UNION OF INDIA Vs. HARI RAM GUPTA

JUDGEMENT

(1.) THIS appeal has been preferred under Section 39 of the Arbitration Act, 1940 against the order dated 15.1.2002 passed by the Court of 6th A.D.J. Gwalior in MJC No.24/1999 and for confirmation of the award of Arbitrator dated 26.8.1999 passed by the Respondent No.2.

(2.) BRIEFLY stated facts are that an agreement was executed between the respondent No.1 and the appellant on 8.11.1986. Work pursuant thereto could not be completed within time and a dispute arose between the parties with regard to it. Respondent No.1 submitted an application for appointment of General Manager Central Railway as Arbitrator. Since no such appointment was made, respondent No.l submitted an application before the court for appointment of arbitrator. Court of District Judge Gwalior vide its order dated 9.12.1994 directed that General Manager Central Railway himself or any gazetted officer nominated by him in this regard would decide the dispute under G.C.C (General Conditions of Contract) as an arbitrator. Respondent No.2 was nominated as arbitrator. Who passed an award dated 26.8.1999. On service of award on respondent No.l on 6.9.1999. he submitted an application under Section 30 of the Arbitration Act 1940 for setting it aside mainly with the allegations that he had claimed in all Rs.4,10,091/- against item Nos. 1 to 8, whereas, merely, a sum of Rs.25,204/- has been awarded by the Arbitrator against item No.1 as against Rs.44,191/- as claimed. No award has been passed in respect of remaining other items. Main objection of respondent No.l is that while declining the claim in respect of other items, no reason has been assigned by the Arbitrator. This application has been allowed by the impugned order dated 15.1.2002 on the ground that the Arbitrator was obliged to assign reasons by virtue of sub section (3) of Section 31 of the Arbitration and Conciliation Act 1996. Since the arbitrator was directed to decide the dispute under G.C.C. and the arbitrator by virtue of clause 64 (3)(b)(i) of it was obliged to make the itemwise award with reasons. Accordingly, the arbitration award dated 26.8.1999 has been set aside and the arbitrator was directed to pass a fresh award after keeping in mind Section 31(3) of the Arbitration and Conciliation Act 1996 and the provisions of G.C.C. Aggrieved by it, present appeal has been preferred.

(3.) AS regards furnishing reasons for the award, it may be seen that neither in the arbitration agreement nor in the order dated 9.12.1994 it was so directed that reasons are to be assigned by the arbitrator. Learned District Judge Gwalior vide its order dated 9.12.1994 observed that the General Manager in case of claim not exceeding Rs.5 lac may nominate any gazetted officer as arbitrator. Accordingly, it was ordered vide order dated 9.12.1994 that the General Manager Central Railway may nominate any Gazetted officer as arbitrator, who was directed to decide the dispute of arbitration under G.C.C. There is no material on record that an arbitrator was obliged to assign reason either under the statutory provisions or under the contract or even otherwise.