Punjab Housing Development Board & Another Vs. Ludhiana Builders & Engineers (P) Ltd.
EmailAppeal: Civil Appeal No. 2499 of 2001
(Arising out of SLP (C) No. 3303 of 2000)
(Arising out of SLP (C) No. 3303 of 2000)
Petitioner: Punjab Housing Development Board & Another
Respondent: Ludhiana Builders & Engineers (P) Ltd.
Apeal: Civil Appeal No. 2499 of 2001
(Arising out of SLP (C) No. 3303 of 2000)
(Arising out of SLP (C) No. 3303 of 2000)
Judges: D.P. MOHAPATRA & SHIVARAJ V. PATIL, JJ.
Date of Judgment: Mar 23, 2001
Head Note:
ARBITRATION
Arbitration Act, 1940
Sections 30, 33 – Setting aside of award – Parties appearing before Arbitrator and filing claims and counter claims – Award made – No adjudication of counter claim. Held that Award suffered from manifest error. Award set aside and remitted to Arbi-trator for adjudication.
Held:
The parties appeared before the Arbitrator and filed their re-spective claims/counter claims. In the circumstances the Arbitra-tor was duty bound to adjudicate on the claims made by the re-spondent-contractor as well as the counter claims raised by the appellant-board. The Award is totally silent about the fate of the counter claims raised by the appellants. Indeed, there is no mention of the counter claim at all in the Award. The Arbitrator should have adjudicated on the counter claims filed by the ap-pellants. Thus the Award suffers from a manifest error due to non-consideration of the counter claims raised by the appellants against the respondents. (Paras 5, 6)
Cases Reffered:
1. Indian Oil Corporation Ltd. v. Amritsar Gas Service and Ors. (JT 1990 (4) SC 601) (Para 6)
JUDGEMENT:
ORDER
1. Leave granted.
2. Heard Ms. Rachna Joshi Issar, learned Counsel for the appell-ants.
3. There is no appearances on behalf of the respondent despite service of notice.
4. This appeal is directed against the Order dated 26th May, 1999 of the Punjab and Haryana High Court in C.R. No. 1679 of 1997 dismissing the revision petition filed by the appellants. In the revision petition, the appellants had assailed the order of the trial court rejecting the objections raised by the appellants against the Award and making the Award a rule of the court. On certain disputes relating to the work having arisen between the parties the matter was referred to the then Superintending En-gineer, Punjab Housing Development Board for adjudication. The respondent filed his claim before the Arbitrator and the appell-ants while disputing the claims raised by the respondents raised certain counter claims against them. The Arbitrator passed the Award dated 5.1.1989 holding that a sum of Rs. 1,18,887/- was due to be paid by the appellants to the respondent. Though it is stated in the Award that the Arbitrator has considered the plead-ings of both the parties and also the oral and documentary evi-dence produced by them the Award does not show that the counter claims filed by the appellants were considered by the Arbitrator. In paragraph 4 of the objection filed by the appellants to the Award the appellants raised the question of non-consideration of their counter claims amounting to Rs. 2,03,951/-. This position was reiterated in paragraph 5. The trial court confirmed the Award ignoring the aforementioned objections taken by the appell-ants. The order passed by the trial court was confirmed by the Appellate Court. In paragraph 5 of the revision petition filed before the High Court the appellants specifically took the ground that the misconduct of the Arbitrator is quite apparent from the record because the Arbitrator did not decide the counter claims raised by the appellants while deciding the claims raised by the respondent. The revision petition was dismissed. Hence this appeal.
5. From the arbitration Clause incorporated in Clause 25-A of the Agreement it is clear that all disputes in any way arising in connection or out of the instrument are to be referred for arbi-tration to the named Arbitrator i.e. Superintending Engineer of the Board. The parties appeared before the Arbitrator and filed their respective claims/counter claims. In the circumstances the Arbitrator was duty bound to adjudicate on the claims made by the respondent-contractor as well as the counter claims raised by the appellant-board. The Award is totally silent about the fate of the counter claims raised by the appellants. Indeed, there is no mention of the counter claim at all in the Award. The Appellate Court and the High Court also failed to take note of the objec-tions raised by the appellants in this regard.
