Union of India vs Ashok Katyal

G.S. Sistani, J.—The petitioner has filed the present petition u/s 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award dated 28.1.2002. The brief facts of the case are that the respondent contractor was awarded a contract for two years with effect from October, 1998 for two parking sites measuring 675 sq. mts. and 372 sq. mts. At Hazrat Nizamuddin Railway Station for a total consideration of Rs. 29,52,000/- as per the agreement executed between the parties dated 27.11.1998. Disputes and differences were referred for adjudication to an arbitrator. As per the claim of the respondent possession of the first site, i.e., 675 sq. mts. was initially handed over to him. However, subsequently he was called upon to surrender a portion of the area for construction of a water tank leaving an area of only 290 sq. mts. The second grievance of the respondent was that possession of the second site of 372 sq. mts was never delivered to the respondent contractor on 1.10.1998.

The case of the respondent contractor before the Arbitrator was that since he was handed over a lesser area in accordance with clause 21(b) of the agreement, therefore, license fee on pro rata basis should be charged and he should be refunded the balance amount. The case of the petitioner before the arbitrator was that in view of the area which was taken over for construction of a water tank the respondent was offered two sites and he voluntarily took possession of a much smaller area measuring 290 sq.mts., although he had been offered a site of an area measuring 635 sq. mts. It was submitted that since the respondent himself chose a lesser area he could not now agitate that license fee on pro rata basis be charged. As far as handing over possession of the second site measuring 372 sq. mts. is concerned the stand of the petitioner before the arbitrator was that it is the respondent who refused to accept possession as he did not have any means to carry out the parking at the second site. To buttress his point, counsel for the petitioner relied upon two communications which were issued to the respondent calling upon him to take possession of the site and operate the parking lot. Counsel further relied on letters dated 8.12.1998 and 9.12.1998.

The stand of the claimant before the arbitrator was that the second parking site was not in a parkable condition. According to the claimant the site was full of filth and it was impossible to operate on this site. The arbitrator has noticed that in reply to the communications dated 8.12.1998 and 9.12.1998 the claimant had replied vide letters dated 10.12.1998 and 17.2.1999 as well as 31.3.1999 that the site may be given to him in a parkable condition as the site has no proper entry. The claimant also requested for an alternative site in an adjoining area and in case no site was available he requested that the respondent should stop charging license fee for the second parking area of 372 sq. mts. The grievance of the claimant was thus two fold - Firstly, the area of 675 sq. mts. was unreasonably reduced to 290 sq.mts., and secondly, the parking site was not made available to him at all even though he had paid the entire amount as demanded by the petitioner.

After hearing learned counsel for the parties, the arbitrator framed the following issues:-

Whether 2nd parking site of 372 sq. mtrs. was handed over by the respondent to the claimant.

Whether 2nd parking site of 372 sq. mtrs. was made operational by the claimant or not.

Whether compensation is admissible for the change of location and measurement of the original site allotted for cycle/scooter stand to the claimant.

Whether the licence fee is supposed to be revised as per terms of agreement on proportionate basis for the remaining period of the contract on account of revision of site of parking area during the currency of the contract.

Whether letters dated 3.11.99 and 11.2.2000 issued by the respondent are contradictory to each other or not.

Whether the claimant is entitled for any refund of licence fee paid by him or any compensation as per terms of agreement.

The arbitrator while deciding the matter has taken into consideration a letter which was issued by the petitioner herein. The arbitrator has noticed that on 11.1.1999 the claimant wrote to the respondent that he never requested for shifting of his cycle/scooter parking stand but the decision taken by the respondent unilaterally and hence he may be allowed to use the adjoining area so as to diminish his financial loss for which a request had already been made vide his letter dated 1.1.1999. The site of 675 sq. mts. to 290 sq. mts was shifted by the claimant as confirmed by him vide his letter dated 12.1.999. On 15.6.1999 the claimant submitted his representation to DRM/Comml/NDLS that license fee fixed for two sites of 675 sq. mts and 272 sq. mts. may be proportionally revised as his first site of 675 sq. mts has been reduced to 290 sq. mts with effect from 12.1.1999 and the second parking lot of 372 sq.mts. was not handed over to him despite repeated requests. After considering his requests the DRM/Comml(respondent) decided vide letter 23/AC/393/CS/HNZM/98/2000 dated 3.11.1999 to adjust the excess license fee paid by the claimant as per the physical possession of the parking area. The arbitrator has categorically relied on this letter and stated as under:

It has been mentioned in his letter that a total area of 1047 sq. mtrs. was to be handed over to the claimant for the consideration of licence fee @ Rs. 1,23,000/- per month. The area of 372 sq. mtrs. could not be given to the contractor right from the beginning of the contract and further more the area of 675 sq. mtrs was reduced w.e.f. 11.1.99 to 290 sq. mtrs. on account of construction of overhead water tank. Therefore, the claimant was allowed to continue his contract upto 30.9.2000 without further depositing the licence fee and by adjusting the already paid excess amount of licence fee.

Although subsequently the respondent wrote another letter dated 11.2.2000 wherein a completely contradictory stand was taken. The arbitrator has awarded a sum of Rs. 11,23,079/- to the claimant on account of excess money paid by him to the Railway Administration on account of a reduction of first site of parking area from 675 sq.mts to 290 sq. mt. and on account of not handing over the second site of 372 sq.mts. in operable condition.

I have heard learned counsel for the parties and perused the impugned arbitral award dated 28.01.2002.

The thrust in the petitioner''s objections to the arbitral award is that the arbitrator has failed to take cognizance of certain material facts, and thus, the said action of the arbitrator being against the principles of natural justice, the impugned arbitral award is liable to be set aside. The averments of the petitioner are not acceptable to me for the reason that u[t]he arbitrator is the final arbiter for the dispute between the parties and it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or has failed to appreciate the facts" (per G.N. Ray, J. in State of Rajasthan Vs. Puri Construction Co. Ltd. and Another, ).

Furthermore, as observed in Sudarsan Trading Co. Vs. Government of Kerala and Another, , "[T]here 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.... Courts cannot substitute 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: (per Sabyasachi Mukherji, J. at paragraph 32 of the judgment)

The crux of the aforesaid judgment is that if the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of 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.

Lastly, contrary to the averments of the petitioner, I find that the award of learned Sole arbitrator is reasoned award. The learned Arbitrator has examined each and every claim of the petitioner minutely and has given sufficient and cogent reasons in support of the claims sustained by him. It is trite that where reasons have been given by the Arbitrator in making the arbitral award, the Court cannot examine the ''reasonableness of the reasons'' (see Municipal Corporation of Delhi Vs. Jagan Nath Ashok Kumar and Another, ). For the reasons aforesaid and in light of the judicial dictum prevailing in State of Rajasthan (supra). Sudarsan Trading Co. (supra) and Municipal Corporation of Delhi (supra), I find no grounds to interfere in the award of the learned Arbitrator. Objections of the petitioner are hereby dismissed.