- (1.) This is an appeal under Section 37 of the Arbitration & Conciliation Act, 1996 (for short "the Act") directed against the order dated May 29, 2014 passed by the learned Additional District Judge, SAS Nagar, Mohali dismissing the objections of the appellants under Section 34 of the Act. The award in question was passed by the Arbitrator on July 15, 2008. The award arose out of an agreement for construction of a house. The agreement between the parties was executed on January 01, 2005 and the possession was to be delivered by the builder/developer/colonizer of the residential complex by April 25, 2005. The 1 st respondent owner raised a dispute when the construction was completed finding that the building was made not in accordance with the material and workmanship as was agreed to be constructed in replica of the building already constructed on plot No.1 opposite the plot of the disputing owner/1 st respondent.
(2.) It was urged that the 1 st respondent was not competent to agree to refer the matter to arbitration as there was no specific authorization by the 1 st appellant-colonizer. Once the agreement for referring the dispute to an Arbitrator was void and illegal then the entire arbitration proceedings and passing of the awards were also void and illegal. The Court a quo has not appreciated this aspect. Further, no proper notice was sent to the appellants for appointment of an Arbitrator and this goes to the root of jurisdiction. It was pointed out that the respondent owner admitted that he made last payment of Rs.50,000/- on January 19, 2006 and from this fact it is maintained that there was no dispute regarding anything till that date. The dispute arose when the appellant demanded money for the extra work from the owner of constructing an underground water tank while there was no provision in the agreement for providing sewerage connection. This was the duty and obligation of the person who sold the plot. It was pointed out to be one Smt. Leela Devi from whom the plot was bought by the 1 st respondent.
(3.) On this issue it is argued, the Court a quo has taken far too narrow an interpretation of the grounds of challenge under Section 34 of the Act. It was urged that the person who carried out the works did not submit any bill for the purchase of raw material which clearly suggests that the bill served for removal of defects and completion of left over work was imaginary and was obtained for a self-serving purpose. Besides, no notice was sent for joint inspection to be carried out by the architect on October 27, 2006, though in the claim petition it was so mentioned. And this lends further credence to the plea of the appellant that infact neither was there any defect nor the construction was left incomplete. Rather the claim was lodged just to extract easy money and to preempt the appellant from lodging any claim for recovery of amounts incurred for extra work done. The learned Arbitrator is accused of ignoring this fact. The Court a quo has noticed this fact but not appreciated it in its correct perspective by taking a narrow view in the matter. The estimate submitted by the architect was made on seeing the material used in plot No.1 the building which had to be duplicated. The report submitted by the architect is vague and cannot be said to have been prepared by an expert. The Arbitrator is accused of ignoring this fact and the Court a quo has not appreciated this correctly. It is claimed that this is how the builder, the contractor and the owner are divergent in their respective stands without there being any evidence of purchase of raw material on record of the arbitrator. The 1 st respondent is said to have clearly committed forgery by inserting the damage clause on account of delay in construction. The construction was not delayed and even if it was delayed it was condoned by act and conduct of the 1 st respondent by making the last payment till when no cause for grievance arose. In this manner, award of compensation of Rs.3,15,000/- could not be awarded if the respondent has made the full and final payment on January 19, 2006, which position does not point to defect or deficiency in the work of construction. It was thus to the entire satisfaction of the 1 st respondent. This aspect has also been ignored by the Arbitrator. Reference is made to the agreement (Annexure A- 1), the certified copy of which is said not to be in possession of the appellant. It is argued that the Court a quo has not appreciated that the appellant is a distinct legal entity being a private company incorporated under the Companies Act and any application created by any third party through the wife of the 2 nd appellant, before this Court, is not binding on the appellants. There was no authority with appellant No.2 Surinder Kumar to enter into an agreement on behalf of the company. Surinder Kumar admittedly was Director of the 1st appellant.;