PRAKASH CHAND Vs. DIVISIONAL MANAGER

JUDGEMENT

(1.) The above appeal has been filed under Section 39 of the Arbitration Act against the judgment of the learned District Judge, Solan dated 16.4.1991 incase No. 1-S/2 of 91/89, whereunder the learned Judge while dismissing the objections filed by the Appellant (the Respondent in the Court below) made the Award the rule of the Court by passing a decree for a sum of Rs. 76,739.52 with interest as indicated therein; The contesting parties hereto have entered into an agreement pursuant to invitations calling for participation in an open auction for the work relating to extraction of resin from Government, as well as private forest trees in its various units/forest working divisions. The conditions for inviting rates of extraction etc. during 1983-84 resin season applicable to the auction proposed to be held in which the Appellant participated and was held to be successful before entering into an agreement has been filed by the Respondent-Corporation as Annexure C-1 alongwith their claim before the Arbitrator. The bid offered by the Appellant and the orders in this regard has been filed as Annexure C-2. Annexure C-3 is the formal and regular agreement entered into between the Appellant and the contesting Respondent on the prescribed stamp paper. The terms and conditions of auction as also the agreement deed for the rate of extraction etc. for the resin for the year 1983-84 contained meticulous details relating to the conditions and terms subject to which the work has been entrusted with the Appellant. The agreement entered into between the parties by virtue of Clause 2 was agreed to remain in force w.e.f. 15.2.1983 to 31.12.1983, with further scope for extension to carry the extracted resin to road side depot even beyond 31.12.1983 upto 31.1.1984. The terms and conditions of the auction as well as the agreement provided for the mandatory delivery of the resin collected by the Appellant in the manner and within the time stipulated with initial payment, in portion and on account, of remuneration for the work to be carried out with provision for final determination and settlement of such accounts. Clause 11 of the terms of the agreement stipulated that the quantity of net pure resin shall be as determined at the Resin and Turpentine Factory the resin is carried by the Forest Corporation after deducting the weight of the container, sakki and other impurities and that it shall have to be accepted by the agents to be correct and final. Clause 17 provided that running payments upto 30% of the total value of the work done can be made after verification by the Assistant Manager concerned after having extracted and stacked the resin in the forest at the approved place and another 50% after delivery of resin at the road side depot and that the balance final after percentage of sakki and other impurities having been determined in the Resin and Turpentine Factory of the Corporation to which the resin is supplied. Clause 25 stipulated that in case the Appellant fails to extract the minimum yield fixed for each lot, a compensation of Rs. 750 per quintal for short fall shall be recovered from the agent(s) by the Corporation and that the compensation for decrease upto 10% may be waived off if the Managing Director/Director concerned is satisfied that the decrease in yield is on account of circumstances beyond the control of the agents. Clause 31 provides that the final payment to the agents will be made only after due satisfaction of the Corporation that the agents have discharged all their obligations/liabilities towards his/their labour/workmen/employees and to the Corporation, on the finalisation of their accounts. After arriving at the quantity of pure resin delivered, the Respondent-Corporation determined the net short fall at 154.67 quintals and submitted a claim and thereafter, having regard to the dispute referred the matter to Arbitration of the second Respondent in accordance with the terms of the agreement. The Arbitrator, after considering the materials produced before him made his Award on 29.6.1989 holding that the Respondent-Corporation is entitled to recover a sum of Rs. 76,739.52.

(2.) Thereupon, the Respondent appears to have made an application to the Court under Section 14 read with Section 16 of the Arbitration Act, 1940 for making the Award dated 29.6.1989 the rule of the Court and for a judgment in respect thereof. The original Award was said to have been filed in the Court by the Respondent-Corporation. The Appellant also appears to have moved an application on 26.7.1989 under Section 14 (2) for issuance of directions to the Arbitrator to file his Award, documents etc. in the Court and he was informed that the Award has been already filed in the Court on 20.7.1989. The application so filed by the Appellant under Section 14 (2) was said to have been ordered on 11.1.1990 to be tagged with the record in the other case. Objections to the Award under Sections 30 and 33 of the Act were said to have been filed by the Appellant on 12.7.1990. The learned District Judge after conducting the necessary inquiry into the matter ultimately passed his judgment, as indicated earlier. It may be pointed out at this stage, since it becomes relevant for considering the issues raised before us at the time of hearing, that initially the Award came to be filed before the Senior Sub-Judge, Solan and since the learned Judge held that he had no jurisdiction in the matter, it was placed before the District Judge.

(3.) Mr. K.D. Sood, learned Counsel appearing for the Appellant contended by way of challenge to the judgment of the learned District Judge that the Court below committed an error in law in dismissing the objections filed under Sections 30 and 33 of the Arbitration Act and making the Award rule of the Court thereby. According to the learned Counsel, the objections of the Appellant to the Award could not be said to have been belated, warranting its rejection. The learned Counsel also contended that the claim of the Respondent-Corporation itself is barred by limitation and that, therefore, could not have been countenanced either by the Arbitrator or by the Court below and on that ground also the judgment of the learned District Judge requires to be set aside. Finally, it was contended by the learned Counsel that the Arbitrator came to pass the award beyond the stipulated period of four months and as such the award which was illegal on that ground, could not have been made the rule of the Court by passing a decree, as has been done, by the learned District Judge.