The main legal point established in the judgment is that the Arbitration Act, 1996 does not permit the Court to sit as an Appellate Court to find defects in the award. Additionally, the Arbitrator has the power to award interest pendente lite when the agreement between the parties does not prohibit it, and the fees payable to the Arbitrator are within the purview of reference between the parties and cannot be questioned in an application filed under Section 34 of the Arbitration and Conciliation Act.

JUDGMENT :

[Sambasiva Rao Naidu, J.]

1. Being aggrieved by the Judgment and Decree of I Additional Chief Judge, City Civil Court, Secunderabad, dated 15-03-2018 in Arbitration O.P.No.101 of 2010 by which their request for setting aside the Award dated 09-08-2007 passed by the learned Arbitrator in respect of Claim No.7 and costs of Arbitration was negatived, the petitioners in the said Arb.O.P.No.101 of 2010 and respondents in Arbitration application No.7 of 2004 preferred the present Civil Miscellaneous Appeal on various grounds:

2. Before going into the merits of the appeal and grounds on which the present appeal is filed, it would be necessary to look into the details of said Arbitration Application, Award passed by the learned Arbitrator, petition in Arbitration O.P., and order therein.

3. Prior to 1990, the Railway Board took a decision to run the trains on a track free from harsh sounds, bumps and jerks which occur at the joints of rails. A policy was evolved to join the rails through welding process so that there will not be any joint between the rails, which generally cause sounds, bumps etc., A Transport system consisting stanchion rakes and chute system was required for completing the above task. Therefore, the Railways called for tenders for developing such transport system. The respondent No.1 in the appeal participated in the tender and the same was accepted, an agreement was entered into between appellant and respondent No.1 herein on 05-02-1990 and that respondent No.1 has completed the said work.

4. It further shows that in view of the successful completion of the above work, the appellant herein has entrusted similar work to respondent No.1 on 07-08-1990. He has completed the work and handed over one stanchion rake on 24-11-1990 and another stanchion rake on 02-01-1991 and other equipment on 15-01-1991. The Appellant herein proposed the rates quoted in the first agreement dated 05-02-1990, but respondent No.1 did not agree, thereby, he was called for negotiations on 07-04-1992. After negotiations, the appellant adopted the same rates as per agreement dated 05-02-1990 and issued acceptance letter. Respondent No.1 protested the same but accepted the proposal by his letter dated 24-02-1992 subject to review of the rates. It was the grievance of respondent No.1 that in spite of his repeated demands, the appellant without any final measurements and final bill sent record of measurements on 09-02-1999. Not satisfied with the said measurements, he got issued a legal notice to the appellants on 15-11-2000 seeking reference to an Arbitrator. Appellants vide letter dated 29-12-2000 refused his proposal for appointment of Arbitrator. Respondent No.1 filed A.A.No.296 of 2001 on 07-12-2001 at Hon’ble High Court, Delhi, on the assumption that since the Railway Board is at Delhi, he should file an application at Delhi. His application was returned by the Hon’ble Delhi High Court for filing before the appropriate Court. Then respondent No.1 filed Arbitration Application vide A.A.No.7 of 2004 before the Erstwhile combined High Court of Andhra Pradesh. By an order dated 13-01-2004, a learned Single Judge of the said Court appointed the respondent No.2 herein as sole Arbitrator. Respondent No.1 filed his claim statement raising different claims. The claims of respondent No.1 were resisted by the appellants herein by way of a counter filed before the Arbitrator. The appellants have submitted their reply to each and every claim raised by respondent No.1.

5. The learned Arbitrator having heard both parties and after considering the documents, passed an award on 09-08-2007 holding that respondent No.1 is entitled to Rs.43,11,916-60 with interest @ 12 % per annum from 15-05-1991. It appears from the Award that the fee of the Arbitrator was fixed as Rs.25,00,000/- to be shared by both parties. By that time, already a sum of Rs.1,00,000