Back
1995 Supreme(Mad) 316
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE JAYASIMHA BABU
The Executive Engineer and Administrative Officer, Trichy
Versus
C. Srinivasa Rao & Others
O.P. No. 191 of 1995 & A. No. 1378 of 1995 in O.P. No. 809 of 1994 in C.S. No. 139 of 1994
Decided On :Decided on : 17-03-1995
For the Petitioner:V. Sundar Anand, Advocate.
For the Respondent:M.K. Kabir, Advocate.
The court cannot set aside an Arbitrator's Award unless it is based on erroneous propositions of law, the Arbitrator has misconducted himself or the proceedings, or the Award is vitiated by bias.
Headnote:
ARBITRATION - SETTING ASIDE AWARD - GROUNDS - AWARD NOT REASONED - BIAS - FACTS AND PRINCIPLES OF LAW NOT CONSIDERED - TERMINATION OF CONTRACT - LEGALITY - EMD AND SECURITY DEPOSIT - REFUND - INTEREST - RATE - ARBITRATOR'S DISCRETION.
Fact of the Case:
Defendant in C.S. 139/94 filed O.P. 191/95 to set aside the Arbitrator's Award in C.S. 139/94, filed under Sec. 20 of the Arbitration Act. The Award was made on 28.11.94. A.1378/96 in O.P. 809/94 was filed by the plaintiff in the suit for passing a decree in terms of the award.
Finding of the Court:
The court found that the Award was reasoned, there was no bias, facts and principles of law were considered, termination was illegal, EMD and security deposit were rightly ordered to be refunded, and the interest rate of 18% p.a. was not penal or usurious.
Issues: 1. Whether the Award was reasoned? 2. Whether there was bias on the part of the Arbitrator? 3. Whether the facts and principles of law were considered in the proper perspective? 4. Whether the termination was legal and valid? 5. Whether the EMD and Security Deposit ought to have been directed to be refunded? 6. Whether the Award exhibits bias and has not discussed on the points raised by the petitioner in detail? 7. Whether the interest awarded at the rate of 18% p.a. is high?
Ratio Decidendi: 1. The Award was reasoned as it gave reasons for the findings, considered documents and arguments, and reached conclusions. 2. No case of bias was made out as the Award did not disclose any bias, and due opportunity was given to parties to present their cases. 3. The contention that documents and evidence were not considered in the proper perspective was vague and contrary to the record, and the Arbitrator had the jurisdiction to consider documents and reach conclusions. 4. The termination was held to be illegal as reasons were given, law was discussed, and the Arbitrator concluded that termination without making time the essence of the contract was not valid. 5. The EMD and security deposit were rightly ordered to be refunded as the termination was illegal. 6. The Award did not exhibit bias and discussed the points raised by the petitioner in detail. 7. The interest rate of 18% p.a. was not penal or usurious, and the Arbitrator had the power to award interest.
Final Decision: The petition for setting aside the award was rejected, and a decree was passed in terms of the Award.
1. The defendant in C.S. 139/94 has filed O.P. 191/95 for setting aside the Award made by the Arbitrator appointed by this Court in C.S. 139/94, which had been filed under Sec. 20 of the Arbitration Act. The Award was made on 28.11.94. A.1378/96 in O.P. 809/94 has been filed by the plaintiff in the suit for passing a decree in terms of the award. In this order, parties are referred to with reference to their rank in the civil suit.
2. By the said Award, the arbitrator has decided the disputes that had arisen between the parties to the agreement bearing No. SEAgt. No. 9/90-91 for providing storm water drain and culvert phase 3 Navalpattu. Plaintiff/Claimants case is that his contract was illegally terminated by the defendant on 15.5.1991. The Arbitrator has found that the termination so effected was not legally tenable and has awarded a sum of Rs. 1,73,415.70 together with interest at 18% p.a. from the date of the Award till date of payment.
3. The defendant having filed a counter claim for payment of triple the value of the materials which had not been returned by the plaintiff, the Arbitrator has allowed the counter claim of the respondent to the extent of single recovery of the value of such unreturned materials from the claimant the amount being Rs. 50,945.47 Further, a sum of Rs. 3,518/- being the single recovery of the materials used in the works, has also been awarded by the arbitrator to the defendant.
4. The defendant in the suit by O.P. 191/95 has sought the setting aside of the Award inter alia on the following grounds:— that the Award is not a reasoned one; that there are traces of bias; that the facts and principles of law as also the documents were not considered by the arbitrator in the proper perspective; that the termination ought to have been held to be legal; that the EMD and Security Deposit ought not to have been directed to be refunded; that the Award exhibits bias and has not discussed on the points raised by the petitioner in detail; and that interest awarded at the rate of 18% p.a. is high.
5. The contention that the award is not a reasoned one is wholly untenable. A perusal of the Award shows that reasons have been given in support of the findings rendered by the arbitrator. The arbitrator had considered the documents placed before him, has adverted to the arguments addressed before him and then proceeded to give reasons for the conclusion arrived at.
6. As regards the contention that there are traces of bias, no case of bias is made out by the plaintiff. The Award does not disclose any bias on the part of the Arbitrator. Due opportunity has been given to the parties to place their respective cases and the evidence placed by the parties has been duly considered.
7. The contention that the Award was passed without considering the documents and other evidence in the proper perspective is not only vague but also is contrary to the record. In any event, it was within the jurisdiction of the arbitrator to consider the documents and on basis of such consideration reach his own conclusions.
8. As regards the contention that the termination ought to have been held as legal and valid, reasons have been given holding that the termination was not legal. The law bearing on this point has been adverted to and discussed and only thereafter, the arbitrator reached the conclusion that the termination, without making time the essence of the contract, was not valid. Having held so, the arbitrator has held further, that the claimant is entitled to refund of EMD and the security deposit in view of the termination itself being illegal. As regards, interest it is not in dispute that the arbitrator has the owner to award interest. The appropriate rate of interest is a matter for the arbitrator to decide, so long as it does not amount to a penalty and is not usurious. The rate of 18% p.a. awarded by the arbitrator is neither penal nor usurious.
9. None of the grounds on which the defendant has sought to have the Awar
