JUDGMENT
Gita Mittal, J.
1. Disputes arose between M/s Ajanta Builders, the petitioner herein who was the claimant before the arbitrator on the one hand and M/s Bharat Heavy Electricals Limited, respondent on the other, in respect of a contract awarded as a sub-contractor to the petitioner by the respondent. This matter was referred for arbitration to Justice Y.V. Chandrachud (Retired) who made and published an award dated 8th November, 1997. This award was filed before this Court by the petitioner herein and has been registered as Suit No. 2520A/1997.
The petitioner herein has filed objection to this award under Sections 30 and 33 of the Arbitration Act, 1940 which have been registered as IA 1497/1998.
By this order, I propose to dispose of this suit and application.
2. The respondent had invited tenders for construction of 67.6 MW capacity power units at Rajghat, New Delhi numbering two for implementation of a turn key contract which was awarded to it by the then Delhi Electric Supply Undertaking on cost plus percentage basis. The petitioner herein submitted an offer on 15th May, 1986 which was accepted by the respondent. A letter of intent was issued by the respondent on 13th November, 1986. The total value of the work which was initially Rs. 4,75,75,173.00, was increased to Rs. 6,51,76,800/-. A formal contract was signed by the parties on 18th February, 1987 wherein it was stipulated that the date of commencement of the contract would be 13th November, 1986 while it was to be completed within eighty two weeks i.e. before 8th June, 1988.
3. The petitioners attributed delays to the respondent resulting in it becoming impossible for the petitioner to execute the work according to the prescribed schedule. The respondent terminated the contract by a letter dated 10th August, 1988 with effect from 29th July, 1988. As a result of the default on the part of the respondent, the petitioner raised claims against the respondent before the arbitrator.
4. The respondent not only repudiated the pleas of the petitioner but also filed a counter claim against it, attributing delay on the part of the petitioner. It was urged that the progress was tardy from the very beginning and that drawings had to be given to the petitioner in a phased manner which were so done. The petitioner raised no objection at any point of time and the respondent contended that the petitioner was not entitled to any damages for this reason.
5. Perusal of the record shows that the Award has been made and published after a detailed consideration of every submission on the part of the parties. The learned arbitrator has relied on the specific contractual provisions and has discussed each aspect raised by either side before him. By the award dated 8th November, 1997, the learned arbitrator rejected the counter claims raised by the respondents completely. It was held that there was an inexplicable delay on the part of the respondent in furnishing to the claimant a large number of drawings. The learned arbitrator noted that item Nos. 3 to 8 mentioned in the chart of drawings, were furnished to the claimant for the first time in March, 1988 when the due date of completion was 8th June, 1988; whereas a large part of the work, for which the drawings were so supplied by the respondent, was to be completed under the contract long before the drawings were actually supplied. A reading of the Award shows that the learned arbitrator has dealt with the drawings individually and considered the dates on which they were to be made available as well as other aspects of the contract. Ultimately, the learned arbitrator came to a conclusion that the delay on the part of one party leads to a consequential delay on the part of other party and that this was what had happened in the instant case. It was, therefore, held that there was no justification on the part of the respondent in terminating the contract which it did by its letter dated 10th August, 1988 effective from 29th July, 1988. On these findings, the learned arbitrator held that the counter claims were unjustified and rejected the same.
6. The respondent has accepted the award published by the learned arbitrator and has opted not to file any objections. On the other hand, so far as claims of the petitioner are concerned, the learned arbitrator rejected the first and fifth claim made by the petitioner and granted amounts on the 2nd, 3rd, 4th, 6th and 7th claims.
7. The petitioner before this Court has filed objections by way of IA 1497/1998 under Sections 30 and 33 of the Arbitration Act, 1940 restricted to the refusal of the arbitrator to grant interest on the amounts awarded. During the course of hearing, the petitioner has also urged that there is a typographical error in the award which shall be dealt with hereafter which according to the petitioner deserves to be corrected.
