IMPORTANT POINT
Re-appraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under section 30 of the Arbitration Act

Headnote:Arbitration Act, 1940 – Section 30 –. Execution of works contract – Disputes arose between parties after completion of work regarding the work and payment for the same –Contractor invoked the arbitration clause contained in Clause 70 of the Agreement –Arbitrator, after elaborate discussion of entire evidence led by parties, passed the award –Award was made rule of Court by Civil Court – The findings of Civil Court were challenged by the Union of India in appeal before High Court, which was partly allowed by setting aside finding recorded by the arbitrator – Appeal – High Court committed a serious error in re–appreciating the evidence led by parties before the arbitrator – This evidence was duly scrutinized and evaluated by the arbitrator – With regard to claim No.5, arbitrator had given elaborate reasons – Therefore, finding recorded by the arbitrator could not said to be either perverse or based on no evidence – A firm finding had been recorded that under claim No.5 there was default and delay on the part of Union of India with respect to payment of RARs final bill, delay in appointing agency for ATT, delay in giving decision and increase in height of Tent plinth (given late) – This conclusion had been erroneously substituted by High Court with its own opinion on appreciation of the evidence – Such a course was not permissible to the High Court while examining objections to the award under Section 30 of Act, 1940 – Impugned judgment of High Court does not fall within the limited jurisdiction available to the Court for interference in the award of an arbitrator – Appeal allowed. (Paras 11, 12, 19, 20)
       Facts of the Case :
        Appellant contractor was allotted certain civil works herein in the instant case. Disputes arose between parties after completion of work regarding the work and payment for the same. Contractor invoked the arbitration clause contained in Clause 70 of the Agreement. Arbitrator, after elaborate discussion of entire evidence led by parties, passed the award. Award was made rule of Court by Civil Court.The findings of Civil Court were challenged by the Union of India in appeal before High Court, which was partly allowed by setting aside finding recorded by the arbitrator.
        2. Present appeal has been filed against said order of High Court.
       Findings of the Court :
        Held High Court committed a serious error in re-appreciating the evidence led by parties before the arbitrator. This evidence was duly scrutinized and evaluated by the arbitrator. With regard to claim No.5, arbitrator had given elaborate reasons. Therefore, finding recorded by the arbitrator could not said to be either perverse or based on no evidence .A firm finding had been recorded that under claim No.5 there was default and delay on the part of Union of India with respect to payment of RARs final bill, delay in appointing agency for ATT, delay in giving decision and increase in height of Tent plinth (given late).This conclusion had been erroneously substituted by High Court with its own opinion on appreciation of the evidence. Such a course was not permissible to the High Court while examining objections to the award under Section 30 of Act, 1940.Impugned judgment of High Court did not fall within the limited jurisdiction available to the Court for interference in the award of an arbitrator. Appeal allowed.

JUDGMENT

Surinder Singh Nijjar, J. —

1. Leave granted.

2. Challenge in this appeal is to the Judgment dated 10.7.2007 of the Division Bench of the High Court of Uttrakhand at Nanital whereby the Appeal from Order (AO) No.322 of 1998 New No.242 of 2001 filed by Union of India challenging the award of the arbitrator has been partly allowed.

3. The grievance made by the appellant before us is that the High Court travelled beyond its jurisdiction in re-appreciating the evidence led by the parties before the arbitrator and by substituting its own conclusions for the conclusions recorded by the arbitrator. It is submitted by the learned counsel for the appellant that the award of the Labour Court had been made the rule of the court by the Court of Civil Judge, Sr. Division, Roorkee (hereinafter referred to as the Civil Court). While considering the objections raised by the Union of India, the Civil Court took due notice of the evidence led by the parties before the arbitrator. It has been specifically held that the arbitrator has not acted beyond the scope of the reference nor can it be said that the arbitrator has misconducted himself in law or procedure.

4. We may notice here the relevant facts. The appellant (hereinafter referred to as a contractor), was allotted certain civil works on 22.3.1988. Initially, the work was scheduled to be completed on or before 28.06.1989. However by mutual agreement, the period of contract was extended from time to time and finally till 5.11.1990. The work was completed on 3.11.1990.

5. Disputes arose between the parties after completion of the work regarding the work and payment for the same. The contractor invoked the arbitration clause contained in Clause 70 of the agreement, dated 22.3.1988. Necessary claim was filed before the sole arbitrator under the Indian Arbitration Act, 1940 on 21.4.1994. Both the parties participated in the proceedings.

6. The arbitrator, after elaborate discussion of the entire evidence led by the parties, passed the award dated 30.10.96.

7. Thereafter the contractor filed Original Suit No.184/96 in the Civil Court with a prayer for making the award of the sole arbitrator rule of the Court. The Union of India also filed Miscellaneous Suit No.147/96, with a prayer for setting aside the Award. Both the suits were heard together by the Civil Court. In the miscellaneous suit it was pleaded by the Union of India that the award of the arbitrator is infirm being against the law and available evidence. As such the arbitrator has misconducted himself in law. The main issue between the parties is with regard to claim No.5. It was stated by Union of India that the arbitrator had acted beyond its jurisdiction by allowing claim No.5 of the contractor, contrary to the provision contained in Clause 11(c) of IAFW 2249, which is part of the agreement, dated 22.3.1988. The Civil Court duly framed issues. It took due notice of the objections raised by the Union of India. It was submitted on behalf of Union of India, that the arbitrator cannot accept any claim going beyond the scope of the dispute entrusted and referred to him. The Civil Court specifically observed as follows:

“In the present case, dispute of loss suffered by the decree holder for the hold-ups and delay was referred to the arbitrator and the ld. Arbitrator has decided this dispute within his jurisdiction.”

8. It has been specifically observed by the Civil Court that the parties had placed the case before the arbitrator on the point in issue. It is further observed that the arbitrator has passed the award giving reasons in detail. Therefore it cannot be said that the arbitrator has acted beyond the scope of reference.

9. The Civil Court took due notice of the settled propositions of law that at the time of hearing of objections under Section 30 of the Arbitration Act, 1940 the Court jurisdiction of the Court is limited. It has also been noticed that the Court cannot hear the objections against the award as an appellate co

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2009 Supreme(SC) 1797

2009(8) Supreme 55SUPREME COURT OF INDIATarun Chatterjee and Surinder Singh Nijjar, JJ. M/s. Ravindra Kumar Gupta & Company — Appellant versusUnion of India — RespondentCivil Appeal No. 8019 of 2009(Arising out of Special Leave Petitions (C) No. 3755 OF 2008)Decided on : 3-12-2009

IMPORTANT POINT Re-appraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under section 30 of the Arbitration Act

Cases Referred (3)

2009(8) Supreme 55
SUPREME COURT OF INDIA
Tarun Chatterjee and Surinder Singh Nijjar, JJ.
M/s. Ravindra Kumar Gupta & Company — Appellant
versus
Union of India — Respondent
Civil Appeal No. 8019 of 2009
(Arising out of Special Leave Petitions (C) No. 3755 OF 2008)
Decided on : 3-12-2009

IMPORTANT POINT
Re-appraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under section 30 of the Arbitration Act