Rajesh Dhar vs Chief Engineer, R. and B. Public Works, Srinagar and Another

Arun Kumar Goel, J.—Record of the case shows that work of construction of Nageen Club, Srinagar was allotted to the petitioner by the

government and for that purposes agreement No. 126 dated 17-3-1983 was entered into between the parties.

Since dispute had arisen between the parties in relation to this agreement, therefore vide Govt. order No. 158-PW of 1990 dated 19-4-1990

Shri M.N. Durani, was appointed as Arbitrator to adjudicate the dispute which had arisen between the parties and make award within three

months allowed in the said communication. After having entered upon reference and then after examining the records produced by the parties

before him award was made on 24th March, 1995.

Award came to be filed in this Court and was received on 25/3/1995, vide order dated 31-3-1995 notice was ordered to be issued to the

parties for filing objections if any to the Award. Objections under Sections 30 and 33 of J & K Arbitration Act were presented on behalf of the

State on 1-5-1995. According to the averments made in para No. 'a' thereof notice was received on 4-4-1995, as such those are within time.

Prayer was made for setting aside the award by allowing objections. Reply to such objections was filed on behalf of the petitioner and it was

pointed out that no case is made out for setting aside the award and consequently it was prayed, that while dismissing the objections filed on behalf

of the respondents award passed by the Arbitrator be made rule of the Court.

On the pleadings of the parties following issues were framed on 24-11-1995 :--

Whether the Arbitrator has misconducted himself and the proceedings? OPR.

Whether the award was improperly procured or is otherwise invalid ? OPR.

Relief,

CMP No. 32/95 was filed on behalf of the objector for summoning the witnesses with a view to prove the issues framed by this Court. When

this application came up for consideration before the Court, prayer was confined only to the extent for granting some more time for filing affidavit

or for producing records which was intended to be procured in support of the objections. Time was granted for this purpose but again needful was

not done. Another application being CM(AA) No. 88/96 was filed for condonation of delay in filing the affidavits and documents which came up

for consideration before the Court. Vide order passed on this application on 11th July, 1996 it was allowed subject to payment of costs of Rs.

5000/- to be paid to the counsel opposite within two weeks.

Another feature of this case is that this is a case of non-speaking award passed by the Arbitrator and for that matter error if any has to be found

out on examination of the award itself. Objector in support of above noted issues has relied upon the affidavits of Mr. N.M. Paul, Executive

Engineer, R & B Projects Division, Srinagar together with communications attached and uptodate payment certificate made to the Contractor, Mr.

Abdul Majed Mir marginal witness of the agreement in question, Mr. Sheikh Abdul Salam who was posted as Chief Engineer Project,

Organisation of the State Government at Srinagar, he was executant of the agreement on behalf of the State. Mr. Abdul Ahad Bhat, Accounts

Officer in the Office of the Chief Engineer Project Organisation, Srinagar. Mr. Mohd Aslam Bhat who was working as Executive Engineer in the

year 1983. Whereas the petitioner filed his own affidavit while opposing the evidence led on behalf of the respondents, as well as for supporting

the award with a view to make the same rule of the Court.

A perusal of the objections and affidavits filed by way of evidence indicate that they are in the nature of evidence as if this Court is exercising

appellate jurisdiction against the award.

Main thrust of attack against award is that Arbitrator in his capacity as Chief Engineer had dealt with the affairs of the Project in question and he

has pressed into service his personal knowledge while making the impugned award. Reliance in this behalf was placed on number of

communications attached with the affidavit of Mr. N.M. Paul. Thus on this ground award was required to be set aside as per learned Government

Advocate.

In addition to this other evidence for setting aside the impugned award consists of affidavit of Mr. Mohd Aslam Khan who amongst other things

speaks of there being provision for extra work, alteration, addition, ommission and variation in terms of the agreement supra. This was permissible

to be done by the Engineer Incharge with the approval of the Chief Engineer which authorised him to make any variation of form, quality and

quantity of the work. It is admitted in this affidavit that during the execution of the work certain changes were made in view of the directions of the

Architect of the project from time to time.

On the basis of this clause it was urged that Contractor was not entitled to make any claim by reason of alterations having been made.

So far misconduct on the part of the Arbitrator concerning himself as well as proceedings, it has to be spelt out from the award itself on its

examination. As already noticed reliance in this behalf was placed on communication addressed by the Arbitrator in his capacity as Chief Engineer

which was addressed by him to his subordinate as well as his higher authorities and other officers. But then question that arises is whether it

tantamounts to official bias so as to vitiate the impugned award ?

Admittedly Arbitrator was appointed by the State Government as noted hereinabove. When Arbitrator was appointed vide order No. 158-

PW of 1990 dated 19-4-1990, respondents as well as other functionaries of the State Government were well aware that Arbitrator M.N. Durani,

Director Design, Jammu & Kashmir, Jammu had worked as Chief Engineer and in his capacity as such had entered into correspondence with

different functioneries of the State Government regarding construction of Nageen Club, Srinagar. Still the Government chose to appoint him as

Arbitrator to adjudicate the dispute regarding the claim for construction of Nageen Club at Srinagar. In case there was anything like official bias as

has not only been pleaded but also Intended to be supported by leading evidence on issue No. 1, respondents should have been prompt to initiate

action in this behalf. Admittedly no such steps were initiated by them till the filing of objections after award has filed and notice issued by this Court.

