MOHINDER SINGH DHAMRAIT Vs. UNION OF INDIA

JUDGEMENT

(1.) Mohinder Singh Dhamrait, a contractor, executed the work of providing certain roads and paths with bitumen surface for the Union of India. The agreement under which this work was accounted stipulated that all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions mentioned in it and as to the quality of workmanship or materials used on the work or as to any other question, claim, right matter or thing whatsoever, in any was arising out of or relating to the contract, designs, drawings, specifications estimates instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, C.P.W.D. in charge of the work at the time of dispute or if there is no Chief Engineer, the Administrative Head of the C.P.W.D. at the time of such appointment. A dispute of the type contemplated by the agreement did arise and the contractor claimed from the Government a sum of Rs. one lac and odd. This claim was not acceptable to the authorities of the Central Public Works Department and the dispute was, therefore, reterned by the Chief Engineer concerned as per clause 25 of the agreement to the arbitration of Shri M. B. Rao. After some time Shri Rao resigned and the Chief Engineer appointed in his place Shri H. C. Gupta as he sole arbitrator. Shri Gupta was told in the order of reference that 'on case the amount of claims in dispute is Rs. 50,000.00 or above the arbitrator shall give reasons for the award'. This directive was issued in view of a term in the original agreement between the parties requiring the arbitrator to do so.

(2.) Shri Gupta took up the arbitration in pursuance of the reference made to him. He framed 13 issues to facilitate adjudication with the consent of the parties and on consideration of the evidence adduced thereon made an award on August 24, 1974. Mohinder Singh Dhamrait, the contractor, preferred an application in this court with a prayer that the arbitrator be ordered to file the award and in compliance with a process received from the court in this behalf Shri Gupta filed his 'award- on October 4, 1974. Notice of the filing of the award was given to the parties. The contractor took no exception to the same but the Union of India filed objections and urged that the award was liable to be set aside because the arbitrator had misconducted himself and the proceeding and he had transgressed the limits of his authority. In the light of the objections of the respondent and the petitioner's reply there to the following issues were framed in the case :

(3.) Issues No. 1 & 2- The one plea on which the respondent has mainly relied is that although the claim of the contractor referred to the arbitrator was more than rupees one lac in value the arbitrator did not give any reasons for the award. As we learn from the award there were thirteen issues before the arbitrator and he took them up one by one for consideration and reached an indedendent decision with regard to each of them. But the fact remains that not only the claim considered was for a such exceeding Rs. 50,000.00 the award too favoured the contractor to the tune of Rs. 54,911.26. The arbitration clause and the order of reference made it obligator for the arbitrator to give his reasons for allowing the aforesaid sum to the contractor and it is not disputed by the petitioner that such reasons have not been furnished. The arbitrator has observed at one place that the claim under the issue stands proved and as such the claimant is entitled to recover the amount asked for and at another that withholding of the security by the respondent is not justified under the terms and conditions of the agreement and as such the amount in question is payable by the respondent to the claimant. And so on. It must be conceded that the arbitrator's bald verdict whether the claim is proved or not or it is justified or not fails to fulfil the requirement of recording reasons in herent in his appointment.