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Seth Sunder Parshad and Sons, New Delhi Vs. State of Himachal Pradesh - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtHimachal Pradesh High Court
Decided On
Case NumberCivil Suit No. 23 of 1978
Judge
Reported inAIR1984HP9
ActsArbitration Act, 1940 - Sections 30 and 33
AppellantSeth Sunder Parshad and Sons, New Delhi
RespondentState of Himachal Pradesh
Appellant Advocate H.M. Bhardwaj, Adv.
Respondent Advocate L. Chauhan, Law Officer
DispositionSuit dismissed
Cases ReferredPvt. Lid. v. Union of India
Excerpt:
- .....on the reference on 30th june. 1977 and gave hip award on 27th feb.. 1978.4. the arbitrator filed the award inthis court on 1st july. 1978 with aprayer that the award be made a ruleof the court.5. notices regarding the filing of the award were even to the parties. the plaintiff filed -objections under section 30 readwith section 33 of the arbitration act on 13th nov.. 1978 i.e. within the statutory period. the defendant filed a reply and contested the claim of the plaintiff.6. on the pleadings of the parties the following issues were framed on 22nd march. 1979:'1. whether the arbitrator misconducted himself in proceedings? 2. whether the award was made beyond the time prescribed? if so to what effect? 3. whether the award suffers from any illegality on its face? 7. the parties.....
Judgment:
ORDER

V.P. Gupta, J.

1. M/s. Seth Sunder Par-shad and Sons contractors (Plaintiff) agreed to execute some work for the construction of Government residential accommodation Quarters at Kasumpti, Simla, vide agreement No. 6 entered into between the plaintiff and the State of Himachal Pradesh (defendant). The work order was issued to the plaintiff in Sept/ October, 1973, and the plaintiff in accordance with the terms of the agreement constructed the quarters.

2. In the agreement under Clause 25 all questions and disputes arising out of or relating to the contract were to be decided by an arbitrator to be appointed by the Chief Engineer. Himachal Pradesh Public Works Department.

3. Disputes arose between the partiesA and they were referred to the arbitration of Shri O.P. Sablok Superintending. Engineer. H.P.P.W.D. The arbitrator entered on the reference on 30th June. 1977 and gave hip award on 27th Feb.. 1978.

4. The arbitrator filed the award inthis Court on 1st July. 1978 with aprayer that the award be made a ruleof the Court.

5. Notices regarding the filing of the award were even to the parties. The plaintiff filed -objections under Section 30 readwith Section 33 of the Arbitration Act on 13th Nov.. 1978 i.e. within the statutory period. The defendant filed a reply and contested the claim of the plaintiff.

6. On the pleadings of the parties the following issues were framed on 22nd March. 1979:

'1. Whether the Arbitrator misconducted himself in proceedings?

2. Whether the Award was made beyond the time prescribed? If so to what effect?

3. Whether the Award suffers from any illegality on its face?

7. The parties were allowed to lead evidence. Shri Shiv Parshad Seth (plaintiff) appealed in the witness-box and further stated that the arbitration file be read in evidence. The defendant also stated that the arbitration file he read in evidence. Arguments were heard. Issue No. 1:

8. Shri H.K. Bhardwai appearing on behalf of the plaintiff-objector contends that the arbitrator has made wrong calculations and has awarded lesser amount to the plaintiff. The next contention of the learned counsel is that the plaintiff Should 'have been allowed rates 66% above the amended schedule of rates as were available on 17-8-1673. According to the learned counsel, the plaintiff has been allowed rates which are 66% above the schedule of rates of 1968. He refers to the agreement and the letter dt. 13-9-73 (Exhibit P-1) addressed by the plaintiff to the Chief Engineer. H. P. P,W.D. He also referred to the reply dt. 8-10-73 from the Executive Engineer. Simla Division No. 4, to the plaintiff which is available in the file pertaining to agreement No. 1.

