N P C C Vs. RAJDHANI BUILDERS

JUDGEMENT

(1.) The respondent-contractor was awarded the construction work at the PETS complex, Faridabad, Haryana by the petitioner in pursuance of the agreement dated 26.04.1991. The stipulated date of completion of work was 17.06.1992, but the work was actually completed on 21.08.1993 with the delay of about one year and two months. The terms and conditions agreed to between the parties contained arbitration clause and since disputes arose between the parties, the matter was referred to arbitration. The earlier arbitrator passed away and subsequently Mr.M.M.Kapoor was appointed as the sole arbitrator who made and published his award dated 30.04.2001. The petitioner aggrieved by the same has filed the present objections under Section 34 of the Arbitration and Conciliation Act, 1996 (herein after referred to as the 'said Act')

(2.) Learned counsel for the petitioner at the inception of the hearing drew the attention of this court to the judgment in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd., AIR 2003 SC 2629 to contend that the objections canvassed by the petitioner fall within the scope of scrutiny under Section 34 (2) of the said Act. Learned counsel submitted that the jurisdiction or powers of the arbitral tribunal is prescribed under the Act and if the award is de hors of the said provisions, it would be on the face of it illegal. Further if the arbitral tribunal has not followed the mandatory procedure prescribed under section 24, 28 or 31(3) of the said Act which affects the rights of the parties, the award cannot be sustained and the court has to intervene as it is settled principle of law that the procedural law cannot fail to provide relief when substantive law gives the right.

(3.) The apex court interpreted the term ? Public Policy of India? used in the provisions of Section 34(2) of the Act in the context of the jurisdiction of the court where the validity of the award is challenged before it becomes final and executable. Another aspect considered by the apex court was that the award cannot be in violation of the contractual terms agreed to between the parties as thereby it would violate section 28(3) of the Act. A reference was also made by the apex court to the judgment in M/s Alopi Prasad v. Unon of India; AIR 1960 Supreme Court 588; which examined the scope of scrutiny by the court under Section 30 and 33 of the Indian Arbitration Act, 1940. One of the aspects which was to be considered as an error apparent on the face of the award was where the award was founded on some legal proposition which was erroneous. However if a specific question was submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law does not make the award bad on its face so as to permit it being set aside.