IN THE HIGH COURT OF GAUHATI
SWAPAN CHANDRA DAS, J.
Shri Shekhar Chandra Poddar, Contractor, S/o Late Mahindra Chandra Podder, a resident of "Puspa Lodge", Khoshbagan, Agartala, West Tripura – Appellants
Vs.
The State of Tripura, Represented by the Executive Engineer, Public Works Department, Southern Division No. I, Udaipur, South Tripura – Respondent
Arb. A. 02 of 2002
Decided On: 07.03.2012
Arbitration Act - Setting Aside of Arbitral Award - The court set aside and rejected the arbitral award on improper grounds without considering the specific grounds for setting aside an award as prescribed in Section 30 of the Arbitration Act, 1940. The court's order was found to be illegal and causing immense hardship to the litigants.
Fact of the Case:
Dispute arose between the parties during the execution of a construction work. The dispute was referred to a sole arbitrator for resolution as per the agreement. The sole arbitrator passed an award, which was subsequently rejected by the court without proper consideration of the grounds for setting aside an award.
Finding of the Court:
The court's order to reject the arbitral award was found to be illegal and causing immense hardship to the litigants. The court was supposed to consider the specific grounds stated in the objection filed by the respondent and pass an order accordingly, as prescribed in Section 30 of the Arbitration Act, 1940.
Issues: Improper rejection of the arbitral award without considering the specific grounds for setting aside an award as prescribed in Section 30 of the Arbitration Act, 1940.
Ratio Decidendi: A court can interfere with an arbitral award only on the grounds specified in Section 30 of the Arbitration Act, 1940. The court's order to reject the award without proper consideration of the grounds for setting aside an award was found to be illegal and causing immense hardship to the litigants.
Final Decision: The court set aside and quashed the order rejecting the arbitral award and directed the matter to be reheard according to the provisions prescribed in the Arbitration Act, 1940, with a caution to be careful in future regarding such harsh orders in such proceedings. The matter was to be disposed of within six months.
Hon'ble Mr. Justice S.C. Das
1. This appeal, under Section 39 (vi) of the Arbitration Act, 1940, is directed against the order, dated 19.12.2001 passed by learned Civil Judge (Sr. Divn.), South Tripura District, Udaipur in Case No. T.S.(ARB)8/1995, whereby and whereunder the learned Civil Judge was pleased to set aside and reject the award, dated 21.09.2001, passed by sole Arbitrator in Arbitral Proceeding No. ARB/SB/98(36). Heard learned senior counsel, Mr. S M Chakraborty, assisted by learned counsel, Mr. Suman Bhattacharjee for the appellant and learned counsel, Mr. P Datta for the respdt.
2. Agreement No. 14/S.E-III of 1989-90 was signed between the appellant and the respdt for execution of a work namely "constriction/upgradation of S.H.C into P.H.C/construction of P.H.C building including Kitchen and Morgue" at Athorabhola under Udaipur. Because of some disputes arose between the parties, in course of execution of the work, in due course the dispute was referred to the sole Arbitrator for resolution as per the agreement. The sole Arbitrator passed award, dated 21.09.2001 and the award was placed before the learned Civil Judge, Senior Division, Udaipur, South Tripura.
3. Learned senior counsel, Mr. Chakraborty submits that the impugned order shows that a petition for condonation of delay was taken up for hearing on 19.12.2001 but on that day itself learned Civil Judge, Senior Division was pleased to pass an order in absentia of the appellant and rejected the award summarily without assigning any reason. Learned counsel, Mr. Chakrabory, further submits that the arbitral award might be set aside by Court only on specific ground as prescribed in Section 30 of the Arbitration Act, 1940, whereas in this case the Court rejected the award without looking into the provisions prescribed in the said Act and taking into consideration a letter, dated 18.01.1995 which was not at all a document for decision on the issue.
4. Learned counsel, Mr. Datta, appearing for the respdts. also criticized the order, dated 19.12.2001 on the ground that Court below did not at all consider the objection filed by the respdts against the award. Learned counsel further submits that there was no question for the respdts to file a condonation petition since the objection was filed in time and the Court below passed the order, dated 20.11.2001 on receipt of the award from Arbitrator on that date and both the parties were directed to file written objection, if any. Under such circumstances, learned counsel, Mr. Datta, submits that the order was passed most capriciously without even looking into objection raised by the respdts against the award made by the sole Arbitrator.
5. I have gone through the impugned order and the relevant record. The impugned order, dated 19.12.2001 shows that perhaps the learned Civil Judge, Senior Division has no idea at all about an arbitral preceding and he has also not gone through the provisions of law. Such a mechanical order, passed by a court of law is certainly bound to cause immense hardship and harassment to a litigant. The order was passed, on 19.12.2001 and the parties are suffering because of that order for long 12 years and the reason was the illegal order passed by the Court.
6. It appears that the respdts filed an objection under Section 30 of Arbitration Act 1940, on 4/12/2001, supplying copy of the same to the other side i.e. the present appellant. The Court was supposed to consider the grounds stated in that objection and to pass an order accordingly.
Section 30 of the Arbitration Act 1940 prescribes thus:
"Grounds for setting aside award - An award shall not be set aside except on one or more of the following grounds, namely :-
(a) That an arbitrator or umpire has misconducted himself or the proceedings:
(b) That an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35:
(c) That an award has been improperly proc
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