9. Shri M.L. Chauhan appearing on behalf of the defendant contends that the award is a non-speaking award and no reasons have been given, in the award. It is contended that the evidence that the evidence has not been discussed in the award and there is no error of law or fact apparent on the face of the award. The learned counsel further contends that no other document except the award can be looked into for adjudication of t he present objections filed by the plaintiff

10. It is not disputed that in this case the award is non-speaking award. The plaintiff claimed Rs. 67,488-93 onaccount of various claims filed by him before 'the arbitrator in the shape of a final bill. This statement of Claims is Schedule A in the arbitration file. The arbitrator has awarded Rs. 6.496-30 against this claim of the plaintiff without giving any reasons. The defendant also filed a counter-claim of Rs. 6,496-30 but the arbitrator did not accept this claim. The arbitrator has not given any reasons for allowing a Dart of the plaintiff's claim or for disallowing the defendant's counter-claim.

11. In N. Chellappan v. Secy. Kerala State Electricity Board (AIR .1075 SC 2301 it was held in paras 12 and 13 of the judgment:

'The umpire as sole arbitrator was not bound to five a reasoned award and if in passing the award he makes a mistake of law or of fact, that is no ground for challenging the validity of the award. It is only when, a proposition of law is stated in the award and which is the basis of the award, and that is erroneous, can the award be set aside or remitted on the ground of error of law apparent on the face of the record.

Where an arbitrator makes a mistake either in law or in fact in determining the matters referred, but such mistake does not appear on the face of the award, the award is Rood notwithstanding the mistake, and will not be remitted or set aside.

An error of law on the face of the award means that you can find in the award or a 'document actually incorporated thereto, as for instance a note appended by the arbitrator stating the reasons for 'his judgment some legal proposition which is the basis of the award and which you can then say is erroneous. The Court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for tine purpose of finding out whether or not the arbitrator has committed an error of law.'

This judgment of the Supreme Court is based upon the observations made in Champsey Bhara and Co. v. Jivrai Ballo Co. (AIR 1923 PC 66 (69)) and Union of India v. Bungo Steel Furniture Pvt. Ltd. (AIR 1967 BC 1032).

12. Similarly, in Omvik Electronics Pvt. Ltd.. Kanpur v. Union of India ((1980) 82 Pun LR (B) 167),:.(AIR 1980 Delhi 169) it was observed that 'no part of an agreement can be referred to forthe purpose of finding an error apparent on the face of the record unless that part of the agreement is incorporated in the award itself'. This observation is based upon Allen Berry & Co, Pvt. Lid. v. Union of India (AIR 1971 SC 6961 wherein it is held:

'The rule thus is that as the parties choose their own arbitrator, to be the Judge in the dispute between them, they cannot, when the award is Hood on the face of it, object to the decision either upon the law or the facts. Therefore even when an arbitrator commits a mistake either in law or in fact in determining the matters- referred to him but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it the award will neither be remitted nor set aside notwithstanding the mistake.'

13. In view of the settled law as stated' above, this Court, is not competent to find out' the mistakes in calculations Or otherwise from the statement of claims filed' by the plaintiff: This Court is also not competent to find out as to whether the plaintiff has been allowed 66% above the schedule of rates of 1968 or the schedule of rates as available on 17-9-1973'. The award of the arbitrator dt. 27th Feb, 1978 does not give any facts or the reasoning for accepting or rejecting' the claims.

14. The learned counsel for the plaintiff could, not' point out any other misconduct: of the arbitrator or the proceedings.

15. In, view of the above discussion issue No. 1 is decided against the plaintiff-objector.

Issue New 2:

16. No evidence has been adduced on this issue by the plaintiff. The arbitrator in his award has stated that the time limit for announcing the award was up to 28-2-78: The award was announced on 27-2-78.' In these circumstances this issue is decided against the plaintiff-objector. Issue No. 3:

17. The learned counsel for the plaintiff could- not point out any illegality in the award. After going through the award; I find that the same is not illegal. This issue is decided against the plaintiff.

18. In view of the above discussion, the objections of the plaintiff-objectorare dismissed and the award is made a rule of the Court, A decree in terms at the award is passed in favour of the plaintiff and against the defendant


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