Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: 6.4.2009
Date of Order: April 21, 2009
CS(OS) No. 1907A/1988
%
M/s Nav Nirman Engg. &
Contractors & Ors. ... Plaintiff/Petitioner
Through: Ms. Manjula Gandhi, Advocate
Versus
Vivekanand Mahila College
& Ors. ... Defendants/Respondents
Through: Mr. Atul Kumar, Advocate
IA no. 5205/89 in CS(OS) No. 1160/1989 (Objections)
%
M/s Nav Nirman Engg. &
Contractors & Ors. ... Plaintiff/Petitioner
Through: Ms. Manjula Gandhi, Advocate
Versus
Vivekanand Mahila College
& Ors. ... Defendants/Respondents
Through: Mr. Atul Kumar, Advocate
JUSTICE SHIV NARAYAN DHINGRA
1 . Whether reporters of local papers may be allowed to see the judgment? Yes.
2. To be referred to the reporter or not? Yes.
3. Whether judgment should be reported in Digest? Yes.
JUDGMENT
By this order, I shall dispose of an application under Section 14/17 of the
Indian Arbitration Act 1940 for making the award as Rule of the Court and the petition
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 1 of 8
under Section 30/33 made by the respondent/objector raising objections against the
award.
2. The parties had entered into a contract for construction of Vivekanand
College building. After construction of the building a dispute arose between the parties
and an OMP 51/1984 was filed in this Court whereby the petitioner challenged
appointment of Shri Swami Dyal as the Sole Arbitrator to decide the dispute. The said
petition was compromised and the parties agreed that Shri Swami Dyal should cease to
act as Arbitrator and the Vice Chancellor of Delhi University should appoint an
independent Arbitrator to adjudicate the dispute. The Vice Chancellor of the Delhi
University vide letter dated 15.5.1986 appointed Prof. M.P.Singh as the Arbitrator. Both
the parties filed their claims, counter claims before the Arbitrator and ultimately the
Arbitrator concluded the hearing and gave an award dated 5.12.1987. The petitioner
filed an application under Section 14/17 on 16/27.7.1988 praying that the Court should
direct the Arbitrator to file award in the Court and the award should be made Rule of the
Court. Notice of the petition was served upon the parties and ultimately the award was
got filed in the Court by Delhi University through an advocate and the notice of the award
was sent to the parties. It transpires from the record that the Arbitrator after giving the
award had sent it to the Vice Chancellor and later on Vice Chancellor told the parties
that arrangement was being made for filing of award in the Court. After notice was sent
to the parties respondent filed objections against the award and assailed it on the ground
that there was an error apparent on the face of the award as the learned Arbitrator had
not published the award within the period prescribed under law. The Arbitrator entered
reference on 3.5.1986 and the award was purportedly made on 5.4.1989. The other
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 2 of 8
ground taken was that the Arbitrator had not issued a notice of making and publishing of
the award to the parties. The award was not filed in the Court properly, it should have
been filed by the Arbitrator but it was got filed through advocate. The other objections
taken are regarding those claims which have been allowed by the learned Arbitrator
stating that the Arbitrator allowed these claims on the basis of mere conjectures and
surmises. The petitioner/contractor never submitted running account bills and the bills
were not certified and checked by the architect. The Arbitrator wrongly allowed claim
against the additional items, no payment against additional items could have been made
by the Objector unless they were certified by the architect. There was no certification of
architect in respect of the additional items. The Objector also raised objection against
grant of 9% interest by the Arbitrator stating that there was no provision for awarding of
interest in the agreement between the parties.
3. A prayer was made that the award be set aside. All the objections raised
by the objector were refuted by the petitioner, who supported the award. On the basis of
objections and response, following issues was framed by this Court:
1. Whether the award submitted by Shri M.P.Singh, sole arbitrator, filed
in Court on 5.4.1989 is liable to be set aside/modified for the
objections raised by the respondent in IA No. 5205/89 ? – OPO
2. Whether the objections filed by the respondent are within time? –
OPO
Whether the objections have been signed by a duly authorized
3.
person? – OPO
4. Relief.
4. A perusal of award shows that out of nine claims made by the claimant,
the learned Arbitrator rejected claim no.2, 3, 6 & 8. Claim no. 5 was waived off by the
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 3 of 8
claimant himself and was rejected on this ground. The Arbitrator only allowed claim no.1
for Rs.35,377.21, claim no.4 for Rs.11,429.66, claim no.9 to the extent of Rs.15,000/-
and claim no.7, regarding interest. The learned Arbitrator held that claimant would be
entitled to 9% simple interest from the date amount became due till the amount was
paid. The learned Arbitrator ruled that cost of the arbitration shall be borne by both the
parties 50% each.
