SAGARMULL AGARWALA Vs. UNION OF INDIA

JUDGEMENT

(1.) This application is directed against the judgment and decree of the learned District Judge, Special Division dated 2-2-2000 setting aside the award of the Arbitrator in respect of a dispute which arose out of contract agreement No. GE/867/ 30 of 1980-81. The Union of India, the respondent objected to the award before the learned District Judge on the ground that some of the claims mentioned in judgment were not within the jurisdiction of the Arbitrator. It was contended before the learned trial Judge that the claims barred by the condition of agreement were taken up and awarded by the Arbitrator. Other grounds of misconduct were urged on the basis of fact and non-consideration of point of law. The present appellant submitted in the reply that neither the measurements documents were produced nor the contract the agreement and general condition of contract were produced before the Arbitrator.

(2.) The learned trial Judge, after referring to the decision of the Supreme Court rendered in Associated Engineering Co. v. Government of Andhra Pradesh, held that the Arbitrator cannot act arbitrarily, irrationally, capriciously or independently of contract. His sole function is to arbitrate in terms of contract. He has no power apart from what the parties had given him under the contract. If he has travelled outside the bounds of contract he has acted without jurisdiction and the Arbitrator who acts in manifest disregard of the contract acts without jurisdiction. The learned trial Judge held that in the instant case it has been established that no contract agreement was produced before the Arbitrator, and so it is clear that the Arbitrator decided the matter independently of contract and he acted without jurisdiction. In the result, the award was set aside and the respondent was directed to appoint fresh Arbitrator within a period of two months who would decided claims and counter claim within a period of three months from the date of appointment of the Arbitrator.

(3.) We find the reasoning of the learned trial Judge un-exceptional. However, the learned counsel for the appellant has submitted that inspite of the opportunity having been granted to the respondent to file documents the respondent did not file the documents and has referred to the decision rendered by the Supreme Court in Secretary, Irrigation & Power Department, Government of Orissa and another v. Niranjan Swain, where it was held that where the documents were not produced by a party despite the party being called upon to do so and also having given undertaking in that behalf, the Arbitrator could raise an adverse inference, if necessary, and proceed to finalise the award. On the basis of this decision, the learned counsel submits that on account of the failure on the part of the respondent to file the agreement which was in the custody of the respondent, the Arbitrator was within jurisdiction to draw adverse inference against the respondent.