Dismissed

State of Bihar And Ors. v. Geeta Devi W/o-Late Rameshwar Prasad

Jharkhand HC1 Apr 2019MA/179/1997

Case brief

AI extract

What is this about?

The High Court of Jharkhand dismissed an appeal by a government department against the enforcement of an arbitral award. The arbitrator had conducted an inspection without the deponents before the respondents and allowed claims exceeding the original agreemental value. The court held the inspection was not illegal and the appeal was rejected.

What did the court decide?

The appeal was dismissed as there was no illegality or perversity in the impugned judgment regarding the arbitration proceedings.

State of Bihar And Ors. Vs Geeta Devi W/o-Late Rameshwar Prasad — Arbitration | Jharkhand HC (2019)

¶1

IN THE HIGH COURT OF JHARKHAND AT RANCHI

¶2

M.A No.179 of 1997 (R)

¶3

The State of Bihar.

¶4

The Executive Engineer P.W.D. (Road Division), Monoharpur, P.O. and P.S. Monoharpur, District Singhbhum (West), and

¶5

The Superintending Engineer, Road Construction Department, Jamshedpur, Road Division, Jamshedpur.

¶6

… …. Opposite Parties/Defendants/Appellants Versus

¶7

Smt. Geeta Devi w/o Late Rameshwar Prasad

¶8

Radhika Raman Prasad

¶9

Bhagirathi Prasad

¶10

Kumar kashyap

¶11

Anant Prasad All are sons of late Rameshwar Prasad

¶12

Smt. Anita Srivastava

¶13

Smt. Mamta Srivastava

¶14

Both are daughters of late Rameshwar Prasad … Claimants/Plaintiffs/Respondents

¶15

CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

¶16

For the Appellants : Ms. Kanchan Kumari, A.C. to A.A.G. For the Respondents : None

¶17

24/01.04.2019 Heard Ms. Kanchan Kumari, counsel appearing on behalf of the appellants.

¶18

2. Nobody appears on behalf of the respondents.

¶19

3. This appeal is directed against the judgment and decree dated 21.12.1996 (Decree signed on 13.1.1997) passed by Subordinate Judge – I, Chaibasa in Title Suit No.38 of 1983 whereby the award given by the learned Arbitrator, Sri Awadh Kumar dated 07.02.1988 has been made the rule of the court.

¶20

4. The counsel for the appellants submits that an agreement was entered into between the parties as back as in the year 1979 – 1980 and the work was awarded to the respondents herein from 18.02.1980. Some dispute arose between the parties and the matter was referred by the then learned Subordinate Judge III, Chaibasa to Sri Pashupati Nath Sinha, Superintending Engineer, Kharkhai Dam Circle, Chaliyama and subsequently the Arbitrator was removed and in his place another Arbitrator namely Awadh Kumar, Retired Chief Engineer (Irrigation),

¶21

¶22

Patelnagar, Patna – 23 was appointed. The dispute and differences were referred to him by Memo No.84 dated 26.08.1987 for arbitration. The learned Arbitrator had submitted a non-speaking award vide his award dated 17.02.1988, awarding an amount of Rs.5,08,590/- in favour of the respondents and a petition was filed by the respondents for making award a rule of the court.

¶23

5. The appellants had filed an objection under Section 30 of the Arbitration and Conciliation Act, 1940 (hereinafter referred as Act of 1940) and initially the same was rejected as time barred, against which, the appellants had moved before this Court in Misc. Appeal No.8 of 1989 (R), which was dismissed vide order dated 13.04.1989 with a direction to the appellants to allow the respondent to withdraw the decretal amount , which was deposited by the appellants before the learned Subordinate Judge, Chaibasa.

¶24

6. The counsel submits that pursuant to such order, the respondents herein have already received the amount from the court of learned Sub-ordinate Judge, Chaibasa. However, the appellants had moved before the Hon'ble Supreme Court in Special Leave Petition and ultimately the Hon'ble Supreme Court, after hearing the parties, was pleased to allow the appeal by an order dated 07.05.1993 and had remanded the matter to the court of the learned Subordinate Judge, for disposal of objection filed by the appellants on merits. It was also held that the petition filed by the appellants under Section 30 of the Arbitration Act, 1940 was not barred by limitation.

¶25

7. He submits that the learned Subordinate Judge at Chaibasa vide judgment dated 21.12.1996, ultimately rejected the objection of the appellants under Section 30 of Arbitration and Conciliation Act, 1940 on merits in Title Suit No.38 of 1983. 8. Counsel for the appellants submits that the appellants had sought for setting aside the award on the following grounds: “(a) The Arbitrator had committed legal misconduct by holding local inspection of the spot in absence of the petitioners and he

¶26

¶27

has mis reported in his Award that he held local inspection on 26.11.1987 in presence of both the parties.

