Union Of India vs Shri Suresh Chand Jain
2010 Latest Caselaw 1359 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       O.M.P. 307/2001

UNION OF INDIA                                 ..... Petitioner
                                  Through      Mr. Sanjay Kumar Pathak,
                                               Advocate

                         versus

SHRI SURESH CHAND JAIN                         ..... Respondent
                 Through                       Mr. Vivekanand, Advocate


%                                     Date of Decision : MARCH 11, 2010

CORAM:
HON'BLE MR. JUSTICE MANMOHAN

1. Whether the 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.


                                  JUDGMENT

MANMOHAN, J (ORAL)

1. Present petition has been filed under Section 34 of Arbitration

and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996")

challenging the arbitral Award dated 10th April, 2001 passed by

Mr. R.K. Kardam, Sole Arbitrator and Adviser, Judicial Commission,

Northern Railway.

2. Mr. Sanjay Kumar Pathak, learned counsel for petitioner-objector

submits that the Arbitrator has reached incorrect finding of facts. He

further states that the Arbitrator has not applied his mind properly to the

documents and evidence on record.

3. Mr. Pathak lastly submits that the Arbitrator could not have

awarded any interest in view of Sub-clause 3 of Clause 16 of General

Conditions of Contract (in short "GCC"), which reads as under :-

"(3) No interest will be payable upon the earnest money or the security deposit or amounts payable to the contractor under the contract, but Government Securities deposited in terms of sub-clause (1) of this clause will be repayable with interest accrued thereto."

4. On the other hand, Mr. Vivekanand, learned counsel for

respondent-claimant states that this Court in Section 34 proceedings can

neither sit in appeal nor re-appreciate facts. He further states that as the

issue of interest is pending adjudication in the Supreme Court, he does

not wish to press for interest prior to the date of the Award.

5. Having heard the parties at length and having perused the

impugned Award, I am of the view that it would be appropriate to first

outline the circumstances in which a Court can interfere with an arbitral

award passed under the Act, 1996. The Supreme Court in McDermott

International Inc. Vs. Burn Standard Co. Ltd. & Ors. reported in

(2006) 11 SCC 181 has succinctly summed up the scope of interference

by this Court by stating " the 1996 Act makes provision for the

supervisory role of courts, for the review of the arbitral award only to

ensure fairness. Intervention of the court is envisaged in few

circumstances only, like, in case of fraud or bias by the arbitrators,

violation of natural justice, etc......"

6. It is well settled that if the parties have selected their own forum,

the deciding forum must be conceded the power of appraisement of

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. It is

equally well settled that reasonableness of reasons cannot be challenged

in a petition filed under Section 34 of Act, 1996. Consequently, as this

Court is not sitting in appeal over the Award passed by the Arbitrator, I

am of the opinion that this Court need not re-appreciate the evidence.

Moreover, in my view, the Arbitrator has given cogent and concise

reasons for his findings. Accordingly, the objection petition with

regard to the Award on merits is dismissed.

7. However, keeping in view the bar contained in Clause 16 of GCC

as well as the statement made by Mr. Vivekanand before this Court, I

deem it appropriate to modify the impugned Award to the extent that

simple interest @ 12% per annum would be payable by petitioner-

objector from the date of Award till the date of payment. I may

mention that under Sub-section (7) of Section 31 of Act, 1996, the

parties have the right to agree upon the rate of interest to be awarded by

the arbitral tribunal between the date on which the cause of action arose

and the date on which the award is made. However, for post award

interest, the parties do not have any such autonomy and the rate of

interest for such period is to be determined either by the Arbitrator or

interest has to be awarded at the rate of 18% per annum. Since in the

present case, Arbitrator has awarded interest at the rate of 12% per

annum, I do not find any ground to interfere with the said rate for the

post award period. With the aforesaid modification, present petition is

dismissed but with no order as to costs.

MANMOHAN, J.

MARCH 11, 2010 rn