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2004(4) Supreme 92
SUPREME COURT OF INDIA
(From Gauhati High Court)
V.N. Khare, CJI., S.B. Sinha & S.H. Kapadia, JJ.
D.D. Sharma -Appellant
versus
Union of India -Respondent
Civil Appeal No. 6678 of 1999
With
Civil Appeal No. 1984 of 2000
Decided on 27-4-2004
Counsel for the Parties :
For the Appearing Parties : K.K. Rohtagi, Praveen Jain, Rakesh K. Sharma, Mrs. Anjani Aiyagari and Mrs. Anil Katiyar, Advocates.
Held : The jurisdiction of the court to set aside an arbitration is well-settled. The court, inter alia, can set aside an award if the arbitrator has misconducted himself or the proceedings. The jurisdiction of the court in interfering with a non-speaking award is very limited. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the Arbitrator to determine, even if it gives rise to determination of a question of law. (Paras 22 and 23)
An Arbitrator being a judge chosen by the parties, his decision would ordinarily be final unless one or the other condition contained in Section 30 of the Arbitration Act is satisfied for the purpose of setting aside his award. Once it is held that the construction of an agreement fell for consideration of the Arbitrator, the determination thereupon shall not ordinarily be interfered with. The court s jurisdiction in this behalf is merely to see whether the Arbitrator has exceeded his jurisdiction or not. The High Court did not point out any material on the basis whereof it could be said to have been established that the two documents in question had not been considered by the learned Arbitrator. Such a conclusion could be arrived at if the award was a speaking one. The award being not a speaking one, the averments made therein should be accepted at their face value unless contrary is proved by the party questioning the validity of the award. (Paras 26 and 27)
It has not been shown before us on behalf of the Union of India that there exists any provision in the contract which precluded the arbitrator from deciding the dispute or there existed any specific bar in the contract precluding the contractor to raise such a claim. Once it is held that the Arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award. [See Pure Helium India (P) Ltd. vs. Oil & Natural Gas Commission (2003) 8 SCC 593]. (Para 33)
JUDGMENT
S.B. Sinha, J.-These appeals arise out of a common judgment and order dated 15.09.1998 passed by a Division Bench of the Gauhati High Court in FA No. 8 of 1993 whereby and whereunder an objection filed by the Union of India purported to be in terms of Section 30 of the Arbitration Act, 1940 was allowed in part.
2. The parties hereto admittedly entered into a contract for construction of six permanent major bridges on Lakhabali Basar-Along Road in State of Arunachal Pradesh wherefor a notice inviting tender was issued by the Chief Engineer, Project Vartak, Director General (Border Roads). Shri D.D. Sharma, appellant in Civil Appeal No. 6678 of 1999, (hereinafter referred to as the contractor ) pursuant thereto and in furtherance thereof made an offer. Negotiations admittedly took place between the parties in relation thereto.
3. The notice inviting tender, inter alia, stipulated that the entire work was to be completed within 36 months from the date of handing over the site which would be within one month from the date of issue of acceptance letter. It was further stipulated that the notice of tender shall form part of the contract.
4. It appears that the Union of India proposed an alternative design and in response thereto the contractor by his letter dated 25.8.1983 made an offer on the terms and conditions stipulated therein, clause 6 whereof reads as under :
"All other terms and conditions will be as per NIT except that the tender is valid for all the 6 bridges and cannot be divided. To avail the coming working season if the work is allotted within 60 days of opening of the tender, we are ready to offer suitable rebate."
5. The Union of India in response thereto showed its inclination but requested the contractor to withdraw various stipulations/conditions specified in his tender in terms of a letter dated 30.09.1983 stating:
"You are requested to withdraw various stipulations/conditions specified by you in your tender as brought out above. In case you consider that the withdrawal of the stipulation/conditions involve financial effect you are requested to indicate the same for each withdrawal/modification of condition separate itemwise."
6. The contractor replied thereto stating:
"We are pleased to withdraw all our terms and conditions besides our condition No.4 for design assumption and the interim payment schedule as the same has been prepared keeping conformity with the estimate. As such the same will form a part of contract. We are also pleased to inform you that if the work is allotted to us, we will offer a rebate of Rs. 90,000.00 only per bridge. For withdrawal of the above stated conditions and for offering rebate, the Department will have to give us 10% advance over our L.S. tendered amount against H.G. Bond of Industrial Cooperative Bank Ltd. Gauhati. This 10% advance will have to be adjusted proportionately along with the interim payment and the B.G. Bond for the adjusted amount will have to be released from time to time."
7. From a perusal of the said counter offer made by the contractor it will appear that one of the conditions laid down therein was to the effect that all withdrawal of conditions and rebate would be made subject to the conditions stated therein. It was, therefore, a conditional offer.
8. By another letter dated 22.11.1983, the contractor offered further rebate on 10% mobilization advance, stating:
" In partial modification to our rebate offered by us vide our letter under reference at serial (2) we are pleased to offer the following final rebate if the department gives interest free 10% over our L.S. tendered amount against B.G. bond of Industrial Cooperative Bank Ltd., Gauhati. This 10% advance will have to be adjusted proportionately along with the interim payment and the B.G. bond for the adjusted amount will have to be released from time to time.
The Rebates of the Bridges are as follows : These rebates are over and above the rebates mentioned in our letter at Serial (2) under reference.
1.
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