8. It has been contended that despite the jurisdiction to award interest in favor of the petitioner after holding that the respondent had delayed the matter, the petitioner has contended that the learned arbitrator has erred in refusing to grant the interest and that the same is an error apparent on the face of the record which is glaring from a perusal of the award itself without anything more and that this Court should award interest on the amounts awarded to the petitioner as per settled law. It has been urged that the arbitrator has found amounts due and payable by the respondent and further that the petitioner was constrained to execute certain bank guarantees against mobilisation advances which were had to be kept alive. It is contended that these bank guarantees were to the tune of Rs. 11,55,304/- towards mobilisation advance and Rs. 16,33,170/- towards the security deposit. Contending that arbitration proceedings lasted for over seven years and that the respondent delayed the matter by seeking adjournments, the interest deserves to have been awarded on the amounts. The principal submission is that it has been repeatedly held by the Apex Court that interest is the only panacea for delayed payment or deprivation of the amount to the person who is entitled to the amount and the learned arbitrator having come to a conclusion that the contract was wrongfully rescinded, the petitioner deserves to be granted interest. In support of these submissions, reliance is placed on the pronouncement of the Apex Court (para 43) entitled Secretary to Government of Orissa v. G.C. Roy. It has been pointed out that the learned arbitrator has made awards in respect of the 2nd, 3rd, 4th, 6th and 7th claims in favor of the petitioner and yet has concluded that no interest was payable to the petitioner.
9. So far as the error in calculation is concerned, Ms. Sanghi, learned Counsel for the petitioner has urged that the learned arbitrator has clearly noticed in para 12.2 of the Award that the respondent was not justified in deducting Rs. 12,33,755/- from the invoice of the petitioner for defective work.
It is urged that in para 12.3 and 12.5 of the Award, the learned arbitrator has carefully concluded that the petitioner is entitled to the difference between Rs. 2.79 crores and Rs. 2.50 crores which comes to Rs. 29 lakhs. In para 12.4 the learned Arbitrator arrived at a clear conclusion that the claimant was entitled to recover the sum of Rs. 29 lakhs from the respondent. However, while issuing the direction to the respondent, the amount has been mentioned as Rs. 20 lakhs. The petitioner has relied upon the pronouncement of this Court in 1997 70 DLT 565 entitled Puri & Co. v. DDA in support of the submission that this Court has the jurisdiction to correct the error.
10. On the other hand, the respondent has urged that the petitioner has not raised any such objection in the objection petition being IA 1497/1998. It has further been contended that the respondent has made payment of the amounts to the petitioner which was noted in the order dated 17th May, 1999 and having accepted the amount from the respondent, the petitioner cannot be permitted to raise such a contention. It has been urged that such contention not having been raised prior hitherto, it is not permissible for the petitioner to urge this contention orally during the course of hearing.
11. In the light of the above, I have carefully considered the record and the submissions made before this court. I find that the learned Arbitrator has considered the evidence and the submissions of the parties at great length. The award is reasoned and considered. It would be useful to notice the 7th claim made by the objector which was for the valuation of the work done before it. The objector claimed the value of the work done by it at Rs. 3,60,71,931.43. According to the respondent BHEL, the value of the work done was Rs. 2,79,00,949.75. The respondent withheld a sum of Rs. 27,62,881.68. According to the respondent, the work to the value of Rs. 12,30,755/- was certified as defective by the engineer and consequently it was held that this amount also has to be deducted from the amount due to the claimant. Holding that on the evidence before it, the payment made by the respondent of the value of work done by the claimant was preferable to the claimant’s estimate, however, the arbitrator found that the respondent was not justified in deducting the sum of Rs. 12,30,755/- from the invoice of the claimant for defective work. After so holding, the arbitrator recorded thus:
12.3. A sum of Rs. 2.50 crores was paid by the respondent to the claimant for the value of the work done by the claimant. Therefore, the claimant would be entitled to claim the difference between Rs. 2.79 crores and Rs. 2.50 crores which comes to Rs. 29 lakhs. As stated above, there is no justification on the part of the respondent for deducting any amount for defective work.
Thereafter, paras 12.4 and 12.5 read thus:
12.4. There is no substance in the claim of the respondent that a sum of Rs. 28 lakhs is due from the claimant for the value of Cement and Steel supplied to the claimant. There is no evidence at all on the record to show that cement and steel of the particular value was supplied by the respondent to the claimant.
