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M/S. SITA RAM AND SONS versus EXECUTIVE ENGINEER & ORS

High Court of Punjab and Haryana, Chandigarh

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M/s. Sita Ram and sons v. Executive engineer & Ors - CR-5783-1998 [2006] RD-P&H 2487 (21 April 2006)

Civil Revision No.5783 of 1998 1

IN THE HIGH COURT OF PUNJAB & HARYAN AT CHANDIGRH

Civil Revision No.5783 of 1998

Date of decision: April 5,2006

M/s. Sita Ram and sons V. Executive engineer and others CORAM: HON'BLE MR.JUSTICE VINEY MITTAL
Present:Shri Amit Jain, Advocate, for the petitioner.

Shri Siddarath Batra, Assistant Advocate General,Haryana, for the respondents.

Viney Mittal,J.

On a request made by the learned counsel for the petitioner,at the out set, the present civil revision is treated to be a petition filed under Article 227 of the Constitution of India.

The petitioner before this Court is a Contractor. He has challenged the order dated September 4,1998 passed by the learned Additional District Judge whereby the appeal filed by the present respondents has been allowed by the appellate Court and as a result thereof, the order dated October 24,1996 passed by the learned trial Court has been set aside. The learned trial Judge had dismissed the objections filed by the present respondents and consequently made award dated April 7,1993 as a rule of the court.

The Contractor had been awarded some work and on completion thereof had submitted final bills along with his claim for extra work. There was a dispute between the parties with regard to the entitlement of the Contractor. Consequently, the matter was referred to an Arbitrator for adjudication as per the agreement between the parties, The Arbitrator through his award dated April 7,1993 upheld the claim of the Contractor and awarded an amount of Rs.1,92,359.06 to the Contractor.

The Contractor filed an application under sections 14 and 17 of Civil Revision No.5783 of 1998 2

the Arbitration Act,1940 ( hereinafter referred to as the "Act") for making the aforesaid award as a rule of the Court. Objections were filed by the respondents. It was claimed by them that the Arbitrator had misconducted himself and proceedings and,therefore, the award of the Arbitrator could not be made the rule of the rule.

The learned trial Court rejected the objections filed by the respondents. It was held that the award dated April 7,1993 passed by the Arbitrator was legal and valid. Consequently,the aforesaid award was ordered to be made rule of the Court.

The objector-respondents took up the matter in appeal. The learned appellate court held that the claim of the Contractor which had been accepted by the Arbitrator was not justified. Consequently, the appeal of the Objector was accepted and the order of the trial court was set aside.

I have heard Shri Amit Jain,learned counsel appearing for the petitioner and Shri Siddarath Batra, learned Assistant Advocate General, Haryana appearing for the respondents and with their assistance have also gone through the record of the case.

Shri Amit Jain, learned counsel appearing for the appellant has argued that the order of the appellate court was clearly based upon misconception of law inasmuch as the Arbitrator had duly considered the entire evidence available on the record and on that basis had accepted the claim made by the Contractor. Learned counsel has also argued that a civil court could not sit in appeal over the award and could not have gone into the justifiability or otherwise of the claim made by the Contractor. It has further been maintained by the learned counsel that the Arbitrator was not required in law to give reasoned award since no such stipulation was contained in the arbitration agreement. In support of the aforesaid contention, learned counsel has placed reliance upon two judgments of the Hon'ble Supreme Court of India in State of Rajasthan V. M/s.Nav Bharat Construction Company JT 2005(9) SC 173 and Rajendra Construction Company V. Maharashtra Housing and Area Development Authority and others JT 2005(7) SC 388.

On the other hand Shri Siddarath Batra, learned counsel appearing for the respondents has supported the order passed by the learned Civil Revision No.5783 of 1998 3

Additional District Judge and has argued that since the award in question had not given any reasons to reject the various documents relied upon by the Objector, therefore, the award itself was liable to be set aside. According to the learned counsel, the award in question is a result of non-application of mind by the Arbitrator and the aforesaid fact would itself amount to a legal misconduct by the Arbitrator. Shri Batra has also relied upon a judgment of the Apex Court in Dandasi Sahu V. State of Orissa (1990)1 Supreme Court Cases 214 to support the aforesaid contention.

I have duly considered the aforesaid rival contentions of the learned counsel for the parties. In my considered view, the present revision petition deserves to be accepted.

The Apex Court in Rajendra Construction Company's case (supra) had relied upon a judgment of the constitution bench rendered in Raipur Development Authority and others V. M/s.Chokhamal Contractors and others JT 1989(2) SC 285 to hold that merely on the ground that no reasons had been recorded by the Arbitrator in support of the award could not be a ground to set aside the arbitration award. It has also been held in the aforesaid judgment that unless and until the arbitration agreement itself provided that reasons are to be recorded in the award, there was no requirement of law that the arbitration award should contain the reasons. To the similar effect is the judgment rendered by the Apex Court in M/s.Nav Bharat Construction 's case (supra).

In view of the law laid down by the constitution bench in M/s.Chokhamal Contractor's case (supra) the award in question cannot be held to be illegal, in any manner, nor it can be held that merely on account of the non-mentioning of the reasons by the Arbitrator, the award in question was liable to be set aside.

I have also perused the order passed by the appellate court. I find that the appellate court had gone into the merits of the claim raised by the Contractor. This course was not open to the appellate Court. A civil court cannot sit in appeal over the merits of the controversy adjudicated by an Arbitrator. The Arbitrator is a forum chosen by the parties themselves and,as such, is free to adjudicate the controversy. Until and unless an arbitration agreement provides for spelling out the reasons in the award, Civil Revision No.5783 of 1998 4

there is no requirement of law that the Arbitrator must give reasons in his award, under the Act of 1940. In these circumstances, the order passed by the appellate court cannot be sustained.

As a consequence of the aforesaid discussion, the present petition is allowed. The order passed by the learned Additional District Judge is set aside and that of the trial court is restored with the result the award rendered by the Arbitrator shall be treated to have been made a rule of the court.

April 5,2006 (Viney Mittal )

sks Judge


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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