To the contrary what to talk of objecting to the appointment of the Arbitrator on the grounds now being urged to question his engagement,

respondents submitted to his jurisdiction, participated in the proceedings regularly from 1990 i.e. date of his appointment till he passed the final

award. Thus only when the award has gone against respondents that the objections have been raised. Impugned award further indicates that time

was extended during the currency of the Arbitration proceedings before Arbitrator with the consent of the parties as also under the orders of the

Court. This is not a case where respondents were not aware about the Arbitrator having dealt with the matter relating to agreement in question in

his capacity as Chief Engineer. Rather they were aware in that behalf. As is evident from the documents attached by them along with affidavit

produced as evidence. As already noticed no protest was raised, rather participation was without any demur, much less any grievance in that

behalf.

Thus it is clear that after having acquiesced, as well submitted to the Jurisdiction of the Arbitrator, objections have been raised in that behalf

after award had gone against. Here what has been stated by Russel on Arbitration 18th Edition page 105, needs to be extracted which completely

repels the contention of the respondents.

If the parties to the reference either agree beforehand to the method of appointment, or afterwards acquiesce in the appointment made, with full

knowledge of all the circumstances, they will be precluded from objecting to such appointment as invalidating subsequent proceedings. Attending

and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquiescence.

In addition to this what is stated at page 295 of 15th Edition of Russel on the Law of Arbitration should needs also to be referred to :--

Although a party may by reason of some disability be legally incapable of submitting matters to arbitration that fact is not one that can be raised as

a ground for disputing the award by other parties to a reference who were aware of the disability. If one of the parties is Incapable the objection

should be taken to be the submission. A party will not be permitted to He by and join in the submission and then if it suits its purpose attack the

award on that ground. The presumption in the absence of proof to the contrary will be that the party complaining was aware of the disability when

the submission was made.

Thus it is obvious that after having taken a chance with Arbitrator as well as after participating in arbitration proceedings, respondents cannot

be permitted to raise any objection against the appointment of Shri Durani as Arbitrator. Such objection would otherwise be not only unjustified

and unfair, but will further lead to increase the litigation at the instance of a party who had opportunity to question appointment of such Arbitrator,

but instead of doing so accepted the same by its acts of ommission and commission. That being so objection urged by the respondents against

appointment of the Arbitrator is not tenable and is accordingly rejected.

Moreover this matter has been concluded by the Supreme Court in cases reported in Prasun Roy Vs. Calcutta Metropolitan Development

Authority and Another, and N. Chellappan Vs. Secretary, Kerala State Electricity Board and Another, ,

So far grant of different amounts for different claims is concerned which according to the learned Government Advocate have been wrongly

allowed in the face of Clause 34 of the agreement relied on by the respondents is concerned, Arbitrator on an overall examination of the matter has

allowed those amounts. In this behalf question that needs to be seen is whether this Court has to re-assess the evidence and then come to a

conclusion whether any error has been committed while making Impugned award or not.

In this connection it may be appropriate to notice that Arbitrator is sole judge of quality and quantity of evidence etc. that may be produced by

the parties during the course of arbitration proceedings before him. This Court is not required to go into evidence and then assess as to what

weighed with him while passing award as in the present case. Simply because this Court would take a different view of the whole matter is no

ground to hold that award is liable to be set aside. It is also now well settled that Arbitrator is a judge appointed by the parties to adjudicate the

disputes between them and Court would ordinarily examine the awards with a view to support the same. However, this does not mean that when

on examination of an award and or despite there being patent and glaring error having been committed by the Arbitrator, the Court will remain a

silent spectator and uphold the same.

On the materials on records of this case it could not be disputed by the learned government Advocate that after agreement was entered upon

and work had commenced its execution was stayed under the order or His Excellency, the Governor, and thereafter designs and drawings were

changed. In these circumstances also the award passed by the Arbitrator deserves to be upheld. Reference in this behalf can usefully be made to

State of U.P. Vs. M/s. Ram Nath International Const. Pvt. Ltd.,

As already observed that High Court does not act as Court of appeal while considering objections of the parties against the award passed by

the Arbitrator. Respondents want this Court to treat the objections and further want those to be dealt with in the matterllke a civil appeal. Whereas

under law this Court is to first examine the award and then spell out the misconduct if any. In the event of any misconduct being made out from the

award itself and or proceedings, Court would not hesitate to set aside the award and not otherwise. See B.V. Radha Krishna Vs. Sponge Iron

India Ltd., .

Regarding interest having been allowed by the Arbitrator as a ground to set aside the impugned award as was urged on behalf of the

respondents. When reference is made to the agreement in question there is no prohibition for allowing interest by the Arbitrator. In the absence of

such prohibition and as also keeping in view the fact that amount which has been found due and payable by the Arbitrator to the Contractor was

more than a decade ago, Had this amount been paid to the petitioner then probably he would have availed the same long ago. In addition to this,

Court cannot ignore the fact that purchasing power of rupee has gone down substantially during the last 10/15 years. In this view of the matter,

Arbitrator was well within his authority to have allowed interest to the petitioner on the awarded amount in terms of the award in question. For

taking this view reliance is placed in AIR 1994 J&K 56, Smt. Manjit Johi v. Bewan Modern Breweries Ltd.

No other point is urged.

As a result of aforesaid discussion Issue Nos. 1 & 2 are decided against respondents and consequently on issue No. 3 objections filed by the

respondents are hereby dismissed and consequently award is ordered to be made rule of the Court.

Decree sheet be drawn accordingly.