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1996 Supreme(Del) 125

High Court Of Delhi
UNION OF INDIA - Appellant
Versus
SOHAN SINGH SETHI AND COLONEL R.K.SALDHI - Respondent
Decided On : 02/01/1996

The failure of an arbitrator to file the award and relevant records in court is a ground for setting aside the award under sections 30 and 33 of the Arbitration Act, 1940.

Headnote:

ARBITRATION - SETTING ASIDE AWARD - GROUNDS - FAILURE TO FILE AWARD AND RECORDS - ARBITRATION ACT, 1940 - SECTION 30, 33.

Fact of the Case:

The Union of India filed a suit under sections 14 and 17 of the Arbitration Act, 1940, to make an arbitration award a rule of court. The contractor, M/s Sohan Singh Sethi, filed an application under sections 30 and 33 of the Act to set aside the award on grounds of lack of opportunity to substantiate the case, consideration of matters brought after the arbitrator received orders for passing the award, absence of reasons, and failure to file the award and relevant records in court.

Finding of the Court:

The court found that the arbitrator did not send any records, making it impossible to examine the matter in light of the parties' contentions. Therefore, the court set aside the award and remitted the matter back to a different arbitrator to pass a new award within four months.

Issues: 1. Whether the arbitrator provided sufficient opportunity to the contractor to substantiate its case. 2. Whether the arbitrator considered matters brought to their attention after receiving orders to pass the award. 3. Whether the arbitrator provided reasons for the award. 4. Whether the arbitrator misconducted themselves in passing the award. 5. Whether the arbitrator followed the proper procedure for filing the award and relevant records in court.

Ratio Decidendi: The court held that the failure of the arbitrator to file the award and relevant records in court was a sufficient ground to set aside the award. The court relied on the provisions of sections 30 and 33 of the Arbitration Act, 1940, which empower the court to set aside an award if it is satisfied that the arbitrator has misconducted themselves or has failed to comply with the provisions of the Act.

Final Decision: The court set aside the arbitration award and remitted the matter back to a different arbitrator to pass a new award within four months.

K. RAMAMOORTHY

( 1 ) THERE is a contract for supply of vegetables by the latter to the Union of India. Differences arose between the parties and the matter was referred to arbitration. Accordingly, Shri R. K. Saldhi was appointed as the sole arbitrator. On 28th day of April 1989 the arbitrator passed an award directing Sohan Singh Sethi to pay the Union of India Rs. 8,70,198. 25. The Union of India has filed this suit under section 14 and 17 for making the award rule of court.

( 2 ) M/s Sohan Singh Sethi has filed IA 9190 under section 30 and 33 of the Arbitration Act, 1940 to set aside the award.

( 3 ) MR. Jagjit Singh, learned counsel for the contractor submitted that the arbitrator did not give any opportunity at all to the contractor to substantiate its case and the arbitrator had taken into account matters which were brought to the notice of the arbitrator by the Union of India after the arbitrator received orders for passing the award. He also submitted that the arbitrator has not given any reasons and the arbitrator misconducted himself in passing the award. Another objection taken by the learned counsel w as that the arbitrator did not file the award and the relevant records pertaining to the arbitrator into this court. The award is filed by the Union of India without any authority from the arbitrator and the procedure prescribed under the Act has not been followed.

( 4 ) THE award of the arbitrator is in the following terms:- ISSUES BEFORE THE ARBITRATOR The following issues have come up before the arbitrator: (a) Issues raised by Supply Depot. ASC Delhi Cantt, M/s Sohan Singh Sethi and Sons. 1306/7. Gilwali Gate, Amritsar entered into a contract No. 57/87-88/sts dated 21 Aug 87 for the supply of vegetables fresh to Supply Depot ASC, Delhi Cantt for the period 01 Oct 87 to 30 Sep 88. The contractor commenced supply w. e. f 01 Oct 87 till 14 June 88 and thereafter did not meet Supply Depot s demands. Exercising his powers under the contract, Commandant Supply Depot ASC, Delhi Cantt resorted to risk and expense purchase of vegetables. Due to continuous failure of the contract, the contract was finally rescinded w. e. f. 29 July 88. The risk and expense purchase front 15 June 88 to 30 Sep 88 resulted in the extra expenditure of an amount of Rs. 9,32,707. 50 and the amount is due for recovery from the contractor. (b) Issues raised by M/s Sohan Singh Sethi and Sons. The contractor has denied that there was any contractual failure on his part. He admits that there w as some lapse on his part to meet the demands of Supply Depot ASC, Delhi Cantt due to the following reasons, which were beyond his control: (i) non-release of security deposit of Rs. 32,000. 00 of the expired contract for the year 1986-87, (ii) with-holding of 10% of payment of bills for two months of current year from 15 Apr 88 to 15 June 88, (iii) hardship created by Supply Depot ASC, Delhi Cantt by not accepting/ rejecting the vegetables brought by the respondent, (iv) bomb blasts/closure of vegetable market at Tilak Nagar on 20 June 88 causing difficulty in procuring the vegetables to meet the demands of Supply Depot ASC, Delhi Cantt, (v) heavy rains/floods in North Zone causing traffic disruption and closure of markets making the respondent unable to procure vegetables. AND WHEREAS, I, the Sole Arbitrator appointed herein have read the pleadings and documents filed on record. I have duly considered the claims and documents of the respective parties and deliberated over the contentions of both the parties and has come 10 the conclusion that: (a) there was breach of contract by the contractor i8n supplying vegetables fresh to Supply Depot ASC, Delhi Cantt, (b) action on the part of Supply Depot ASC, Delhi Cantt to resort to risk and expense purchase of vegetables w. e f 15 June 88 was due to the continuous failure of contractual obligations and in exercise of the powers conferred upon vide clause 7 (ii) of the General conditions (1afz-2120) of the contract, (c


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