JUDGMENT
Vinod K. Sharma, J.
1. This order will dispose of C.R. No. 2413 of 2003 titled M/s Sunder Dass and Company v. Jind Co-operative Sugar Mills Limited, Jind, C.R. No. 1394 of 2004 titled Sunder Dass and Co. v. Jind Cooperative Sugar Mills Limited and C.R. No. 1395 of 2004 title Sunder Dass and Co. v. Jind Cooperative Sugar Mills Limited, Jind as common questions of law and facts are involved in these cases and the learned Additional District Judge, Chandigarh has disposed of three appeals by way of common Judgment which is under challenge in the present revision petitions.
2. In pursuance to the tender floated by the Jind Co-operative Sugar Mills Limited, Jind (for short Sugar Mills) the parties entered into a contract on 18.7.1983. The contract contained an arbitration clause which reads as under:
All disputes and differences of any kind whatever arisen out of or in connection with the contractor or carrying out of the works (whether during the progress of the works or after their completion and whether before or after the determination abandonment or breach of the contact) shall be referred to and settled by the Architect and the Engineer-in-Charge who shall state their decision in writing. Such decision may be in the form of a FINAL CERTIFICATE or otherwise. The decision of the Architect and the Engineer-In-Charge with respect to any of the accepted matters shall be final and without appeal as stated in the preceding clause. But, if either the employer or the contractor be dis-satisfied with the decision of the Architect and the Engineer-In-Charge or any matter, question or disputes of any kind (except any of the accepted matters) or as to the withholding by the Architect and the Engineer-In-Charge of any Certificate to which the contractor may claim, to be entitled then and in any such case either party (the employer or the contractor) may within thirty days after receiving notice of such decision give a written notice to the other party though the Architect and the Engineer-in-Charge requiring that such matters in dispute be arbitrated upon. Such written notice shall specify the matters which are in dispute and such dispute or difference of which such written notice has been given shall be referred to the Registrar, Co-operative Societies, Haryana or his nominee as sole Arbitrator for his award which shall be final and binding on both the parties.
3. On 20.7.1988 a notice was issued by the petitioner M/s Sunder Dass and Company, civil contractor to the sugar mills calling upon them to make the payment as claimed within 7 days. In the said notice certain record was also sought from the respondent. Again on 27.7.1985 a notice was issued to the Engineer In-charge, Sugar Mills, seeking full payment for the work done. On the same date another notice was also issued to the Architect i.e. SIJCOM Architect Engineer in which also the amount due was claimed. In response to the said notice M/s SIJCOM vide their letter dated 9.8.1958 denied the claim raised by the petitioner and further granted petitioner the liberty to proceed with the matter. This reply was sent to M/s Nanaji Engineers and Consultant Private Limited (for short M/s Nanaji Engineers).
4. Thereafter, vide letter dated 12.8.1988 the claims raised by the petitioner were denied by the respondent Sugar Mills by stating the said claims to be bogus, baseless and against the provisions of agreement. On 4.9.1988, the petitioner approached the Registrar, Co-operative Societies for adjudication of the claim raised by the petitioner. Thereafter, vide letter dated 12.9.1988, the Engineer-In charge wrote to the petitioner that as the Petitioner had already referred the matter to the Arbitrator without waiting for his decision there was no necessity for him to give any comments or decision on the demand raised. The claims were filed by the petitioner on 21.9.1988. It is the case of the petitioner that thereafter the petitioner was forced to-move an application to the court for appointment of an Arbitrator after issuance of notice on 23.1.1988 and the learned Civil Court appointed Shri B.P. Duggal as the sole Arbitrator to adjudicate the dispute.
The respondent Sugar Mills challenged the order passed by the learned Civil Court by way of Civil Revision No. 1088 of 1990 in this Court and the said revision was also dismissed on 15.11.1990 and it is admitted case that the said order has attained finality. On 15.3.1991 the appointed Arbitrator passed an award in favour of the petitioner. The award was non-speaking which reads as under:
AWARD
I was appointed Arbitrator in the matter of disputes of M/s Sunder Dass & Co. and the Jind Cooperative Sugar Mills Ltd., Jind, regarding construction of civil works of Jind Co-operative Sugar Mills (Sugar Factory Category ‘A’) at Jind. The disputes were referred to me by the parties.
