Delhi High Court
Vidarbha Paper Mills vs Union Of India on 1 December, 2011
Author: S. Muralidhar
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS (OS) 828A/2005 & IA Nos. 9795/94, 8096/96 & 917/97
Reserved on: November 29, 2011
Decision on: December 01, 2011
VIDARBHA PAPER MILLS ..... Petitioner
Through: Mr. Shiv Khorana, Advocate.
versus
UNION OF INDIA ..... Respondent
Through: None
CORAM: JUSTICE S. MURALIDHAR
JUDGMENT
% 01.12.2011
1. These proceedings commenced with the filing of the Award dated 28th
October 1992 by the learned Arbitrator to this Court on 26th July 1994. The
disputes adjudicated by the learned Arbitrator related to the supply by the
Petitioner Vidarbha Paper Mills Ltd. ('VPML') of 147.751 MT of
duplicating semi-absorbent paper to the Union of India at the rate of Rs.
9,300 per unit under the rate contract dated 13th January 1988 vide supply
order dated 17th May 1988. The learned Arbitrator has in the impugned
Award held that VPML was liable to pay to the Respondent Union of India
a sum of Rs. 10,37,428.71.
2. Upon the learned Arbitrator on his own filing the Award in this Court
on 26th July 1994, an order was passed by the Registrar on 3rd August 1994
directing notice to issue to the parties. VPML filed objections to the Award
under Section 30 read with Section 33 of the Arbitration Act, 1940 ('Act')
which was registered as IA No. 9795 of 1994. It filed I.A. No. 209 of 1995
seeking stay of the present proceedings under Section 10 of the Civil
Procedure Code, 1908 on the ground that it had already instituted Civil
Suit No. 76 of 1993 in the court of Judge, Senior Division, Nagpur under
Sections 30 and 33 of the Act. VPML also filed IA No. 828 of 1997
seeking rejection of the suit on the ground that the filing of the Award was
barred by limitation.
3. Certain amendments were prayed for was allowed by this Court on 28th
January 2000. I.A. No. 209 of 1995 was dismissed as not pressed.
4. This Court has heard the submissions of Mr. Shiv Khorana, learned
counsel appearing for the Petitioner. None has appeared on behalf of the
Respondent.
5. There were three points urged by Mr. Khorana. The first was that the
present suit was liable to be rejected as the Award filed was barred by
limitation. It is submitted that the Award was filed on 26th July 1994, i.e.,
after 21months after passing of the Award whereas under Article 119 of
the Limitation Act, 1963 it had to be filed within 30 days thereof. Learned
counsel relied on the decisions of this Court in Union of India v. Rajesh
Kumar Pradeep Kumar 2002 (65) DRJ 217, Union of India v. Chadha
Engineering Works 2009 (2) Arb. LR 316 (Delhi), Seth and Associates v.
Steel Authority of India AIR 1998 Cal. 208 and the order dated 27th April
2005 of this Court in I.A. No. 1440 of 1994 in CS(OS) 2441 of 1993
(Wochardt Ltd. v. Bharat Chemicals and MFG).
6. The above submission merits acceptance. Indeed there is no explanation
given by the Respondent in response to the above contentions of the
Petitioner. In other words, there is no explanation why the Award was not
filed in this Court within 30 days. Clearly, therefore, the suit is liable to be
rejected as being barred by limitation in terms of Article 119 of the
Limitation Act, 1963.
7. It is next pointed out that the learned Arbitrator has in the impugned
Award recorded that he has perused the "purchase file brought before me
on my directions". The entire arbitral record is before this Court. The
proceedings before the learned Arbitrator do not show that he issued any
order for production of the purchase file. It is not understood how the
learned Arbitrator could have observed in the impugned Award that he had
perused the purchase file when he issued no direction for its production. It
is well settled that the Arbitrator cannot rely on a document which does not
form part of the arbitral record. In this connection, the decision of this
Court in G.L. Textiles Co. v. Union of India 2004 (3) R.A.J. 685 (Del.)
and Mahabir Industries v. Union of India 2009 (2) RAJ 664 (Del.) are
relevant.
8. Thirdly, it is submitted that the learned Arbitrator has failed to give any
reasons for his conclusions in the impugned Award. The Petitioner has
rightly pointed out that the impugned Award does not deal with the issues
2, 7 and 8 as well as the submissions made by the Petitioner.
9. For all of the aforementioned reasons, this Court is satisfied that the
impugned Award of the learned Arbitrator is unsustainable in law and
ought to be set aside.
10. The objections of the Petitioner under Section 30 and 33 of the Act are
upheld and the impugned Award dated 28th October 1992 is set aside. CS
(OS) No. 828A of 2005 and all pending applications are disposed of in the
above terms.
S. MURALIDHAR, J.
DECEMBER 1, 2011
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