M.M. Das, J.@mdashAn application u/s 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act'') was filed by the Appellant-Mahanadi Coal Fields Ltd (for short, ''the M.C.L.'') before the Learned District Judge, Sambalpur challenging the arbitral award dated 22.7.2002 passed by the Arbitrator on a dispute between the parties referred to the said Arbitrator by this Court. The said application being rejected by judgment dated 9.3.2005, this appeal has been preferred u/s 37 of the Act by the Appellant-M.C.L. against the said judgment dated 9.3.2005 passed in Arbitration Petition No. 2 of 2002 by the Learned District Judge, Sambalpur.
The M.C.L. invited tender by the tender notice dated 7.9.1987 for construction of Civil and Structural Work of Coal Handling Plant at Lajkura Open Cast mines of Ib Valley Area, Brajrajnagar at an estimated cost of Rs. 63, 02, 025/-. The Respondent herein submitted its offer for undertaking the said work and ultimately the tender was accepted and the work was entrusted to it by the M.C.L. An agreement was entered into between the parties on 10.5.1988. The work order was issued in favour of the Respondent with a stipulation that the work should be completed within a period of twelve months which shall be calculated from the 10th day of the issue of the work order or from the date of handing over of the site, whichever is later. As per the above stipulation, the work was to be completed by 17.1.1989. However, the period was extended and the Respondent was granted time till 31.3.1992 for completion of work with a condition that penalty would be imposed on the Respondent. The Respondent abandoned the work and left the site in the year, 1992. The M.C.L. prepared the final bill on 15.4.1992, and, thereafter, on 7.11.1992, an ex parte measurement of the work was done on the ground that the Respondent did not make itself available for measurement on the day fixed, though it was invited for that purpose. The bill for the work drawn up to 17.3.1991 was paid to the Respondent except Rs. 1,30,438/- besides the security deposit of Rs. 1,00,000/-. The Respondent, having raised a dispute, moved this Court in M.J.C. No. 111 of 2000 for appointment of an Arbitrator u/s 11 of the Act. This Court by Order Dated 6.7.2001, passed in the said M.J.C. appointed Shri Ganeswar Rath, Advocate, Orissa High Court, Cuttack, as the Arbitrator. After both the parties filed their claim and counter claim before the Learned Arbitrator and adduced oral and documentary evidence in support of their respective cases, the Learned Arbitrator framed necessary issues for adjudication of the dispute and after taking into consideration all the materials available before him, passed the award on 22.7.2002. The Appellant challenging the said award filed the application u/s 34 of the Act registered as Arbitration Petition No. 2 of 2002 before the Learned District Judge, Sambalpur. By the impugned Order Dated 9.3.2005, the Learned District Judge holding that the said petition u/s 34 of the Act is not maintainable, dismissed the said application on contest. Being aggrieved, the Appellant has preferred the present appeal.
2. From the application filed by the Appellant u/s 34 of the Act before the Learned District Judge, it appears that the award passed by the Learned Arbitrator was challenged by the Appellant on the ground that the award is untenable having not assigned any reason in support of the determination of the liability, the finding of the Learned Arbitrator that the claim of the Respondent is not barred by limitation, is an error of law apparent on the face of the award. According to the Appellant, the cause of action arose on 15.4.1992 when the final bill was prepared or in the alternative on 5.6.1992, when the Respondent submitted a set of claim, and, as such, the claim was barred having been made after the period of limitation, i.e., after three years from the date, when the cause of action arose. The further ground stated in the petition was that the finding of the Learned Arbitrator that the cause of action accrued on 15/16.3.2000 is not tenable. The other grounds of challenge were with regard to factual findings arrived at by the Learned Arbitrator.
3. Mr. S.D. Mohanty, Learned Counsel appearing for the Appellant relying upon the decision in the case of
4. The main thrust of argument of Shri Mohanty, Learned Counsel for the Appellant is that, all the documents exhibited before the Learned Arbitrator, unequivocally disclose that the cause of action for the arbitration arose on 5.4.1992, and, therefore, the claim having been made after the period of limitation, which is three years, the same is barred by limitation inasmuch as the last date for filing of the claim was 14.4.1995 which was before the commencement of the Act which came into operation from 1.10.1999.
5. Mr. R.K. Rath, Learned Senior Counsel appearing for the Respondent, on the contrary, submitted that the petition filed by the Appellant before the Learned District Judge was u/s 34 (2) (b) (ii) as the objection to the award was not raised under any other clauses of the said Section 34 of the Act. Section 34 (2) (b) (ii) prescribes that an arbitral award may be set aside by the Court if the arbitral award is in conflict with the public policy of India. Mr. Rath, drawing the attention of this Court to the application u/s 34 of the Act filed by the Appellant before the Learned District Judge, submitted that, no where in the entire petition u/s 34 of the Act, the Appellant has stated or taken a ground that the award is in conflict with the public policy of India. He further submitted that objections which have been taken or raised in the application u/s 34 of the Act cannot be permitted to be raised for the first time before this Court nor the application u/s 34 even can be allowed to be amended by inserting new grounds. According to Mr. Rath, the application u/s 34 filed by the Appellant is also vague as it is not stated in the said application as to by applying which part of Section 34 of the Act, the award can be set aside.
