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2007 DAILYLAW 2330 (DEL)

DDA v. SAT PAUL

2007-09-19

T S Thakur, Veena Birbal

body2007
THAKUR, J, J. ( 1 ) THIS appeal arises out of an order passed by a learned Single Judge of this Court whereby an application under Section 30/33 of the Arbitration Act, 1940 for setting aside an arbitral award dated 25th May, 1995 has been dismissed and the award made a rule of the Court. ( 2 ) DISPUTES between the parties in relation to a civil contract were referred for adjudication to the sole arbitration of Sh. L. R. Gupta, Retd. Director General, Works, PWD. A number of claims, it appear, were made by the contractor claimant before the arbitrator which were examined by the arbitrator at length culminating in an award for payment of a sum of Rs. 1,17,173/- in favour of the claimant and a sum of Rs. 37,138/- awarded in favour of the respondent/dda. The net amount payable after adjustment of the said amount was rs. 80,035/- with interest @ 12% p. a. from 23rd May, 1991 to 25th May, 1995 and @ 15% from the date 25th May, 1995 till the date of actual realization. The arbitrator had also directed return of the bank guarantee for a sum of rs. 1,00,000/- furnished by the contractor and payment of cost of Rs. 10,000/- ( 3 ) THE appellant appears to have filed objections to the award inter alia contending that the award was against the weight of evidence on record and that the arbitrator had failed to give reasons for his conclusions as required by the terms of the contract. Award of interest and costs was also challenged by the appellant. These objections did not however find favour with the learned Single judge before whom the same were argued. The learned Single Judge has by the order impugned in this appeal rejected the objections and made the award a rule of the court holding that the arbitrator had indeed given reasons in support of the findings recorded by him and that since the Court was not sitting in appeal over the award made by the arbitrator, there was no room for any interference with the same. The present appeal, as already noticed above, assails the correctness of the said order. ( 4 ) WE have heard Mr. Sabharwal, learned senior counsel appearing for the appellant and Mr. Anurag Kumar, counsel appearing for the respondent. Mr. Sabharwal made a two-fold submission before us. The present appeal, as already noticed above, assails the correctness of the said order. ( 4 ) WE have heard Mr. Sabharwal, learned senior counsel appearing for the appellant and Mr. Anurag Kumar, counsel appearing for the respondent. Mr. Sabharwal made a two-fold submission before us. Firstly he contended that the award made by the arbitrator was not reasoned as it was required to be in terms of Clause 25 of the Contract Agreement executed between the parties. Secondly, it was contended that the award was contrary to the terms of the agreement executed between the parties and was therefore unsustainable. Mr. Sabharwal found fault even with the award of interest which was according to him exorbitantly high. ( 5 ) HAVING given our careful consideration to the submissions made at the bar, we are of the view that there is no merit in either of the submissions made by Mr. Sabharwal. A reading of the award made by the arbitrator would show that the same does set out the basis on which the conclusions arrived at by him have been drawn. The award may not match the perfection of a judgment of a court of law, yet what is important is that the process of reasoning by which the arbitrator has either rejected or awarded the amounts has been disclosed by him. That is in our opinion a sufficient compliance with the requirements of Clause 25 contained in the contract agreement. ( 6 ) EQUALLY untenable is the argument of Mr. Sabharwal that the award is contrary to the terms of the agreement executed between the parties. No such submission appears to have been urged before the learned Single Judge nor has the same been referred to in the order. If an argument like the one advanced before us was urged before the Single Judge, we would have expected the appellant to make a grievance in the memo of appeal about the failure of the learned Single Judge to deal with the same. The memo of appeal does not however make any such grievance. It is silent about the objection or the submissions made in support of the same before the learned Single Judge. It is, therefore, evident that the question whether the arbitrator had gone against the terms of the contract is being urged before us for the first time. The memo of appeal does not however make any such grievance. It is silent about the objection or the submissions made in support of the same before the learned Single Judge. It is, therefore, evident that the question whether the arbitrator had gone against the terms of the contract is being urged before us for the first time. In any event, the contention does not appear to be well founded inasmuch as the same proceeds on an involved process of interpretation of the terms of the agreement between the parties. We do not think that even when an alternative interpretation of the very same terms of the agreement is possible, this court would be justified in substituting that interpretation for that of the arbitrator. As rightly mentioned by the learned Single Judge, a court exercising power under Section 30/33 of the Arbitration Act, 1940 does not sit in appeal over the findings recorded by the arbitrator. It is only in situations referred to in the said two provisions that the court may be justified in interfering. The present is not in our opinion one such case where any interference is called for with the award made by the arbitrator. ( 7 ) THAT brings us to the third and the only other submission made by mr. Sabharwal touching upon the rate of interest awarded by the arbitrator. As noticed earlier, the arbitrator has awarded interest @12% p. a. pendente lite and pre reference period and 15% future interest till realization. This does appear to be slightly on the higher side having regard to the rates of interest offered by a nationalized bank during the relevant period. We are therefore inclined to modify the award but only to the extent of reducing the rate of interest on a uniform basis from 12% and 15% as awarded by the arbitrator to 10% pre-reference, pendente lite and till realization. The order passed by the learned single Judge and the award made by the arbitrator shall to that extent stand modified. The appeal is, with that modification, disposed of leaving the parties to bear their own costs. The order passed by the learned single Judge and the award made by the arbitrator shall to that extent stand modified. The appeal is, with that modification, disposed of leaving the parties to bear their own costs. ( 8 ) SINCE the award amount has been deposited in this court in terms of the directions issued in the present appeal, we direct the Registry to calculate the amount payable to the respondent claimant in terms of the modification made by us and disburse the same from out of the amount lying in deposit having regard to the part payment already received by the claimant. The excess if any shall then be refunded to the appellant. No costs.