DANDASI SAHU Vs. STATE OF ORISSA

JUDGEMENT

(1.) Special leave granted.

(2.) In respect of a dispute relating to the work Lankagada Minor Irrigation Project (Balance Work) in Jagannathaprasad Block which was entrusted to him, the appellant contractor, invoking clause 23 of the agreement and Section 8 of the Arbitration Act requested the Chief Engineer, Rural Engineering Organisation, Bhubaneswar, Orissa, to nominate an arbitrator. It may be mentioned that before making this request for nomination of an arbitrator the appellant made a claim on 16-6-1975 before the Executive Engineer, M. I. Division, Berhampur, Ganjam, claiming to be paid a sum of Rs. 2,81,745 / -. He had also claimed interest on this at the rate of 18 per cent from the date of receiving of the claim book till payment. The work entrusted to the appellant was to commence on 6-12-1971 and to be completed within 18 months i.e. on or before 5-6-1973 and the total cost of the work was Rs. 9,98,970/ -. One Shri D. C. Panda, Superintending Engineer, Central Range, was nominated as the sole arbitrator to decide the dispute and give the award. This arbitrator having accepted the appointment entered on the reference and issued notices to both the parties directing them to file their claims. The appellant filed a claim statement on 5-4-1977 before the arbitrator. In this claim statement he had made a detailed description of each of the items of the claim and the total of the 15 items claimed came to Rs. 3,87,796 / -. To this he added interest at 18 per cent from the date which according to him each of the claims should have been settled making a total claim of interest to the tune of Rs. 2,95,894/-. He thus prayed for an award of Rs. 6,83,690/- and also prayed for further interest , on Rs. 3,87,796/- from 6-4-1977 till date of award and thereafter until payment at 18 per cent. It may be mentioned that in this statement of claim made before the arbitrator some of the claims made before the Executive Engineer were omitted, some were reduced whereas some new claims were introduced and some other items of claim were enhanced. The State of Orissa filed a written statement and the arbitration proceedings continued for some time but before the arbitrator could make the award an application before the Subordinate Judge, Bhubaneshwar was filed under Sections 8(2) and 12 of the Arbitration Act. By an order dated 17-12-1979 the learned Subordinate Judge removed the arbitrator and appointed one Shri J. Pati, Chief Construction Engineer, Paradip Port as the sole arbitrator to decide the dispute between the parties. However, since Shri J. Pati expressed his inability to arbitrate, by another order dated 16-4-1980 the, court appointed Shri Banabasi Patnaik, Superintending Engineer, Sambalpur as the sole arbitrator in place of Shri J. Pati. This arbitrator entered on the reference, got all the relevant records from the Previous arbitrator continued the hearing on the 9th June and 9th July, 1980. On the ground that the appellant has not included some of his claims "relating to this work" in the claim statement submitted to the previous arbitrator, he made a supplemental claim for a sum of Rs. 8,27,857/- and prayed that in addition to the claim stated in the original claim statement a sum of Rs. 8,27,857/- be awarded in his favour with interest at 18 per cent per annum on Rs. 8,27,857/- from 14-10-1973 till date of payment. The State of Orissa not only disputed the claim made but also objected to the entertainment of an additional claim in their written statement dated August 13, 1981. The arbitrator, however, decided to entertain the supplemental- claim and proceeded with the hearing of the dispute. The supplement claim consisted of 11 items. As seen from the note papers, the arguments on supplemental claims 1 to 6 were heard on two different dates and the hearing was adjourned to 8-11-1981. On that. day arguments in respect of rest of the supplemental claim items were heard and the hearing was closed. On the same day the appellant-contractor filed what he termed as one consolidated 'abstract' of his two claim statements and the abstract showed a total claim of Rs. 31,44,437/- and he had further prayed in this that the total amount of Rs. 31,44,437/ - may be allowed along with an interest at 18 per cent per annum on the said amount from 9-11-1981 till date of payment. The arbitrator made an award on 7-12-1981 allowing a lump sum of Rs. 25,00,156 / - together with interest at 9 per cent after the expiry of 30 days from the date of making the award till the date of payment or decree whichever is earlier. The award was filed in Court for making a decree and the Government filed an application to set aside the award on various grounds. The trial Court overruled the objections of the State and the award was made a decree of the court. However, learned Judge disallowed the interest from the date of decree till realisation. On appeal by the State Government, the High Court came to the conclusion that award suffers from non-application of the mind amounting to legal misconduct. In that view the award was set aside and the matter was remitted back to the Arbitration Tribunal constituted under Section 41-A of the Arbitration Act as amended by Orissa Act 3 of 1983. The contractor-claimant has filed this appeal against this judgment of High Court.

(3.) As is seen from the award though it refers to getting all the relevant records from the ex-arbitrator there is no reference to the hearing of the parties or consideration of the documents relating to the original claim made on 6-4-1977. In the order-sheet it has been mentioned that both parties had agreed that they had nothing more to add except what had been already given in their respective claim and counter statement and what had been recorded in the depositions already made before the previous arbitrator. The reference to depositions already made is incorrect as it is admitted by both the parties that no deposition was at all recorded before the previous arbitrator nor there is any record of the previous arbitrator, showing such oral evidence was recorded by him. Neither of the parties adduced any oral evidence before the new arbitrator. Though the arbitrator is not bound to disclose as to what interprete has made and what inference he has derived from the documentary evidence, he is bound to refer in the award that he had considered all the documents placed before him no matter whether he relied on them or discards them from consideration. The arbitrator in his award ex facie does not mention that he has referred to or considered the documents placed before him in respect of the original claim. The order-sheet mentions about the hearing on different dates relating. to the supplemental claim statement which was filed before him. It is this argument in respect of the suppmental claim that has been mentioned in the award.