I entered on the reference and both the parties appeared before me. Both the parties were granted a number of hearing and were given full opportunity to lead evidence, make submissions, produce documents and argue their respective case.
I have carefully examined the claims, counter claims, documents, submissions etc. made by the parties. After having carefully considered all disputes, I make my award as under:
I award a sum of Rs. 18,41,800/- (Rupees Eighteen lacs forty one thousand eight hundred only) in favour of M/s Sunder Dass & Co. to be paid to them by the Jind Co-operative Sugar Mills Ltd. alongwith 18% simple interest per annum with effect from 16.2.1985 till 4.12.1990 viz the date of 1st hearing before me when both parties were present.
M/s Sunder Dass Company shall also be entitled for further simple interest @ 18% per annum from the date of award till the date of decree or payment, whichever is earlier.
The cost of the stamp paper and other miscellaneous expenses amount to Rs. 380/-(Rupees Three Hundred Eight only) will be paid by the two parties to the Arbitrator in equal shares viz Rs. 190/- each.
Made and signed by me at Chandigarh on 15th March, 1991.
5. The award made by the learned Arbitrator was challenged by the respondent by filing objections under Section 30 of the Arbitration Act, 1940 (for short ‘the Act’). The said objections were dismissed by the learned trial Court and the award was made rule of the Court vide order date 12.5.1992. The respondent filed an appeal against the judgment passed by the learned Sub Judge First Class, Chandigarh vide which the objections filed by the petitioner under Section 30 of the Act were ordered to be dismissed, the appeal was accepted and the order making the award rule of the court was set aside. The petitioner, thereafter, challenged the said judgment by filing three revision petitions i.e. C.R. No. 3852. 3872 of 1992 and C.R. No. 92 of 1993. Said revision petitions were allowed by this Court on December 12, 2000 and the awards dated 15.3.1991 were made rule of the Court. The order was challenged by the Sugar Mills before Hon’ble Supreme Court and the appeals were disposed of by passing the following orders:
Heard, the learned Counsel for the parties.
Leave granted.
These appeals are directed against the judgment and order dated 12.12.2000 passed in Civil Revision No. 3853 of 1992, 3872 of 1992 and 92 of 1993 by the High Court of Punjab and Haryana at Chandigarh.
In the aforesaid Revision Applications, the High Court set aside the judgment and order dated 10.9.1992 passed in appeal by the learned Additional. District Judge against the award passed by the trial Court. The appellate court has not decided the appeal on merits as it arrived at conclusion that appointment of the Arbitrator was void and without jurisdiction. Against that order Revision was filed which was allowed and the matter was decided on merits. It is submitted that the findings given by the High Court in Revision Application on merits are without appreciation of the contentions and objections which were raised before the appellate Court.
In this view of the matter, learned Counsel for the parties agreed that the impugned order be set aside and the matter be remitted to the appellate authority for decision on merits in accordance with law.
Hence, the impugned judgment and order passed by the High Court are set aside. As agreed, the matters are remitted to the appellate Court for decision on merits in accordance with law. The appellate court is directed to dispose of the appeals as early as possible preferably within four months from the receipt of a copy of this order. The appeals stand disposed of accordingly with no order as to costs.
6. After the remand learned Additional District Judge, Chandigarh accepted the appeals and set aside the judgment and decree passed by the learned trial Court vide which the award of the learned Arbitrator was ordered to be made rule of the Court. The present revision petitions have been filed to challenge the said orders:
7. Learned lower appellate court has been pleased to set aside the judgment and decree passed by the learned trial court on the grounds that the award passed was in violation of the arbitration clause reproduced above. Learned Additional District Judge has been pleased to hold that the terms contained in Clause 36 of the Agreement were mandatory in nature and once the said compliance was not done, the reference of dispute to arbitrator by the petitioner was illegal and void. The finding recorded by the learned lower appellate court is that the Arbitrator has failed to look into this important aspect of the matter because the award was totally silent. Therefore, the award could not be upheld.