12.5. The result is that the claimant is entitled to recover from the respondent a total sum of Rs. 29,00,000/- Accordingly, I direct that the respondent shall pay to the claimant a sum of Rs. Twenty lakhs. I do not propose to award any interest on the said amount.
From a bare reading of the above, it is glaring that the arbitrator had found that the objector was entitled to the claimed difference between Rs. 2.79 crores and Rs. 2.50 crores which comes to Rs. 29 lakhs. It was repeated in para 12.5 where the arbitrator again recorded that the claimant was entitled to a sum of Rs. 29 lakhs from the respondent. However, while issuing the direction in the same part at a later place in the same para, the value which the respondent has been directed to pay has been recorded as only a sum of Rs. 20 lakhs.
This, in my view is clerical error which arises from an accidental slip.
12. The respondent has contended at length that the power to correct such a mistake would rest and lie with the arbitrator in view of Section 16 of the award and that the same cannot be done by way of the present proceedings. It has also been vehemently contended that no objection has been raised by the objector with regard to this error.
However, these submissions overlook the power of the court under Section 15 of the Arbitration Act, 1940 which provides thus:
15. Power of Court to modify award – The court may by order modify or correct an award –
(a) where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred ; or
(b) where the award is imperfect in form, or contain any obvious error which can be amended without affecting such decision; or
(c) where the award contains a clerical mistake or an error arising from an accidental slip or omission.
13. So far as the submission of the respondent that the petitioner has accepted the payment of the full amount unconditionally and is therefore precluded from raising such objection. In order to appreciate this submission, it becomes necessary to notice the order dated 17th May, 1999 when it was recorded thus:
17.05.1999
Present: Mr. Mukul Rohtagi, Senior Advocate with
Ms. Amrita Sanghi for the petitioner
Mr. B.K. Satija for the respondent
S. No. 2520-A/97 & I.A. 1497/98
Counsel for the respondent states that he has brought a cheque for an amount of Rs. 6359,154.71 towards full and final payment of the awarded amount and the said cheque is issued in favor of the petitioner and drawn on Canara Bank, Janpath, New Delhi-110001 bearing No. 441656. The said cheque is handed over to the counsel for the petitioner which is accepted by the counsel without prejudice to the rights and contentions of the parties in the present proceedings.
Counsel for the respondent further states that the income tax deducted at source and 10% surcharge total amounting to Rs. 1,43,049/- has been deducted from the total value of the award which is Rs. 65,02,203.71.
Counsel for the petitioner, however, states that the entire awarded amount is more than Rs. 65,02,203.71 in view of Clause 12.5 of the award passed by the arbitrator.
The aforesaid aspect will be dealt with while hearing arguments on the objections filed by the petitioner.
List on 1.10.1999 to be listed in the category of “Short Causes” for arguments on the objections filed by the petitioner.
14. In the light of the contention which was noticed in this order, it certainly does not lie open to the respondent to urge that the petitioner had accepted the payment without reserving any right or without contending that the amount was deficient. Even if the petitioner had not raised a specific objection in this behalf in the objections filed by way of IA 1427/98, however, the petitioner had pointed out that in view of para 12.3 of the award more amounts were payable by the respondent to the petitioner.
15. It now becomes necessary to examine the second contention of the respondent on this aspect. It has been pointed out that in para 9 of IA No. 1427/98, the petitioner has categorically urged that it is only objecting to the refusal to award interest. Based on this contention, the petitioner accepted the award to the extent of Rs. 63,59,154.71p. The respondent has paid an amount of Rs. 65,02,2003/71p after deducting TDS from the amount of Rs. 63,59,154/71. Section 13(d) of the Arbitration Act, 1940 confers the powers to make corrections in its award only on the arbitrator. The award was made on 8th November, 1997 and no objections or corrections have been sought by the petitioner till date no application has been filed before the learned Arbitrator. According to the respondent, the only option available to the petitioner was to move an application before the Arbitrator and it cannot be permitted to seek any correction by such oral submissions before this Court. Placing reliance on 1999 Vol. III ALR 321 entitled Anoop Pack Equipments Pvt. ltd. v. Ganpati Co-op. Group Housing Society Ltd. and Ors. it has been contended that the statute provided a specific provision for correction in the award and that the petitioner has to abide by the statutory provision.
