IMPORTANT POINT
The court upheld the arbitrator's award, emphasizing limited grounds for judicial interference in arbitration matters.

JUDGMENT :

M.G. Priyadarsini, J.

The parties, issue and impugned Award in both these Civil Miscellaneous Appeals are one and the same, therefore, these Civil Miscellaneous Appeals are being disposed of by way of this Common Judgment.

2. The Civil Miscellaneous Appeal No.788 of 2009 is filed under Section 37 of the Arbitration and Conciliation Act, 1996 by appellant-contractor aggrieved by the Decree and Order dated 03.03.2004 in Original Petition No.943 of 2000 passed by the learned III Additional Chief Judge, City Civil Court, Hyderabad (for short ‘learned Chief Judge’) wherein application filed by M/s.Tolani Brothers (hereinafter referred as ‘Contractor’) to set aside Award dated 07.06.2000 passed by learned Sole Arbitratorrespondent No.2, was dismissed.

3. The Civil Miscellaneous Appeal No.789 of 2009 is filed under Section 37 of the Arbitration and Conciliation Act, 1996 by appellant-contractor aggrieved by the Decree and Order dated 03.03.2004 in Original Petition No.140 of 2001 passed by the learned Chief Judge wherein application filed by Union of India (Air Force) (hereinafter referred as ‘Union of India’) to set aside Award dated 07.06.2000 passed by learned Sole Arbitrator-respondent No.2 in respect of its Claim Nos.2 to 4, was dismissed.

4. For the sake of convenience, hereinafter, the parties will be referred as per their array before the learned Sole Arbitrator.

5. Contractor’s tender for power capacitors to electrical installation at Air Force Station, Hakeempet was accepted by Union of India for a sum of Rs.1,77,860/- on 29.05.1992. Work order was issued on 30.05.1992 with date of commencement as 08.06.1992 and date of completion as 07.10.1992. Accordingly, work was executed to the full satisfaction of Union of India. Union of India has intimated Contractor vide Letter dated 26.11.1993 that the power capacitors at WR44R and SV and ATC are defective. Contractor has procured power capacitors from M/s.Arunanand Capacitors at Balanagar, Hyderabad. Contractor addressed a Letter dated 26.11.1993 to M/s.Arunanand capacitors to attend the alleged defects. There was no response as the said firm became defunct. Union of India vide Letter dated 21.03.1996 made a demand to deposit Rs.1,84,500/- and through its letter dated 10.04.1996 circulated to various MES formations to hold payment of Contractor to the extent of Rs.1,84,500/-. Union of India issued another demand letter dated 15.10.1996 for Rs.1,44,251/-. Contractor denied any liability as the equipment provided was of choice of Union of India. All the installations were approved by the Union of India vide their Letter dated 30.09.1992 and dated 03.10.1992 and issued certificate of completion vide Letter dated 29.10.1992. The rectifications which were pointed out at the time of issuance of the completion certificate are not related to capacitors. They were of minor nature regarding lamps, saddles etc. Since the dispute arose between Contractor and Union of India, the learned Sole Arbitrator-respondent No.2 was appointed for settlement of disputes, in terms of Agreement.

6. Notices were issued to the parties. After giving reasonable opportunities to both sides and after duly considering the facts and consequences of the case, the learned Arbitrator passed an Award dated 07.06.2000 and awarded a sum of Rs.1,84,500/- in favour of Union of India towards the alleged extra cost for rectification of defectsreplacement of defective work at risk and costs of Contractor along with interest at the rate of 10 percent on Claim No.1 with effect from 01.01.1995 till the date of realization was awarded. Claim Nos.2 and 3 of Union of India were rejected. Learned Sole Arbitrator-respondent No.2 herein rejected all claims made by Contractor.

7. Aggrieved by the same, Contractor filed Original Petition No.943 of 2000 before the learned Chief Judge and the same was dismissed vide Decree and Order dated 03.03.2004. Aggrieved by the same, Contractor has filed the Civil Miscellaneous Appeal No.788 of