8. Mr. Akshay Bhan, learned Counsel appearing on behalf of the petitioner has controverted this finding. The contention of the learned Counsel for the petitioner was that the reading of the award and proceedings show that the respondent actively participated in the proceedings and therefore, it could not be said that the reference was bad. It was also contended by the learned Counsel for the petitioner that the findings recorded by the learned Additional District Judge are prima facie contrary to the record and therefore, cannot be sustained. The contention of the learned Counsel for the petitioner was that notice was issued to Architect as well as Engineer-in-Chief. While the Architect specifically allowed the petitioner to proceed with the matter, the Engineer-in-Chief, chose not to reply to the said notice. However, after the petitioner approached the learned Registrar, Cooperative Societies, the named Arbitrator, a letter was received from the Engineer-in-Chief also refusing to proceed with the matter in the view of the fact that the petitioner had already invoked arbitration clause.
9. There is force in the contentions raised by the learned Counsel for the petitioner. The letter placed on record shows that the petitioner did take steps to proceed with the matter in accordance with the agreement and it was on the failure of the Architect and Engineer-in-Chief to act in accordance with the agreement that the petitioner approached the Court. It is, however, pertinent to notice here that the objections against the appointment of Arbitrator were taken by the Sugar Mills firstly before this Court when the order of appointment of Arbitrator was under challenge. Once this plea was rejected by this Court and the said order has attained finality the learned Additional District Judge, Chandigarh could not go into the same matter again.
10. As already referred to above the finding of the learned Additional District Judge otherwise also cannot be sustained as the arbitration clause was involved in terms of arbitration clause. In view of this finding, there is no force in the contention of the learned Counsel for the respondent that the reference was premature or illegal as held by learned lower appellate Court and reiterated by Mr. Raman Mahajan, Advocate, appearing on behalf of the respondent.
11. The finding of the learned Additional District Judge that the contention raised by the respondent qua the maintainability of the reference having not been considered award was liable to be set aside, also cannot be sustained. It is the settled law that the Arbitrator could pass a non-speaking award and the award can not be set aside merely on the ground that reasons are not given for rejection of contention raised by the party.
12. The second reason given for acceptance of appeal by the learned Additional District Judge is that it is non-speaking award. This plea also cannot be accepted as it is a settled law that the Arbitrator is competent to pass non-speaking award. Reference in this regard can be made to the judgment of Hon’ble Supreme Court in the case of Hindustan Construction Co. Ltd. v. State of J. and K. . Para No. 10 of the said judgment reads as under:
10. There is. however, apart from the existence of an “another angle from which a non-speaking award can be considered by the Court and, if necessary interfered with. This ground for impeaching a non-speaking award and its limitations have been explained by this Court in the Sudarsan Trading Co. case earlier referred to. Subyasachi Mukherjee, J. enunciated the rule and its limitation thus:
An award may be remitted or set aside on the ground that the arbitrator in making it, had exceeded his jurisdiction and evidence of matters not appearing on the face of it, will be admitted in order to establish whether the jurisdiction had been exceeded or not, because the nature of the dispute is something which has to be determined outside the award -whatever might be said about it in the award or by the arbitrator. See in this connection, the observations of Russel on The Law of Arbitration, 20th Edn. 427. Also see the observations of Christopher Brown Ltd. v. Ganossenschaft Oesterreichischer (1954)1 Q.B. 8 at page 10 and Dalmia Dairy Industries Ltd. v. National Bank of Pakistan (1978)2 llloyd’s Rep. 223. It has to be reiterated that an arbitrator acting beyond his jurisdiction is a different ground from the error apparent on the face of the award. In Halsbury’s Laws of England (4th Edn., Vol.2 para 622) one of the misconducts enumerated is the decision by the arbitrators on a matter which is not included in the agreement or reference. But in such a case one has to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. See: the observations in Anisminc Lid. v. Foreign Compensation Commissioner (1969)2 A.C. 147 and Regina v. Noseda. Field. Knight and Filzpatrhk (1958)1 W.L.R. 793. But, in the instant case the court had examined the different claims not to find out whether these claims were within the disputes, referable to the arbitrator, but to find out whether in arriving at the decision, the arbitrator had acted correctly or incorrectly. This, in our opinion the court had no jurisdiction to do, namely, substitution of its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid or damages liable to be sustained, was a decision within the competency of the arbitrator in this case. By purporting to construe the contract the court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiction. It has to be determined that there is a distinction between disputes as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised….