It has also been contended that there is nothing to show as to how the learned arbitrator has arrived at the figures mentioned in para 12 of the Award. There is no force in the objection of the petitioner in as much as no error can be pointed out from a reading of the contract. It is further submitted that there is no correction needed in as much as the learned arbitrator has carefully directed the respondent to pay a sum of Rs. 20 lacs which has been mentioned in words and not in figures.
16. The award has been placed before this Court which has to apply its mind before passing appropriate orders making the same rule of court or otherwise dealing with it. On a bare reading of the Award, it is apparent that there is a mistake in issuing the direction in para 12.5. There was no ambiguity in what was held due and payable by the respondent to the objector in respect of the 7th claim. The arbitrator has repeated the amount as being Rs. 29 lakhs and the basis thereof has been clearly laid down in para 12.3. I find no substance in the contention on behalf of the respondent that there is no basis disclosed in the award so far as the figure of Rs. 29 lakhs is concerned. I am also unable to agree with learned Counsel for the respondent that this Court does not have the jurisdiction or power to correct such a mistake which is glaring in the face of the award to this extent, in my view the objector has to succeed on the contention which has been raised before the court. In my view the fact that the objector did not specifically raised the objection on this ground is of no assistance to the respondent inasmuch as the bare reading of the award makes this typing error apparent. The award is requires to be corrected to the extent that the respondent is required to pay a sum of Rs. 29 lakhs and not Rs. 20 lakhs only as directed in para 12.5 of the award.
17. So far as the objection of the petitioner in respect of the refusal to grant interest is concerned, the respondent has pointed out that the learned arbitrator has considered every claim at great length and has found that the petitioner was not entitled to interest in as much as it had also contributed to the delays. Submitting that the arbitrator is creature of an agreement between the parties and bound by the terms thereof, the respondent contends that Clause 3.3(ix) of the General Conditions of the Contract (Page 173 of Vol. IV) provides that no interest shall be payable by the employer on earnest money security deposit or any other money due to the contractor by the employer. Therefore, according to Mr. B.K. Satija, learned Counsel for the respondents, the agreement between the parties prohibited award of interest and the petitioner was disentitled to interest on this count alone. Reliance has been placed on the pronouncements of this Court in 2004 (2) ALR 33 entitled DSA Engineering v. Housing (para 14); 2006 (1) Arb. LR 194 (Delhi) (entitled) Beebcon Engineers Pvt. Ltd. v. Bharat Heavy Electricals Ltd.; entitled Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. 2001 (3) SC 397 entitled UPSEB v. Sia Sales Chemicals; ; to contend that in the facts and circumstances of the instant case and in the light of the well settled principles in law, the petitioner was rightly not granted interest.
18. So far as the second objection of the objector is concerned, it has raised strong objection to the refusal to award interest on the amounts which fell due and payable to the claimant under the award. In this regard, more delays and deficiencies were attributable to the respondent with regard to several responsibilities as stipulated under the contract. The respondent BHEL pointing out the imperative need for expeditious completion of the work has stated that the claimant/objector did not deploy adequate manpower and equipment resulting in stardy progress of the work from the very beginning. Several defaults have been attributed to the claimant and a counter claim was also raised before the arbitrator.
19. So far as consideration of the conduct of the claimant is concerned, the learned Arbitrator has found that though the respondent was not justified in terminating the contract, tardiness was attributed to the claimant for the non-performance of the contract within the stipulated time. In fact, the learned arbitrator has specifically held that the objector and the respondent were in para delicto. This was the reason for which the arbitrator rejected the claim for loss of profits as well as the claim of the objector that for the cost of idling of its resources. While considering the award to be made on each claim wherein part amounts of the claim were awarded out of the claims made on the 2nd, 3rd, 4th, 6th and 7th claim, the learned Arbitrator has specifically mentioned that he did not propose to award any interest on the amounts.
