IN THE HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT JABALPUR Misc. Appeal No.296/2006 [ENTITY] Vs. M/s. [ENTITY] for the Appellant : Mr. [ENTITY], Advocate None for the respondent Date of Hearing : 27/07/2015 Date of Order : 27/07/2015 Present : Honble Mr. Justice [ENTITY] JUDGMENT
This appeal under [SECTION] of the [ACT] (hereinafter referred to as the Act), has been preferred against the judgment dated 27.10.2005 passed by the trial Court by which the objection raised by the appellant under [SECTION] of the Act, has been dismissed.
2. Facts giving rise to filing of the appeal briefly stated, are that the respondent was allotted the work of construction of 16 numbers of Staff Quarters for All India Radio Station at Sagar. The stipulated period for construction of the work was 13 months. The site was allotted by the District Administration, Sagar, and the respondent was also awarded the contract for construction of Radio Station Building. As per the terms of the agreement, the construction was to commence from 14.2.1987. The Collector, Sagar, however, changed the location, and new site was allotted in August, 1988. The construction of the Staff Quarters was completed by the respondent on 22.7.1992. Thereafter, the final bill was submitted by the respondent and the same was paid on 24.2.1995. On 13.7.1998, the respondent raised certain disputes and invoked the arbitration clause. The Chief Engineer, New Delhi vide order dated 28.8.1996 appointed one [ENTITY] as the sole Arbitrator. The respondent submitted its statement of claim and claimed an amount of Rs.13,22,341/- on the ground that there was delay in the execution of the work. The appellant also filed the statement of claim wherein, it was pleaded that the claim of the respondent was barred under the provisions of [ACT], as the same was filed beyond the period of three years from the date of completion of the work.
3. The Arbitrator vide award dated 14.6.1997 partly awarded the claim preferred by the respondent to the tune of Rs.06,08,782/-. Thereafter, the appellant filed an application under [SECTION] of the Act and raised an objection with regard to the award. The Additional District Judge vide judgment dated 27.10.2005 rejected the objection raised by the appellant. In the aforesaid factual backdrop, the appellant has approached this Court.
4. Learned counsel for the appellant submitted that the Arbitrator as well as the Additional District Judge erred in not appreciating that the claims preferred by the respondent were barred by limitation. It was further submitted that the conditions of contract were not considered in their true perspective, which were the essence of the contract.
5. I have considered the submissions made by learned counsel for the appellant and have perused the record. Scope of [SECTION] of the Act has been defined in catena of decisions. The Supreme Court in [PRECEDENT] while taking note of the decision rendered by it in [PRECEDENT] wherein it was held that an arbitral award can be set aside if it is contrary to fundamental policy of Indian law; the interests of India; or justice or morality, held that public policy is a matter dependent upon the nature of transaction and the nature of statute. However, subsequently, in the case of [PRECEDENT], the Supreme Court added another ground for exercise of courts' jurisdiction for setting aside the award i.e. if it is patently arbitrary. In [PRECEDENT] it was held by the Supreme Court that if an award suffers from patent illegality, which goes to the root of the matter, the court can interfere with the award passed by the arbitrator. In a recent decision, in the case of [PRECEDENT], the Supreme Court after taking note of various previous judgments rendered by it with regard to scope of interference with the arbitral award held that none of the grounds contained in [SECTION] of the Act deals with the merits of the decision rendered by an arbitrator. It is only when the award is in conflict with the public policy of India as prescribed in [SECTION] of the Act that the merits of an arbitral award are to be looked into under certain specified circumstances. It was further held that the Court would interfere with an award passed by an arbitrator if it is in violation of statute, interest of India, justice or morality, patent illegality, contravention of the Act or terms of the contract. It was also held that the court hearing an appeal does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus, an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score.
6. In the backdrop of aforesaid well settled legal position, facts of the case may be seen. Challenge has been made to the impugned judgment on behalf of the appellant mainly on the ground that the claims of the respondent were barred by limitation. The Additional District Judge in the judgment has held that the payment of first final bill was made to the respondent on 24.2.1996 whereas, the final bill was paid on 14.4.1996. The Arbitrator was appointed some time in August, 1996. The appellant has not filed any document to show that it is ready to make payment of the first final bill to the respondent. The appellant has not made payment of the final bill to the respondent and after payment of the final bill on 24.2.1995 within a period of three years, the Arbitrator has been appointed and the claim has been filed by the respondent before the arbitration, therefore, it cannot be said that the claims of the respondent were barred by limitation. Accordingly, it is held that the claims of the respondent are within limitation. For the aforementioned reasons, the contention raised by the appellant that the claims of the respondent were barred by limitation, does not deserve acceptance.
7. So far as the second contention raised on behalf of the appellant that the conditions of the contract were not considered in their true perspective, which were the essence of contract is concerned, in view of the scope of [SECTION] of the Act, it was not open for the Court to have entered into the merits of the award, as it is well settled in law that while dealing with the objection under [SECTION] of the Act, the Court cannot act as an appellate authority.
8. For the aforementioned reasons, I do not find any merit in the appeal. The same fails and is hereby dismissed.
([ENTITY]) Judge a.