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2009 Supreme(J&K) 587
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
J.P. Singh, J.
Union Of India - Appellant
Versus
Darshan Kumar Sharma - Respondent
File No. AA 57/1998 & CMP No. 48/1997
Decided On : 31 December, 2009
Advocate For Appellant: Ajay Sharma
Advocate For Respondent: Anil Khajuria
The central legal point established in the judgment is that a non-speaking award issued without evidence or material, and violating the express term of the contract requiring the arbitrator to give reasons in support of the award, is considered invalid.
Headnote:
Contract - Supply of Firewood/Charcoal/Limequick - CD-17, Clause 21(g) - Jammu and Kashmir Arbitration Act - The court discussed the non-speaking award issued without evidence or material, the violation of the express term of the contract requiring the arbitrator to give reasons in support of the award, and the applicability of previous cases. The court found the award to be illegal and set it aside.
Fact of the Case:
Dispute between parties arising from a contract for the supply of firewood/charcoal/limequick at FSD ASC Udhampur. Union of India seeks direction to make the award rule of the court, while Darshan Kumar Sharma prays for its setting aside.
Finding of the Court:
The court found the award to be illegal due to the arbitrator's omission to give reasons, failure to maintain minutes of the proceedings, and issuing the award without recording evidence. The court decided in favor of Darshan Kumar Sharma and set aside the award.
Issues: The issues were whether the award is liable to be set aside on the ground of misconduct and whether the award suffers from any illegality.
Ratio Decidendi: The court held that the non-speaking award issued without evidence or material, and violating the express term of the contract requiring the arbitrator to give reasons in support of the award, renders it invalid.
Final Decision: The court set aside the award and dismissed Union of India's application seeking to make the award rule of the court.
2. Union of India, through its CMP No.48/1997 seeks direction to make the Award, Rule of the Court, whereas Darshan Kumar Sharma, through his Arbitration Application No.57/1998, prays for its setting aside.
3. The resolution of the disputes raised in the above two Petitions, depends on the findings on the following issues to which the parties were put vide Courts order of July 06, 2000:-
"i) Whether the award is liable to be set-aside on the ground of misconduct. If so, how? O.P.Objector.
ii) Whether the award suffers from any illegality? O.P.Objector."
4. The parties have opted not to lead evidence by Affidavits or otherwise, despite being allowed opportunity, so to do in terms of the aforementioned order.
5. I have considered the submissions made by learned counsel for the parties and perused the records of the Arbitrator, which were summoned pursuant to the order passed during the currency of the proceedings.
6. Before considering the submissions made by learned counsel for the parties, the Award made by the Arbitrator and Clause 21(g) of the Contract Agreement entered into by the parties, needs to be noticed. The award reads thus:-
"AWARD
Whereas certain differences arose between the Claimant and Respondent out of a contract in writing Deed no.CD-17 for the year 1995-96 made between the Respondent of the one part and the claimant of the other part and whereas the said differences were referred to me for determination;
Now I, IC-34024W Lt Col R.C.Verma of 244 Medium Regiment C/O 56 APO having taken upon myself the burden of the reference and having duly considered the matter to me;
Do hereby make and publish this my final Award in writing of and concerning the matter so referred to me as follows:-
iii) I award and direct that the Respondent shall pay to Claimant a total sum of Rs.97,332.59 (Rupees ninety seven thousand three hundred and thirty two and paise fifty nine only).
(Total recovery due Rs.1,18,142.13 minus security deposit of Rs.19,100/- & Rs.1709.54 value of sup made by contractor during month of Mar 96 not paid to him.
iv) The security deposit amounting to Rs.19,100.00 (Rupees Nineteen thousand one hundred only) be re-appropriated and adjusted against the dues to be recovered from the Respondent.
v) I Award and dirrect that the parties bear their own costs of the suit as well as of the proceedings before me.
As Witness my hand this 10th day of February 1997.
| Sd/- (R.C.Verma) Lt. Col 2IC Field 244 Medium Regiment 10 Feb 97 ARBITRATOR. |
Witness
1. In the presence of IC-47595N Maj Ajay Sharma
Copy to Award forwarded to :-
FSD ASC Udhampur
M/s. Darshan Kumar Sharma
Vill & PO : Manpa
The & Distt : Udhampur (J&K)
The copy of the Award is forwarded in lieu of the notice of the making, signing and publishing of the Award by me on the date shown hereinabove.
| Sd/- (R.C.Verma) Lt. Col. 2IC |
ARBITRATOR"
Clause 21(g) of the Contract Agreement reads thus:-
"It is also term of the contract that in case where the amount of claim of dispute is Rs.30,000/- and above the arbitrator shall give reasons for his award."
7. Perusal of the Award quoted hereinabove reveals that the learned Arbitrator has not given any reason(s) to justify payment of Rs 97,332.50 by Darshan Kumar Sharma to Union of India and in providing for re-appropriation and adjustment of Darshan Kumar Sharmas Security Deposit amounting to Rs.19,100/- by Union of India.
8. Omission of the learned Arbitrator to give reasons, in support of the Award, as he was required so to do, in terms of Clause-21(g) of the Contract Agreement, the error committed by him in issuing the Award contravening essential term of the Contract between the parties, thus becomes apparent on the face of the records.
9. That apart, the rec
