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Goa, Daman and Diu Housing Board Vs. Ramakant V.P. Darvotkar - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtMumbai High Court
Decided On
Case NumberFirst Civil Appeal Nos. 35/B to 38/B of 1981
Judge
Reported inAIR1984Bom120
ActsArbitration Act, 1940 - Sections 30
AppellantGoa, Daman and Diu Housing Board
RespondentRamakant V.P. Darvotkar
Appellant AdvocateF. D'Mellow, Adv.
Respondent AdvocateM.S. Usgaonkar, Adv.
Excerpt:
an arbitrator was under obligation as per agreement to give reasons for award when the claim exceeded rs. 50,000/-- in case the arbitrator failed to give reasons for the same, he was guilty of misconduct and the award stood vitiated on that ground. - - as the housing board failed to do so. under the circumstances if the arbitrator were to fail to give reasons for his award in such cases, it would be a misconduct on his part. the other contention was that the arbitrator had failed to decide and give his findings on the issue as to the abandonment of the contract by the respondent......to an award. awarding to the respondent rs. 3.36.230.36 and appeal no. 38 of 1981 relates to an award awarding to the respondent rs. 46.321.32 although the claim was over rs. 50.000. since all these appeals raise common questions, they are being disposed of by a common judgment.2. the appellant in the appeals, is the goa. dasman and diu housing board white the respondent is a contractor who was under an agreement with the housing board entrusted with the construction of 200 tenements on behalf of the said housing board. the parties entered into an agreement provided for referring the disputes between the parties to the aribtration of an arbitrator appointed by the a housing board.3. a dispute arose between the parties in respect to the said agreement. the respondent alleging that the.....
Judgment:

Rege, J.

1. These four appeals by Goa. Daman and Diu Housing Board. Are against the Judgment and order of the learned Civil Judge. Senior Division. Panatii.dt. 26-6-81. Confirming four different awards by one arbitrator appointed in pursuance of an agreement between the parties. Appeal No. 35 of 1961 relates to the award. Awarding to the respondent against the appellant Rupees 2.75. 09. 13. Appeal No. 36 of 1981 relates to an award. Awarding to the respondent Rs. 3.36.230.36 and Appeal No. 38 of 1981 relates to an award awarding to the respondent Rs. 46.321.32 although the claim was over Rs. 50.000. Since all these appeals raise common questions, they are being disposed of by a common judgment.

2. The appellant in the appeals, is the Goa. Dasman and Diu Housing Board white the respondent is a contractor who was under an agreement with the Housing Board entrusted with the construction of 200 tenements on behalf of the said Housing Board. The parties entered into an agreement provided for referring the disputes between the parties to the aribtration of an arbitrator appointed by the a Housing Board.

3. A dispute arose between the parties in respect to the said agreement. The respondent alleging that the appellant Housing Board was slow in supplying the material causing damage to him while the Housing Board alleging that they had terminated the agreement with the respondent as he had abandoned the contract. Accordingly the respondent requested the Housing Board to appoint an arbitrator as provided under Clause 25 of the Agreement and refer the dispute between the parties to his arbitration. As the Housing Board failed to do so.the respondent made an application to the Court under S. 20 of the Arbitration Act for directing the Housing Board to file the arbitration agreement in court and in pursuance of clause 25 of the agreement to appointee an Arbitrator Accordingly the Court by its order dt. 28-2-1979 had the agreement between the parties filed in curt and directed the Housing Board to appoint an Arbitrator conversant with engineering . The Housing Board thereupon appointed one J. S. Pinto. Ex-P.W.D . Engineer as an Arbitrator.

4. The parties thereafter filed the reference with the Arbitrator along with the claims of the respondent and a counter-claim of the appellant . The Arbitrator framed issues which were agreed to between the parties and after receiving all the documentary evidence that the parties desired to produce and after hearing the parties he made his award as aforesaid on 28-3-81.

5. On the said awards being filed in Court of Civil Judge Senior Division, Panaii. Notices were issued to the parties for making the said awards decrees of the Court. However, the Housing Board, against which the awards were made, made an application to the Court under S. 30 of the Arbitration Act to set aside the said awards amongst others. Mainly on the ground that the Arbitrator had misconducted himself in not giving reasons for his awards, as admittedly all the claims exceeded Rs. 50,000 though required to do so under Clauses 25 of the Agreement by which he was governed.

6. The learned Civil Judge. Senior Division. Panaji. By his order dt. 26-8-81 negatived all the objections raised by the learned counsel for the petitioner against the said awards and confirmed the same. He held that the Arbitrator in his award had infact given reasons for his findings and cannot be said to be guilty of misconduct. Against the said order of the learned Judge these appeals have been filed.