6. This Court in the case of Indian Oil Corporation Ltd. v. Amrit-sar Gas Service and Ors. (JT 1990 (4) SC 601) held that refusal to consider the counter claim for the only reason stated in the Award that they were not placed before the court when the refer-ence was made is not supportable. However, in that case as the counter claim was not being pressed by the appellant this Court did not examine the matter further. In the case in hand, the Arbitrator should have adjudicated on the counter claims filed by the appellants. Thus the Award suffers from a manifest error due to non-consideration of the counter claims raised by the appell-ants against the respondents.
7. Determination of the amount due to be paid by the appellants to the respondent is also inter-linked with determination of the counter claims made by them. Therefore, the Award passed by the Arbitrator and the orders of the courts below confirming the same are liable to be set aside and the matter remitted to the Arbi-trator for adjudication of the counter claims filed by the ap-pellants. It is made clear that the Arbitrator will not reopen the adjudication of the claims made by the respondent on merits, but will only consider the merits of the counter claims raised by the appellants and then decide the amount which is to be paid by one party to the other. This appeal is disposed of in the manner aforementioned. No costs.
1. Leave granted.
2. Heard Ms. Rachna Joshi Issar, learned Counsel for the appell-ants.
3. There is no appearances on behalf of the respondent despite service of notice.
4. This appeal is directed against the Order dated 26th May, 1999 of the Punjab and Haryana High Court in C.R. No. 1679 of 1997 dismissing the revision petition filed by the appellants. In the revision petition, the appellants had assailed the order of the trial court rejecting the objections raised by the appellants against the Award and making the Award a rule of the court. On certain disputes relating to the work having arisen between the parties the matter was referred to the then Superintending En-gineer, Punjab Housing Development Board for adjudication. The respondent filed his claim before the Arbitrator and the appell-ants while disputing the claims raised by the respondents raised certain counter claims against them. The Arbitrator passed the Award dated 5.1.1989 holding that a sum of Rs. 1,18,887/- was due to be paid by the appellants to the respondent. Though it is stated in the Award that the Arbitrator has considered the plead-ings of both the parties and also the oral and documentary evi-dence produced by them the Award does not show that the counter claims filed by the appellants were considered by the Arbitrator. In paragraph 4 of the objection filed by the appellants to the Award the appellants raised the question of non-consideration of their counter claims amounting to Rs. 2,03,951/-. This position was reiterated in paragraph 5. The trial court confirmed the Award ignoring the aforementioned objections taken by the appell-ants. The order passed by the trial court was confirmed by the Appellate Court. In paragraph 5 of the revision petition filed before the High Court the appellants specifically took the ground that the misconduct of the Arbitrator is quite apparent from the record because the Arbitrator did not decide the counter claims raised by the appellants while deciding the claims raised by the respondent. The revision petition was dismissed. Hence this appeal.
5. From the arbitration Clause incorporated in Clause 25-A of the Agreement it is clear that all disputes in any way arising in connection or out of the instrument are to be referred for arbi-tration to the named Arbitrator i.e. Superintending Engineer of the Board. The parties appeared before the Arbitrator and filed their respective claims/counter claims. In the circumstances the Arbitrator was duty bound to adjudicate on the claims made by the respondent-contractor as well as the counter claims raised by the appellant-board. The Award is totally silent about the fate of the counter claims raised by the appellants. Indeed, there is no mention of the counter claim at all in the Award. The Appellate Court and the High Court also failed to take note of the objec-tions raised by the appellants in this regard.
6. This Court in the case of Indian Oil Corporation Ltd. v. Amrit-sar Gas Service and Ors. (JT 1990 (4) SC 601) held that refusal to consider the counter claim for the only reason stated in the Award that they were not placed before the court when the refer-ence was made is not supportable. However, in that case as the counter claim was not being pressed by the appellant this Court did not examine the matter further. In the case in hand, the Arbitrator should have adjudicated on the counter claims filed by the appellants. Thus the Award suffers from a manifest error due to non-consideration of the counter claims raised by the appell-ants against the respondents.
7. Determination of the amount due to be paid by the appellants to the respondent is also inter-linked with determination of the counter claims made by them. Therefore, the Award passed by the Arbitrator and the orders of the courts below confirming the same are liable to be set aside and the matter remitted to the Arbi-trator for adjudication of the counter claims filed by the ap-pellants. It is made clear that the Arbitrator will not reopen the adjudication of the claims made by the respondent on merits, but will only consider the merits of the counter claims raised by the appellants and then decide the amount which is to be paid by one party to the other. This appeal is disposed of in the manner aforementioned. No costs.
