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Judgment
Kuldip Chand Sood, J.—These objections, u/s 34 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as "The Act" are laid by the Petitioner M/s. Bombay Tubes and Poles Company, hereinafter referred to as the "Petitioner firm", for setting aside of the award made by Shri S.S. Gupta, Arbitrator on February 19, 2001.
It appears, the Himachal Pradesh State Electricity Board, Respondent, hereinafter referred to as "The Board" placed supply order for the supply of some material including 800 Nos. 8 mtr. long hollow rectangular steel poles on the rates stipulated in the Supply Order. A contract agreement was executed between the Petitioner firm and the Board for the supply of the material stipulated in the Supply Order. Disputes between the parties arose which were referable, under the Contract Agreement, to the sole arbitration of the Chairman of the Board or his nominee under Clause 10 of Article-Ill of the Contract Agreement. The Chairman of the Board nomi-nated Shri S.S. Gupta, then Chief Engineer of the Board as the sole arbitrator to adjudicate the dispute between the parties. The Arbitrator by his impugned award dismissed the claim of the Petitioner firm. Counter claim of the Board too was dismissed.
Aggrieved, the Petitioner firm has filed these objections u/s 34 of the Act.
The claim of the Petitioner was:
(a) 800 Nos. 8 mtr. long hollow rectangular steel of poles were to be supplied by the Petitioner Firm to the Board at the contracted price of rupees 1,370 plus 4% CST for which an amount of 11,39,840 was payable to the firm. The Board rejected the supply. The Petitioner firm could only get scrap value of Rs. 300 per pole. The Petitioner firm thus suffered loss of rupees 8,99,840. The Board is bound to compensate the Petitioner firm for the loss.
(b) These 800 poles were lying at Delhi border since 1.6.1993. The Petitioner firm had to pay ground rent charges for the storage of the said poles at the rate of Rs. 1 per pole per day. The rent is payable till those poles were sold as scrap. The Petitioner firm claimed rupees 10,10,400 as ground rent for the poles which were kept at Delhi border;
(c) Refund of rupees 1,50,000 deducted for the late delivery of the material;
(d) Interest on the amount not paid to the Petitioner firm at the rate of 24% per annum;
(e) National amount of rupees 100 towards the loss of reputation and good will.
The Arbitrator found that the claims of the Petitioner firm were not established and rejected them. The award of the arbitrator is assailed by the Petitioner firm on the grounds:
(i) The Arbitrator while making his award was influenced by the fact that the Petitioner firm was not represented on certain hearings and this was held against the Petitioner firm which is contrary to law and therefore, against Public Policy of India;
(ii) The award exhibits total lack of mind by the Arbitrator;
(iii) Though the Petitioner firm violated the provisions of the Contract Agreement by dispatching the material before the inspection by the Board from Bombay but the Arbitrator ignored the fact that the Board agreed to carry out the inspection of the material in transit at Delhi;
(iv) The award is not referable to the material on record and, therefore, against the Public Policy of India;
(v) A new case was made by the Arbitrator for the Board.
I have heard Mr. J.S. Bhogal learned Senior Advocate for the Petitioner firm and Mr. S.S. Mittal, Senior Advocate for the Board. I have also perused the record.
The case set up by the Petitioner was that 800 Nos. 8 mtr. long rectangular poles were dispatched by the Petitioner firm for delivery to the Board as the Board waived of the inspection. Learned Arbitrator has referred to the material on record particularly various letters of the Petitioner firm and concluded that the Board waived the inspection of only 500 No. 8 Mtr. and 750 No. 9 Mtr. long steel tubular poles at claimant''s works. However, there was a stipulation that the balance material against Purchase Order, when ready, will be inspected by the Inspector of the Board. Clause 12 of the Purchase Order and Article 5 of the Contract Agreement deals with the inspection by the Board which clearly stipulates that unless specifically otherwise agreed to by the Board, the inspection of the material shall be conducted and test witnessed by the Engineer or his duly authorised agent during the course of manufacture as well as completion of the manufacture. It covenants, "No material will be dispatched without inspection and approval by the engineer or his agent." The contention of the Petitioner firm that inspection of 800 No. 8 Mtr. rectangular hollow steel poles was waived of was repelled by the Arbitrator. The Arbitrator concluded:
The claimant firm has failed to establish through documentary or oral evidence the dispatch of the said material from Bombay. On the contrary, the Respondent has proved beyond reasonable doubt that the claimant neither manufactured nor dispatched the said material from Bombay and that the material was arranged by the claimant locally from Delhi.
The conclusion reached by the Arbitrator cannot be said to be dehors the material on record or evidence. The award made by the Arbitrator is reasoned and referable to the material on record. It cannot be said that the award is visited by non-application of mind.
There is nothing on the record to suggest that the arbitrator was influenced by the fact that the Petitioner firm was not represented on certain hearings. The allegation is devoid of any merit. Mr. Bhogal, learned Senior Counsel could not point out how award is influenced from this fact.
It is well settled that the scope of interference with the award u/s 34 of the Act is limited and the Court is not permitted to reappraise the evidence. The Supreme Court in M/s. Ispat Engineering and Foundry Works, B.S. City, Bokaro Vs. M/s. steel Authority of India Ltd., B.S. City, Bokaro, ,referring to M/s. Arosan Enterprises Ltd. Vs. Union of India and Another, ; Champsey Bhara and Co. v. Jivraj Balloo Spg. Co. Ltd. AIR 1923 PC 66 : 1923 AC 480 ; Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., ; N. Chellappan Vs. Secretary, Kerala State Electricity Board and Another, , Sudarsan Trading Co. Vs. Government of Kerala and Another, ; State of Rajasthan Vs. Puri Construction Co. Ltd. and Another, ; and Olympus Superstructures Pvt. Ltd. Vs. Meena Vijay Khetan and Others, , held that reappraisal of evidence by the Court is not permissible unless their exists a total perversity in the award or the judgment is based on wrong proposition of law. Even if two views are possible on a question of law, the Court would not be justified in interfering with the award of the Arbitrator if the view taken is possible view. In Bungo Steel Furniture, it was observed that the Court has no jurisdiction to investigate _ into the merits of the case or to examine the documentary and oral evidence in the record for the purposes of finding out whether or not the arbitrator has committed an error of law. The Court, it was also observed, cannot substitute its own evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. The decision of the arbitrator is binding on the parties unless the award falls within the mischief of Section 34 of the Act.
Judicial intervention in arbitration proceedings is limited. A perusal of the Objects and Reasons of the Act shows that new act was enacted to encourage resolution of the disputes expeditiously and less expensively with minimal intervention by the Courts.
In Himachal Pradesh State Electricity Board Vs. R.J. Shah and Company, the Apex Court considering the scope of interference u/s 34 of the Act held that scope of interference was limited and the court would not interfere with the award made by an arbitrator even if the claim was unjustified.
For the reasons recorded above, there is no merit in the objections of the Petitioner firm. The learned Senior Counsel could not say how new case is set up by the Arbitrator for the Board. It was for the claimant to prove his case before the Arbitrator. Since the claims of the Petitioner firm have been dismissed, therefore, there was no question of payment of any interest or token amount for a loss of good will and reputation as claimed by the Petitioner firm.
There is no merit in the petition, which is dismissed.
There will be no order as to costs.