The learned Judge further proceeds to point out that Courts are sometime persuaded to reply on this ground to set aside an award when, actually, what they were embarking upon was an interpretation of the contract and a criticism of the arbitrators’ approach thereto. It is clear that this is what has happened in the present case also. We have already mentioned that the High Court has not rested its decisions on any question of the arbitrator having exceeded his jurisdiction or travelled beyond the contract; it has clearly held it to be a case of “error apparent on the face of the award”. In our view, the case cannot be brought within the scope of the excess of jurisdiction” rule either.
12. The Hon’ble Supreme Court again in the case of Rajasthan State Mines and Minerals Ltd. v. Eastern, Engineering Enterprises has been pleased to lay down as under:
In a case of non-speaking award, the jurisdiction of the Court is limited. The award can be set aside if the arbitrator acts beyond his jurisdiction. It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impelled arbitrator to arrive at his conclusion. It is not open to the Court to admit to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award. If the arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the Court cannot interfere. If no specific question of law is referred, the decision of the arbitrator on that question is not final, however, much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. In a case where specific question of law touching upon the jurisdiction of the arbitrator was referred for the decision of the arbitrator by the parties then the decision of the arbitrator on the said question between the parties may be binding.
and therefore, it has to be held that learned Additional District Judge was not right in rejecting the award on the ground that it was non-speaking award.
13. The finding of the learned Additional District Judge that the Arbitrator acted in haste and proceeded without complying with the provisions of principles of natural justice can also not be sustained. Learned Counsel for the petitioner contended that the arbitration proceedings were placed on record of the court which clearly shows that the parties were allowed to file statement of admission and denial of documents. Thereafter, the parties were allowed to file necessary documents and further to file written arguments. It has been specifically noted by the learned Arbitrator as under:
Both the parties closed their respective cases and have nothing more to say. The case is therefore closed for award.
The proceedings have been duly signed by the learned Counsel for the parties.
14. It is also pertinent to mention here that prior to this, the parties had also agreed to extension of lime for making the award. Thus, the contention of the learned Counsel for the petitioner is right that the order recorded by the learned Additional District Judge holding that the parties were not given proper opportunity is prima facie contrary to the record placed before the Court. The findings of the learned lower appellate court otherwise cannot be sustained as they are contrary to the settled law that the court while deciding objection against the award do not sit as a court of appeal and the award can be interfered with only on the grounds set out in Section 30 of the Act.
15. Thus, the reliance of the learned lower appellate court on the judgment in the case of Ram Dass Singla v. Devinder Singh Brahmchari, Shri Jai Ram Armchetra, Rishi Kesh District Dehradun (U.P.) (1991-2)100 P.L.R. 467 was misconceived, as in view of the position explained above no fault could be found with the procedure adopted, especially, when the Arbitrator is not bound by the law of evidence or procedure of law except to follow the principles of natural justice. In the present case the parties had voluntarily closed the case after having satisfied themselves that their case has been put up before the Arbitrator.
16. The other ground taken by the learned Additional District Judge for setting aside the award was that the Arbitrator was technical advisor of Nanaji Engineers through whom the claim was pursued and therefore a presumption was drawn that the Arbitrator was under the pay role of the petitioner. This plea had been taken from the grounds of appeal as raised by the respondent after the award was made rule of the court. There is no other material on record to substantiate this pleading.