¶28

The real fact is that none of the defendants were represented by any person duly authorized by them at the alleged local inspection.

¶29

b) The learned Arbitrator had committed misconduct by entertaining new claims beyond the amount of claim specified in the application for reference u/s. 20 of the Arbitration Act.

¶30

c) That for the reasons mentioned in the proceeding, the learned Arbitrator has acted without jurisdiction as he entertained claim of amount which are not mentioned in application u/s 20 of the Arbitration Act filed in this Hon’ble Court.

¶31

d) The error is apparent on the face of the Award as it has been made beyond scope of the reference by the learned Arbitrator.

¶32

e) The learned Arbitrator had not filed any documents voucher or muster sheets etc. on the basis of which he has made the award.

¶33

f) That in any case the Award invalid and liable to be set aside.”

¶34

9. Counsel for the appellants submits that these grounds, which were raised before the learned court below were the grounds under which the award could have been set-aside, considering the scope and the provisions of Section 30 of the Arbitration Act, 1940, but these aspects of the matter have not been properly considered by the learned court below and accordingly, the impugned judgment suffers from perversity and is fit to be set-aside.

¶35

10. Counsel for the appellants during the course of arguments emphasized on only two points, firstly, the Arbitrator had committed legal misconduct by holding a local inspection in absence of the parties as learned Arbitrator has no authority in law to conduct local inspection, and secondly, the learned Arbitrator has misconducted by entertaining new claim,

¶36

¶37

beyond the amount of claim specified in the application for reference under Section 20 of the aforesaid Act of 1940 and while elaborating the second point, she submits that the agreemental value was only of Rs. 2,74,000/-, but the award has been given for Rs.5,08,590/-. She submits that as the agreemental value was less than the awarded value therefore, the learned Arbitrator could not have exceeded the agreemental value while passing the award.

¶38

11. After hearing the counsel for the appellants, this Court finds that admittedly, the award involved in this case is a nonspeaking award and upon perusal of the award, this Court finds that the learned Arbitrator had conducted a local inspection on 26.11.1987 in presence of both the parties and thereafter had heard the parties at Patna on 27.12.1987 and 28.12.1982 and also the hearing was fixed on 10.01.1988, 11.01.1988, 29.01.1988, 30.01.1988 and finally on 09.02.1988. The Lower Court’s Records have already been received in this case, which also contains the proceeding of the learned Arbitrator.

¶39

12. Upon perusal of the record of the learned Arbitrator, this Court finds that a letter dated 16.11.1987 was issued to the parties by the learned Arbitrator, intimating the parties that the learned Arbitrator would be inspecting the site of the work on 26.11.1987 at 10.30 hours and the parties were requested to be present. This Court further finds that the records of the learned Arbitrator also contains letter No.641 dated 13.11.1987 issued by the Executive Engineer, Road Construction Department, indicating that the said authority was unable to attend the court on 16.11.1987. On 16.11.1987, the learned Arbitrator had issued letter to the parties regarding the inspection to be conducted on 26.11.1987. This Court also finds that there is a letter dated 03.12.1987, issued by the learned Arbitrator and addressed to the Executive Engineer wherein, the learned Arbitrator has mentioned about the inspection conducted on 26.11.1987 wherein, it was mentioned that though the Executive Engineer was not present, but the contractor as well as the Junior

¶40

¶41

Engineer, working under the Executive Engineer was present. Thereafter, the case was fixed on various dates for hearing. This Court finds that on one of the dates of hearing, a copy of letter No.732 dated 16.12.1987 was served upon the learned Arbitrator wherein, the Executive Engineer had requested the Government Pleader to produce certain documents for submission to the learned Arbitrator. This Court finds that at no point of time, the inspection, which was conducted by the learned Arbitrator was objected to, by the appellants and further this Court also finds that the parties had participated in the hearing before the learned Arbitrator, even after the inspection conducted on 26.11.1987. In view of the fact that at any point of time, the appellants never objected to the inspection conducted by the learned Arbitrator and further the parties were also given opportunity to advance their arguments on merits, therefore, this Court is of the considered view that the Arbitrator has conducted no illegality in conducting the inspection. The aforesaid aspects of the matter have been considered by the learned court below by a well-reasoned order and the learned court below has held as under:

¶42

“ I further find and hold that local inspection was made by the learned arbitrator in presence of both parties which appears from the order sheet of the arbitration proceeding. I further find and hold that the representative of the defendant no.2 was present at the time of local inspection by the arbitrator and defendants never raised any objection before the arbitrator or before this court while the arbitration proceeding was going relating to local inspection which has been made the learned arbitrator and therefore, in my opinion, defendants are now estopped from challenging the local (page 34 begins) inspection made by the learned arbitrator.”

