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High Court Of Delhi
D.C.KAPUR,PROPRIETOR,M/S.DIPSON AND COMPANY - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Decided On : 07/01/1996
ARBITRATION - AWARD - SETTING ASIDE - GROUNDS - MISCONDUCT OF ARBITRATOR - IGNORING MATERIAL ON RECORD - MISINTERPRETATION OF CONTRACT - OVERLOOKING MATERIAL ON RECORD - ACCEPTING UNILATERAL FACTS AND FIGURES - DISALLOWING RECOVERIES - ORDERING REFUND OF RECOVERIES - NOT GIVING REASONS - AWARDING FUTURE INTEREST - SCOPE AND LIMIT OF CORRECTION BY COURT - REASONABLENESS OF REASONS - SUFFICIENCY OF REASONS - INSUFFICIENCY OF REASONS - ERROR OF LAW - ERROR OF FACT - SPEAKING AWARD - APPRAISEMENT OF EVIDENCE BY ARBITRATOR - JURISDICTION OF ARBITRATOR - GRANT OF INTEREST.
Fact of the Case:
Petitioner, a sole proprietor, filed a petition seeking to direct respondent, an arbitrator, to file an award along with proceedings and to make the award a rule of the Court. A dispute arose between the petitioner and respondent DDA regarding the construction of dwelling units. Respondent was appointed as the sole arbitrator to resolve the dispute. The arbitrator gave his award on 23.9.89. The petitioner filed a notice of filing the award, which was accepted by the Court. Respondent DDA filed objections under Sections 30 and 33 of the Arbitration Act, 1940, alleging misconduct of the arbitrator, ignoring material on record, misinterpreting the contract, overlooking material on record, accepting unilateral facts and figures, disallowing recoveries, ordering refund of recoveries, not giving reasons, and awarding future interest.
Finding of the Court:
The Court held that the objections raised by respondent DDA were devoid of substance. The Court found that the arbitrator had given reasons for his findings, and that the reasons were sufficient to meet the requirements of a reasoned award. The Court also held that the arbitrator was justified in granting future interest, as it was covered by a recent decision of the Supreme Court.
Issues: 1. Whether the award is liable to be set aside on the objections raised in the objection petition? 2. Relief.
Ratio Decidendi: 1. The scope and limit of correction by the Court of an award made by the Arbitrator is to ensure that the Arbitrator acts within the norms of justice and that the award is clear, just, and fair. The Court should give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. 2. An Arbitrator, acting as a Judge, has to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to the primordial necessity of order in the social life. Therefore, where reasons germane and relevant for the Arbitrator to hold in the manner he did, have been indicated it cannot be stated that the reasons were unreasonable. 3. Insufficiency of the reasons could not be a ground for setting aside the award. 4. Appraisement of evidence by the Arbitrator is never a matter which the Court questions and considers. If the parties have selected their own Forum, the deciding Forum must be conceded the power of appraisement of evidence. The Arbitrator is the Sole Judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the Arbitrator. 5. The Arbitrator is competent to award interest for the period commencing with the date of award to the date of decree or date of realisation whichever is earlier.
Final Decision: The Court rejected the objections filed by respondent DDA and made the award dated 23.9.89 given by respondent a rule of the Court. The Court passed a decree in terms of the award and directed respondent DDA to make payment of the decretal amount to the petitioner firm within eight weeks from the date of communication of the order. The Court also directed respondent DDA to pay interest on the decretal amount at the rate of 10% per annum from the date of the decree till payment.
( 1 ) THE present petition has been filed by Shri D. C. Kapoor, sole proprietor of M/s. Dipson and Company with the prayer to direct respondent No. 2 Shri O. P. Mittal, the Arbitrator to file the award alongwith the proceedings and thereafter to make the award rule of the Court.
( 2 ) THE work of construction of "104 MIG, Type c Dwelling Units at Malviya Nagar, New Delhi" was awarded to the petitioner by the Executive Engineer of the Delhi Development Authority (hereinafter referred to as the DDA ) vide agreement No. 8/hd-1/76-77. As regards the above said work certain disputes/ differences had arisen between the parties and as per the agreement between the parties respondent No. 2 Shri O. P. Mittal was appointed as the sole Arbitrator by the Engineer Member, DDA vide letter dated 17. 12. 84. The said Arbitrator entered upon the reference and gave his award on 23. 9. 89.
( 3 ) AFTER the Arbitrator had filed the award alongwith the proceedings, notice of the filing of the award was accepted by the learned Counsel for the petitioner in the Court on 20. 2. 90. No objections have been filed on behalf of the petitioner. Notice of the filing of the award was also issued to respondent No. 1 DDA directing the said respondent to file objections, if any, within the statutory time limit. In pursuance of the notice, served on respondent DDA, the said respondent filed objections (IA 3215/90) under Sections 30 and 33 of the Arbitration Act, 1940 (hereinafter referred to as the Act ), raising various objections. It is mainly contended on behalf of the respondent DDA that the Arbitrator has misconducted himself, has ignored the material on record, has misinterpreted the various provisions of the contract between the parties, has overlooked the material on record, has accepted unilateral facts and figures submitted by the petitioner, has erred in disallowing the recoveries for non-submission of fortnightly labour reports and excess material used and has ordered for the refund of recoveries which are not sustainable. It is also contended that the Arbitrator has not given the reasons on the basis of which he has come to the conclusions arrived at by him while giving his award. It is also stated in the objections that it was not within the jurisdiction of the Arbitrator to award future interest as has been awarded in the impugned award. It has been prayed that the objections filed on behalf of the respondent DDA be accepted and the award dated 23. 9. 89, made by the Arbitrator Shri O. P. Mittal be set aside.
( 4 ) THE objections filed by the respondent DDA are resisted by the petitioner by filing reply to the same. In the reply filed on behalf of the petitioner it is stated that the objections are not maintainable. The same be rejected with costs and the award dated 23. 9. 89, given by respondent No. 2 the Arbitrator, be made rule of the Court with costs and interest till realisation.
( 5 ) ON the pleadings of the parties the following issues were framed vide order dated 31. 7. 90 :-
1. Whether the award is liable to be set aside on the objections raised in the objection petition ? (OPR) 2. " Relief. Issue No. 1 (A) Before going into the merits of the matter I would like to discuss the scope and limit of correction by the Court of an award made by the Arbitrator. The Supreme Court in case Food Corporation of India v. joginder Pal Mohinderpal and Another, reported as (1989) 2 SCC 347: AIR 1989 SC 1263 have observed that arbitration as a mode for settlement of disputes between the parties, has a tradition in India. It has a social purpose to fulfil today. It has a great urgency today when there has been an explosion of litigations in the Courts of Law established by the sovereign power. It is, therefore, the function of Courts of Law to oversee that the Arbitrators act within the norms of justice. Once they do so and the award is clear, just and fair, the Courts should, as far as possible, give effect to the award of the parties
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