17. Learned Counsel for the respondent on being asked as to whether this plea was raised either before the Arbitrator or before the trial Court, replied in negative. However, it was contended by him that the letter placed on record shows that the Arbitrator was working for Nanaji Engineers and therefore, presumption drawn by the learned Additional District Judge cannot be faulted with. This finding of the learned Additional District Judge and the contention raised in support thereof cannot be accepted, in view of the law laid down by the Hon’ble Supreme Court in the case of Bijendra Nath Srivastava (Dead) through Lrs. v. Mayank Srivastava A.I.R. 1994 S.C. 2562 wherein the Hon’ble Supreme Court has been pleased to lay down as under:
Under Order 6 Rule 4, C.P.C. particulars have to be furnished of the plea of fraud or misconduct raised in accordance with Order 6, Rule 2, C.P.C. and it is not permissible to introduce by way of particulars a plea of fraud or misconduct other than that raised in the pleadings. In the instant case challenging the award of arbitrator on ground of misconduct, the paragraph which was sought to be introduced by way of amendment it has been alleged that the arbitrator had misconducted the proceedings by returning the papers and documents specified in subparagraphs to be parties who had submitted the said papers and documents during the course of the proceedings. In subsequent paragraph it has been alleged that the arbitrator had misconducted the proceedings in falsely showing the presence of one of the respondents in the proceedings on certain dates in spite of the fact that he fully knew that said respondent was absent from these proceedings. Although in the original objections various acts of misconduct have been imputed to the arbitrator in several paragraphs, there was no averment in any of the paragraphs, of original petition imputing misconducts of the nature mentioned in above said paragraphs which were sought to be inserted by way of amendment. The said amendments cannot be treated as merely better particulars of what had already been pleaded in the original objections. And the trial Court cannot allow the said amendments.
Once a party is not allowed to amend the objection petition to raise a plea not taken in original petition how could the learned Additional District Judge take note of ground of appeal raised against the award without the said point even having been raised before the trial Court. Thus, the finding of the learned Additional District Judge even on this point cannot be sustained. The finding of the learned lower appellate court that there was an error apparent on the face of award also cannot be sustained. No error of law and facts has been pointed out in the award passed by the learned Arbitrator. No misconduct was proved on record as was held by the learned Additional District Judge.
18. Before concluding, the arguments raised by Shri Raman Mahajan, learned Counsel appearing for the respondent deserve to be noticed. Learned Counsel appearing on behalf of the respondent reiterated the fact that the Arbitrator had not acted in accordance with the arbitration clause. However, this plea deserves to be rejected, in view of the finding recorded, wherein it had been found as a matter of fact that the procedure as per arbitration clause was duly followed and this matter had been earlier adjudicated by this Court.
19. The next contention of the learned Counsel for the respondent was that the award suffered from an error apparent on the face of record as the claims raised under Head 2-B, 2-D and 2-F were beyond the terms of the agreement and thus beyond the reference but those were entertained. However, learned Counsel for the respondent was not able to substantiate this argument. Award is non-speaking and therefore, it is not open to this Court to probe into the mental functioning of the Arbitrator to come to a conclusion that the awarded amount also included the claims which were not covered. In the absence of any proof or pleadings this contention cannot be accepted.
20. Learned Counsel for the respondent thereafter referred to the factum of misconduct of arbitrator due to his association with Nanaji Engineers. Said contention also stands already rejected.
21. Learned Counsel for the respondent further contended that he can raise the contention with regard to the validity of reference as his participation could not amount to acquiescence to the jurisdiction of the arbitrator. For this he placed reliance on the judgment of Hon’ble Supreme Court in the case of Union of India v. G.S. Atwal and Co. (Asansole) . This contention of the learned Counsel for the respondent cannot be disputed. However, in the present case it may be noticed that the objections raised by the petitioner to the reference being bad had been adjudicated earlier in the High Court when the order of appointment was challenged. Even otherwise, it has been found from the record that the petitioner invoked the arbitration clause as per the terms of the agreement and therefore, this contention is also without any merit.
22. For the reasons recorded above, all the three revision petitions are allowed. The impugned order passed by the learned Additional District Judge is set aside and that of the learned trial Court is restored with no order as to costs.