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High Court Of Delhi
RS.AVTAR SINGH AND COMPANY - Appellant
Versus
N.P.C.C.LIMITED - Respondent
Suit 2464 of 1990
Decided On : 03/31/1992
Held:
It is a well settled principle of law that the award of the arbitrator who is a choosen Judge of facts and of law, between the parties, cannot be set aside unless the error is apparent on the face of the award or from the award it can be inferred that the arbitrator has misconducted himself or the proceedings or that he has not applied his mind to the material facts. The court is not sitting in appeal on the award of the arbitrator nor can re-assess and re-examine the material which was adduced before the arbitrator. The Court cannot examine the correctness of the award on merits nor it is obligatiory for the arbitrator to give detailed reasons. The Court unless come to the conclusion that the award is prepostrous or absurd cannot set it aside nor can substitute its own decision in place of the arbitator. It will be for the arbitrator to interpret the contract between the parties. If the arbitrator takes a reasonable view on the construction of a clause, the Court will not interfere unless the view is perverse. The award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the facts. The arbitrator being the final judge of facts and law, the Court will interfere only if the arbitrator arrives at inconsistent conclusion even on his own finding or arrives at a decision ignoring the material document. The Court may differ in arriving at the decision but unless as pointed out above, the Court cannot set aside the award. That being the settled legal position, what we have to see in the facts and circumstances of this case is whether there is any error pointed out by the objector for which the award could be set aside?
Misconduct - Arbitrator making and publishing award without getting Explanationn and clarification and affording opportunity on the point raised- amounts to misconducting the proceedings.
The objector had always been ready and willing to explain and reconcile the quantities, but was not afforded any time. This tentamounts to depriving opportunity to the objector to dislodge the confusion working in the mind of the arbitrator. The arbitrator without getting the Explanationn and clarification on the points raised had no right to make and publish his award. In fact by doing so he has ignored the material facts i.e. the final bill and measurements. Final bill was submitted on 9.7.90 on which date there was no hearing on the final bill nor was discussed on 10.7.90 nor it find mention in arbitrators letter dated 12.7.90. thereforee, it amounts to misconduct of proceedings by the arbitrator for which the award is liable to be set aside.
thereforee in the absence of any Explanationn, it amounted to depriving the opportunity of being heard. Having pointed out these discrepencies it was necessary for the arbitrator to await the reply or the clarification and at least afford a reasonable opportunity to the objector to explain the discrepancy in this regard. It cannot be said that these observations were inconsequential. They in fact needed Explanationn.
This conduct of the arbitrator shows that he was in great hurry to deliver the award even though it amounted to depriving reasonable opportunity of being heard the view point of the respondent/objector. This is nothing but a misconduct On the part of the arbitrator.
But without giving any reasonable opportunity, the arbitrator having published the award in a hurry, to my mind, amounted to misconduct.
The arbitrator having pointed out the discrepencies in the final bill and measurement and having called clarification, it was necessary for him to wait for the reply from the respondent but having not done so, the arbitrator misconducted himself and the proceedings thereby depriving reasonable opportunity to the objector.
( 1 ) SHRI T. S. Murthy, the sole arbitrator was appointed to adjudicate the matter between M/s. R. S Avtar Singh and Co. Vs. M/s. National Projects Construction Corporation Ltd. He made and published his award on 31st July, 1990 and filed the same in this Court. Notice of the filing of the award was issued to both the parties. M/s. R. S. Avtar Singh and Co. did not file objections. However, the respondent/npcc has filed the objections inter alia on the grounds that:
1. The arbitrator has misconducted himself and the proceedings bydepriving the objector reasonable opportunity of hearing and also by omitting to record the minutes of the meeting held on 25th May, 1990.
2. The arbitrator has ignored the material document i. e. the final bill while publishing the award. The arbitrator acted behind the back of the objector by asking the petitioner to purchase the stamp paper on 25th May, 1990 while the proceedings were still going on.
3. The arbitrator has ignored the admitted facts regarding the cost of material. He made and published his award in haste even without waiting for his fees frorm the objector. He received respondent s part of the share of his fees from the petitioner without the knowledge of the respondent, and hurriedly published the award. The arbitrator had been biased.
( 2 ) IT is in this background that the objections have been filed challenging the a ward made by Mr. Murthy. The reason for seekinng the arbitration by the petitioner was that responden. committed breach of the contract. The facts on the basis of which breach had been alleged were that the contract was entered into between the parties. Petitioner was to construct four godowns of total capacity of 19,580 metric tonnes with ancillary buildings e. g. canteen block, lavatory block and isolation shed at Partapur at a cost of Rs. 97,73,738. 90 p. These godowns were meant for use by Food Corporation of India and the same were to be used for the deposit work undertaken by the Objector on behalf of the Food Corporation of India. The stipulated date for completion of this work was seven months. The site was handed over along with the lay out as per the drawings. The allegation before the arbitrator was that the objector started effecting major changes right from the very beginning which effected the mobilisation of resources, which had been planned on the basis of original drawings as well as the pace of construction. It was further the grievance of the petitioner that the objector did not supply the drawings for steel structural work in time nor supplied the drawing for ancillary buildings namely Isolation Shed, Lavatory Block and Canteen Block. The drawings were supplied almost after three months. Meanwhile, the price of the steel was increased. Since the drawings were supplied three months after, therefore, the work could not be completed within the stipulated period. The mobilisation advance amounting to Rs. 5,00,000. 00 was sanctioned in favour of the petitioner. Payments were also delayed against the running bills. Further grievance of the petitioner was that after commencement of the work, it came to light that the quantities required to be executed at ground had practically no co-relation whatsoever to the quantities given in the document annexed to the contract. Some of the items were drastically curtailed or deleted and majority of the items were abnormally annexed. This was done entirely due to deliberate under assessment of quantities. The reduction of quantities in certain items of the contract was also deliberate as a result of which the petitioner was unable to meet their commitments and the work came to a stand still. Even the respondent failed to extend the schedule period of completion and categorically refused to grant the extention of time. This the objector did in order to avoid discharging his responsbility. With all these allegations the petitioner raised the following claims:
1. On account of work bill for work done amoun
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