Union of India Vs. Universal Consortium of Engineers Pvt. Ltd.
EmailAppeal: Civil Misc. Petition Nos. 34058-59 of 1987.
IN
Civil Appeal Nos. 4778-79 of 1984.
(With C.M.P. Nos. 6642 – 43 of 1988)
IN
Civil Appeal Nos. 4778-79 of 1984.
(With C.M.P. Nos. 6642 – 43 of 1988)
Petitioner: Union of India
Respondent: Universal Consortium of Engineers Pvt. Ltd.
Apeal: Civil Misc. Petition Nos. 34058-59 of 1987.
IN
Civil Appeal Nos. 4778-79 of 1984.
(With C.M.P. Nos. 6642 – 43 of 1988)
IN
Civil Appeal Nos. 4778-79 of 1984.
(With C.M.P. Nos. 6642 – 43 of 1988)
Judges: RANGANATH MISRA & MURARI MOHON DUTT, JJ
Date of Judgment: Mar 08, 1988
Head Note:
ARBITRATION
Arbitrator appointed by the Court by its order of 21st November, 1984 – Clause 25 of the Agreement stipulated that the sole arbitrator should be the nominee of the Chief Engineer or the administrative head and if such nominee was not the arbitrator , no arbitration was to take place – When the Court appointed the arbitrator, the provisions of clause 25 were not intended to be complied – The challenge to the award dismissed – Award directed to be made rule of the Court.
Held:
|”&” |
JUDGEMENT:
O R D E R
1. In Civil Appeal Nos. 4778-79 of 1984 this Court on November 21, 1984, directed the disputes to be referred to the sole arbitration of Mr. Sudhamoy Basu, a retired Judge of the Calcutta High Court. Pursuant to the directions contained in that order Mr. Basu has now filed his award. The claimant-respondent in the appeals has asked the awards to be made rule of the Court and the appellant, Union of India, has asked for setting aside of the same.
2. Two grounds have been raised in support of the stand that the awards should be set aside:-
(1) Clause 25 of the Agreement containing the arbitration clause provided -“It is also a term of this contract that no person other than a person appointed by such Chief Engineer or administrative head of the C.P.W.D., as aforesaid should act as arbitrator and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs.50,000/- (Rupees fifty thousand) and above, the arbitrator shall give reason for the award.”
(2) There was a counter claim for Rs. 26.80 lakhs but the award is silent about the same.
3. From the extracted part of clause 25 it is clear that the sole arbitrator should be the nominee of the Chief Engineer or the administrative head of the C.P.W.D. and if such nominee was not the arbitrator, no arbitration was to take place. Appointment made by this Court by order dated 21st November, 1984, of a person other than a nominee of Chief Engineer or the administrative head as contemplated in clause 25 was obviously not within the purview of the clause. We are of the view that when a retired Judge of the Calcutta High Court was appointed as the sole arbitrator, the provisions of clause 25 were not intended to comply. The order made by this Court also did not indicate that the sole arbitrator was to give reasons in support of his awards.
4. There is a statement in the Awards to the effect:
Both sides in course of their arguments agreed that the points of dispute between the parties need not be answered separately by me but I should indicate whether I have jurisdiction to entertain the counter claims preferred by the respondents.
5. There is some dispute as to whether such an agreement has been made before the Arbitrator and in support of this stand taken in the affidavit filed on behalf of the Union of India, a letter from the counsel appearing for the Union of India before the learned arbitrator has been produced.
6. The letter of the Advocate addressed to the Executive Engineer of the CCDIII C.P.W.D. Calcutta reads thus:
“I confirm having told you when you met me yesterday that as far as my recollection goes it was never agreed in the course of arguments that the points of dispute need not be answered separately and also that whatsoever was agreed to were recorded by the learned Arbitrator in the Minutes of the Meetings.”
7. It is well settled that record of judicial proceedings are to be accepted as correct and if there is any error the authority whose proceedings are challenged. Besides the advocate who was appearing before the Arbitrator is not very clear in his stand. Ordinarily the advocate should have filed an affidavit to support the stand. In such circumstances we cannot hold that the statement incorporated in the Awards does not correctly reflect what transpired in the proceedings.
8. Coming to the next objection raised on behalf of the Union of India we find that the award refers to the counter claims. We may extract the relevant portion from the Awards:
“I hold and award that after taking into consideration and setting off the allowable claims for deduction and counter claims made by the respondent (appellant herein) the claimant to be entitled to a sum of Rs. 26,80,000/- from the respondent…….”.
9. The Arbitrator was, therefore, cognizant of the fact that there were counter claims and in view of the fact that parties had agreed that the different heads of claims need not be separately dealt with, the Arbitrator was entitled to award a consolidated amount in favour of the claimant after taking into consideration the claim and the counter claims. This is what seems to have been done in these cases.
