R.K. Nanda vs State

M.H. Beg, C.J.—The application has come up before this Court for revision of the order of the Additional District Judge of Kangra rejecting the applicant''s civil appeal against the order of a Senior Sub-Judge who had dismissed the applicant''s petition, u/s 30/33 of the Arbitration Act, for setting aside the award dated 25th June, 1966. The award was made by Shri K.L. Kapoor, Superintending Engineer, Kangra Hill Circle, opposite party No. 2, on differences arising between the applicant contractor and the Executive Engineer. The arbitration was apparently undertaken under the terms of an agreement signed by the Contractor before he was entrusted with certain work which he alleged having completed for the Public Works Department. It appears that there were seven items in respect of which he claims to be entitled to payment. The Arbitrator recorded some evidence and also the various points of agreement between the disputants from stage to stage. On 2nd of June, 1966, the Arbitrator noted in his record of proceedings:

Both parties agreed to satisfy each other at the site and send a joint report signed by both of them, which should reach the arbitrator by 14th June, 1966. The report will be sent by the Executive Engineer.

The arbitrator also noted the queries put by each side to other and their answers and the documents filed by each side. The arbitrator then recorded:

Both the parties have nothing more to say on this case, both orally or otherwise, and no more evidence has to be produced by them. Beside, inspection will be made by the Arbitrator regarding claim No. 7. The information regarding date of inspection will be sent telegraphically to both the parties. The case is otherwise closed.

This statement on record was signed not merely by the Arbitrator, but by the Contractor as well as the Executive Engineer. It appears that, after that, the contractor and the Executive Engineer went to the site and submitted their own reports which were then persued by the Arbitrator who summoned the parties by means of a Regd. A.D. letter dated 24th June, 1966 which ran as follows:

A hearing in connection with the two letters noted under reference, will be held by the undersigned in his office at Dharamsala on 29th June, 1966 at 9 A.M. Both the parties are requested to please attend the hearing duly prepared. The Executive Engineer, Hamirpur is also requested to produce Shri Basant Ram, Sectional Officer, along with all measurement books relating to this work.

Both the parties then appeared before the Arbitrator on 29-6-1966. The proceedings record that the Superintending Engineer persued the documents and what each party had to say about each item and concluded that certain entries in registers of work done belied the case of the contractor. After that, the Arbitrator closed the proceedings with the following sentence:

The case is closed as neither of the parties has anything more to say nor required any further examination of the dispute under arbitration with the Arbitrator.

The proceedings of this date are also signed by the contractor applicant, the Executive Engineer, and the Arbitrator. It is, therefore, evident that, although, the case was said to have been closed earlier, on 2nd June, 1966, except for the site inspection which was to be undertaken by the Superintending Engineer, yet, it was reopened in view of the site inspection by the contractor and the Executive Engineer together and the further evidence they submitted by means of letters. The Superintending Engineer, therefore, thought fit to decide the dispute by looking at the registers summoned and evidence of parties, given by question and answer, and he decided not to inspect the site. The position reached, that the evidence was closed and that there was to be no further examination of the disputed matter under arbitration by the Arbitrator, was recorded and agreed to by the applicant and the Executive Engineer on 29-6-1966. The agreement was signed by both sides and by the Arbitrator. It was futile, after this, for the applicant to urge that he did not have sufficient opportunity to prove his case.

It is true that the award merely gives the conclusions reached by the Arbitrator and recorded on 25th July, 1966. Against item Nos. 1 and 3 to 7, the entry is ''rejected''. The award also shows what item of claim is in respect of and how much was claimed. It is evident that the reasons for coming to these conclusions had already been recorded by the Arbitrator on 29th June, 1966. The award was only intended to convey the final conclusions reached by the Arbitrator.

Against the award, the applicant submitted a petition u/s 30/33 of the Arbitration Act, in which he did not take up the case that his signatures were obtained on 29-6-1966 by fraud or under any misapprehension of any sort. He did not even complain that he was not given a proper hearing or that the inspection of the site was not made by the Superintending Engineer as Arbitrator. He merely claimed to be entitled to payment for work of which he set out details, although the proceedings of 29-6-1966 indicate that the Superintending Engineer had rejected his claims in respect of six out of seven items as incorrect. The Senior Sub-Judge rightly rejected the contractor''s application, and the Additional District Judge, thereafter, quite properly rejected the applicant''s appeal.

