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2014 Supreme(Gau) 946

Gauhati High Court
L.S. Jamir, J.
Union of India - Appellant
Versus
Hindustan Metal Refining Works (P.) Ltd. - Respondent
RFA No. 15 of 2011
Decided On : 01-07-2014

Advocates:
For the Appellant : Mr. Vanlalnghaka.
For the Respondent: Mr. M.Zothankhuma and Mr. Lalfakawma.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 34 - Micro, Small and Medium Enterprises Development Act, 2006 - Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 - Arbitration award - Fail to deposit 75% of award - Erred in law -Application was devoid of any merit and failure to deposit 75% of award as required - He submits that arbitration award was beyond scope of letter of reference dated as lie sole arbitrator has considered matter involving other claims as can be detected from arbitral award dated - It is submission of learned CGC that learned arbitrator framed as many as 14 issues for determination and had come to conclusion without giving any reasons and had proceeded to hear claims - This would indicate that learned sole arbitrator had passed impugned award on basis of pre-determined conclusions and had therefore acted in a very bias manner - Learned Addl. District judge had also failed to appreciate this fact and had seriously erred in law and therefore arbitral award dated as well as judgment and order dated is liable to set aside and quashed - Held, A court may be justified in remitting an award if same is erroneous on face of it - Court held that an error of law on face of award would mean that one can find in award or a document actually incorporated thereto stating reasons for a judgment some legal proposition which are basis of award and which can be said to be erroneous - It was ruled therein that an arbitrator being a creature of agreement - Apex Court held that plausible view taken by arbitrator shall not be interfered with unless view of arbitrator is vitiated by a manifest error on face of award or is wholly improbable or perverse - In view of law laid down by Supreme Court as cited above has urged that impugned award has been vitiated by manifest error of law on face of it and hence impugned order and arbitral award are liable to be set aside - Present appeal as well as other materials available on record has been considered - Further on a consideration of relevant laws in force as well as ratio laid down by hon’ble Supreme Court as well as by this court this court does not find any infirmity in arbitral award dated as well as in judgment and order dated - Appeal has been dismissed

1. This appeal is directed against the judgment and order dated 28.2.2011 passed by the learned Addl. District & Sessions Judge, Aizawl in Arbitration Case No. 2 of 2007 as well as the Arbitral Award dated 24.11.2006 passed by the sole arbitrator in Arbitration Dispute Pertaining to CA No. CE(P) Psk-33 of 1993-94.

2. Heard Mr. Vanlalnghaka, learned CGC appearing for the appellant as well as Mr. M. Zothankhuma, learned senior counsel assisted by Mr. Lalfakawma, learned counsel appearing for the respondent.

3. Mr. Vanlalnghaka, learned CGC submits that the Arbitration Case No. 2 of 2007 was dismissed on the ground that the application was devoid of any merit under section 34 of the Arbitration and Conciliation Act, 1996 and failure to deposit 75% of the award as required under the Micro, Small and Medium Enterprises Development Act, 2006. He submits that the arbitration award was beyond the scope of the letter of reference dated 29.6.2004 as t lie sole arbitrator has considered the matter involving other claims as can be detected from the arbitral award dated 24.11.2006. The said award is not based on any available evidence.

He also submits that the learned Addl. District & Sessions Judge, Aizawl had dismissed the application of the appellant without going into details of the case. The learned court had misread the provisions of law and facts. It is the submission of the learned CGC that the learned arbitrator framed as many as 14 issues for determination and had come to the conclusion without giving any reasons and had proceeded to hear the claims. This would indicate that the learned sole arbitrator had passed the impugned award on the basis of pre-determined conclusions and had, therefore, acted in a very bias manner. The learned Addl. District judge had also failed to appreciate this fact and had seriously erred in law and, therefore, the arbitral award dated 24.11.2006 as well as the judgment and order dated 28.2.2011 is liable to set aside and quashed. The learned court while passing the judgment and order dated 28.2.2011 has taken a one sided and bias view of the matter and has not taken into consideration that the reasons for delayed completion of abutment was exclusively attributable to the respondent inasmuch as the respondent has submitted faulty designs and drawings which had led the appellant to request the respondent for rectification and during which process considerable length of time was consumed. The abutments were to be completed with the bearings which was supposed to be supplied by the respondent. The bearings could not be supplied by the respondent on time and this had lead to delay in completion of the abutments and, therefore, the appellant cannot be faulted for the same. Further, as per the respondent’s time and progress chart, the work was to be completed on 24.4.1995. The flood came only on 17.5.1995. This would show that had the respondent provided the necessary requirements on time, the work would have been completed much before the flood had come, i.e., 17.5.1995. Therefore, the whole responsibility of not completing the work fails squarely due to the inefficiency and callousness on the part of the respondent and, therefore, it was not correct to hold that time is of no more essence of the contract and the appellant was held to be the defaulter. He also submits that the learned Addl. District Judge had discussed the issue as to whether the damaged should fall under the accepted risk but had failed to come to a decision on the same. While admitting that the incomplete bridge (73.12% completed) was washed away by the flood, however, such an event could have been avoided if the bridge was standing on its own legs after being completed on time. While the bridge was washed away there was only erection of super structure and deck casting was still to be commenced. Under the circumstances, the bridge was easily washed away by the flood. The incompletion of the work beyond the scheduled time was due to the fau


















































































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