7.The learned counsel for the appellant manners before the lower Court./ that the award was vitiated by reason of the misconduct on the part of the Arbitrator inasmuch as he did not give reasons for his awards though the claims in all cases were Rs. 50,000 and above as he was obliged to do under clause 25 of the agreement between the parties.

As against that the learned counsel for the respondent has contended that although the Arbitrator might not have given artistic reasons for his award and the reasons given by him may not be considered to be sufficient. Still it cannot be said that he had given no reasons. At all. According to him. Therefore, if the Arbitrator had given some reasons. Though not sufficient it would not amount to misconduct on the part of the Arbitrator and the Court cannot interfere with the award on that ground.

To appreciate the said contention the relevant part of Clause 25 of the Agreement between the parties under which the arbitrator derived be set out.

Clause 25 at the end provided, interalia, 'In all cases where the amount of the claim in dispute is Rupees 50,000 and above. The Arbitrator shall give reasons for the award.'

The said clause, therefore, casts an obligation on an Arbitrator to give reasons for his award in cases where the claim was Rs.50,000 and above, In cases of climbing below Rs.50,000 there was no such obligation. In this case it was not disputed that all the claims of the respondent were above Rs.50,000 there was no such obligation. IN this case it was not disputed that all the claims of the respondent were above Rs.50,000 and therefore the Arbitrator who derived his jurisdiction only under the said Cl.25 was bound to give reasons for his award. It also cannot be disputed that if the Arbitrator had given reasons for his awards, the Court cannot go into the sufficiency or otherwise thereof and the Arbitrator would be said to have carried out his obligation under Cl. 25 of the Agreement.

The question, therefore, was whether for his findings in the impugned awards the Arbitrator could be said to have given any reasons at all.

The basic issue before the Arbitrator common to all the findings, which was tried as preliminary issue, was whether the Housing Board had committed a breach of the agreement by it was justified. The Arbitrator's finding was that termination of the agreement by the Board ..... Board had committed breach by being responsible for show while progress of work. As the awards show while dealing with the said issue and in giving his findings there on the Arbitrator had set out in detail the rival contentions and the documents relied upon by him and ultimately had gone on to give his finding by observing :

'Considering the arguments advanced by both the parties and after carefully considering the various letters, documents and exhibits relied on by both the parties, I give my finding as ......... '

The same method has been adopted by the Arbitrator as regards his findings on the other issues and it was not necessary to repeat the same.

In our view what was stated by the Arbitrator while giving his findings cannot be considered to be the reasoning for his findings or award. The award nowhere contains any reasoning for the same nor does it even obliquely mention that in giving his finding the Arbitrator under Clause 25 of the agreement stands, the reasons should appear in the award itself which does not appear to be so in this case.

Admittedly the last part of Cl 25 requiring the Arbitrator to give reasons for his award did not exist initially and was introduced subsequently restricting it to claims above Rs.50,000 which were large claims. The object being that the Court would be in a position to point out whether the Arbitrator has applied his mind to the making of the award and the same was not perverse. Under the circumstances if the Arbitrator were to fail to give reasons for his award in such cases, it would be a misconduct on his part. IN this case as pointed out above the Arbitrator not having given reasons above Rs.50,000, which he was under an obligation to do under Cl 25 of the agreement , he was guilty of misconduct and the award was liable to be violated on that ground. The said contention of the learned counsel for the appellant, therefore, deserves to be accepted.

The other contention of the learned counsel for the appellant was that the Arbitrator had not considered the letter of termination of the agreement by the Board to the respondent on the ground of the respondent have abundance ...... no substance. The award states that the Arbitrator had considered all the documents placed before him one of which was the said letter of termination. There was also no material to hold that the Arbitrator had not considered the said letter.

The other contention was that the Arbitrator had failed to decide and give his findings on the issue as to the abandonment of the contract by the respondent. This contention also had no substance. The claims and counter-claim filed by the parties before the Arbitrator along with reference paper did not contain any such claim. Similarly issues raised before the Arbitrator to which the parties had agreed did not contain any such issue. Further the finding of the Arbitrator that the Board was guilty of breach and therefore liable for damages that the Arbitrator had impliedly negatived the Board's plea of abandonment of the contract by the respondent.

The result therefore, was that all the appeals are allowed. The order of the lower Court is set aside. However, the awards are remitted back to the Arbitrator for giving reasons for the same as required under Cl. 25 of the Agreement and thereafter to file the same in Court of Civil Judge Senior Division. Panji, within eight weeks after the order is served on him.

8. Appeal allowed.


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