ORDER
J.D. Kapoor, J. (Oral)
1. This is a suit under Section 14 and 17 of the Arbitration Act 1940 for direction to the arbitrator, respondent No. 5 to file the award dated 1st August, 1996 and the proceedings in the court and make the same as a rule of the court.
2. Though the respondents have filed the objections to the award but none has put an appearance on their behalf. Put briefly the cats are as under:-
The petitioner is a Public Limited Company duly registered under the Companies Act 1913 and Shri Rajiv Gupta is the Director-in-charge and Constituted Attorney of the petitioner company.
3. In the proceedings under Section 20 of the Arbitration Act initiated by the petitioner, which was registered as a suit No. 4546/92 titled the Motor & General finance Limited Vs. Shanker Singh & Ors, respondent No. 5 Shri Inderjit, Gulati, Advocate was appointed as an arbitrator vide judgment respondent No. 5 issued notices to the petitioner and respondents 1 to 4 calling upon them to file their respective claims. The petitioner filed the statement of claims against the respondents 1 to 4 Along with the statement of accounts and the copy of agreement of hire purchase and other documents. Thereafter the arbitrator issued the notices to respondents 1 to 4 to file their replies, if any, together with the documents and the evidence in support of their defense against the claim of the petitioner. The respondents 1 to 4 failed to appear before the arbitrator despite service of notice. The arbitrator thereafter fixed the case for evidence by way of affidavit and the petitioner filed the affidavit by way of evidence in support of its statement of claims. After considering the evidence led by the petitioner and perusing the documents filed on the record the arbitrator gave, pronounced and published his award dated 1.8.1996 and the intimation of the filing of the award was given to the parties.
4. In terms of the award the learned arbitrator directed respondents 1 to 4 to pay to the petitioner the amount of Rs.6,28,252/- Along with interest at the rate of 18 per cent per annum.
5. Inspite of the said award and service of notice of the passing of the award, the respondents failed to comply with the terms of the said award, Hence this petition.
6. Having been served with the notice of the petition the respondents filed the objections by way of IA. No. 8361/96. The main objections are as under:-
i). That the respondents were proceeded ex parte without having been served with any notice by the arbitrator and as such the award has been procured by misleading the arbitrator.
ii). That the award has been passed in a time-barred claim as the suit vide which the arbitrator was appointed was filed in the year 1992 while the claim of the petitioner relates to the cause of action that accrued on 19th August, 1986.
iii). That the petitioner has misled this Court that the respondents have voluntarily surrendered the possession of the bus to the petitioner on 16.5.1991 whereas no such surrender was ever made and the surrender letter was signed when it was blank at the time of execution of the agreement by the respondent.
iv). That the petitioner has suppressed the fact that according to the agreement the entire Installments were to be paid within 35 months and inspite of the fact that the respondents paid the Installment as per agreement, the petitioner preferred to issue a demand notice on 19th August, 1986.
v). That the petitioner has suppressed the truth that they have forcibly taken the possession of the bus for which the respondents had already filed a criminal complaint under Section 392 of the Indian Penal Code which is pending disposal before the Additional Chief Judicial Magistrate, Bhabhua wherein the petitioners have been granted anticipatory bail.
7. It is settled law that the court cannot sit in appeal to the award particularly as to its factual matrix. The court can not look into the findings of fact given by the arbitrator. The jurisdiction of the court to interfere with an award of an arbitrator is undoubtedly a limited one.
8. In State of Uttar Pradesh Vs. M/s. Ram Nath International Const., Pvt. Ltd. it was held that it is not open to the court to re-assess the evidence to find whether arbitrator has committed any error or to decide the question of adequacy of evidence and the court cannot sit on the conclusion of the arbitrator by re-examining and re-appreciating the evidence considered by the arbitrator. It was further observed that it will be open to the court to examine those Clauses of the agreement whereby the agreement gets engrafted into the award and find out the correctness of the conclusion of the arbitrator with reference to those Clauses.
9. In Associated Engineering Co. Vs. Govt. of Andhra Pradesh and Anr it was held that unless and until the arbitrator travels beyond the bounds of agreement he acts within his jurisdiction was his authority is derived from the contract. But if he has remained inside the parameters of the contract and has construed the provision of the contract, his award can not be interfered with.
10. Reliance was placed upon Bunge & Company vs. Dewar & Webb. [1921] 8 L.I.L. Rep. 436 (K.B.) wherein the scope of the arbitrator was enunciated as under:-
“If the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But it he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictionnal error. Such error going to his jurisdiction can be established by looking into material outside the award. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The dispute as to jurisdiction is a matter which is outside the award or outside whatever may be said about it in the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such jurisdictional error needs to be proved by evidence extrinsic to the award.”
11. The objection as to the award being in respect of a time-barred claim is groundless and is not sustainable. The matter was referred by the Court to the arbitrator for adjudication of the disputes on 1st August, 1995 in S. No.4546/92. Despite service of notices in the said proceedings the respondents did not appear to contest and as such ex parte order for reference was made. Since the respondents did not raise this objection before the arbitrator, they are estopped from raising this objection in the proceedings under Sections 14 & 17 of the Arbitration Act. The cause of action first arose when the vehicle was surrendered by the respondents i.e. on 16th May, 1991. It again arose on 23rd May, 1991 when the notice was given by the petitioner to the respondents calling upon the respondents to make payments due under the agreement and it again arose when the notice for demand was made from the respondents for taking the possession of the vehicle for payment of overdue hire money, incidental charges caused to the vehicle. Since the respondents failed to comply with the said notice the cause of action became available to the petitioner from the dater when the matter was referred by the Court to the arbitrator. It was only after the hiring was terminated in the year 1991 that a petition under Section 20 of the Arbitration Act for reference of the disputes was to be made as the respondents failed to comply with the terms of the notice served upon them and till then he was in permissive possession of the vehicle in question.
12. As regards the suppression of the fact by the petitioner as to the taking of the possession of the bus forcibly in respect of which a criminal complaint was filed by the respondents, it is pointed out that the complaint has been dismissed and the proceedings against the petitioners have been quashed by the High Court of Patna vide order dated 7th January, 1997. Certified copy of the same has been placed on record. Remaining objections are of no significance because these pertain to factual matrix.
13. The perusal of the award shows that the arbitrator has gone into every details and has considered all the facts and the contention raised on through these objection. Since the objections of the respondents are with regard to findings of facts, these are beyond the purview of the Court and are hereby dismissed. The award is made a rule of the Court and the suit is decreed in terms of the award with pendente lite and future interest @18 per cent till the realization of the decretal amount.