MUNDA BUILDERS Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is an application for setting aside the award dated the 22nd of September, 1978. The petitioner entered into a contract dated the 25th of January, 1965, with the defendant represented by the General Manager, South Eastern Railway, for certain construction work upon the terms and conditions contained in the said agreement. The said agreement contained the usual arbitration clause in Railway Contracts. As disputes arose regarding the claim of the petitioner and in spite of invoking the arbitration clause the respondent did not act and, therefore, the petitioner made an application under Section 20 of the Arbitration Act, 1940, at Ranchi in the Subordinate Judges' Court being Transfer Suit No. 140 of 1974. The said application was dismissed in or about June, 1976, on the ground that the Ranchi Court had no jurisdiction. Thereafter, the petitioner instituted an application under Section 20 of the Arbitration Act, 1940, before this Court and by an order dated the 19th of November, 1976, the said agreement was directed to be filed and disputes were ordered to be referred to arbitration in terms of the arbitration agreement and after the appointment of the Arbitrators, parties filed their statements and counter-statements and the petitioner alleged that the respondent, Railway made delay in filing their counter-statements. It appears that at the hearing before the Arbitrators the petitioner accepted the total unpaid final bills and the total amount held in deposit by the Railway as furnished by the defendant in its counter-statements as correct, that is, the total sum of final unpaid bills of Rs. 35,620 and total security deposit of Rs. 37,830. The parties agreed before the Arbitrators that the sum of Rs. 2,046,44 p. should be kept out of the said arbitration proceedings. It is alleged that the defendant expressly accepted as correct that the amount due to the plaintiff was in all Rs. 68,450/- in its counter-statement of facts but the defendant claimed to have deducted in all Rs. 35,620.90 p, on account of penalty, price of the empty cement bags, empty drums, steel etc. In the hearing before the Arbitrators the plaintiff accepted the deductions of all except several items, that is, the plaintiff accepted the deduction for Rupees 649,78 p. as being duly deducted. It is submitted that the defendant failed to produce any evidence at the hearing in respect of its right to impose penalty against the plaintiff or non-return of empty cement bags. Therefore, it is submitted by the petitioner that the award of the Arbitrators deducting the said amount of penalty and price of empty cement bags is perverse and without any evidence. The award was made on the 22nd of September, 1978, in favour of the plaintiff for a sum of Rs. 36,159, as would appear from the award and the notice of filing of the said award under Section 14 (2) of the Arbitration Act, 1940, was served upon the plaintiff on the 31st of October, 1979, and the petitioner challenged the award on the said motion, that is, the award was arbitrary and deductions were made from the claim of the plaintiff without any evidence. The award was perverse and being based on no evidence. The present application was filed on the 20th of November, 1979, and after filing of affidavit, the matter was heard.

(2.) MR. D. K. De, appearing with MR. Banjan Dutta, for the petitioner, submitted that the award is bad on the face of it as the Arbitrator has deducted from the petitioner the penalty and the price of the bag without any evidence being tendered and produced before the Arbitrators, He submitted that the Arbitrators misconducted themselves and the proceedings by making the award without any evidence admitting the counterclaim of the Respondent in respect of the penalty and the price of the empty cement bags. MR. De, submitted that in view of the fact of the admitted amount to be deducted from the claim of the petitioner other amount could not be deducted as there was no material or evidence produced by the Respondent before the Arbitrators and, therefore, this is a misconduct which the Arbitrators have committed on the face of the award. It appears from the statement of claim and the annexures thereto that the petitioner claimed a total sum of Rs. 1,41,618/- with interest. MR. De submitted that if the counter claim of the Respondent is admitted without any evidence, then it must be held that the Arbitrators have misconducted the said proceedings. From the award and the documents filed by the Arbitrators in the judgment upon award matter, there does not. appear to be any documentary evidence produced and tendered before Arbitrators in respect of the said counter-claim of the Respondent but it cannot be said whether the Respondent produced any oral evidence or any document before the Arbitrators on which they were satisfied as to the claim of the Railways in respect of the said penalties and the value of the cement bags. The award is a non-speaking award which clearly stated that the Arbitrators had heard the parties and examined the documents and evidence produced before them and thereafter, they made the award prima facie seems to be quite in order. MR. De cited a Single Bench decision of the Delhi High Court in Alkaram v. Delhi Development Authority, AIR 1980 NOC 47, at page 21 where it has been held that the Court can examine whether there was evidence on record in support of the findings and the Court will not look into the sufficiency or quality of the evidence. It was further held that the Court can correct clerical and typographical errors but cannot correct and modify the award under Section 15,