20. While, it was held that the respondent caused inexplicably long delays in performing its obligations under the contract, the arbitrator notices that the delay was aggravated by the somewhat slow pace of the work done by the claimant. It was therefore held that the respondent cannot recover the amounts from the claimant anymore than the claimant could have recovered damages from the respondent for termination of the contract. After a detailed consideration and due application of mind, finally the learned arbitrator gave reasons as to why the arbitrator has not granted interest to the claimant on the various amounts and stated thus under the award:
29. I would like to add that I have not granted interest to the claimant on the various amounts awarded to it since, the claimant cannot be totally absolved from responsibility from delay in completing the contract. As I has said time and again, both the claimant and the respondent are equally to blame for delay in commissioning the project awarded by DESU to the respondent which was sub-contracted by the respondent to the claimant.
The arbitrator not only did not grant interest to the claimant but also did not award any costs to the claimant/objector.
21. Before this court, the respondent has objected to the claim of interest placing reliance on Clause 3.3 (sub-para ix) of the GCC (page 173 of volume IV) which according to it was part of the contract between the parties and which prohibited payment of interest to the claimant. The extract of the clause which was produced before this Court reads thus:
No interest shall be payable by the employer on Earnest Money, Security Deposit or any money due to the contractor by the employer.
Undoubtedly, it is well settled that no award can be made in contravention of the specific terms of the contract. Therefore, if the contract prohibited award of interest on amounts payable to the contractor, no interest could be paid by the arbitrator. It has been so held in 2004 2 ALR 33 (Del) DSA Engineers v. Housing & Urban Development Corporation wherein the court held that there exist between the parties an agreement which prohibits grant of interest.
22. Power to grant interest by the arbitrator arises from the statutory provisions but the same is always subject to the agreement between the parties as laid down by the Supreme Court. My attention has been drawn to the pronouncements of the Apex Court Secretary to Government of Orissa v. G.C. Roy and State of Orissa v. B.N. Agarwalla in support of this submission. The clause prohibiting award of interest to the contractor was contained in Clause 20.1 of the agreement between these parties and was similar in terms to the Clause 3.3(ix) relied upon by the respondent herein. It would be useful to consider the principles laid down by the Apex Court in State of Orissa v. B.N. Agarwalla wherein the court specifically laid down that “there can be no doubt that if the terms of the contract expressly stipulated that no interest would be payable, then, notwithstanding the provisions of the Interest Act, 1978 the arbitrator would not get the jurisdiction by right to award interest.”
23. Learned Counsel for the respondent has also placed reliance on the pronouncement of a learned single Judge of this Court reported at 2006 1 Arb. LR 194 (Delhi) Beebcon Engineers Pvt. Ltd. v. Bharat Heavy Electricals Limited. The clause prohibiting award of interest was similar as in the present case and was noticed in para 5 of the judgment. Placing reliance thereon and the pronouncements of the Supreme Court, the court held that the arbitrator cannot travel beyond the specific terms of the contract and consequently no interest was payable to the claimant. Clause 4.7 which was relied upon by the respondent in this case was almost identical to the Clause No. 3.3(ix) which has been urged by the respondent to be applicable in the instant case. On a consideration of the clause, the court held that a plain reading thereof, would mean that if any money is found due and payable from the respondent on any count to the petitioner, the petitioner would be entitled to interest thereon.
24. So far as the jurisdiction of the arbitrator is concerned, it is extremely well settled that an arbitrator is a creation of the contract and could not travel beyond the specific terms of the arbitration agreement. The principles laid down by the Apex Court in 2003 3 SCC 705 Oil and Natural Gas Corporation Limited v. Saw Pipes Limited on this aspect of the matter are extremely well settled are binding on this court.
Learned Counsel for the objector has submitted that no such plea has been raised in the reply which has been filed before this court. In support of this submission, reliance has been placed on 112 (2004) DLT 63 DDA v. Mittal Construction Co. (para 5). In this case, the court noticed that the objection which was raised had not been raised by the objector and consequently the objection was held to have been waived and the respondent having acquiesced in the proceedings before the arbitrator without raising any question of bias before him. For this reason, the objection was rejected by the court.
