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2018 Supreme(Raj) 404

IN THE HIGH COURT OF RAJASTHAN
DINESH MEHTA, J.
STATE OF RAJASTHAN - Appellant
Vs.
ISHWAR CHAND GUPTA - Respondent
Civil First Appeal No. 40 of 1990
Decided On : 09-01-2018

Advocates Appeared:
For the Appellant :Mr. N.S. Rajpurohit, Advocate.
For the Respondent:Mr. S.G. Ojha, Advocate.

An arbitral award cannot be set aside merely for being non-speaking, unless required by the arbitration agreement, deed of submission, or an order of the Court.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - GROUNDS - MISCONDUCT OF ARBITRATOR - NON-SPEAKING AWARD - INTEREST ON AWARD - ESTOPPEL.

Fact of the Case:

The State of Rajasthan challenged an order of the District Judge making an arbitral award a rule of the Court. The award was passed in a dispute between the State and a contractor regarding the manufacture and supply of tiles and bricks. The State argued that the award was non-speaking and did not conform to the principles of adjudication, and that the arbitrator had misconducted the proceedings by refusing to grant adjournments.

Finding of the Court:

The Court held that the award was not non-speaking and that the arbitrator had not misconducted the proceedings. It also held that the State was estopped from claiming interest on the award after the date of the award, as it had not challenged the award on this ground in its objections to the application to make the award a rule of the Court.

Issues: 1. Whether the arbitral award was non-speaking and did not conform to the principles of adjudication? 2. Whether the arbitrator had misconducted the proceedings by refusing to grant adjournments? 3. Whether the State was estopped from claiming interest on the award after the date of the award?

Ratio Decidendi: 1. An arbitral award need not contain reasons, unless required by the arbitration agreement, deed of submission, or an order of the Court. 2. The grounds for setting aside an award are limited to those specified in Section 30 of the Arbitration Act, 1940, which do not include refusal to grant adjournments. 3. A party who has not challenged an award on a particular ground in its objections to the application to make the award a rule of the Court is estopped from raising that ground later.

Final Decision: The appeal and cross-objections were dismissed.

JUDGMENT :

Dinesh Mehta, J.

The present appeal under Section 96 of the Code of Civil Procedure has been preferred by the appellant-State of Rajasthan against the judgment dated 11.10.1989 passed by learned District Judge, Sri Ganganagar, whereby the award dated 31.03.1983 passed by the sole arbitrator Mr. K.L. Bhatia has been made rule of the Court.

2. Though, instant appeal under Section 96 of the Code of Civil Procedure challenging an order passed by the Court, making an award rule of the Court is not maintainable and an appeal under Section 39 of the Arbitration and Conciliation Act, 1940 ought to have been filed, nevertheless, as the present appeal had been admitted and is pending consideration before this Court since 1990, it would not be appropriate to dismiss it on this count.

3. In view of the above, the present appeal, though filed under Section 96 of the Code of Civil Procedure is being decided within the contours and parameters of Section 39 read with other provisions of the Arbitration Act, 1940.

4. Assailing the order dated 11.10.1989, Mr. N.A. Rajpurohit, learned counsel appearing for the State submitted that the Court below has seriously erred in making the award dated 31.03.1983 as a rule of the Court, despite substantial objections raised by the appellant regarding the award. He further submitted that the award passed by the learned arbitrator was absolutely non-speaking and did not conform to the principles of adjudication of the disputes.

5. Before adverting to the arguments advanced by Mr. Rajpurohit, it would be appropriate to narrate the facts in a nutshell: An agreement came to be executed between the appellant - State and the respondent - Contractor Ishwar Chand Gupta being agreement number - 45, for the manufacture and supply of 'Kacchi' tiles and bricks at killa near RD-262-L of Suratgarh Branch. Due to delay in providing the land and other reasons, the work could be commenced in time and despite extension granted the contractor abandoned the work giving rise to a dispute between the contractor and the State Government, for which, the former requested referring of the dispute to an arbitrator. In pursuance of such request, the Superintendent Engineer - Mr. K.L. Bhatia was appointed as a sole arbitrator to adjudicate the same.

6. During the arbitral proceedings, the appellant - State had lodged their counter claim seeking an amount of Rs. 36,240/-, for the delay in execution of work. The Claim lodged by the contractor as well as the counter claim submitted by the State of Rajasthan came to be decided by the sole Arbitrator vide award dated 31.03.1983, in a rather slipshod manner, vide an unreasoned order.

7. The relevant part of the aforesaid order is reproduced below :-

"After hearing, examining and considering statements of both the parties and the oral and documentary evidence produced before me by each of them, and having given due consideration to all the facts, records, documents and arguments with due care, I made my award as follows :-

1. Claims put forth by Shri Ishwarchand Gupta.

S. No.

Particulars of claim

Amount Claimed

Amount Admitted

1.

Payment of the final bill recorded at page 93 of measurement book No. 271.

800.00

800.00

2.

Cost of 3,01,750 Nos. calculated @ Rs. 82/25p% Nos.

24,818.93

9,177.00

3.

Carriage of 767.21 tonnes of slack coal from places other than specified in the contract agreement.

13,896.45

10,908.25

4.

Supply of clean tibba sand and mixing of the same with the local clay.

32,062.50

Nil

5.

Refund of cost of 124.16 tonnes of slack coal.

11,174.40

Nil

6.

Refund of Rs. 600/- deducted with respect to earnest money under other supply orders.

600.00

600.00

7.

Refund of royalty recovered in excess.

4,553.57

4,553.57

8.

Refund of security deposit deducted from the running bills.

25,000.
































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