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High Court Of Delhi
OM PRAKASH BALDEV KISHAN - Appellant
Versus
UNION OF INDIA - Respondent
First Appeal (OS) 14 of 1980
Decided On : 04/08/1984
Under Section 30 of the Arbitration Act an award can be set aside if the arbitrator has misconducted himself or the proceedings. It does not necessarily imply moral turpitude, dishonesty, partiality and bias. It is often used in a technical sense denoting irregularity. In that sense it means and includes some honest though erroneous breach of duty causing, miscarriage of justice. If there has been some mishandling of the arbitration proceedings or serious neglect of duties on the part of the arbitrator which is likely to lead to substantial miscarriage of justice the court would be justified in setting aside the award.
"Under Section 30(a) of the Arbitration Act an award can be set aside when an Arbitrator has misconducted himself or the proceedings. Misconduct under Section 30(a) has not a connotation of maral lapse. It comprises legal misconduct which is complete if the Arbitrator on the face of the award arrives, at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. It is in this sense that the Arbitrator has misconducted the proceedings in this case."
2. Arbitration Act: Section 30 : Does an erroneous decision by an arbitrator on a question of law vitiate the award ? No, unless the error appears on the face of the award.
The question of construction, generally speaking, is a question of law. An arbitrator is a domestic tribunal appointed by the parties. An erroneous decision by him on a question of law does not vitiate the award unless the error appears on the fact of the award.
"The question whether a contract or a clause of it is incorporated in the award is a question of construction of the award. The test is, does the arbitrator come to a finding on the wording of the contract. If he does he can be said to have impliedly incorporated the contract or a clause in it whichever be the case. But a mere general reference to the contract in the award is not to be held as incorporating it. The principle of regarding contracts or other documents into the award is not to be encourages or extended. [See Babu Ram v. Nanhemal, C.A, No. 107 of 1966, D/ 5-12-1968 (S.C.) ]. The rule thus is that as the parties choose their own arbitrator to be Judge in the dispute between them, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts. thereforee, even when an arbitrator commits a mistake either in law or in fact in determing the matters referred to him but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake."
3. Arbitration Act: Section 30 : An error of law on the face of the award : Its meaning :
An error of law on the face of the award means as laid down in Champasey Bhara and Company v. Jivraj Baloc Spinning and Weaving Company Limited, (1923 A.C. 480) : that you can find in the award or a document actually incorporated thereto as for instance a note appended by the arbitrator stating the reasons for his judgment some legal proposition which is the basis of the award and which you can then say is erroneous.
( 1 ) THESE two cross-appeals (F. A. O. (O. S.) No. 14 of 1980 and F. A. O. (O. S) No. 32 of 1980) arise out of the judgment of a learned Single Judge dated November 20, 1979.
( 2 ) MESSRS 0m Parkash Baldev Krishan (hereinafter to be refrred as the Contractor ) submitted a tender for "provision of Married Accommodation for CPL s/ac s Flt. Sgt. /mwo s/wo s/near Delhi". The tender was accepted and the work was awarded to the contractor by the Union of India vide agreement No. CEDZ-8 of 1972-73, dated August 21, 1973. Clauses 9, 26, 62 (0) and 70 of the General Conditions of contract and clause 3. 1 of the Special Conditions of Contract, which are relevant for the decision of these appeals, read as under :
"9. Suspension of Work. The Contractor shall suspend execution of the Works or any part of parts thereof, whenever called upon in writing by the Garrison Engineer to do so, and shall not resume work thereon until so directed in writing by the Garrision Engineer. The Contractor will be allowed by the G. E. an extension of time (not less than the period of suspension) for completion of the item or group of items of work for which a separate period of completion is given in the contract and of which the suspended work forms part but no other claim in this respect for compensation or otherwise, howsoever shall be adm itted,"
"26. Labour-The Contractor shall employ labour in sufficient number to maintain the required rate of progress and of quality to ensure workmanship of the degree required by the Specifications and to the satisfaction of the Engineer-in-Charge. The Contrac tor shall remain liable for the payment of all wages or other moneys to his work-people or employees under the Payment of Wages Act, 1936, Minimum Wages Act, 1948 Employers Liability Act, 1938, Workman s Compensation Act, 1923, or any other Act or enactments relating thereto and rules framed thereunder from time to time. The Contractor shall work only on and during the hours of a working day unless he obtains the prior written approval of the Engineer-in-charge to do otherwise. If such approval is given no liability in respect of any excess cost arising therefrom shall beincurred by Government.
"62 (G ). If any work, the rate for which cannot be obtained by any of the methods referred to inparas (A) to (E) above, has been ordered on the Contractor, the rate shall be decided by the G. E. on the basis of the cost to the Contractor at site of Works plus l0/o to cover all overheads and profit. Provided that if the Contractor is not satisfied with the decision of the G. E. , he shall be entitled to represent the matter to the C. W. E. within seven days of receipt of the G. E. s decision and the decision of the C. W. E. thereon shall be final and binding. "
"70. All disputes, between the parties to the contract (other than those for which the decision of the C. W. E. or any other person is by the Contract expressed to be final and binding shall, after written notice by either party to the Contract to the other of them, be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents".
"3. 1. The contractor shall have no claim whatsoever, if on account of any local regulations or otherwise he is required to pay wages in excess of the fair wages shown in the Schedule of Fair Wages. "certain disputes and differences arose between the parties. Contractor raised several claims. These included the following four claims :
"1. Reimbursement/compensation for infructuous expenditure incurred on account of enforced idleness of staff, shuttering and machinery during suspension of work and also for higher cost incurred in the purchase of material and the employment of labour subsequent, to resumption of work after the period of suspension Rs. 6,37,557. 00.
"2. Reimbursement of additional expenditure incurred due to rise in labour wages enforced by the Govt. w. e-f. 25 Apr. 73 Rs. 1,19,556. 00.
13. Reimburs
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