UNION OF INDIAREPRESENTING Vs. J P SHARMA SONS

JUDGEMENT

(1.) THIS is an appeal under section 39 of the Arbitration Act and is directed against the judgment and decree of the learned District Judge, Bikaner, dated 28 -10 -1963, whereby the learned Judge awarded a decree of Rs. 4,26,528.90 paise in favour of the respondent and against the appellant on the basis of an award given by Shri S.P. Lal Deputy General Manager, Northern Railway on 12 -2 -1963 consequent to the dismissal of the objections filed by the appellant against the validity of the award The respondent has also filed a cross -objection and has prayed that interest be awarded on the amount decreed by the District Judge from the date of the decree till the realisation of the decretal amount. The main question that arises for consideration is about the validity of the award and we may briefly state the relevant facts as follows:

(2.) THE respondent firm was engaged as contractor by the Northern Railway for the purpose of performing all the work of porterage of goods at the various railway stations and goods -sheds falling in Zone No. 2 of the Bikaner Division of the Northern Railway. The terms and conditions of the contract were contained in an indenture dated 3 -4 -1957. The agreement came into force from 1 -4 -1957 and was terminable on 31 -3 -1960. There were two schedules A and B appended to the agreement which provided for the rates payable to the plaintiff -respondent 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 the work. It was also agreed between the parties that all other handling work not specified in the agreement was to be performed by the contractor at the rates to be mutually agreed upon by the railway administration and the contractor. The procedure for payment to the contractor was that he was to prepare and submit monthly bills on the basis of the goods handled during the previous month and the actual job done was to be certified by the Station Masters concerned on submission of the bills to the Divisional Superintendent. The Accounts Office was to certify the bills after a checking and payment was ordinarily to be made within six weeks of the submission of the bills. It was, however, laid down that pending final check from the several station -returns, the contractor was to be provisionally paid to the extent of 90 per cent of the amount claimed in the bills. The grievance of the contractor was that in disregard of the terms of the contract it was not paid an amount of Rs. 36,870 38 paise for the period from April, 1957 to August, 1958. It also felt aggrieved of certain unauthorised deductions made by the railway administration for the period from January, 1958 to September, 1958 to the tune of Rs. 1,24,715.44 paise. Then, according to it for the period from May, 1957 to December, 1958, certain bills for repacking stations and road side stations aggregating to Rupees 1,01,222.03 paise were not paid to it. Then it had a further grievance that the Station Masters had not submitted about 125 bills for the period from March, 1958 to January, 1959 to the tune of Rs. 40.000. The plaintiff respondent, according to it, made several demands to the railway administration for settlement of his claims, but it was not heard. Consequently after serving a notice under Section 80 of the Code of Civil Procedure the firm filed a suit against the Union of India for a sum of Rs. 3,17,728.81 paise in the Court of the District Judge, Bikaner on 21 -9 -59. However, the defendant -appellant applied under Section 34 of the Arbitration Act for staying the suit as, according to the Union of India, clause 33 of the agreement provided for arbitration in the matter of all disputes between the Union of India and the contractor. We will have occasion to refer to the arbitral clause a little later. To continue the narration, the District Judge accepted this application and stayed the suit leaving the parties free to get the matter adjudicated upon by the arbitrator provided in the agreement. Against this decision the respondent came in appeal to this Court but eventually it withdrew the appeal and agreed to go in for arbitration. The General Manager, Northern Railway by his order dated 21 -9 -62 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 owing to his previous heavy engagements and pressure of official work it was not possible for him to act as an arbitrator. The order of the General Manager is available at page 411 of the paper book. Accordingly by his letter dated 29 -8 -62 (available at page 420 of the paper book) Shri S, P. Lal called upon both the parties to submit their respective claim petitions giving full details of the claim together with all relevant documents, He also directed that the respondent should submit a copy of the claim petition directly to the Chief Commercial Superintendent who was then to reply to the claim petition para by para Accordingly the respondent filed its claim petition on 10 -9 -62 (available at page 423 of the paper book).

(3.) THIS award was filed in the court of the learned District Judge. Bikaner by the arbitrator on 25 -2 -63. The Union of India filed objections against this award under Section 30 of the Arbitration Act on 28 -3 -63. It was contended that the award was bad as the arbitrator had committed misconduct in deciding the case. It was urged that the arbitrator did not apply his mind in examining the counterclaim of the railway administration, that he did not decide the matter on each issue, that the award was very vague as it did not show what the dispute was and what was the judgment of the arbitrator about the dispute, that no evidence had been taken by the arbitrator, that the arbitrator had gone beyond the terms of reference by including claims for parcel and other miscellaneous services, that the arbitrator had no jurisdiction to award an amount of Rs. 4,26,828.90 paise when in the suit the plaintiff had claimed only Rs 3,17,728.81 paise, that the arbitrator had not taken into account the sums already paid to the contractor, that the amount awarded by the arbitrator was not correct, and that the claim filed by the respondent contained extraneous matters which had not been referred to the arbitrator. The objections were contested by the respondent. The District Judge framed the following issues on 12 -7 -63: '(1) Whether the award is vague and is liable to be set aside? Burden on the defendant. (2) Whether the arbitrator has gone beyond the terms of reference and has otherwise misconducted the proceedings? If so, what shall be its effect? Burden on the defendant. (3) Whether the arbitrator had no jurisdiction to give award for the amount exceeding the amount of the suit filed by the plaintiff and if so, what will be its effect? Burden on the defendant. (4) Relief'