ISSUE No.1
5. It is submitted by the Objector/Respondent that the period of limitation for
publishing the award was four months from the date of entering the reference. The
award was neither published nor made within this statutory period of four months. None
of the parties had asked for extension of time. The proceedings were concluded in
October, 1987 however, the award published was on 5.4.1989 therefore, the award was
liable to be set aside. It is also argued that the learned Arbitrator did not issue notice of
making the award or publishing of the award to the parties and the award was not filed in
the Court by the duly authorized person. The other ground for assailing the award is that
the learned Arbitrator has not given reasons for allowing claims no. 1, 4, 7 & 9. Claim
No.4 was based on some items of work which were outside the terms of the contract, the
Objector had never asked the contractor to do these works and never agreed to pay for
the same. It is submitted that payment of bills was to be made to the petitioner only after
approval/certification of those bills by the architect, no payment was permissible in
absence of certificate by the architect. The petitioner never submitted the running
account bills in respect of items of work mentioned in claims no. 4 & 9 to the Objector
and therefore no payment was liable to be made, the award passed by the Arbitrator
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 4 of 8
was therefore invalid. It is also stated that the award in respect of claim no.9 was
without any basis and was not based on evidence. The petitioner had failed to rectify
the defects in the building within the specified period of 15 days and the Objector had to
get the defects removed on its own; under these circumstances, the award under claim
no. 9 was bad in law.
6. There is no doubt that the Arbitrator had not given its award within the
period of four months which is the period prescribed for making an award however, the
petitioner and the respondent both had been participating in the proceedings before the
Arbitrator even after expiry of the prescribed period of four months. It is not the case of
Objector that it stopped participating in the proceedings or raised objection before the
Arbitrator that four months had expired and it was not prepared to extend the period
beyond it. Where the parties keep on participating in the arbitration proceedings without
raising any objection of expiry of period of four months, a presumption is there that both
the parties have given tacit consent to continue with the proceedings of the arbitration
and the period of four months stand extended due to this tacit consent of the parties.
The objection regarding delay in giving the award in such case cannot be entertained. I
get support for this view from decision given in State of Punjab v. Hardyal (1985) 2 SCC
629. This objection of the respondent/objector is therefore liable to be rejected and is
hereby rejected.
7. A perusal of the arbitration proceedings would show that the Arbitrator
had given full opportunity to the parties to lead evidence and to place before it all the
record. The learned Arbitrator after going through the record and the evidence of both
the sides gave its award in respect of each claim. There is no doubt that the award is a
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 5 of 8
non-speaking award but that cannot be a ground for setting aside of an award. There
was no binding on the Arbitrator to give a speaking award. The Arbitrator had given its
award based on the evidence. Where the award is a non-speaking award, the Court
cannot enter into the mind of the Arbitrator and speculate as to what would have been
the reasons with the arbitrator for giving the award and Court cannot determine whether
the conclusions are right or wrong. It is not open to the Court to attempt to probe the
mental process of the arbitrator by which the arbitrator reached conclusions. Giving of
non-speaking award in itself is not a ground for setting aside of the award neither it
amounts to misconduct on the part of the Arbitrator. I, therefore find that this objection
raised by the respondent/objector is not tenable.
8. This Court while considering the objections raised against an award does
not act as a Court of appeal and cannot re-appreciate the evidence adduced before the
Arbitrator. The Arbitrator is the final judge of the facts and law and unless it is shown
that the Arbitrator mis-conducted himself, the award cannot be set aside. The
misconduct should be of such nature as the award was given under extraneous
influence or the arbitrator totally ignored the evidence and award was without any basis
or he ignored the law of land and passed its award contrary to settled law. It is not the
case of the respondent that the arbitrator had not given full opportunity to the respondent
of hearing or that the award of the arbitrator was not based on evidence.
9. The plea of the respondent that it had not asked for extra items to be
done by the contractor is belied from the agreement entered into between the parties. A
perusal of agreement would show that agreement itself provided that the contractor
would execute all such extra items as are told to him from time to time and the payment
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 6 of 8
in respect of extra item would be made at CPWD rates plus profit of the contractor.
