State of Haryana vs Om Parkash Gupta and Another

L.N. Mittal, J.—State of Haryana has filed this revision petition u/s 115 of the CPC impugning judgment and decree dated 30.04.1998 passed by learned Additional District Judge, Hisar. Respondent No. 1-contractor-Om Parkash Gupta was allotted some work by petitioner-State of Haryana. Dispute arose between the parties. The dispute was referred to respondent No. 2-Arbitrator who gave award dated 24.08.1990. Petitioner filed application u/s 14(2) of the Arbitration Act, 1940 for directing respondent No. 2 to file the award in the Court along with arbitration proceedings. The petitioner also reserved its right to file objection, if any, against the award. Accordingly, the Arbitrator filed the award and the arbitration proceedings in the Court.

Respondent No. 1-contractor filed objections under Sections 30 and 33 of the Arbitration Act, 1940 for setting aside the award. The contract containing arbitration clause was alleged to be unconstitutional. The award was also assailed on merits. It was also alleged that the award was made beyond the period of four months. It was also pleaded that counter-claim of the contractor has not been adjudicated upon by the Arbitrator. It was also pleaded that proper opportunity was not given to the contractor.

Petitioner-State of Haryana by filing reply controverted the averments made by the contractor in the objections. It was pleaded that time for making the award was extended with the consent of the parties. Objections challenging the validity of the award were denied.

State of Haryana also filed application under Sections 15 and 17 of the Arbitration Act, 1940 for modifying the award and for making modified award as rule of the Court.

Learned trial Court vide order dated 27.03.1995 dismissed the objections preferred by the contractor and made the award dated 24.08.1990 passed by Arbitrator rule of the Court and passed decree accordingly. However, appeal preferred by contractor against order and decree of the trial Court has been allowed by Additional District Judge vide judgment dated 30.04.1998 whereby objections filed by the contractor have been allowed and award of the Arbitrator has been set aside. Feeling aggrieved, State of Haryana has filed the instant revision petition to challenge judgment and decree of the lower appellate Court.

I have heard learned counsel for the petitioner and perused the case file including files of the trial Court and Arbitrator.

Whereas none has appeared for respondent No. 1-contractor. On 02.07.2013 also, none had appeared for the contractor and the case was adjourned to 26.07.2013 and counsel for respondent No. 1-contractor was ordered to be informed by the office. Accordingly, counsel for respondent No. 1-contractor was informed by the office. But inspite thereof, none appeared for respondent No. 1 on 26.07.2013. In the interest of justice, the case was adjourned for today with last opportunity for respondent No. 1. However, even today, none has appeared for respondent No. 1.

Learned lower appellate Court has set aside the award on two grounds. The first ground is that the Arbitrator was appointed vide order dated 18.01.1990 and was supposed to make the award within four months. He made the award on 24.08.1990 after expiry of the said period of four months and, therefore, the award is bad. However, this approach of the lower appellate Court is patently erroneous and factually incorrect and, therefore, is completely illegal and unsustainable. Perusal of the record of Arbitrator reveals that both the parties gave written consent on 25.05.1990 for extension of time for making the award by four months from 20.05.1990 and the Arbitrator vide order of even date extended the time accordingly. The award was made on 24.08.1990 within the said extended time. Consequently, the award could not be set aside on the ground that it was made beyond the prescribed period of four months.

The other ground to set aside the award by the lower appellate Court was that counter-claim of the contractor had not been adjudicated upon by the Arbitrator. However, on the said ground, the award relating to claim of the petitioner-State could not have been set aside and the aforesaid grievance of the contractor could be redressed by remitting the matter to the Arbitrator for adjudication upon the counter-claim of the contractor. It is thus apparent that impugned judgment of lower appellate Court is patently illegal and suffers from jurisdictional error. Resultantly, the instant revision petition is allowed. Impugned judgment and decree dated 30.04.1998 passed by the lower appellate Court are set aside. Award dated 24.08.1990 made by respondent No. 2 -Arbitrator is made rule of the Court and the decree is passed in terms thereof. However, at the same time, counter-claim of respondent No. 1-contractor is remitted to Arbitrator for adjudication in accordance with law. Competent authority shall appoint Arbitrator for this purpose because respondent No. 2 must have retired by now.