High Court Of Delhi
K.C.BHATIA AND ASSOCIATE - Appellant
Versus
URBAN IMPROVEMENTS COMPANY PRIVATE LIMITED - Respondent
Suit 2618A of 1987
Decided On : 05/24/1989
ARBITRATION - AWARD - FUNCTUS OFFICIO - ARBITRATOR BECOMES FUNCTUS OFFICIO AFTER MAKING AND SIGNING THE AWARD - CANNOT RE-WRITE OR CHANGE THE AWARD THEREAFTER - AWARD TYPED ON STAMP PAPER AFTER THE DATE OF MAKING AND SIGNING IS INVALID.
Fact of the Case:
In an arbitration proceeding, the arbitrator made and signed the award on 6th August 1987. However, the award was typed on a non-judicial stamp paper purchased on 22nd August 1987. The objector challenged the validity of the award, alleging that it was improperly procured and the arbitrator was guilty of misconduct.
Finding of the Court:
The court held that the arbitrator had become functus officio after making and signing the award on 6th August 1987 and could not re-write or change it thereafter. The court found that the first page of the award appeared to have been changed on or after 22nd August 1987, which was after the date of making and signing the award. The court also noted that the award was typed on two different typewriters, which raised further suspicion.
Issues: 1. Whether there is any error apparent on the face of the award? 2. Whether the award has been improperly procured? 3. Whether the arbitrator is guilty of misconduct as alleged in the objection petition. 4. Whether the award is liable to be set aside?
Ratio Decidendi: The court relied on the judgment of the Supreme Court in Rikhabdass vs. Ballabhdas and others, AIR 1962 SC (551), which held that an arbitrator becomes functus officio after making the award and cannot remedy any mistake on his own authority. The court also referred to the judgment of the Delhi High Court in Johri Mal Gupta and Company vs. MCD and others, Suit No. 330-A/74, which held that writing an award on a stamp paper is a ministerial act that can be done after the award has been made. However, the court distinguished the Johri Mal Gupta case on the grounds that the award in that case was treated as a draft and was ordered to be typed again on receipt of stamp paper.
Final Decision: The court allowed the objections raised by the objector and set aside the award dated 6th August 1987 made by Brig. Harish Chandra (Retired). The parties were left to bear their own costs.
( 1 ) THE sewerage work in Sector c of Green Fields Colony, Faridabad (Haryana) was awarded by the respondent/objector to the petitioner. Disputes and differences between the parties were referred to the sole arbitration of Brig. Harish Chandra (Retired) in accordance with the arbitration agreement. The arbitrator has filed the award and the proceedings in this Court. The respondent has challenged the validity of award and has filed objections thereto (I. A. 766188 ). , On pleadings of the parties, following issues are framed :
1. Whether there s any error apparent on the face If the award ?
2. Whether the award has been improperly procured ?
3. Whether the arbitrator is guilty of misconduct as alleged in the objection petition.
4. Whether the award is liable to be set aside ?
5. Relief.
( 2 ) PARTIES have filed evidence in the form of affidavits. As all the issues are inter-connected, it will be convenient to take them up together.
( 3 ) THE main objection raised by the respondent is that the arbitrator had made and signed his award on 6th August, 1987 but it was typed on a non-judicial stamp paper purchased, on 22nd August, 1987 which is an inconceivable proposition. The inference- drawn by the objetor is that the award which. was made and written, on 6th August. 1987 was changed later on by the arbitrator who had become functus officio after making and signing the award on 6th August, 1987. The objector contends that only award dated 6th August, 1987 is the original award and the award filed in the Court is apparently that which was written on or after 22nd August. 1987. It has also been. contended that the facts show that the arbitrator has changed the first page of the award. On the basis of these facts, it is contended that there is an error apparent on the face of the award which has been improperly procured and the arbitrator is guilty of misconduct.
( 4 ) IN order to appreciate the objection I may notice that the date given on the award as filed in Court is 6th August, 1987. The award consists of two pages. The date 6th August. 1987 is typed on the second page of the award. The second page is signed by the arbitrator and by one Avinash Bhasin as -a witness to the award. The first page is on non-judicial stamp paper of Rs. 75. The first page also bears the initials of the arbitrator under the date 6th August. A small correction has also been made on. the first page under the initials of the arbitrator. The date given there also is 6th August. The first page does not bear signatures or initials of the witness Avinash Bhasin
( 5 ) MR. Wadhwani, learned counsel for the objector contends that after making and signing of the award on 6th August. 1987, the arbitrator had become functus officio and thereafter had no authority to change or re-write the award. As the stamp paper was purchased on 22nd August. 1987 learned counsel contends. it is apparent that at least the first page of the award was written on or after 22nd August 1987.
( 6 ) IT is common case of the parties that the arbitrator had seat to the objector a notice dated 6th August. 1987. which ready as under :
BE. it known that I have this, sixth day of August, 1987 finalised the award in above matter. You are required to remit an amount of Rupees ten thousand only towards cost of award to enable the arbitrator to publish the award. The costs shall be shared by both parties eqully
( 7 ) A copy of the aforesaid notice was also sent by the arbitrator to the petitioner M/s K. C. Bhatia and Associates. The contention of the objector is that this notice shows that the arbitrator had made and signed the award as required by section 14 (1) of the Arbitration Act on 6th August, 1987. Section 14 (1) provides that when the arbitrators or Umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and the award. Thre
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