2008 Supreme(Del) 1058
IN THE HIGH COURT OF DELHI
HIMA KOHLI
IN THE MATTER OF : M/S R.S.AVTAR SINGH and CO. - Appellant
Versus
NATIONAL PROJECTS CONSTRUCTION CORPORATION LTD. - Respondent
I.A.No.2569/2000 in CS(OS) No.1497/1993
Decided On : 15-10-2008
Mr. Ajay Kumar, Adv.
Mr. Paritosh Budhiraja, Adv. for objector
Headnote:Arbitration Act, 1940 Sections 30 & 33 - Objections - Arbitrary award - Arbitrator derives his authority from the contract and if he acts in manifest disregard of the contract, the award given by him would be an arbitrary one - The function of the arbitrator depends upon the agreement and it is his duty to act within the limits of such an agreement - Objection raised to the effect that the arbitrator did not have jurisdiction to deal with "excepted matters" can be raised not any time as the same goes to the root of the matter, and can be taken even at the time of arguments - A dispute as to the manner in which the jurisdiction is exercised, is, an error within the Jurisdiction of the arbitrator - Non-speaking lump sum award - Not open to the court to probe the mental process of the arbitrator and speculate when no reasons have been given by the arbitrator as to what impelled him to arrive at a conclusion - Objections rejected.
This order shall dispose of the objections filed by the respondent/objector under Sections 30 and 33 of the Arbitration Act, 1940 (in short “the Act”) against an award dated 3.6.1993 passed by the sole arbitrator, Shri G.K. Saxena, wherein the learned arbitrator directed the respondent/objector to pay Rs.13,87,160/- to the petitioner/claimant in full and final settlement of all the dues and claims mentioned in its statement of claims and the counterclaims of the respondent/objector, along with the interest @ 15% per annum from 2.7.1993, to the actual date of payment of award or the date of decree whichever was earlier.
.2. In a nutshell, the facts of the case are that the respondent/ objector awarded a contract in favour of the petitioner/claimant for work of construction of four food grains godowns of total capacity of 19,580 metric tones with ancillary buildings including canteen block, lavatory block and isolation shed, which were to be constructed at Partapur at a cost of Rs.97,73,738.90 paise. The godowns were meant for use by the Food Corporation of India (FCI). The respondent/objector had undertaken the work of construction of godowns at various places on behalf of FCI and in turn, entered into a contract with the petitioner/claimant dated 6.2.1985 for a sub-contract for carrying out the aforesaid work. The period of completion for the work was stipulated as 7 months, as indicated in the letter of intent dated 17.11.1984. The stipulated date of completion of work was 16.6.1985. However, the work was not completed by the due date.
3. Disputes and differences arose between the parties with respect to the work, pursuant to which initially, Mr. T.S. Murthy was appointed as a sole arbitrator by the Chairman and Managing Director of the respondent/objector, vide letter dated 4.5.1989, to adjudicate all the disputes between the parties. The said sole arbitrator entered upon reference and gave an award dated 31.7.1990 for Rs.19,91,418/-in favour of the petitioner/claimant and against the respondent/objector. The said award was filed in this Court and notice was issued to both the parties. While the petitioner/claimant did not file any objections, however, the respondent/objector filed objections to the award which were upheld by a judgment dated 31.3.1992 passed in CS(OS) No.2464A/1990 on the ground that the sole arbitrator had mis-conducted himself in the proceedings and deprived the respondent/ objector of a reasonable opportunity of hearing.
4. The aforesaid judgment dated 31.3.1992 was challenged by the petitioner/claimant, who filed an appeal, registered as FAO(OS) No.92/1992. The said appeal was dismissed by a Division Bench, vide order dated 17.9.1992 with a direction to the respondent/objector to appoint another arbitrator within a period of 3 weeks from the date of the order. Under these circumstances, the Chairman and Managing Director of the respondent/objector passed an order dated 7.10.1992 appointing Shri G.K. Saxena as a sole arbitrator to decide the disputes and differences between the parties afresh. Shri G.K. Saxena entered into reference on 16.4.1993 and passed a non-speaking lump sum award of Rs.13,87,160/- in favour of the petitioner/claimant and against the respondent/objector, as indicated above, which is under challenge by the respondent/objector herein.
.5. In the objections filed by the respondent/objector, six grounds have been taken to assail the award, which include the ground that the learned Arbitrator did not give a reasonable opportunity to the respondent/objector and did not call for the records or peruse the documents placed on the record of the earlier proceedings. The second ground taken to assail the award is that from a bare reading of the award, it is not possible to find out which claim has been allowed and which has been dis-allowed as there were 14 claims raised by the petitioner/claimant and that the sole arbitrator acted illegally in passing the lump sum award, withou