High Court Of Delhi
K.C.BHATIA - Appellant
Versus
URBAN IMPROVEMENT TRUST - Respondent
Suit 2618A of 1987
Decided On : 05/24/1989
ARBITRATION - AWARD - FUNCTUS OFFICIO - Arbitrator becomes functus officio after making and signing the award and cannot change or re-write it thereafter.
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 contended that the award 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 it thereafter. The court also found that the first page of the award appeared to have been changed on or after 22nd August 1987.
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: 1. The court relied on the judgment of the Supreme Court in Rikhabdass v. Ballabhdas and others, AIR 1962 SC 551, which held that an arbitrator becomes functus officio after making the award. 2. The court also noted that the award was witnessed by a third person, Mr. Avinash Bhasin, who signed it on 6th August 1987. The court found it difficult to accept the contention of the petitioner that the first page of the award was changed on or after 22nd August 1987, as the stamp paper itself was purchased on that date.
Final Decision: The court allowed the objections and set aside the award dated 6th August 1987 made by Brig. Harish Chandra (Retired).
( 1 ) THE sewerage work: in Sector c of Greenfields Colony, Faridabad (Haryana) was awarded by the respondent/to the petitioner. Disputes and differences between the parties were objectorreferred TO to the sole arbitration of Brig. Harish Chandra (Retired) inaccordance with the arbitration agreement. The arbitrator has filed theaward and the proceedings in this Court The respondent has challenged thevalidity of award and has filed objections thereto (I. A. 766/88 ). On pleadingsof the parlies, following issues are framed :
(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 theobjection 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 theissues are inter-connected, it will be convenient to take them up together.
( 3 ) THE main objection raised by the respondent is that the arbitratorhad made and signed his award on 6th August, 7987 but it was typed on anon-judicial stamp paper purchased on 22/08/1987 which is aninconceivable proposition. The inference drawn by the objector is that theaward which was made and written on 6/08/1987 was changed lateron by the arbitrator who had become functus officio after making andsigning the award on 6/08/1987. The objector contends that onlyaward dated 6/08/1987 is the original award and the award filed in thecourt is apparently that which was written on or after 22/08/1987. It has also been contended that facts show that the arbitrator has changedthe first page of the award. On the basis of these facts, it is contended thatthere is an error apparent on the fact of the award which has beenimproperly procured and the arbitrator is guilty of misconduct.
( 4 ) IN order to appreciate the objection I may notice that the dategiven on the award as filed in Court is 6/08/1987. The awardconsists of two pages The date 6/08/1987 is typed on the secondpage of the award The second page is signed by the arbitrator and by oneavinash Bhasin as a witness to the award. The first page is on non-judicialstamp paper of Rs75. 00. The first page also bears the initials of thearbitrator under the date 6th August. A small correction has also been madeon the first page under the initials of the arbitrator. The date given therealso is 6th August, The first page does not bear signatures or initials ofthe witness Avinash Bhisin.
( 5 ) MR. Wadhwani, learned counsel for the objector, contends thatafter making and signing of the award on 6/08/1987, the arbitratorhad become functus officio and thereafter had no authority to change orre-write the award. As the stamp paper was purchased on 22/08/1987, learned counsel contends, it is apparent that at least the first page ofthe award was written on or after 22/08/1987.
( 6 ) IT is common case of the parties that the arbitrator had sent tothe objector a notice dated 6/08/1987 which reads as under : ~
"be it known that I have this sixth day of August, 1987 finalisedthe award in above matter. You are required to remit an amount of Rupees ten thousandonly towards cost of award to enable the arbitrator to publish theaward. The costs shall be shared by both parties equally. "
( 7 ) A copy of the aforesaid notice was also sent by the arbitrator tothe petitioner M/s. K. C. Bhatia and Associates. The contention of theobjector is that this notice shows that the arbitrator had made and signedthe award as required by section 14 (1) of the Arbitration Act on 6/08/1987. Section 14 (1) provides that when the arbitrators or Umpirehave made their award, they shall sign it and shall give notice in writing tothe parties of the making and signing there of and of the amount of fees andcharges payable in respect of the arbitration and the award. Three stagesare contemplated by section 14 (1) of the Act. The first stage is making ofthe award. The second stage is o
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