There is no provision in the contract between the parties that the payment in respect of
extra items is not to be made unless it is approved by the architect. The dispute in fact
arose only because extra items executed by the contractor at the instance of the
architect/respondent were not paid for. The arbitrator has considered the material
produced before it and taken a conscious and reasonable decision regarding all the
claims. I find no merits in the objections raised by the petitioner on this count. In view of
my above discussion the issue is decided in favour of the petitioner and against the
objector/respondent.
ISSUE NO.2
10. It is not disputed that notice of filing of the award was directed to be
issued by this Court to the parties on 4.5.1989. This notice was received by the Objector
th
on 18.5.1989. The period of 30 days for filing objections expired on 17 June, 1989.
The Courts were closed for summer vacation from 29.5.1989 to 1.7.1989. The limitation
period was not to run for the purposes of institution of Civil Suits and Criminal Cases
nd
during the summer vacation. 2 July, 1989 was a Sunday and objections were filed on
3.7.1989. The objections filed by the respondent were thus within time. The issue is
decided accordingly.
ISSUE NO. 3
11. The objections were filed by the respondent through Mr. J.R.Jindal the
then ‘Treasure’ of respondent college. Under the rules of society and under
memorandum of association ‘Treasure’ of society was a duly authorized person to sign
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 7 of 8
and verify the proceedings on behalf of the society. The objector proved rules of the
society and Memorandum of Association as Exh. RW1/4 and RW1/5. Appointment of
Mr. J.R.Jindal who signed the petition as ‘Treasurer’ was approved by the governing
body in its minutes of meeting dated 31.5.1989 (RW1/3). I, therefore, hold that the
objections were filed by the authorized person.
12. In view of above discussion I find that this petition under Section 30/33
made by the respondent/objector is liable to be dismissed and is hereby dismissed. The
petition made by the petitioner under Section 14/17 of the Arbitration Act is hereby
allowed. The award is made rule of the Court. The petitioner shall be entitled to costs of
its petition. I consider that respondent has filed frivolous objections against the petition.
A cost of Rs.25,000/- is awarded to the petitioner.
April 21, 2009 SHIV NARAYAN DHINGRA, J.
vn
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 8 of 8
Date of Reserve: 6.4.2009
Date of Order: April 21, 2009
CS(OS) No. 1907A/1988
%
M/s Nav Nirman Engg. &
Contractors & Ors. ... Plaintiff/Petitioner
Through: Ms. Manjula Gandhi, Advocate
Versus
Vivekanand Mahila College
& Ors. ... Defendants/Respondents
Through: Mr. Atul Kumar, Advocate
IA no. 5205/89 in CS(OS) No. 1160/1989 (Objections)
%
M/s Nav Nirman Engg. &
Contractors & Ors. ... Plaintiff/Petitioner
Through: Ms. Manjula Gandhi, Advocate
Versus
Vivekanand Mahila College
& Ors. ... Defendants/Respondents
Through: Mr. Atul Kumar, Advocate
JUSTICE SHIV NARAYAN DHINGRA
1 . Whether reporters of local papers may be allowed to see the judgment? Yes.
2. To be referred to the reporter or not? Yes.
3. Whether judgment should be reported in Digest? Yes.
JUDGMENT
By this order, I shall dispose of an application under Section 14/17 of the
Indian Arbitration Act 1940 for making the award as Rule of the Court and the petition
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 1 of 8
under Section 30/33 made by the respondent/objector raising objections against the
award.
