The main legal point established in the judgment is that an arbitral award can be set aside if it suffers from misconduct of the arbitral proceeding, lack of proper notice, and overstepping the point of reference.

JUDGMENT :

This appeal is filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter called Act, 1996) against the judgment dated 07.01.2011 passed by Sub Judge-I, Dhanbad in Misc. (Arbitration) Case No.26 of 2005 under Section 34 of Arbitration and Conciliation Act, 1996 for setting aside ex-parte award dated 20.06.2005 passed by the learned sole Arbitrator.

2. The brief facts leading to the present appeal is that the respondent/contractor was awarded a contract for construction of side support wall and roof support with pre-cast RCC slab and R.S. Joist beneath within 45 meter of railway acquired land for grand chord line at 5 Km incline of Kumardhubi Colliery by work order dated 15.10.1998 for a total work value of Rs.28,34,986.25.

3. As per the work order, the date of commencement of work was 17.08.1998 and the date of completion as per work order was 31.3.1999. Two extensions were granted up to 31.03.2000.

4. Dispute arose between the parties as the work could not be completed within stipulated time. The claimant demanded payment for the work done and also refund of security on the plea of non-settlement of said claim.

5. The respondent moved the Court under Section 11(6) of Arbitration and Conciliation Act, 1996 in Arbitration Appeal No.42 of 2003, in which Justice Satyeshwar Roy, Former Judge of Patna High Court was appointed as sole Arbitrator to give award within a period of four months from the date of entering into the said reference.

6. Finally, ex-parte arbitral award was made on 20.06.2005 for a sum of Rs.14,76,312/- with interest @ 18% from the date of passing of the said award till the time of its payment and with further direction for payment of sum of Rs.1,50,858/- without any interest and arbitration cost of Rs.30,000/-.

7. The summary of Award is as under :

8. Being aggrieved by the said award, the appellants preferred appeal under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside of ex-parte award dated 20.06.2005.

9. The Award was challenged before the learned Court below on grounds inter-alia that on 28.04.2005, notices were issued to both the parties by the arbitrator, but as per the appellants’ contention, no registered notice was received or served upon them. On 12.05.2005, the appellant was directed to file written statement, but the copy of said order was also not received as they had no knowledge about it. Finally, ex-parte arbitral award was made on 20.06.2005 for a sum of Rs.14,76,312/- with interest @ 18% from the date of passing of the said award till the date of payment. The appellant came to know about this award only when they received copy of it sent to them by courier post.

10. The learned court below formulated the following points for determination :

I. Whether proper notice has been served on the applicant for the arbitral proceeding by the learned arbitrator?

II. Whether the claim of the claimant is barred by time?

III. Whether the arbitral award is in conflict with the terms and conditions of the contract and against the public policy of India?

IV. Whether the award in question is fit to be set aside under section34 of the Act?

11. On point n