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TMI Blog1989 (3) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... from the godown of the appellant. There was an agreement between' the parties for shelling of paddy into rice, after lifting the paddy from the godown of the appel- lant, at the rate of 70% of the paddy. The shelling charge was ₹ 2.20 per quintal. The learned Subordinate Judge, First Class, directed on or about 17th March, 1980 appoint- ment of an arbitrator on an application by the respondent. On 22nd January, 1982, the arbitrator gave his award. The arbitrator did not allow the claims of the appellant as claimed as per the terms of the agreement. The arbitrator allowed certain claims. It is necessary, in view of the contentions that have been raised, to refer to the award of the arbitrator. After setting out the history the arbitrator dealt with the various contentions. It is not necessary to refer to all the contentions and points urged before the arbitrator and upon which he has made his award. It is sufficient if the relevant portions are dealt with. The arbitrator, inter alia, dealt with a claim of ₹ 55,060.29 which had claimed as penalty at ₹ 2 per qtl. for not lift- ing the balance of the paddy weighing 2765-3093 mts. The arbitrator noted that he had h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in any law. However, Shri Pritam Singh in the statement attached to the affidavit work it out at ₹ 110 per qtl. The procurement price of paddy is ₹ 85 per qtl. as shown therein. He has added to it market fee and other charges including cost of gunny ₹ 2 and interest charges at Re. 1. Under the above clause of the contract, the Corporation has added 50% penalty and thus has claimed the price at ₹ 165 per qtl. I do not think that the Corporation is entitled to such a fantastic rate particularly when the expression 'economic rate' has not been defined. Even if the statement of Shri Pritam Singh is accepted the maximum price of the rice at that time should be ₹ 100 per qtl. exclusive of gunny bag and interest charges to which in my opinion the Corporation is not entitled. The market rate did not exceed that amount at that time. So the calculated at this rate the price of the undelivered rice will come to ₹ 1,96,277.00. to which the Corporation is entitled. I may add here that the above amount has been allowed to the Corporation besides from the evidence on the record I believe that the rice was short delivered. When the paddy had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent and reversed the decision of the learned Subordinate Judge. The High Court did not interfere with that decision because the High Court did not find any ground to interfere. The question therefore is, whether the learned Additional District Judge in the first appeal was right in holding that the award was not liable to be corrected in the manner done by the learned Subordinate Judge. The jurisdiction to interfere by the Court of law of an award made by the arbitrator chosen by the parties is circumscribed. In India, there is a long history of arbitration. Arbitration is a mode of settlement of disputes evolved by the society for adjudication and settlement of the disputes and the differences between the parties apart from the courts of law. Arbitration has a tradition; it has a purpose. Arbitration, that is a reference of any particular dispute by consent of the parties to one or more persons chosen by the parties with or without an umpire and an award enforceable by the sovereign power were generally unknown to ancient India. Hindus recognised decisions of Panchayats or bodies consisting of wealthy, influential and elderly men of the Community and entrusted them with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e award is clear, just and fair, the courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. It is in this perspective that one should view the scope and limit of correction by the court of an award made by the arbitrator. We should make the law of arbitration simple, less technical and more responsible to the actual realities of the situation, but must be responsive to the cannons of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence, not only by doing justice between the parties, but by creating a sense that justice appears to have been done. Sections 30 and 33 of the Act provide for the grounds on which an award of the arbitrator can be set aside. These were mainly, until recent changes made by statutory laws in England, in consonance with the English principles of Common Law as adopted in India. So far as the material of the present purpose is concerned, an award of the arbitrator can only be interfered with or set aside or modified within the four corners of the procedure provided by the Act. It is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jivraj Balloo Spinning Weaving Co. Ltd., L 1922 IA 324. Dr. L.M. Singhvi, learned counsel for the appellant, urged before us that the arbitrator was wrong in not awarding 50% of the added penalty as claimed by the appellant, as mentioned hereinabove. The appellant had claimed the price of ₹ 165 per qtl. The arbitrator was of the view that the expression 'Economic Rate' had not been defined. It is true that the expression 'Economic Rate' has not been used, but the expression 'Economic Cost' has been used. The arbitrator has noted that the market rate did not exceed that amount at the time. The amount of ₹ 100 per qtl. is mentioned of such a rate as the arbitrator had noted, could only be pre- estimated damages but this was not so according to the arbitrator. The arbitrator had construed the effect of clause g(i) of the contract as mentioned hereinbefore. It cannot be said that such a construction is a construction which is not conceivable or possible. If that is the position assuming even for the argument that there was some mistake in the construction, such a mistake is not amenable to be connected in respect of the award by the court. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uming even that it was a wrong statement of law, was not wrong statement of the proposition of law which was the basis for decision in this award. Error of law as such is not to be presumed, if there is legal proposition which is the basis of the award and which is erroneous as observed in Champsey Bhara Co, (supra), then only the award can be set aside. There was no proposition of law; there was a legal deduction of law arrived at to say that the provisions of clause g(i) of the contract would be penal rate and such penal rate cannot be sustainable without evidence of the damages suffered to that extent. We are of the opinion that the arbitrator had taken a view which is plausible view. Beyond this, the court has nothing to examine. It is not necessary for a court to examine the merits of the award with reference to the materials produced before the arbitrator. The Court cannot sit in appeal over the views of the arbitrator by re-examining and re-assessing the materials. See the observations of this Court in Puri Construction Pvt. Ltd. v. Union of India, [1989] 1 SCC 411. In the aforesaid view of the-matter, it appears to us that the learned Additional District Judge was righ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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