10. When parties agreed and this Court appointed a retired Judge of the Calcutta High Court to act as Arbitrator it was obviously accepted that the learned Judge would hear the parties and come to a fair conclusion. The grounds on which the challenge has been raised to the awards do not merit consideration.
11. We accordingly overrule the objections and direct that the Awards be made rule of the Court. The interest awarded would not run beyond that date of the Awards in view of the clear provision of the Arbitration Act. If the award is satisfied within two months from today there will be no interest from the date of the award. Failing such payment, interest shall run from the date of the award till the amount is paid or recovered at the rate of 10 per cent per annum .
Petition dismissed.
1. In Civil Appeal Nos. 4778-79 of 1984 this Court on November 21, 1984, directed the disputes to be referred to the sole arbitration of Mr. Sudhamoy Basu, a retired Judge of the Calcutta High Court. Pursuant to the directions contained in that order Mr. Basu has now filed his award. The claimant-respondent in the appeals has asked the awards to be made rule of the Court and the appellant, Union of India, has asked for setting aside of the same.
2. Two grounds have been raised in support of the stand that the awards should be set aside:-
(1) Clause 25 of the Agreement containing the arbitration clause provided -“It is also a term of this contract that no person other than a person appointed by such Chief Engineer or administrative head of the C.P.W.D., as aforesaid should act as arbitrator and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs.50,000/- (Rupees fifty thousand) and above, the arbitrator shall give reason for the award.”
(2) There was a counter claim for Rs. 26.80 lakhs but the award is silent about the same.
3. From the extracted part of clause 25 it is clear that the sole arbitrator should be the nominee of the Chief Engineer or the administrative head of the C.P.W.D. and if such nominee was not the arbitrator, no arbitration was to take place. Appointment made by this Court by order dated 21st November, 1984, of a person other than a nominee of Chief Engineer or the administrative head as contemplated in clause 25 was obviously not within the purview of the clause. We are of the view that when a retired Judge of the Calcutta High Court was appointed as the sole arbitrator, the provisions of clause 25 were not intended to comply. The order made by this Court also did not indicate that the sole arbitrator was to give reasons in support of his awards.
4. There is a statement in the Awards to the effect:
Both sides in course of their arguments agreed that the points of dispute between the parties need not be answered separately by me but I should indicate whether I have jurisdiction to entertain the counter claims preferred by the respondents.
5. There is some dispute as to whether such an agreement has been made before the Arbitrator and in support of this stand taken in the affidavit filed on behalf of the Union of India, a letter from the counsel appearing for the Union of India before the learned arbitrator has been produced.
6. The letter of the Advocate addressed to the Executive Engineer of the CCDIII C.P.W.D. Calcutta reads thus:
“I confirm having told you when you met me yesterday that as far as my recollection goes it was never agreed in the course of arguments that the points of dispute need not be answered separately and also that whatsoever was agreed to were recorded by the learned Arbitrator in the Minutes of the Meetings.”
7. It is well settled that record of judicial proceedings are to be accepted as correct and if there is any error the authority whose proceedings are challenged. Besides the advocate who was appearing before the Arbitrator is not very clear in his stand. Ordinarily the advocate should have filed an affidavit to support the stand. In such circumstances we cannot hold that the statement incorporated in the Awards does not correctly reflect what transpired in the proceedings.
8. Coming to the next objection raised on behalf of the Union of India we find that the award refers to the counter claims. We may extract the relevant portion from the Awards:
“I hold and award that after taking into consideration and setting off the allowable claims for deduction and counter claims made by the respondent (appellant herein) the claimant to be entitled to a sum of Rs. 26,80,000/- from the respondent…….”.
9. The Arbitrator was, therefore, cognizant of the fact that there were counter claims and in view of the fact that parties had agreed that the different heads of claims need not be separately dealt with, the Arbitrator was entitled to award a consolidated amount in favour of the claimant after taking into consideration the claim and the counter claims. This is what seems to have been done in these cases.
10. When parties agreed and this Court appointed a retired Judge of the Calcutta High Court to act as Arbitrator it was obviously accepted that the learned Judge would hear the parties and come to a fair conclusion. The grounds on which the challenge has been raised to the awards do not merit consideration.
11. We accordingly overrule the objections and direct that the Awards be made rule of the Court. The interest awarded would not run beyond that date of the Awards in view of the clear provision of the Arbitration Act. If the award is satisfied within two months from today there will be no interest from the date of the award. Failing such payment, interest shall run from the date of the award till the amount is paid or recovered at the rate of 10 per cent per annum .
Petition dismissed.