2. The parties had entered into a contract for construction of Vivekanand
College building. After construction of the building a dispute arose between the parties
and an OMP 51/1984 was filed in this Court whereby the petitioner challenged
appointment of Shri Swami Dyal as the Sole Arbitrator to decide the dispute. The said
petition was compromised and the parties agreed that Shri Swami Dyal should cease to
act as Arbitrator and the Vice Chancellor of Delhi University should appoint an
independent Arbitrator to adjudicate the dispute. The Vice Chancellor of the Delhi
University vide letter dated 15.5.1986 appointed Prof. M.P.Singh as the Arbitrator. Both
the parties filed their claims, counter claims before the Arbitrator and ultimately the
Arbitrator concluded the hearing and gave an award dated 5.12.1987. The petitioner
filed an application under Section 14/17 on 16/27.7.1988 praying that the Court should
direct the Arbitrator to file award in the Court and the award should be made Rule of the
Court. Notice of the petition was served upon the parties and ultimately the award was
got filed in the Court by Delhi University through an advocate and the notice of the award
was sent to the parties. It transpires from the record that the Arbitrator after giving the
award had sent it to the Vice Chancellor and later on Vice Chancellor told the parties
that arrangement was being made for filing of award in the Court. After notice was sent
to the parties respondent filed objections against the award and assailed it on the ground
that there was an error apparent on the face of the award as the learned Arbitrator had
not published the award within the period prescribed under law. The Arbitrator entered
reference on 3.5.1986 and the award was purportedly made on 5.4.1989. The other
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 2 of 8
ground taken was that the Arbitrator had not issued a notice of making and publishing of
the award to the parties. The award was not filed in the Court properly, it should have
been filed by the Arbitrator but it was got filed through advocate. The other objections
taken are regarding those claims which have been allowed by the learned Arbitrator
stating that the Arbitrator allowed these claims on the basis of mere conjectures and
surmises. The petitioner/contractor never submitted running account bills and the bills
were not certified and checked by the architect. The Arbitrator wrongly allowed claim
against the additional items, no payment against additional items could have been made
by the Objector unless they were certified by the architect. There was no certification of
architect in respect of the additional items. The Objector also raised objection against
grant of 9% interest by the Arbitrator stating that there was no provision for awarding of
interest in the agreement between the parties.
3. A prayer was made that the award be set aside. All the objections raised
by the objector were refuted by the petitioner, who supported the award. On the basis of
objections and response, following issues was framed by this Court:
1. Whether the award submitted by Shri M.P.Singh, sole arbitrator, filed
in Court on 5.4.1989 is liable to be set aside/modified for the
objections raised by the respondent in IA No. 5205/89 ? – OPO
2. Whether the objections filed by the respondent are within time? –
OPO
Whether the objections have been signed by a duly authorized
3.
person? – OPO
4. Relief.
4. A perusal of award shows that out of nine claims made by the claimant,
the learned Arbitrator rejected claim no.2, 3, 6 & 8. Claim no. 5 was waived off by the
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 3 of 8
claimant himself and was rejected on this ground. The Arbitrator only allowed claim no.1
for Rs.35,377.21, claim no.4 for Rs.11,429.66, claim no.9 to the extent of Rs.15,000/-
and claim no.7, regarding interest. The learned Arbitrator held that claimant would be
entitled to 9% simple interest from the date amount became due till the amount was
paid. The learned Arbitrator ruled that cost of the arbitration shall be borne by both the
parties 50% each.
ISSUE No.1
5. It is submitted by the Objector/Respondent that the period of limitation for
publishing the award was four months from the date of entering the reference. The
award was neither published nor made within this statutory period of four months. None
of the parties had asked for extension of time. The proceedings were concluded in
October, 1987 however, the award published was on 5.4.1989 therefore, the award was
liable to be set aside. It is also argued that the learned Arbitrator did not issue notice of
making the award or publishing of the award to the parties and the award was not filed in
the Court by the duly authorized person. The other ground for assailing the award is that
the learned Arbitrator has not given reasons for allowing claims no. 1, 4, 7 & 9. Claim
No.4 was based on some items of work which were outside the terms of the contract, the
Objector had never asked the contractor to do these works and never agreed to pay for
the same. It is submitted that payment of bills was to be made to the petitioner only after
approval/certification of those bills by the architect, no payment was permissible in
absence of certificate by the architect. The petitioner never submitted the running
account bills in respect of items of work mentioned in claims no. 4 & 9 to the Objector
and therefore no payment was liable to be made, the award passed by the Arbitrator
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 4 of 8
was therefore invalid. It is also stated that the award in respect of claim no.9 was
without any basis and was not based on evidence. The petitioner had failed to rectify
the defects in the building within the specified period of 15 days and the Objector had to
get the defects removed on its own; under these circumstances, the award under claim
no. 9 was bad in law.
6. There is no doubt that the Arbitrator had not given its award within the
period of four months which is the period prescribed for making an award however, the
petitioner and the respondent both had been participating in the proceedings before the
Arbitrator even after expiry of the prescribed period of four months. It is not the case of
Objector that it stopped participating in the proceedings or raised objection before the
Arbitrator that four months had expired and it was not prepared to extend the period
beyond it. Where the parties keep on participating in the arbitration proceedings without
raising any objection of expiry of period of four months, a presumption is there that both
the parties have given tacit consent to continue with the proceedings of the arbitration
and the period of four months stand extended due to this tacit consent of the parties.
