Union Of India vs M/S Dawar Rubber Industries & Anr.
2014 Latest Caselaw 1953 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  FAO Nos.323/2012 & 326/2012

%                                                         17th April, 2014

1.    FAO NO.323/2012

UNION OF INDIA                                 ....Appellant
                          Through:       Mr. Jaswinder Singh, Advocate.


                          VERSUS


M/S DAWAR RUBBER INDUSTRIES & ANR.          ...... Respondents
                 Through: Mr. Shiv Khorana, Advocate.



2.    FAO NO.326/2012

UNION OF INDIA                                 ....Appellant
                          Through:       Mr. Jaswinder Singh, Advocate.


                          VERSUS


M/S DAWAR RUBBER INDUSTRIES & ANR.          ...... Respondents
                 Through: Mr. Shiv Khorana, Advocate.


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

To be referred to the Reporter or not?


FAO Nos.323/2012 & 326/2012                                       Page 1 of 4
 VALMIKI J. MEHTA, J (ORAL)

FAO No.323/2012

1.            The Award in this case passed by the arbitrator and which is

dated 15.9.2009 is clearly a non-speaking Award. This becomes clear from

paras 9.1 to 9.5 of the Award and which read as under:-

     "9.1     All claims of Claimant as para 5(a) to (d), are 'disallowed',
     being 'unjustified'.

     9.2The Counter Claim of the Respondent/UOI, as at para 6(a) above,
     for Rs.17,50,153/- towards cost of stores not supplied is 'allowed', in
     favour of the Respondent/UOI and against the Claimant Firm,
     alongwith interest @ 18% P.A. from the date, the payment was
     received, by the Claimant till its actual realization.

     9.3The Counter Claim of the Respondent/UOI for Rs.63,614.98/-
     towards Liquidated Damages (LD) due to supplying the stores as at
     Para 6(b) is 'allowed' in favour of Respondent/UOI and against the
     Claimant being 'justified'.

     9.4The Counter Claim of the Respondent/UOI for Rs.1622/- as at 6(c)
     above, towards cost of 66 pairs of shoes and other recoveries reflected
     by the consignees on copies No.2& 5 of the Inspection Notes is
     'allowed' by in favour of the Respondent/UOI and against the
     Claimant, being 'justified'.

     9.5Rs.50,000/- is awarded as cost of proceedings, as at para 6(d), in
     favour of the Respondent/UOI and against the Claimant Firm, for
     unnecessary dragging the Respondent/UOI into an avoidable
     litigation."

2.            As per Section 31(3) of the Arbitration & Conciliation Act,

1996 the Award has to be a reasoned Award or a speaking Award.

FAO Nos.323/2012 & 326/2012                                        Page 2 of 4
 3.           By the impugned judgment, though the objections to the Award

have been allowed, nothing further has been done for remanding the matter

to the arbitrator for fresh decision in accordance with law. That there is

power to remand the matter after setting aside of the Award is no longer res

integra in view of the judgment of this Court in the case of BSNL Vs.

Canara Bank & Anr. 169 (2010) DLT 253 (DB).

4.           In view of the above, even taking the impugned judgment

setting aside the Award as final, yet the impugned judgment is to be faulted

with because it fails to remand the matter back to the arbitrator for a fresh

decision in accordance with law.

5.           In view of the above, this appeal is allowed to the limited extent

that the disputes between the parties which are subject matter of the

arbitration proceedings are remanded for a fresh decision to the arbitrator in

accordance with law from the stage of final arguments. In case the arbitrator

who has passed the Award, for some reason is not available, then a fresh

arbitrator will be appointed as per the arbitration clause/agreement between

the parties and to which respondent has no objection, and who would give

due notice to the respondent before commencement of hearing in the

arbitration proceedings.


FAO Nos.323/2012 & 326/2012                                        Page 3 of 4
 6.           Appeal is disposed of in terms of aforesaid observations,

leaving the parties to bear their own costs.

FAO No.326/2012

7.           This FAO is also remanded back to the arbitrator in terms of the

observations made while disposing of FAO No.323/2012.




APRIL 17, 2014                                 VALMIKI J. MEHTA, J.

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