even remotely

available the resort to the above provisions was completely

misplaced.

13. We also hold that no appeal lies against the order dated 26th

March, 2009. The only appeals allowed under the Arbitration Act,

1940 are those as specified in S. 39 of the Act. There is no

provision for an appeal under S. 39 from an order refusing to remit

the matter for decision to the arbitrator which is an order under S.

16. By various judgments this Court as also the Hon‟ble Supreme

Court has held that no appeal lies except against the orders

specified in S. 39 of the Act. The appeal against the order dated

26th March, 2009 therefore does not lie to a Division Bench of this

Court from an order of the learned single judge of this Court.

14. The appellant then urged that he has also challenged the

order dated 10th September, 2007 along with an application for

condonation of delay in view of his IA No. 11993/2007 having

been filed within 30 days before the learned Single Judge. In our

view, the application filed by the applicant in IA No. 11993/2007

was wholly misconceived and ill-advised as none of the grounds

stipulated under Section 16 were attracted and consequently, filing

of a misconceived application does not give a valid ground for

condonation of delay as such exercise cannot be termed bonafide

pursuit of another remedy. Consequently, we dismiss the

application for condonation of delay of 564 days and thus the

appeal itself. This exercise in futility by unnecessary wastage of

time of the learned Single Judge should have normally invited an

order of substantial costs but since we have dismissed the appeal

in limine without issuing notice to the respondents, we refrain

from doing so.

15. The appeal stands disposed of accordingly.

(MUKUL MUDGAL) JUDGE

(VALMIKI J. MEHTA) JUDGE May 06, 2009 sk