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1996 Supreme(Del) 405
High Court Of Delhi
ANANT RAJ AGENCIES - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Decided On : 05/01/1996
Headnote:Arbitration Act, 1940 - Section 30 — Interference with award-Scope of — Grounds for interference — Discussed.
Held:
The power of the Court to set aside the award is restricted to cases set out in Section 30 of the Act. Section 30 of the Act has set forth the grounds on which the award can be set aside namely - (i) if the arbitrator or the umpire has mis-conducted himself; (ii) if the arbitrator or the umpire mis-conducted the reference proceedings; (iii) if an award has been made after the court has made an order superseding the arbitration; (iv) when an award has been made after the arbitration proceedings have become invalid under sec. 35, i.e. after service of the notice of the legal proceedings as whole of the subject-matter of the reference is also the subject-matter of the pending legal proceedings; (v) when an award has been improperly procured; and (vi) when an award is otherwise invalid.
Section 30 — Misconduct — Meaning of — Discussed.
Held:
There are various types of misconduct. The court should not primarily be guided by the meaning of the word misconduct. It really means and includes conduct on the part of the arbitrator or umpire which is on the face of the award opposed to rational and reasonable principles. It would be a question of fact in each case to be ascertained from the entire proceedings. So long as the arbitrator acts within the scope of his authority be cannot be said to be guilty of misconduct. The word misconduct is an ambiguous term and includes mishandling of arbitration proceedings or laches of duties on the part of the arbitrator.
Misconduct has a wider meaning in arbitration than what is understood in popular sense. It includes mistaken conduct such as reception of inadmissible evidence at the hearing or denying the parties opportunity to tender evidence or refusing one of the parties to be properly represented by lawyer.
"Misconduct" of an arbitrator or an umpire does not mean a deliberate or careless breach of duty on the part of the arbitrator or umpire but also includes a purely technical error of law, e.g., reception of inadmissible evidence which goes to the root of the case and makes an award on a point which was not in issue before him.
Section 30 and 33 — Interference with award — Misconduct — Arbitrator continuing with proceedings even after he was informed that the objector had lost faith in him and was moving the Court to revoke his authority — Arbitrator mis-conducted the proceedings — Award set aside.
( 1 ) THE Executive Engineer, Development Division No. 2of the Delhi Development Authority (hereinafter REFERRED TO as the DDA ) invited tenders for the work titled "construction of 504 MIG houses in Block -R (Uttari) at Pitam Pura including internal development (balance work)". The petitioner/objector had tendered for the said work at 91. 9% above the estimated cost i. e. for Rs 1,48,91,920. 60. The tender of the petitioner/ objector was accepted by the Delhi Development Authority and the contract was awarded to the petitioner/objector by the Delhi Development Authority vide letter No. 54 (718)/dd-11/dda/3412 dated the 6th October, 1982. The date of the start of the work was 16. 10. 82 and the work was to be completed within a period of 12 months.
( 2 ) AN agreement No. 36/ee/dd. II/dda/82-83 was executed between the petitioner/objector and the respondent Delhi Development Authority containing an arbitration clause (clause 25 of the agreement ).
( 3 ) DURING the currency of the work, disputes arose between the petitioner/objector and the respondent DDA, which were REFERRED TO the sole arbitration of Sh. O. P. Mittal by the Engineer member Delhi Development Authority in terms of the above said clause of the agreement vide letter dated 28. 1. 85.
( 4 ) THE arbitrator made his award on 11. 8. 83 and filed the game in the Court. Notice of the filing of the award was issued to the parties and only the petitioner filed objections to the award (IA 1/87 in S. 2341-A/86 ). The objections filed by the petitioner/ objector to the award dated 11. 8. 83 were decided by this Court vide order dated 13. 7. 89 passed in S. 2341- A/86. The findings of the arbitrator in respect of claim I and 2 in the above said award were set aside and remitted to the arbitrator to decide the above said claims afresh on merits. The above orders of this Court were communications to the arbitrator vide letter dated 3. 11. 89. In compliance with the above directions of this Court in S. 2341-A/86 imparted vide order dated 13. 7. 89 the arbitrator has made his revised award dated 3. 11. 90.
( 5 ) NOTICE of the filing of the award dated 3. 11. 90 was issued to the parties directing the parties to file objections, if any, within the statutory time. The petitioner/objector has filed objections to the award (IA 1471/91) within time. No objections to the award have been filed by the respondent DDA.
( 6 ) IN the objections filed on behalf of the petitioner/objector the main thrust is that the arbitrator has acted with bias and prejudiced mind against the objector, acted with material ir-regularity right from the very beginning and thus has misconducted himself in the entire proceedings while making the impugned award alleged to be dated the 3rd November, 1990. It has been prayed in the objections filed by the petitioner/objector that the revised award dated the 3rd November, 1990 be set aside. Reply to the objections has been filed on behalf of Delhi Development Authority stating that the objections are mis-conceived and be dismissed with costs.
( 7 ) ON the pleadings of the parties the following issues were framed vide order dated 21. 4. 92:-
1. Whether the award is liable to be set aside on the objections taken in the objection petition?
2. Relief.
( 8 ) THE parties have adduced evidence by means of affidavits. On behalf of the petitioner an affidavit of Sh. Anil Sarin has been filed whereas on behalf of respondent DDA an affidavit of Sh. M. C. Behl, Chief Engineer (North Zone) Delhi Development Authority has been filed.
( 9 ) I have heard the learned counsel for the parties at length and have also carefully gone through the documents/material on record. During the course of arguments the learned counsel for the petitioner/objector submitted that the arbitrator has mis-conducted himself and on the above ground alone the award dated 3. 11. 90 made by the arbitrator Sh. O. P. Mittal is liable to be set aside. The learned counsel for the petitioner/obj
