Decided on November 25,1983



Yogeshwar Dayal, J. - (1.)-
(2.)PETITION under Section 14 of the Arbitration Act 1940 on behalf of M/s. D.K. Enterprises against employees of State Insurance Corporation (E.S.I. Corporation)-the Arbitrator Smt. A.K. Sparkar filed the award and proceedings in this court.
On notice being issued to the filing of the award, the ESI Corporation filed the objections to the award dated 29-1-82. The objections themselves were filed on 5-7-82. It appears that E.S.I. Corporation was served with the notice of the filing of the award on 18-5-82.

In the objections that part of the award was challenged, wherein the arbitrator did not adjudicate upon the counter claim. No objections were filed on the merits of the claim, which was substantiated by the petitioner before the Arbitrator.

On the objections of the Corporation, the following Issues were framed by order dated 16-2-83 :

(1) Whether the objection petition (2569/82) has been signed and filed by a duly authorised ? (person)

(2) Whether the objection petition required verification ? If so, what is the effect of it having not been verified ?

(3) Whether the objection petition is barred by time, and

(4) Whether the decision of Arbitrator regarding the counter claim of the objection is perverse ?

(5) Whether the Arbitrator was guilty of misconduct in making the award relating to counter claim of the objector and that part of the award is liable to be set aside ?

(6) Relief.

It is conceded by the learned counsel for the petitioner that the objections are within time.

I am not deciding Issues Nos. 1 & 2 which have been framed in view of the objections of the petitioner, as I am deciding issue Nos. 4 & 5 on merits against the objector.

Regarding issue Nos. 4 & 5 that the Arbitrator committed in misconduct in declining to adjudicate upon the counter claim filed on behalf of the Corporation. It will be noticed that the disputes were referred to the learned Arbitrator in view of the communication dated 10/13 November, 1980 from the Director (Administration) E.S.I. Corporation to the Sole Arbitrator. So far as the relevant part of the counter claim is concerned, paragraph 2 of the letter dealt with it and it reads as under :

"2. It is further informed that the ESI Corporation lias also concurred without prejudice to the rights raised to legal objection against the claim preferred and to prefer their counter claim."

That the Arbitrator entered upon reference, the counter statement was filed on behalf of the Corporation, which itself shows that the claim related to breach of contract by the claimant. The ESl Corporation is resorting to risk purchase and it is also clear that when at the time reference Was made, the risk purchase has not been effected, therefore, no claim has arisen by the time the reference was made by the Director Administration E.S.I. Corporation to the Arbitrator.

(3.)IT is true that during the pendency of the proceedings before the Arbitrator, the supplementary counter statement was filed on behalf of the ESl Corporation on the face of it shows that loss occurred much after the reference to the Arbitrator. The Arbitrator had julisdiction to enter upon reference either by reference by the parties or through court.
In this case, as per the arbitration clause, the reference was made by the Director (Administration) E.S.I. Corporation. At the stage, when reference was made, there was no counter-claim of the Corporation; therefore, the learned Arbitrator rightly declined to adjudicate upon it and held the claim as premature.

As stated earlier, there is no misconduct whatsoever. The result is that issue Nos. 4 & 5 are decided against the objector and in view of the claims, it is held that the Award is not vitiated in any manner as of the counter claims filed on behalf of ESl Corporation.

The result is that the objection filed on behalf of ESl Corporation are dismissed and the award of the Arbitrator dated 29-1-82 is made Rule of the Court, and the decree is passed in terms thereof. The claimant would also be entitled to its cost of the present proceedings.


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