The objection regarding delay in giving the award in such case cannot be entertained. I
get support for this view from decision given in State of Punjab v. Hardyal (1985) 2 SCC
629. This objection of the respondent/objector is therefore liable to be rejected and is
hereby rejected.
7. A perusal of the arbitration proceedings would show that the Arbitrator
had given full opportunity to the parties to lead evidence and to place before it all the
record. The learned Arbitrator after going through the record and the evidence of both
the sides gave its award in respect of each claim. There is no doubt that the award is a
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 5 of 8
non-speaking award but that cannot be a ground for setting aside of an award. There
was no binding on the Arbitrator to give a speaking award. The Arbitrator had given its
award based on the evidence. Where the award is a non-speaking award, the Court
cannot enter into the mind of the Arbitrator and speculate as to what would have been
the reasons with the arbitrator for giving the award and Court cannot determine whether
the conclusions are right or wrong. It is not open to the Court to attempt to probe the
mental process of the arbitrator by which the arbitrator reached conclusions. Giving of
non-speaking award in itself is not a ground for setting aside of the award neither it
amounts to misconduct on the part of the Arbitrator. I, therefore find that this objection
raised by the respondent/objector is not tenable.
8. This Court while considering the objections raised against an award does
not act as a Court of appeal and cannot re-appreciate the evidence adduced before the
Arbitrator. The Arbitrator is the final judge of the facts and law and unless it is shown
that the Arbitrator mis-conducted himself, the award cannot be set aside. The
misconduct should be of such nature as the award was given under extraneous
influence or the arbitrator totally ignored the evidence and award was without any basis
or he ignored the law of land and passed its award contrary to settled law. It is not the
case of the respondent that the arbitrator had not given full opportunity to the respondent
of hearing or that the award of the arbitrator was not based on evidence.
9. The plea of the respondent that it had not asked for extra items to be
done by the contractor is belied from the agreement entered into between the parties. A
perusal of agreement would show that agreement itself provided that the contractor
would execute all such extra items as are told to him from time to time and the payment
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 6 of 8
in respect of extra item would be made at CPWD rates plus profit of the contractor.
There is no provision in the contract between the parties that the payment in respect of
extra items is not to be made unless it is approved by the architect. The dispute in fact
arose only because extra items executed by the contractor at the instance of the
architect/respondent were not paid for. The arbitrator has considered the material
produced before it and taken a conscious and reasonable decision regarding all the
claims. I find no merits in the objections raised by the petitioner on this count. In view of
my above discussion the issue is decided in favour of the petitioner and against the
objector/respondent.
ISSUE NO.2
10. It is not disputed that notice of filing of the award was directed to be
issued by this Court to the parties on 4.5.1989. This notice was received by the Objector
th
on 18.5.1989. The period of 30 days for filing objections expired on 17 June, 1989.
The Courts were closed for summer vacation from 29.5.1989 to 1.7.1989. The limitation
period was not to run for the purposes of institution of Civil Suits and Criminal Cases
nd
during the summer vacation. 2 July, 1989 was a Sunday and objections were filed on
3.7.1989. The objections filed by the respondent were thus within time. The issue is
decided accordingly.
ISSUE NO. 3
11. The objections were filed by the respondent through Mr. J.R.Jindal the
then ‘Treasure’ of respondent college. Under the rules of society and under
memorandum of association ‘Treasure’ of society was a duly authorized person to sign
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 7 of 8
and verify the proceedings on behalf of the society. The objector proved rules of the
society and Memorandum of Association as Exh. RW1/4 and RW1/5. Appointment of
Mr. J.R.Jindal who signed the petition as ‘Treasurer’ was approved by the governing
body in its minutes of meeting dated 31.5.1989 (RW1/3). I, therefore, hold that the
objections were filed by the authorized person.
12. In view of above discussion I find that this petition under Section 30/33
made by the respondent/objector is liable to be dismissed and is hereby dismissed. The
petition made by the petitioner under Section 14/17 of the Arbitration Act is hereby
allowed. The award is made rule of the Court. The petitioner shall be entitled to costs of
its petition. I consider that respondent has filed frivolous objections against the petition.
A cost of Rs.25,000/- is awarded to the petitioner.
April 21, 2009 SHIV NARAYAN DHINGRA, J.
vn
CS(OS) No. 1907A/1988 & IA no. 5205/89 in CS(OS) No. 1160/1989 Page 8 of 8