The Court dismissed the petition under Section 34 of the Arbitration and Conciliation Act seeking to set aside an award upholding the Respondent’s rejection of the Petitioner’s claim due to alleged negligence, holding the award did not violate public policy despite assertions of a forged report.
The petition was dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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kps
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO.21 OF 2010
Sumac Security Services.
..Petitioner
-Versus-
The Bharat Petroleum Corporation Ltd..
..Respondent
Bidan Chandran, for the Petitioner. Mr.S.A.Bhalwal i/b Vyas & Bhalwal, for the Respondent.
CORAM : S.C.DHARMADHIKARI, J. DATE : 05th January, 2011.
P.C.
1 This petition was listed under the caption for direction but both sides request that they are ready to argue the matter finally. With their consent, the matter is taken up for hearing .
2 This petition under Section 34 of the Arbitration and Conciliation Act, 1996 impugns the award made by the Sole Arbitrator. 3 The award made by the Sole Arbitrator on 12.11.2008 holds that the Petitioner before me has failed to prove the case, therefore, the claim petition is dismissed.
4 The Petitioner was aggrieved by the fact that the Respondent, who had awarded the contract to safeguard and protect the premises, had made wrongful deductions from the amounts due and payable under the contract on account of alleged negligence on the part of the Petitioner. The negligence alleged was that despite the Petitioner being engaged as security agency, there was theft of 18 aluminum ladders from the premises, therefore, the deductions are made from the running bills and
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aggrieved thereby the claim was lodged.
5 The only contention raised before me by the learned counsel appearing for the Petitioner is that the award is contrary to the public policy inasmuch as there is discrepancy in the statement which was relied upon by the Respondent namely letter dated 25.08.2005 wherein he states that 3000 kilograms aluminum scrap along with other scrap material was stocked at crap yard and on routine check it was found that 18 ladders of aluminum were missing. However, according to the learned counsel, when this was disputed what has been sought to be relied upon is the valuation report submitted by the Chartered Engineer. However, this valuation report is forged and fabricated document inasmuch as signature is not that of a person who has made the report. Therefore, reliance placed on this document by the Arbitrator contravenes the basic principles of natural justice namely no material or document which has been disputed or challenged can be relied upon unless the same is proved by summoning a person and recording his oral evidence. For this reason, the subject award is perverse. Reliance is placed on two decisions of the Hon’ble Supreme Court reported in 1984 AIR 1805 ( Rajinder Kumar Kindra vs. Delhi Administration Through Secretary (Labour) and others) and (2007) 13 SCC 434 ( ONGC Limited vs. Garware Shipping Corporation Limited) .
6 I am unable to accept this argument for more than one reason. Firstly, on query from the Court as to whether the Petitioner/claimant made any request during the course of proceedings before the Arbitrator to summon the author of report, in all fairness, it was stated that the same was not made. However, it was stated that the argument was canvassed that the valuation report Annexure B-9 is not genuine.
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7 I do not find any fault with the approach of the Arbitrator who has observed that as the Petitioner who has challenged the report as not genuine then it was incumbent upon the Petitioner to substantiate this plea. The Petitioner has not produced any evidence. Therefore, it is too late in the day to now urge that the valuation report could not have been relied upon. From reading of the award, it appears that apart from the report, the Petitioners themselves on 06.10.2005 addressed a communication to the Respondent stating therein that they should not deduct a lumpsum amount from the running bills but deduct the amount of alleged loss in monthly installments. Once such stand is taken by the Petitioner, then, it is not open for them to urge that the award is perverse. The award is based on materials that have been produced by the Petitioner, therefore, cannot be said to be based on no evidence. Further there is no serious dispute about the theft or else the letter marked as Annexure B-11 dated 06.10.2005 could not have been addressed. Therefore, the loss caused being an admitted claim, the Petitioner cannot question the award as being contrary to the public policy.
8 Reliance placed on the decisions of the Hon’ble Supreme Court is misplaced because in those cases in the peculiar facts the Court interfered with the award. There it was clearly established that the award was based on no evidence. In such circumstances, these decisions are distinguishable on facts.
9 The Petition is, therefore, devoid of any merit and it is hereby, dismissed.
3 issues framed by the court
Whether the impugned arbitral award awarding nothing for the Petitioner is contrary to public policy as being based on forged evidence or lack of evidence.
Whether the Arbitrator erred in relying on a valuation report that the Petitioner claimed was forged without summoning the author.
Whether the Petitioner is precluded from challenging the award claiming perversity after having admitted the occurrence of theft in earlier correspondence.
Colour shows how this judgement treated each authority
Rajinder Kumar Kindra vs. Delhi Administration Through Secretary (Labour) and othersDistinguished¶20
1984 AIR 1805 (Rajinder Kumar Kindra vs. Delhi Administration Through Secretary (Labour) and others) · Who else cites this
ONGC Limited vs. Garware Shipping Corporation LimitedDistinguished¶20
2007 (13) SCC 434 (ONGC Limited vs. Garware Shipping Corporation Limited) · Who else cites this
1 provisions across 1 enactments
Sumac Security Services
The Bharat Petroleum Corporation Ltd.
S.C. Dharmadhikari
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