By means of this application u/s 115 Code of Civil Procedure, learned Counsel for the applicant has brought the matter to this Court. He has tried to take me through the arbitration proceedings in order to establish that the Arbitrator had misconducted the proceedings. He cited an authority, The Indian Minerals Co. Vs. The Northern India Lime Marketing Association, to support the proposition that "misconduct not amounting to moral turpitude is called legal misconduct and has a very wide meaning." He also relied on a passage in this case where it was said: "It is difficult to give an exhaustive definition of what amounts to legal misconduct. It may however, be stated that legal misconduct means misconduct in the judicial sense arising from some honest, though erroneous, breach and neglect of duty and responsibility on the part of the arbitrator causing miscarriage of justice." In this case, an observation of Martin C.J., in Bhogilal Purshottam Vs. Chimanlal Amritlal, was cited to show that misconduct "includes failure to perform the essential duties which are cast on an arbitrator as such." It was said there; "It also includes any irregularity of action which is not consonant with general principles of equity and good conscience which ought to govern the conduct of an arbitrator."

It was urged before me that the award does not give reasons for the conclusions. It has been held, in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, that mere failure to state the reasons for an award does not amount to an error on the face of the award. Moreover, in the instant case, the reasons are found in the proceedings of 29th June, 1966, the record of which was meticulously kept by the Arbitrator. The record was signed by the contractor as well the Executive Engineer. It is true that absence of reasons does create an impression of arbitrariness about an award although an arbitrator may not be bound to record his reasons. Arbitrators have not to observe anything more than the rules of natural justice. An arbitration award may not be invalid merely because no reasons for conclusion are stated in the award itself. But, as an award devoid of reasons for the conclusions creates an initially unfavourable impression about it, it is certainly better for the arbitrator to indicate the reasons. As I have already said, in the instant case, even the reasons can be found by going through the record of the arbitration proceedings. In such a case, absence of a statement of reasons in the award could not possibly make the award defective or illegal, on the face of it, or indicate a misconduct of proceedings.

The next contention of the Petitioner, that the arbitrator has not followed a just and equitable procedure in not inspecting the site after having recorded, on 2nd June, 1966, his intention to inspect the site before making the award, is answered by the record of the proceedings of 29-6-1966 showing that, in view of the fresh developments, the arbitrator had given up his intention to inspect the site. The statement on the record of 29th June, 1966, was certainly open to the natural interpretation that the applicant--contractor and the Executive Engineer had acknowledged the absence of any need to inspect the site. Hence, the conclusion arrived at by the lower appellate Court that there was no prejudice caused to the applicant, of which he did not even complaint in his application u/s 30/33 of the Arbitration Act, was quite correct.

Some argument has taken place about the maintainability of this revision application u/s 115 Code of Civil Procedure. The view is well established by Privy Council decisions, from Amir Hasan Khan v. Sheo Buksh Singh (11 CI.L.R 6 ) to AIR 1949 156 (Privy Council) and, after that, by a series of decision of the Supreme Court, in Keshardeo Chamria Vs. Radha Kissen Chamria and Others, Chaube Jagdish Prasad and Another Vs. Ganga Prasad Chaturvedi, , Roshan Lal Mehra Vs. Ishwar Das, , and Prem Raj Vs. D.L.F. Housing and Construction Pvt. Ltd. and Another, , which have been cited before me in this case, that only jurisdictional errors can be corrected by this Court in the exercise of its revisional jurisdiction u/s 115 Code of Civil Procedure. Even illegalities or material irregularities committed by subordinate Courts, to justify interference by a High Court u/s 115 Code of Civil Procedure, must relate to the exercise of their jurisdictions by the Courts below. There may be a case in which, by a misinterpretation of a provision of law, a subordinate Court may have failed to exercise jurisdiction vested in it, or, by such misinterpretation, may have usurped a jurisdiction not vested in it. And, in the exercise of admitted jurisdiction, there may be failures or substantial illegalities or irregularities. In every case, however, the error must be a procedural one, relating to exercise of jurisdiction, which substantially affects a parties interests. A court has jurisdiction to give decisions, which may be either correct or erroneous on fact or law. Merely erroneous decisions, either on questions of law or of fact, do not justify interference u/s 115 Code of Civil Procedure.

The case before me is not one in which any failure to exercise jurisdiction vested by law has taken place. Nor has any jurisdiction been exercised illegally or with material irregularity. It could certainly not be a case of an exercise of jurisdiction which did not exist. I, therefore, reject, this application. I make no orders as to costs in this Court.

The learned Counsel for the applicants urges that the calculation of costs in Courts below and entered in the decree of the lower appellate court was erroneous. This is not a matter which is involved in this revision application. The applicant can, if there is such an error in the preparation of the decree of the lower appellate Court, get it corrected in the Court concerned itself.