Bombay High Court
D.M.REGE,F.G.COUTO
Goa, Daman and Diu Housing Board - Appellant
Versus
Ramakant V.P.Darvotkar - Respondent
Decided On : 02/07/1983
ARBITRATION - MISCONDUCT OF ARBITRATOR - FAILURE TO GIVE REASONS FOR AWARD - AWARD VITIATED - ARBITRATION ACT, 1940, S. 25.
Fact of the Case:
The appellant, Goa, Daman and Diu Housing Board, entered into an agreement with the respondent, a contractor, for the construction of 200 tenements. Disputes arose between the parties, and the respondent requested the Housing Board to appoint an arbitrator as provided under Clause 25 of the Agreement. The Housing Board appointed an arbitrator, who made awards in favor of the respondent. The Housing Board challenged the awards on the ground that the arbitrator had misconducted himself by not giving reasons for his awards, as required under Clause 25 of the Agreement.
Finding of the Court:
The court held that the arbitrator had not given reasons for his awards, as required under Clause 25 of the Agreement. The court found that the arbitrator had merely set out the rival contentions and the documents relied upon by him, but had not provided any reasoning for his findings. The court held that this amounted to misconduct on the part of the arbitrator and that the awards were therefore vitiated.
Issues: Whether the arbitrator had misconducted himself by not giving reasons for his awards, as required under Clause 25 of the Agreement.
Ratio Decidendi: The court held that the arbitrator had misconducted himself by not giving reasons for his awards, as required under Clause 25 of the Agreement. The court found that the arbitrator had merely set out the rival contentions and the documents relied upon by him, but had not provided any reasoning for his findings. The court held that this amounted to misconduct on the part of the arbitrator and that the awards were therefore vitiated.
Final Decision: The court allowed the appeals, set aside the order of the lower court, and remitted the awards back to the arbitrator for giving reasons for the same as required under Clause 25 of the Agreement.
REGE, J.:- These four appeals by Goa, Daman and Diu Housing Board, are against the Judgment and Order of the learned Civil Judge, Senior Division. Panaji. dt. 26-8-81, confirming four different awards by one arbitrator appointed in pursuance of an agreement between the parties. Appeal No. 35 of 1981 relates to the award, awarding to the respondent against the appellant Rupees 2,75,091,13. Appeal No. 36 of 1981 relates to an award, awarding to the respondent a sum of Rs. 1,88,968,36. Appeal No. 37 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, Daman and Diu Housing Board while 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 in writing dt. 11-7-1973 to that effect. Clause 25 of the said agreement provided for referring the disputes between the parties to the arbitration of an arbitrator appointed by the 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 appoint an Arbitrator. Accordingly the Court by its order dt. 28-2-1979 had the agreement between the parties filed in Court 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, Panaji, 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 Clause 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 in fact 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 has firstly contended, in the same manner as 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
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