IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Arbitration Case No. 47 of 2002 Date of Decision : November 3, 2009 Dr. Hans Raj and others Petitioners Versus The Divisional Manager, Forest Working Division, Kullu(HP) and others Respondents Coram: Hon’ble Mr. Justice Sanjay Karol, Judge. Whether approved for reporting?1 No. For the petitioners : Mr. Sunil Mohan Goel, Advocate, for the petitioners. For the respondents : Mr. Neel Kamal Sood, Advocate, for respondents No. 1 and 2. Sanjay Karol, J. (Oral) This is a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award dated 15.6.2002 passed by Sh. O.P. Sharma, Managing Director of the Himachal Pradesh State Forest Corporation Limited. The dispute between the petitioner Sh. Ran Singh and respondent-Forest Corporation pertains to the execution of the agreements dated 21.8.1994 and 11.9.1995. On 3.11.1999, inter se disputes between the parties, arising out of the aforesaid agreements, were referred to by this Court to the Arbitration of the 1 Whether reports of Local Papers may be allowed to see the judgment? 2 Managing Director of the respondent Corporation. The order was passed in Civil Suit No. 25 of 1999 filed by the respondent-Forest Corporation. Pursuant to the said orders the Arbitrator entered upon reference and based on the pleadings of the parties he framed the following issues: “1. Whether the loss in ghall is caused due to the negligence of ghall contractor and whether the non-claimant/respondent is guilty of acts of misfeasance, malfeasance and nonfeasance? OPC 2. Whether the loss is caused due to natural calamities/circumstances beyond the human control or due to the acts of omission and commission on the part of the Corporation? OPR/Non-Claimant. 3. Whether the claimant Corporation is entitled to recover the loss to the tune of Rs. 93,46,434/- with interest as claimed? OPC 4. Whether the respondent/non-claimant is entitled to recover Rs. 44,86,246/- with interest as claimed in the counter-claim? OPR/Non-claimant. 5. Whether the claim is bad for mis joinder or causes of action in respect of separate agreement? OPR/Non-claimant. 6. Whether the claim is barred by limitation? OPR/Non-claimant. 7. Whether the claim of the respondent/non-claimant is barred by limitation? OPC.” 3 Having considered the material placed on record by the parties, the Arbitrator partly awarded the respective claims of the parties and after adjustments, awarded a sum of Rs. 65,78,473/- alongwith interest @ 12% per annum till payment, in favour of the respondent-Corporation. In the present proceedings the legal heirs of the original petitioner, inter alia have urged that while passing the impugned award the Arbitrator did not take into account material documents which go to the root of the controversy and are relevant for just and fair decision of the matter. During the course of the hearing my attention has been invited to such documents placed on record, being letter dated 30.9.1994 Ext.PW7/1 (page-120), weekly progress report dated 21.12.1994 Ext.PW7/6 (page-125), letter dated 4.10.1995 Ext.PW7/20 (page-138), letter dated 22.11.1995 Ext.PW7/21 (page- 139), letter dated 7.11.1995 Ext.PW7/22 (page-140), letter dated 3.11.1995 Ext.PW7/23 (page-141). These documents indicate that the original petitioner had been conveying various defaults having been committed by the officials of the respondent-Forest Corporation in performing its reciprocal obligations under the agreement. Unfortunately these documents have not been considered by the Arbitrator. This is the admitted position. For proper and complete adjudication of the entire controversy in issue it was incumbent upon the Arbitrator to have considered the same 4 while passing the impugned award. Novation of contract, fulfilment of reciprocal obligation are all issues which in effect were required to be considered. Apparently the petitioner had been conveying the negligence of the officials of the respondents in handing over the timber for launching purposes. The progress reports prepared by the officials of the respondents itself would indicate the work being executed in terms of the contract entered into between the parties. Hence non consideration of these documents by the Arbitrator has seriously prejudiced the petitioner herein. These documents go to the root of the controversy and definitely has a bearing on the just decision of the controversy in issue. The Apex Court in K. P. Poulose versus State of Kerala and another, AIR 1975 SC 1259 and subsequently in Garg Trading Co. versus Union of India, (2005) 10 SCC 633 has held that non consideration of the material documents by the Arbitrator would tantamount to misconduct as no just and fair decision can be said to have been rendered without considering the same. Under these circumstances, on this short ground alone the impugned award dated 15.6.2002 passed by the Arbitrator Sh. O.P. Sharma, Managing Director of the Himachal Pradesh State Forest Corporation Limited is set aside. The matter, however, is remanded back to the Managing Director of the respondent-Corporation for consideration afresh who shall consider the material already placed 5 on record and pass a reasoned award after affording due opportunity of hearing to the parties. The matter pertains to the years 1994-1995 and the parties shall fully cooperate for expeditious disposal of the same. Mr. Neel Kamal Sood, learned counsel shall hand over the original record to the Managing Director. The award be passed within a period of three months from the date of first hearing. The parties are directed to appear before the Arbitrator on 14.12.2009. The petition is disposed of with the aforesaid observations. (Sanjay Karol), Judge. November 3, 2009 (PK)