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1992 Supreme(Del) 554

High Court Of Delhi
NARAINDAS R.ISRANI - Appellant
Versus
UNION OF INDIA - Respondent
Suit 1701 of 1990
Decided On : 11/13/1992

Advocates Appeared:
J.C.SETH, P.C.MARKANDA

An arbitrator is not required to give a detailed judgment like a civil court, but must give out the trend of his thought process. An arbitrator is competent to award interest pendente lite where there is no prohibition for the same by agreement or otherwise, but not future interest.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - GROUNDS - MISCONDUCT OF ARBITRATOR - ERRORS APPARENT ON THE FACE OF THE AWARD - LIMITATION - INTEREST - FUTURE INTEREST.

Fact of the Case:

Petitioner, a class contractor, was awarded a contract by the Union of India for the construction of a Farmers' Hostel. Disputes arose between the parties, and the matter was referred to arbitration. The arbitrator made an award in favor of the petitioner, and the petitioner filed a petition to make the award a rule of the Court. The Union of India objected to the award on various grounds, including misconduct of the arbitrator, errors apparent on the face of the award, and limitation.

Finding of the Court:

The court held that the arbitrator had not misconducted himself and that there were no errors apparent on the face of the award. The court also held that the claims were not barred by limitation, as the period of limitation started running from the date of payment of the final bill, which was within 90 days of the invocation of the arbitration clause. The court further held that the arbitrator was competent to award interest pendente lite, but not future interest.

Issues: 1. Whether the award is liable to be set aside/modified on the objections raised in the objection petition?

Ratio Decidendi: 1. The court held that an arbitrator is not required to give a detailed judgment like a civil court, but must give out the trend of his thought process. The court also held that an arbitrator is competent to award interest pendente lite where there is no prohibition for the same by agreement or otherwise, but not future interest.

Final Decision: The court allowed the petition to the extent that the reference with regard to the future interest in the award was deleted. The court made the impugned award a rule of the Court with the above modification, and passed a decree in terms of the award in favor of the petitioner against the respondent with the above modification.

Mohd. Shamim, J.

( 1 ) THIS is a petition under Section 14 of the Arbitration Act for making the award dated 10-5-90 given by H. N. Chandwani, Arbitrator, respondent No. 2. a rule of the Court.

( 2 ) BRIEF facts which gave rise to the present petition are as under that petitioner is a "a class contractor. He carries on his business of construction under the name and style of M/s. Narain Dass R. Israni (hereinafter referred to as petitioner for the sake of brevity ). The Union of India, respondent No. 1. awarded a contract to the petitioner for construction of Farmers Hostel, IARI, Pusa Hoad, New Delhi (hereinfter referred to as Respondent No. 1 for the sake of convenience) vide an agreement No. T/ee/cp B/77-78. Later on disputes and differences arose in between the petitioner and respondent No. 1 and the same were referred to Shri H. N. Chandwani, respondent No. for adjudication (hereinafter referred to as respondent No. 2 ). The respondent No. 2 made and published his award on 10. 5. 90. The said award was filed before the Court on 29. 8. 90. Notices were issued to both the parties in regard there to. The petitioner did not file any objection against the said award and prayed that the same be made rule of the Court.

( 3 ) RESPONDENT No. 1, however, objected to the said award inter alia on the following grounds; that respondent No. 2 has misconducted himself and the proceedings. There are errors apparent on the face of the record. The respondent No. 2 failed to appreciate the evidence on record. He has allowed the claim of the petitioner without making a "speaking award , though he was required to do so in terms of the arbitration agreement. The respondent No. 2 was required to give reasons while allowing a claim for more than Rs. 50,o0o. 00 vide clause 25 of the Agreement. All the claims allowed were hopelessly barred by time. The impugned award is thus unsustainable and is thus liable to be set aside.

( 4 ) PETITIONER filed a reply to the objections. According to the petitioner the objections are false and frivolous and are thus liable to be dismissed. He has prayed that the Award be made rule of the Court. The reply is supported by an affidavit.

( 5 ) THE following issues were framed by the learned predecessor of this Court:-

1. Whether the award is laible to be set aside/modified on the objections raised in the objection petition? 2. Relief. Issue No. 1.

( 6 ) LEARNED counsel for the respondent No. l Mr. Seth has contended that the learned Arbitrator has misconducted himself and the proceedings. There are errors apparent on the face of the award inasmuch as all the claims allowed by the respondent No. 2 were hopelessly barred by time. Respondent No. 2 was required to give reasons for arriving at his conclusions when the claim was for more than Rs. 50. 000. 00. He was thus under an obligation to make a speaking award. In view of the above the impugned award is liable to be set aside.

( 7 ) LEARNED counsel for the petitioner Mr. Markanda has urged to the contrary. According to him the award is perfectly legal and valid. Respondent No. 2 has given cogent reasons for the conclusions. It is a speaking award. An arbitrator is not expected to write a detailed judgment like a Civil Court. All the claims were within time and as such were rightly allowed by respondent No. 2. Objections are false and frivolous and are thus liable to be dismissed.

( 8 ) SINCE we are concerned with the construction of Section 30 of the Arbitration Act which deals with the ground on which an award can be set aside, the provisions of the said Section can be adverted to with profit. It is in the following words:-

"an award shall not be set aside except on one or more of the following grounds:- (a) that an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under Section 35; (c) that an awar






























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