6. In order to appreciate the rival contentions of the parties, it is necessary to refer to Section 34 of the Act which provides that an award can be set aside if it is shown that a party applying for setting aside was under some incapacity (Section 34 (2) (a) (i)). The Arbitration agreement was not valid. (Section 34 (2) (a) (H)). The party making the application was not given proper notice of the appointment of Arbitrator or he was unable to present his case (Section 34 (2) (a)(ii)). The award deals with a dispute falling out side the terms of reference or contains decision on matters beyond the scope of submission to arbitration (Section 34 (2) (a) (iv)). The composition of the Arbitral Tribunal or arbitral procedure was not in accordance with the agreement of the parties (Section 34 (2) (v)). The Court finds the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force (Section 34 (2) (b) (i)). The Arbitral Award is in conflict within the Public Policy of India (Section 34 (2)(b)(ii)). It was contended by Mr. Rath that by no means any of the provisions of Section 34 from Sub-Section 2(a) (i) to 34(2)(b) would apply to the present case, and no such grounds have been advanced in the objection petition in the Court below. According to him, Section 34 (2) (b) (i) would also not apply in any manner as it is not the plea of the Appellant that the subject matter of dispute is not capable of settlement by arbitration under the law for the time being in force. In other words, it is not the case of the Appellant that on account of any provision of law the matter was not to be referred to arbitration. The only other clause, i.e. Section 37 (b) (ii) under which the application for setting aside the award can be filed is, if the award is in conflict with the public policy of India.
7. A perusal of the application filed by the Appellant before the Learned District Judge u/s 34 of the Act, clearly shows that even the word "Public policy" has not been mentioned anywhere in the said application.
8. The contention made by the Appellant that the award is untenable being in conflict with the public policy of India cannot be raised for the first time in this appeal as the same was not taken as a ground of objection to the award u/s 34 of the Act.
9. In ARBA No. 20 of 2003 (M/s. Spectra Engineering Corporation v. Paradip Phosphate Ltd.) disposed of on 17.2.2004, in which case, interestingly, the Learned Arbitrator of the present case was appearing as the Counsel for the Respondent, this Court heavily relying upon the decision in the case of Oil and Natural Gas Corporation Ltd. (supra), in the facts of the said case, held as follows:
On reading of the petition filed u/s 34 of the Act, it is found that nowhere in the petition while challenging the award in respect of the aforesaid claims, it is stated that the award is opposed to public policy. It also appears that no other point has been raised to make out a ground as to how the award in respect of those items of claims is opposed to public policy. I am, therefore, of the view that no ground whatsoever having been established in terms of the guidelines laid down by the Apex Court in the aforesaid case, there is hardly any scope for this Court to interfere in respect of all items of claims except claim item No. 1. So far as claim item No. 1 is concerned, I find on examination of the documents that the reasons given by the late Justice v. Gopalaswamy is based on record and therefore, should be accepted.
10. A perusal of the impugned award clearly reveals that the Learned Arbitrator after considering the respective claim and the counter claim filed by the parties before him, framed the relevant issues which arose in the facts of the case and thereupon considering the oral and documentary evidence produced before him in minute details answered the respective issues framed by him. In course of discussion, the Learned Arbitrator in the impugned award has also referred to various case laws cited by the respective parties and on proper analysis came to the conclusion that the contention of the M.C.L. that the claim for arbitration made by the Respondent is barred by limitation, cannot be sustained as the same is within the period of limitation. In the case of
11. It is native to state that it is a well settled principle of law that a Court, while considering the question as to whether an award passed by the Arbitrator should be set aside or not, does not sit in appeal over the award and in the process cannot reappreciate the materials on record for coming to a different conclusion than what has been arrived at by the Arbitrator.
12. As already observed above, applying the decision in the case of Oil and Natural Gas Corporation Ltd. (supra), the contention raised by the Appellant for the first time before this Court that the public policy of the India is violated by the award, cannot be accepted. The Supreme Court in the case of Oil and Natural Gas Limited (supra) held that an award can be set aside if it is so unfair and unreasonable and it shocks conscience of the Court and only in such event, can be said to be opposed to or in conflict with the public policy. In the facts of the present case, this Court does not find the impugned award to be within such fold so as to be held to be in conflict with the public policy.
13. In view of the above discussions, this Court finds that the Learned Arbitrator has properly analyzed the facts of the case, considered all the materials available on record and relevant law on the point, before passing the award, which cannot be said to be untenable and liable to be set aside under any of the clauses u/s 34 of the Act. This Court is, therefore, of the view that the impugned order passed by the Learned District Judge rejecting the application u/s 34 of the Act filed by the Appellant is not liable to be interfered with.
14. In the result, the appeal is dismissed, but in the circumstances without any cost.
Appeal dismissed.
