Case: S. PAL AND COMPANY Vs. STATE OF M.P

1. The appellant claims that it was appointed as a sole selling agent for sale of Narmada Lottery Tickets under the State Lottery Scheme of the Government of Madhya Pradesh under Agreements dated 20/10/1983, 28/12/1984 and 17/04/1985. Certain disputes between the parties were referred to arbitration. Before the arbitrator the appellants claims consisted of; (i) compensation for losses suffered on account of several acts of the respondents; and (2) excess amount realised by way of adjustment. The State disputed the said claims. The State made the following counter claims:(i) balance amount due in regard to tickets supplied (relating to 1994, 1995 and 1996 draws); (ii) excess and wrong realisation by the appellant; and (iii) losses incurred on account of breaches by appellant. The arbitrator by his award dated 25/08/1990 rejected the claims of the appellant and allowed the counter claim of the respondent in part for a sum of Rs. 34,05,888.15 (Rupees Thirty four lakhs five thousand eight hundred eighty eight and paise fifteen only).2. Feeling aggrieved, the appellant filed a petition under Sections 30 and 33 of the Arbitration Act, 1940 challenging the award. The said petition was dismissed and the award was made a rule of the court. The appeal filed by the appellant before the High Court was dismissed by the impugned order dated 27.04.2001. The appellant is aggrieved by rejection of its claim and award of the counter claim.

Court's reasoning:
3. The scope of interference in regard to arbitration awards is limited. The Court examining an award under Section 30 and 33 of the Act does not sit in appeal over the findings of the arbitrator. It cannot re-appreciate or reassess the evidence. In the absence of allegation of Arbitrator misconducting himself or the proceedings, an award can be interfered only if there is an error apparent on the face of the award or if there is any apparent inconsistency in the award. The courts below have examined the award in the correct perspective and rejected the challenge thereto.4. In so far as the rejection of the claims of the appellant is concerned, the learned counsel for the appellant was not able to make out any ground. On a perusal of the award we find no error apparent on the face of it nor any inconsistency.6. We find that the last date of hearing before the arbitrator was 16/07/1990. On that day the respondents filed documents consisting mainly of Statement of Accounts, in the presence of appellant. There is nothing to show that the appellant objected to the filing of the said documents. The arbitrator has recorded the permission to the respondent to file such documents. Therefore, the contention that the documents were filed without giving an opportunity to the appellant to verify and object to the same is not correct. The appellant next contended that their objection was not in regard to the documents which were filed on 6.7.1990 but in regard to another bunch of 100 documents, which were found in the records of the arbitrator, when they took inspection of the arbitration records in the proceedings under Section 33 of the Act. Their contention is that the said documents, the filing of which does not find reference in the proceedings of the arbitrator, renders the award invalid. But the learned counsel for the appellant fairly conceded that having gone through the entire records of arbitrator which has been summoned to this court, he did not find the said 100 documents in file. It is also clear that the said 100 documents were not found in the file when the matter was heard in the High Court. The High Court has recorded a finding in para 9 of its judgment, that the contention of the appellant that certain documents were filed before the arbitrator, without supplying copies to the appellant was not borne out from the record. The appellant was also not in a position to point out any reference to the alleged 100 documents or any of the them in the award of the arbitrator. Therefore, the position is as follows: (a) the record of the arbitrator in fact does not contain the 100 documents allegedly filed by the respondent; and (b) the arbitrator has not referred to them or relied upon any such document while making the award. Thus, the claim of the appellant that 100 documents were filed before the arbitrator without its knowledge and they were relied upon by the Arbitrator is baseless. It is quite probable that the person who took the inspection thought that the documents which were filed in the presence of the appellant on 6/7/1990, as documents which were filed without notice. Be that as it may. Having regard to the clear finding by the High Court that no such documents were filed, the question of arbitrators award being challenged on the ground that the award was passed on the basis of such documents cannot be accepted.