UNION OF INDIA Vs. J P SHARMA

JUDGEMENT

(1.) THE Union of India has filed this appeal under Section 39 of the Arbitration Act (hereinafter referred to as "the Act') against the judgment and decree of the learned District Judge, Bikaner, Dt. Sept. 7, 1970, whereby the learned Judge, while dismissing the objections under Section 30 of the Act filed by the appellant Union of India, accepted the award made by the Arbitrator and made it a rule of the court passing a decree for Rs. 4,26,828.90 P. in favour of M/s. J.P. Sharma and Sons and against the appellant Union of India. THE learned District Judge also directed that the Union of India shall pay interest @ 4% per annum on the principal sum from the date of the decree till realisation.

(2.) RESPONDENTS M/s. J.P. Sharma and Sons were engaged as goods-handling contractor by the Northern Railway for the purpose of performing all the work of porterage of geeds at the various railway stations and goods sheds falling in zone No. 2 of the Bikaner Division of the Novihem Railway. The agreement came into force on April 1, 1957 and was terminable on Mar. 31, 1960. The terms and conditions of the contract were contained in an indenture Dt. April 3, 1957. Two Schedules 'A' and 'B' appended to the said agreement provided for the rates payable to the contractor for the various jobs to be done by it. According to the Schedules, the remuneration of the contractor was to be on the basis of per thousand maunds of goods handled or per vehicle or per man- hour according to the nature of Ihe works. So far as the handling work not specified in the agreement was concerned, it was agreed that for such work, the contractor shall be entitled for such , rates which were to be mutually agreed upon by the railway administration and the contractor. The contract was, however, terminated in Aug. 1959 by the railway administration alleging that the contractor has failed to carry out the terms and provisions of the agreement and the security deposit amounting to Rs. 5.000/- was also forfeit ed under the provisions of Clause 30 of the agreement. The contractor, after serving a notice under Section 80 of the Civil P. C. on the Union of India, filed a suit against it for recovery of a sum of Rs. 3,17,728.81 p. in the court of District Judge, Bikaner, on Sept. 21, 1959. However, the Union of India, invoking Clause 33 of the agreement which provided for arbitration in the matters of all disputes between it and the contractor, filed an application under Section 34 of the Arbitration Act before he District Judge who accepted the application and stayed the suit directing that the parties were free to get the matter adjudicated upon by an arbitrator as provided in Clause 33 of the agreement. The General Manager, Northern Railway, by his order Dt. Sept. 21, 1962, appointed Shri S. P. Lal, _Senior Deputy General Manager, Northern Railway, to act as Arbitrator in the dispute between the Railway Administration and the contractor as he himself, owing to his previous heavy engagements and pressure of official work, could not act as an Arbitrator. The aforesaid Arbitrator entered into arbitration and called upon the parties to submit their respective claim petitions giving full details of the claim together with all relevant documents. The respondent contractor filed a claim petition on Sept. 10, 1962 and the Railway Administra- tion besides filing reply to the claim of the contractor, also made a counter-claim. After a procedure had been mutually agreed to, the Arbitrator laid down the procedure and the parties came forward with a list of ten issues which they wanted to be decided upon. The said issues are reproduced below,- 1. Whether the rate in respect of handling of TR/CR Vans under item 18 of the Rate Schedule 'A' is applicable at all the stations, if not, at what stations? 2. Whether the petitioner is entitled to payment for handling of TR/CR Vans, both on inward as well as outward basis at repacking stations as per item 18 of the Rate Schedule, if not on what basis? 3. Whether the petitioner is entitled to special goods rate as per item 5 of the Rate Schedule 'A' in respect of TR/CR Vans containing special goods. If not, what rate is applicable? 4. Whether loose wool and loose cotton in boras can be classified as special goods? 5. Whether the rate in items 3 and 4 of Schedule A1 in respect of F.P. Cotton bales is applicable to PP wool bales. If not, what rate is applicable? 