In my view even if such plea has not been raised in the reply filed, this Court is required to examine the record laid before the learned arbitrator. In the instant case, the respondent has placed reliance on the written submission filed by it before the learned arbitrator wherein the Clause 3.3(ix) was specifically reproduced and relied upon.
In any case, the arbitrator has not placed reliance on this clause while rejecting the claim of interest but has given other reasons for rejecting the same.
25. The other pronouncement relied upon by Mrs. Amrita Sanghi, learned Counsel appearing for the objector is Kalimpong Land and Building Ltd. and Anr. v. State of West Bengal and Anr. This pronouncement was rendered by the Apex Court while considering interest on compensation under the Requisitioning and Acquisition of Immovable Property Act, 1952. The principles applicable and the scope of consideration are different from the consideration of an arbitrator or this Court under the provisions of the Arbitration Act, 1940.
26. For the same reason, the principles laid down by the Apex Court in K Chemicals & Industries Ltd. and Ors. v. U.P. State Electricity Board and Ors. wherein the court was considering the duty of the court on dismissal of an application for interim stay of a Government order/notification and its effect have no application to the instant case. It was held that on vacation of the interlocutory orders whereby stay had been granted in respect of levy of duty of notification and demand notice issued on that basis does not mean that the order or notification has been wiped out. When the order of stay comes to an end with the dismissal of the substantive proceeding, it is a duty of the court to place the parties in the same position they would have been in but for the interim orders of the court. The petitioners were held liable to pay interest on the amount.
This judgment would have no application to the instant case.
27. Again in Lalchand Roshan Lal v. Ghulam Mohd. Nazir Ahmed, it is not possible to ascertain as to whether the issue of interest had been considered or rejected by the arbitrator.
28. In my view, it is not necessary to examine this issue in any further detail for another reason. The learned arbitrator has considered the entire matter and refused amounts claimed by the claimant towards the loss of profit and damages for the reason that it contributed to the delay in execution of the contract. The arbitrator has specifically held that the parties were in paria delicto. Reasons have been given while rejecting these claims which have been accepted by the objector. There are no objections filed on these findings. There is no challenge to the refusal to grant the full amounts claimed by the claimant. The arbitrator has placed reliance on these very reasons for refusing to pay awarded interest to the claimant.
29. The jurisdiction of this Court while considering objection that Section 30 and 33 of the Arbitration Act, 1940 has been settled by several pronouncements on the subject. It is trite that where two views are possible and when the arbitrator has applied mind to the pleadings, the evidence adduced before it and the terms of the contract, there is no scope for the court to reappraise the matter as if it were hearing an appeal. It is equally well settled that where two views are possible, the view taken by the arbitrators would prevail. The court is prohibited from embarking on any investigation into matters of fact and detail. In this behalf, the law laid down by the Apex Court in U.P. State Electricity Board v. Searsole Chemicals Ltd. is topical and instructive.
30. The Court exercises limited jurisdiction in the proceedings for setting aside an award under Section 30 of the Arbitration Act, 1940. The courts do not exercise appellate jurisdiction over the verdict of an arbitrator and as such cannot go into the merits of the case nor the courts can reappraise and re-examine the evidence led before the arbitrator. The courts cannot go into the insufficiency of the evidence led before the arbitrator. Even when the arbitrator is required to give reasons, it is not for the courts to see the reasonableness of the reasons given by the arbitrator or sufficiency of the reasons. It has been so held by the Apex Court in College of Vocational Studies v. S.S. Jaitley AIR 1987 Delhi 134; Delhi Development Authority v. Uppal Engineering Construction Co. New Delhi ; and by this Court in Rajendra Construction Co. v. Maharashtra Housing Area Development Authority .
31. In the light of well settled principles governing adjudication of objections and the scope of review into the validity of an award by an arbitrator as noticed above, the jurisdiction of this Court is undoubtedly restricted. The award of the arbitrator can be assailed only on grounds of misconduct of the proceedings and an error apparent on the face of the record.
