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Union of India Vs. Ram Kishan Metal Works - Court Judgment

LegalCrystal Citation
SubjectContract
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 49 of 1983
Judge
Reported in26(1984)DLT338; 1984(7)DRJ271
AppellantUnion of India
RespondentRam Kishan Metal Works
Advocates: R.K. Anand and; P.P. Juneja, Advs
Excerpt:
.....in the present case is a non-speaking award. it is one line award: 'pay rs. 1,45,000/- to the union of india,' the arbitrator has said to the seller. he is not required to say that 'i reject all other claims.' all that is required is that the award should be unambiguous.; b. the arbitration act, 1940--form of award--unless the arbitration agreement requires the award to be in a particular form, there are no formal requirements for a valid award under the indian law. the award must however satisfy a number of substantive requirements. it must contain an adjudication, not merely an expression of expectation, hope or opinion. unless it is intended to be an interim award, it must be complete, in that it contains an adjudication on all the matters in dispute it must be certain, so that..........union of india, for the supply of wire conductors. ram kishan metal works was the seller. the union of india was the purchaser. the seller did not supply the contracted goods. the purchaser cancelled the contract. the purchaser made purchases at the risk of the seller. for breach of contract the purchaser claimed rs. 4,10,401.00 on account of risk purchase and general damages for the non-supply of goods. the seller contested the claim. he denied the claim of the purchaser. he invoked the arbitration clause. the matter was referred to the arbitration of mr. n.s. mehta. mr. mehta resigned. in. his place dr. bakshish. singh was appointed as the sole arbitrator. (2) before dr. bakshish singh the seller made an application for amendment of the claim. he claimed three specific amounts.....
Judgment:

Avadh Behari Rohatgi, J.

(1) This is an appeal from the order of a learned single Judge dated 14-2-1983. The respondent M/s. Ram Kishan Metal Works, entered into a contract with the appellant, Union of India, for the supply of wire conductors. Ram Kishan Metal Works was the seller. The Union of India was the purchaser. The seller did not supply the contracted goods. The purchaser cancelled the contract. The purchaser made purchases at the risk of the seller. For breach of contract the purchaser claimed Rs. 4,10,401.00 on account of risk purchase and general damages for the non-supply of goods. The seller contested the claim. He denied the claim of the purchaser. He invoked the arbitration clause. The matter was referred to the arbitration of Mr. N.S. Mehta. Mr. Mehta resigned. In. his place Dr. Bakshish. Singh was appointed as the sole arbitrator.

(2) Before Dr. Bakshish Singh the seller made an application for amendment of the claim. He claimed three specific amounts from the purchaser, namely the following:

(1)Rs. 1,98,225.59 on account of price variation. (2) Rs. 92,461.47 on account of 5 per cent balance of the material supplied; and (3) Rs. l,44,252.00 on account of interest. The amendment was allowed.

(3) As against these claims the Union of India filed their counter-claim. They made a claim of Rs. 8,04,635.00 against the seller on account of damages under three separate heads, namely, general damages, risk purchase and liquidated damages. Their total claim was Rs. 8,04,635.00 as we have said.

(4) The arbitrator on 14th February, 1979 made the following award :

'WHERE Asi, Dr. Bakshish Singh, Additional Legal Adviser to the Government of India, Ministry of Law Justice & C.A., New Delhi, was appointed as Sole Arbitrator by the Director General of Supplies & Disposals, New Delhi vide letter No. Lit. I/A .(145)76 dated 15-3-77 under the terms and conditions agreed to by the parties with reference to A/T mentioned above and the differences between them relating to the said A/T were referred to my arbitration. And whereas I took upon myself the burden of said reference and heard the parties and considered in detail the documentary and oral evidence produced in the case and heard the counsel for the parties at length. I do hereby made my Award and publish as stated below : (a) I award Rs. l,45,000.00 (Rupees one lakh forty five thousand only) to Union of India against the contractor. (b) The parties shall bear their respective costs of these arbitration proceedings.'

(5) This award was filed in court by the arbitrator. The seller raised objections to the award. The learned judge set aside the award. From his order the Union of India appeal to this court.

(6) The learned Judge took the view that from the award it was not clear whether the arbitrator had decided the claims of the seller. He said: 'The award nowhere mentions about the existence of the claim of the petitioner against the Union of India'. 'The arbitrator in the award does not say that the claim made by the petitioner against the Union of India is rejected. ' He went on to hold that 'the arbitrator must give a specific finding on each of the separate claims referred to him. There must be a separate finding on the claim or counter-claim.'

(7) It appears to us that this is an erroneous view of the law. There is no form prescribed for the making of the award. Nor is the arbitrator required by the terms of his appointment to give 'specific' or 'separate' finding on the claim and the counter-claim. The learned judge was in error in holding that the arbitrator was obliged to do so. For this proposition we find no authority. In the recitals he has referred to disputes and differences between the parties. In the operative portion he has given his decision. It is not necessary for him to say that the claims of the seller are dismissed. In what way the arbitrator chooses to word the award is a question of individual style. It is essentially a question of one's individual expression. Some arbitrators write long awards, some short, some delphic. The award in the present case is a non-speaking award. It is one line award: 'Pay Rs. l,45,000.00 to the Union of India', the arbitrator has said to the seller. He is not required to say that 'I reject all other claims'. All that is required if that the award should be unambiguous.

(8) The arbitrator has said in so many words that he was appointed sole arbitrator under the terms and conditions agreed to by the parties with reference to the A/T mentioned above and the differences between them relating to the said A/T were referred to his arbitration. It is clear that the arbitrator was adjudicating upon all the disputes and differences which had arisen between the parties out of the subject A/T. The word 'differences between them' are of vital importance. They clearly show that he was seized of the entire matter. He bestowed his attention on all the disputes and differences referred to him and made his award. He directed the seller to pay Rs. 1.45,000.00 to the purchaser. This was his final decision regarding all the differences. Obviously the claims of the seller as well as the purchaser were before him and he arbitrated on them. If there is one thing which is clear from the award it is this. The arbitrator found for the purchaser and against the seller. He made an award of damages in purchaser's favor. To the seller he gave nothing.

(9) Unless the arbitration agreement requires the award to be in a particular form, there are no formal requirements for a valid award under the Indian Law.

(10) The award must however satisfy a number of substantive requirements. It must contain an adjudication, not merely an expression of expectation, hope or opinion. Unless it is intended to be an interim award, it must be complete, in that it contains an adjudication on all the matters in dispute. It must be certain, so that it is possible to ascertain from the award precisely what the decision is that the arbitrator has reached in relation to the matters in dispute. It must also be final in the sense that it should not leave any of the issues to be decided by a third party, or (unless it is an interim award) by. the arbitrator himself. (Mustill and Boyd-Commercial Arbitration (1982) Ed. P. 26).

(11) In our opinion all these requirements are satisfied in the present award. The award contains an adjudication. It is certain, final and complete. It is capable of enforcement.

(12) For these reasons we accept the appeal and set aside the judgment of the learned judge. We make the award a rule of the court and order that a decree shall be prepared in accordance with the award. The appellant shall be entitled to 6 per cent interest from the date of decree till payment on the amount of Rs. l,45,000.00 .

(13) Mr. Juneja, on behalf of the respondent prays that Installments may be allowed to him. The request is reasonable. We direct that the decretal amount shall be paid by the respondent to the Union of India in Installments of Rs. 10,000.00 per month. The first Installment shall become payable on 1st September, 1984, and subsequently on the first of each succeeding month. In case of default of any two Installments the entire amount minus the amount already paid, if any, shall become payable at once.

(14) The parties are left to bear their own costs.


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