UNION OF INDIA Vs. AJMER CONSTRUCTION COMPANY

JUDGEMENT

(1.) The appellants-defendant has filed this appeal under Sec. 39 of the Arbitration Act, 1940 (for short the Act) against the judgment and decree passed by the learned- Addl. Distt. Judge No. 2, Jodhpur dated 15-1-96 in Civil Misc. Case No. 227/95.

(2.) The dispute raised in this appeal is very short. The relevant facts are that a contract agreement No. CE/B/J/JODH/45/84 ,was executed between the parties of store accommodation at Banar, Jodhpur. The above agreement contained a provision for reference of the disputes arising between the parties in connection with the above work to an arbitrator. A dispute regarding water charges arose between the parties., The dispute was referred to Shri S. G. Mahajan, the Sole Arbitrator. After hearing the parties, the Sole Arbitrator gave his award on 16-2-93. The notice of making the award was given by the arbitrator to the plaintiff-respondent. Under the above award, the arbitrator awarded a sum of Rs. 3,77,959/- to the respondent No. 1. He also awarded interest. However, no dispute has been raised regarding the interest. The appellant-defendant raised certain objections before the learned District Judge when the proceedings under Sec. 14 of the Act were initiated. The petitioner challenged the award on the ground that the arbitrator did not at all consider the respective contentions of the parties regarding the dispute of water. He totally ignored the provision contained regarding water in clause (31) of the above agreement and without assigning any reason awarded a sum of Rs. 3,30,000/- as cost of the water incurred by the respondent in the execution of the above work. It may be stated that the appellant only charged a sum of Rs. 23,629/- as cost of water. As compared to this reasonable cost, the award contains a very exorbitant claim being cleared by the arbitrator without any reason and in total ignorance of the relevant clause which governs the conditions under which water is to be supplied and utilised. Thus, the award is silent about that and suffers fatally on that account. By allowing such unfounded claim in favour of the respondent, the arbitrator has misconducted himself and the award is liable to be set aside on that ground. Learned Counsel has placed reliance on the observations made in Associated Engineering Co. v. Govt. of Andhra Pradesh, AIR 1992 SC 232.

(3.) Learned Counsel for the appellant further submitted that the learned District Judge also did not consider this aspect of the matter. and he also did not deal with the real and material dispute between the parties regarding supply of water.