32. It would be also useful to notice the principles laid down by the Apex Court in Sudarshan Trading Co. v. Government of Kerala and Anr. wherein the court laid down the principles thus:
29. The next question on this aspect which requires consideration is that only in a speaking award the court can look into the reasoning of the award. It is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. See the observations of this Court in Hindustan Steel Works Construction Ltd. v. C. Rajasekhar Rao . In the instant case the arbitrator has merely set out the claims and given the history of the claims and then awarded certain amount. He has not spoken his mind indicating why he has done what he has done; he has narrated only how he came to make the award. In absence of any reasons for making the award, it is not open to the court to interfere with the award. Furthermore, in any event reasonableness of the reasons given by the arbitrator cannot be challenged. Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a judge on the evidence before the arbitrator. See the observations of this Court in Municipal Corporation Of Delhi v. Jagan Nath Ashok Kumar .
31. 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 Ruseell on the Law of Arbitration, 20th Edn. 427. Also see the observations of Christopher Brown Ld. v. Genossenschaft Oesterreichischer (1954) 2 Loyd’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 Law of England (4th Edn. Vol. 2 para 622) one of the misconducts enumerated is the decision by the arbitrator 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 Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 AC 147 and Regina v. Noseda, Field, Knight & Fitzpatrick (1958) 1 WLR 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. There may be a conflict as to the power of the arbitrator to grant a particular remedy. See Commercial Arbitration by Sir M.J. Mustill and Steward C. Boyd. Page 84.
32. The High Court in the judgment under appeal referred to the decision of the Division Bench of the Kerala High Court in State of Kerala v. Poulose 1987 1 Ker LT 781 (supra). Our attention was also drawn to the said decision by the counsel for the respondents that if an arbitrator or the umpire travels beyond his jurisdiction and arrogates jurisdiction that does not vest in him, that would be a ground to impeach the award. If an arbitrator, even in a non-speaking award decides contrary to the basic features of the contract, that would vitiate the award, it was held. It may be mentioned that in so far as the decision given that it was possible for the court to construe the terms of the contract to come to a conclusion whether an award made by the arbitrator was possible to be made or not, in our opinion, this is not a correct proposition in law and the several decisions relied by the learned Judge in support of that proposition do not support this proposition. Once there is no dispute as to the contract, what is the interpretation of that contract is a matter for the arbitrator and on which court cannot substitute its own decision.
35. In the instant case, the High Court seems to have fallen into an error of deciding the question on interpretation of the contract. In the aforesaid view of the matter, we are of the opinion that the High Court was in error. It may be stated that if on a view taken of a contract, the decision of the arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the court in the matter done by the High Court in the instant case.
33. Learned Counsel for the objector has also placed reliance on the pronouncement of the Apex Court in Jagdish Rai v. UOI.
There can be no dispute that the principles laid down in this case related to a consideration of an issue as to whether the court would grant interest even though no claim had been raised by the petitioner before the court. The same is distinguishable on facts from the present case. I am unable to agree with learned Counsel for the objector that it was as of right entitled to the award of interest on every amount awarded in its favor. In my view, no absolute proposition of law can possibly be urged that merely because amounts have been held to be due and payable by the respondent to the claimant, the award of interest to petitioner has to follow. In the instant case, the arbitrator has carefully considered the claim of the objector for interest and has recorded reasons for refusing to award the same. The learned arbitrator has found delay attributable to the objector as well. Interest would be leviable in order to compensate a party for delay in receiving payments. In the facts and circumstances of the instant case and the principles of law laid down, this Court would have no jurisdiction to vary the findings returned by the arbitrator. I therefore, find no merit in the objection of the petitioner to the award that it refused to award interest to it. The objections to this extent are not sustainable and are hereby rejected.
34. For all the foregoing reasons, subject to the modification detailed in para 16 above, whereby it has been held that the claimant was entitled to a sum of Rs. 29 lakhs and not Rs. 20 lakhs as was directed in para 12.5 of the award, the Award dated 8th of November, 1997 is made rule of the court. The Registry shall draw up a decree in terms of the award as modified by this judgment.
The award when filed was registered as Suit No. 2520A/1997. IA 1497/98 and CS (OS) 2520A/97 accordingly shall stand disposed of in the above terms.