¶43

13. So far as the argument of the appellants that the learned Arbitrator has gone beyond the claim and beyond the agreemental value is concerned, this Court finds that although the respondents have not appeared during the course of

¶44

¶45

arguments, but a counter-affidavit has been filed and in para – 12 to 14, it has been stated as follows:

¶46

“12. That I say and submit that it will appear from the application under Section 20 of the Arbitration Act, made by respondent in the learned court below that, some of the disputes were preferred to be referred without giving the exact amounts claimed against those items. This was so done, because, the amount against those items could not have been given at that stage, with definite money value, which were subsequently given in the statement of claim filed before the learned Arbitrator. But it is a fact that, the said dispute had also been referred to arbitration. Before the statement of claim was submitted to the learned Arbitrator, the amount claimed with regard to those disputes had also been given. In their counter statement before the learned Arbitrator, no objection was taken by the appellants in this regard. It is only after the award was made; they took a plea that the learned Arbitrator had entertained new claim. I say and submit that the award cannot be set aside on such incorrect allegation.

¶47

13. That I further say and submit that it is significant to note that, the entire work done by respondent had not been measured by the Department inspite of repeated request. As such, after moving the learned court below for a reference to arbitration, respondent also moved for appointment of a competent pleader commissioner to measure the work, and to submit his report. This was vehemently opposied by the Department, as a result of which, the prayer of the respondent for appointment of the Commissioner was rejected by the learned Court below. Upon such rejection, respondent moved this Hon’ble Court in Civil Revision, and under orders of this Hon’ble Court, a competent Commissioner was appointed, who measured the work and submitted his report. This measurement of the work, enables respondent to give the amount with regard to the disputes on which the amount of claim was not given earlier. This fact has been totally suppressed by appellants in

¶48

¶49

their memo of appeal, and the matter has been mentioned by them in the grounds of appeal incorrectly.

¶50

14. That I say and submit that law of Arbitration does not provide and prescribe that a claim will have to remain confined within the agreemental value. As a matter of fact, the work measured by the Commissioner and the report submitted by him having been accepted by the Department as correct, restrain them from raising any objection against the award. Extra work had been forced to be done by the Department beyond the agreement, which they refused to measure, and that work was measured by the Commissioner under the orders of this Hon’ble Court. The Department wants to suppress and brush out this extra work done by respondent under orders of the Department.” 14. The aforesaid aspects of the matter have also been recorded in the impugned judgment and the learned Arbitrator held that the plaintiff had not included any new claim beyond the amount of the claim made by the plaintiff in his application u/s 20 of the Act of 1940. It was also held that the learned Arbitrator had acted within jurisdiction and not without jurisdiction in giving the award and the objections raised by the defendants in their petition u/s 30 of the Act of 1940, was not tenable and accordingly rejected the objection filed under Section 30 of the Act of 1940. The learned court below also held that since both parties participated in the arbitration proceeding, therefore, defendants cannot be allowed to challenge the arbitration proceeding on the ground that the arbitrator has entertained the claim beyond the reference.

¶51

15. This Court also finds that it is well settled that there was no requirement in law for the learned Arbitrator to pass a reasoned order under provision of the Act of 1940 and the grounds of challenge under the aforesaid Act of 1940 are very limited particularly when the award is a non-speaking award. It is well settled that courts do not sit in appeal against arbitral awards. This Court finds that the learned court below after considering all the grounds, which were raised by the

¶52

¶53

appellants, rejected the arguments advanced on behalf of the appellants by a well-reasoned judgment considering the scope of challenge to the non- speaking award passed by the learned Arbitrator.

¶54

16. This Court does not find any illegality or perversity in the impugned judgment and accordingly, the instant appeal is hereby dismissed.

¶55

(Anubha Rawat Choudhary, J.)

¶56

Saurav/

State of Bihar And Ors. v. Geeta Devi W/o-Late Rameshwar Prasad

Case brief

What is this about?

What did the court decide?

State of Bihar And Ors. v. Geeta Devi W/o-Late Rameshwar Prasad

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bhasin Construction Co.Pvt.Ltd Vs Union of India And Anr.

Jaishiv Construction Pvt. Ltd. Through Its Director Sri Yatindra Nath Singh Vs The Union Of India Through Dy Chief Engineer South Eastern Railway And Ors.

Ramjee Power Construction Ltd. Through Its Duly Authorized Representative Sri Dharmendra Sharma Vs Jharkhand Urja Vikas Nigam Limited Through Its Chairman Cum Managing Director And Ors.

Kashi Nath Mahto Vs the State of Jharkhand and Ors.

Basant Prasad Mahato and Ors. Vs the State of Jharkhand and Others

D.M.,Oriental Insurance Co.Ltd Vs Enamul Ansari And Anr.