6. Who is responsible for submission and preparation of bills in respect of the handling work at the stations? 7. Whether the contract has been wrongly terminated by the Railway Administration and if so, is the petitioner entitled to renewal of the contract? 8. Whether the petitioner is entitled to the interest as claimed? 9. To what amount, if any, the Railway Administration is entitled to recover from the petitioner? 10 Relief? The Arbitrator thereafter gave his award on Feb. 12, 1963 under which, he awarded the contractor a total amount of Rs. 4,26,828.90 P- (Rupees four lacs twenty-six thousand eight hundred twenty-eight and paise ninety only) by the Railway Administration in full and final settlement of all the claims of the parties. The parties were directed to bear their own costs. The award was filed in the court of learned District Judge, Bikaner, by the Arbitrator on Feb. 25, 1963. The Union of India filed objections against the award under Section 30 of the Arbitration Act on Mar. 28, 1963. The District Judge framed issues and, thereafter, after hearing the parties, dismissed the objections of the Union of India and ac- cepted the award and made it rule of the court. The Union of India filed an appeal in this Court under Section 39 of the Arbitration Act which was registered as D.B. Civil Misc. Appeal No. 15 of 1964. This Court, under its judgment Dt. May 12, 1967, allowed the appeal of the Union of India, set aside the judgment and decree of the learned Sessions Judge, Bikaner on Oct. 28, 1963 and remanded the case to him with the direction that he shall remit the award to the Arbitrator and ask him to decide the issues left undecided by him and then decide what amount would be payable by one party to the other The learned District Judge, in pursuance of the aforesaid order of this Court, remitted the award to the Arbitrator Shri S.P. Lal, Shri S.P. Lal, it appears, had retired by then. Shri S.P. Lal re-entered into arbitration and pronounced his award on July 4, 1968 under which, he directed that M/s. J.P. Sharma & Sons, handling contactors, be paid a sum of Rupees 4,26,828.90 p. (Rupees four lacs twenty-six thousand eight hundred twenty-eight and paise ninety only) by the Railway Administration in full and final settlement of all the claims of the parties. Thus, the Arbitrator, under its award, awarded the same amount to the contractor as was awarded by him under his award Dt. Feb. 12, 1963. The Arbitrator filed his award in the court of District Judge, Bikaner and the Union of India filed objections under Section 30 of the Act on Aug. 24, 1968. The objections, inter alia, were that the Arbitrator has misconducted himself and the proceedings after the award had been remitted to him; it failed to discharge his duties by not allowing the Union of India to produce oral as well as documentary evidence after the award had been remitted to him; that the Arbitrator acted with the bias that to change his previous decision, would tell upon his prestige; that the amount of fees which both the parties had to pay in advance, were both exorbitant and unreasonable; that the Arbitrator still left important matters referred to in the order of this Court undecided and has failed to decide all the disputed rates. It appears that later on, the objections were amended wherein more details were given and the learned District Judge, Bikaner, framed only one issue,-- "Whether the Arbitrator was not given the power to adjudicate upon and order the return of security amount to the con- tractor? If not, what is Us effect on he award?" Both the parties admitted para 30 of the agreement and did not adduce any evidence. The learned District Judge, Bikaner under his judgment Dt. Sept. 7, 1970, dismissed the objection petition of 'he Union of India under Section 30 of the Arbitration Act, accepted the award Dt. July 4, 1968 and made it rule of the Court and passed a decree in favour of the contractor M/s. J.P. Sharma and Sons and against the Union of India. As already observed above, the District Judge also awarded interest @ 4% per annum from the date of the decree till realisation of the decretal amount.

(3.) THE first contention of Mr. A.K. Mathur, learned advocate for the appellant is that once the award is remitted to the Arbitrator, the parties have a right of leading evidence and the Arbitrator, Shri S.P. Lal, in spite of a request to that effect on behalf of Union of India to him, did not grant an opportunity to it to lead evidence. As such, the Arbitrator has committed a judicial misconduct.