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High Court Of Delhi
BHARAT OVERSEAS CONSTRUCTION PRIVATE LIMITED - Appellant
Versus
UNIVERSITY TEACHERS COOP.HSG.SCY.LIMITED - Respondent
Interim Application 6953 of 1988
Decided On : 08/04/1989
ARBITRATION - AWARD - SEVERABILITY - COURT'S POWER TO PRONOUNCE JUDGMENT ON ADMITTED AND SEVERABLE PORTION OF AWARD - APPLICABILITY OF ORDER 12, RULE 6 OF THE CODE OF CIVIL PROCEDURE - SECTIONS 14, 15, 16, 17 AND 41 OF THE ARBITRATION ACT, 1940.
Fact of the Case:
Petitioner, a contractor, filed an application under Order 12, Rule 6 and Section 151 of the Code of Civil Procedure read with Section 41 of the Arbitration Act, 1940, seeking a judgment against the respondent for a portion of the arbitral award that was not challenged and admitted by the respondent.
Finding of the Court:
The court held that the award was severable, and there was no reason why the provisions of Order 12, Rule 6 of the Code of Civil Procedure could not be applied to the proceedings under Sections 14 and 17 of the Arbitration Act. The court also held that Section 17 of the Act did not bar passing successive decrees.
Issues: 1. Whether the court could pronounce judgment on a portion of the arbitral award that was admitted and severable? 2. Whether the provisions of Order 12, Rule 6 of the Code of Civil Procedure were applicable to the proceedings under Sections 14 and 17 of the Arbitration Act?
Ratio Decidendi: 1. The court relied on the principle laid down by the Supreme Court in Mattapalli Chelamayya v. Mattapalli Venkatatatnam (AIR 1972 SC 1121), which held that a decree could be passed in terms of a severable part of an award, even if another part of the award was invalid. 2. The court held that Section 41 of the Arbitration Act clearly provided that the provisions of the Code of Civil Procedure would apply to all proceedings before the court under the Act, and no provision of the Act or the rules restricted the applicability of Order 12, Rule 6 of the Code of Civil Procedure to these proceedings.
Final Decision: The court allowed the application and pronounced judgment in favor of the petitioner and against the respondent for an amount of Rs. 3,13. 794. 00 with interest at the rate of 15% p. a. from the date of the judgment till payment.
( 1 ) THIS application under Order 12, Rule 6 and Section 151 of the Code of Civil Procedure read with Section 41 of the Arbitration Act. 1940 (for short the Act ) has been filed by the petitioner. Petitioner wants that judgment be pronounced against the respondent in respect of that portion of the award for payment of certain money to the petitioner which is not under challenge and is admitted by the respondent as well.
( 2 ) CERTAIN disputes between the parties were referred to the sole arbitration of Justice D. R. Khanna on a petition filed under Section 20 of the Act by the petitioner. It appears there was a contract between the parties for construction of various flats of the respondent by the petitioner-contractor. This contract contained a clause constituting the arbitration agreement between the parties. The arbitrator gave his award on 25th September, 1987 and on the same day filed it in this court. At this stage it is not necessary to refer to the award in detail, which runs into as many as thirty four pages except to note that the arbitrator awarded a sum of Rs. 3. 52. 794. 00 to the petitioner but directed that out of this amount a sum of Rs. 40,000. 00 be withheld for a certain period.
( 3 ) ON notice of filing of the award being given, the petitioner-contractor filed objections under Section 15 read with Sections 30 and 33 of the Act. No objections to the award were filed by the respondent. In the objections filed by the petitioner it was stated that the arbitrator miscon-dueled himself of the proceedings in awarding a sum of Rs. 5,50,000. 00 to the respondent on the ground of defects in the work done by the petitioner and directing deduction of this amount from the amount payable to the petitioner by the respondent. It was stated that the architect appointed by the parties had the sole discretion to get the defects rectified and to determine the amount recoverable from the petitioner and that his decision was to be final and binding on the parties. It was stated that the architect had already deducted a sum of Rs. 34,000. 00 from the final bill of the petitioner for the alleged defects in the work done by the petitioner. The petitioner, therefore, wanted that the award be corrected and modified to that extent and interest at the rate of 18% p. a. be awarded to the petitioner on the award as modified, from the dale of the award till payment.
( 4 ) IN the proceedings for making the award rule of the court and passing a decree in terms thereof, the question that arose for consideration is if the award is liable to be modified and or corrected in view of the objections of the petitioner-contractor.
( 5 ) THERE could be no dispute about the payment of the amount of Rs. 3,12,794. 00 to the petitioner by the respondent. The petitioner has, therefore, filed the present application praying that judgment be pronounced and a decree for an amount of Rs. 3,12,794. 00 be passed against the respondent pending further consideration of his objections for modifying and or correcting the award. The application has been opposed. It is stated that the award is one whole and is not divisible and that the only jurisdiction which the court has is either to modify, remit or set aside the award. It is also stated that the payment of the amount ofrs. 3,l2,794. 00 is dependent upon petitioner s accepting the whole of the award. Provisions of Order 12, Rule 6 of the Code of Civil Procedure have also been stated to be not applicable in these proceedings.
( 6 ) I do not think I will agree with the contentions raised by the respondent. As noted above, the respondent did not file objections to the award. The period for filing objections has since long over. The court is not going to upset the award of the amount of Rs. 3,12,794. 00 tothe petitioner whether the objections by the petitioner to modify and or correct the award are accepted or not. The amount of Rs. 3. 12,794. 00 therefore, becomes payable if decree was to be passe
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