IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA Arbitration Cases No. 28 of 2006 Date of decision September 2nd, 2009 __________________________________________________________ Karam Singh ….Petitioner Versus N.J.P.C. ….Respondent _________________________________________________________ Coram The Hon’ble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 No. For the Petitioner : Shri G.S. Bhogal, Sr. Advocate with Shri Suneet Goel, Advocate. For the Respondent : Shri Ramakant Sharma, Advocate. __________________________________________________________ Dev Darshan Sud, J. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) has been preferred by the claimant herein against the award passed by the Arbitrator disallowing his claim for Rs. 2,28,034/-. It is undisputed before me that prior to the present award having been made, the claimant had instituted a claim petition before the Arbitrator praying for an award in his favour for the work performed by him for the respondents in terms of the contract between the parties. During the course of the proceedings, the respondent herein had accepted liability to the extent of Rs. 10,47,142/- subject to the condition that the claimant herein withdraws from the arbitration proceedings. This offer was made by the petitioner vide letter dated 12.12.2002 and the respondent vide communication dated 17.12.2002 accepted the offer. However, the Arbitrator vide his award dated 18/20.5.2004, allowed a part of the claim only. The petitioner approached this Court by way of a petition under Section 34 of the Act, which was registered as Arbitration Case No. 46 of 2004. 1 Whether reports of Local Papers may be allowed to see the judgment? Yes. 2 These objections were accepted and the case was remanded for decision afresh in accordance with law. The parties were again heard by the Arbitrator who has made this impugned award, rejecting the claim of the petitioner, which is now challenged on a number of grounds. Learned counsel appearing for the petitioner has made a number of submissions on the legality of the award and submits that once the claim had been accepted unequivocally by the respondent by the letter noticed above and which is a part of the arbitration proceedings and has been placed on record as Annexure C2, it was not open to the Arbitrator to have rejected the claim of the claimant more especially when it was based on the consent of both the parties. He submits that once a compromise has been arrived at, the respondent could not wriggle out of the promises made. This submission is opposed by the respondent. Learned counsel Shri Ramakant Sharma submits that Annexure C2 does not in any manner advance the case of petitioner and that the offer so made was only conditional to its approval by the administrative authorities. I do not wish to express any opinion on the interpretation of this letter and other documents which have been produced on record. Suffice it to say that I find from the record that the Arbitrator has not given any reason for arriving at the conclusion as to why the claims preferred requires to be rejected. It is trite that any order which is passed must be supported by reasons and in the case of arbitration proceedings, it is a statutory mandate of Section 31 of the Act. It is not the volume of writing on the record which determines as to whether reasons have been supplied but the quality which is to be assessed. In order to arrive at a particular conclusion the Arbitrator is required is to support his conclusions by reasons and with reference to the material on record including evidence oral/documentary. I do not find such an exercise having been undertaken. It is now well settled that Section 31 of the Act is mandatory unless the case can be covered by exceptions so contained therein. There is nothing on record to show or indicate that the parties to the arbitration 3 proceedings had dispensed with the requirement of reasons being recorded or that their case was covered by the exceptions contained in Section 31 of the Act. In Janki Ram Vs. State of H.P. and others 2008 (1) Shim.L.C. 145 I have already held that the statutory mandate has to be complied with. This petition is accordingly accepted and the award made by the Arbitrator is quashed and set aside. Having set aside the award, I cannot leave the parties in the lurch. The original proceedings were filed on 10.3.1999 and the present petition is now taken up for disposal after a period of ten years. In the facts and circumstances of the case, it is deemed appropriate that the matter is remanded for arbitration afresh in accordance with law. Shri Desh Raj Sood, Advocate, High Court of Himachal Pradesh is appointed as the sole Arbitrator. His fee is assessed at Rs. 25,000/- which shall be borne equally by both the parties. In addition, he shall be entitled to incidental/secretarial expenses. He shall endeavor to dispose of the entire proceedings within a period of two months from the date when the parties first appear before him. The Arbitrator and the parties will be free to choose the venue of arbitration. The parties shall first appear before him on 5th October, 2009 in the Bar Room of the Himachal Pradesh High Court Bar Association. The documents and the evidence on record shall constitute the material on the basis of which the learned Arbitrator shall make his award. A direction is issued to the office to make the record available to the Arbitrator. The Arbitrator shall make his award on or before 31st December, 2009. This petition is accordingly allowed. There shall be no order as to costs. September 2nd, 2009 (Dev Darshan Sud), (ms) Judge