TaxTMI 
TaxTMI 
2015 (12) TMI 778
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....e parties which led to an arbitration proceeding and a former Judge of this Court was appointed as the arbitrator/sole umpire to resolve the disputes between the parties. As facts would unveil, the learned arbitrator after holding series of sittings passed an award on 15.07.2009. After the award was sent to the civil court, the claimant-appellant moved the Court for passing a decree under Section 17 of the 1940 Act in terms of the award and the respondent filed O.P. (Arb.) No. 30 of 2009 under Sections 30 and 33 to set aside the award. During the pendency of the said petition, the respondent almost after expiry of two years filed an application, that is, I.A. No. 5625 of 2011 seeking permission to examine the learned arbitrator and the General Manager of the respondent as witnesses. The learned Additional Subordinate Judge, vide order dated 23.12.2011, rejected the application holding that there was no justification to examine the arbitrator; that the Court while considering the objections under Sections 30 and 33 of the 1940 Act does not sit in appeal over the arbitrator's award; that the Court does not assess or re-appreciate the evidence; that the award passed by the learned arb....
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....ction under Sections 30 and 33 of the 1940 Act or to pass a decree in terms of the award. In essence, the attack on the order by Mr. Ranjit Kumar is that the witness No. 2, General Manager, could not have been permitted by the High Court to be examined as a witness in the Court to prove any kind of legal misconduct, for the same has to be demonstrated from the records of the arbitral proceedings as well as the evidence adduced before the learned arbitrator. It is further contended that the witness sought to be examined had already been examined before the learned arbitrator and his evidence can be read by the trial court to discern and decide if there is any perversity of approach by the arbitrator. Learned Solicitor General, to bolster his submissions, has placed reliance on Arosan Enterprises Ltd. v. Union of India and Another (1999) 9 SCC 449, Inder Sain Mittal v. Housing Board, Haryana and Others (2002) 3 SCC 175, State of U.P. v. Allied Constructions (2003) 7 SCC 396 , State Bank of India v. Ram Das and Another (2003) 12 SCC 474 , D.D. Sharma v. Union of India (2004) 5 SCC 325, Hari Om Maheshwari v. Vinitkumar Parikh (2005) 1 SCC 379, Bhagawati Oxygen Ltd. v. Hindustan Copper ....
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....is whether on the basis of the allegations of legal misconduct the High Court should have allowed examination of the witness. 7. To appreciate the controversy in proper perspective, it is pertinent to refer to Sections 30 and 33 of the 1940 Act. They read as under:- "Section 30. Grounds for setting aside award.- An award shall not be set aside except on one or more of the following grounds, namely:- (a) that an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35; (c) that an award has been improperly procured or is otherwise invalid. Section 33. Arbitration agreement or award to be contested by application.- Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, i....
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....me legal proposition which is the basis of the award and which you can then say is erroneous." Be it noted, the proposition laid down in Champsey Bhara & Company (supra) has also been followed in Firm Madanlal Roshanlal Mahajan (supra). 11. In K.P. Poulose (supra) while dealing with the concept of misconduct, a three-Judge Bench was dealing with the speaking award where the reasons had been ascribed by the learned arbitrator. A contention was raised that the learned arbitrator was guilty of legal misconduct in conducting the proceedings, for two very material documents were absolutely ignored by the arbitrator resulting in miscarriage of justice. The Court referred to the said two documents and took note of the finding recorded by the arbitrator in the award but made an observation which was inconsistent with his conclusion that the contractor had no right to extra payment for the particular work. In that context, the Court proceeded to observe as follows:- "We now come to the award. Although the arbitrator has held that "jetting, however, is not an authorised extra covered by the agreement", he has made the following significant observation which is inconsistent wit....
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....(2001) 2 SCC 680. In the said case, a contention was raised that the award was passed in violation of principle of natural justice inasmuch as, certain documents were received without notice to the Port Trust. Such a contention was raised before the High Court and the said stand was abandoned after perusal of the order sheet of the arbitrator which showed that at each stage adequate opportunity was given to both the parties. Thereafter the court referred to the principles stated in Jivarajbhai Ujamshi Sheth v. Chintamanrao Balaji (1964) 5 SCR 480, Puri Construction Pvt. Ltd. v. Union of India (1989) 1 SCC 411, State of Orissa v. M/s Lall Brothers (1988) 4 SCC 153, Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. and Another (1989) 1 SCC 532, Rajasthan State Mines and Minerals Ltd. v. Eastern Engineering Enterprises and Another (1999) 9 SCC 283 and opined thus:- "... It is not a case where the arbitrator has acted arbitrarily, irrationally, capriciously or independently of the contract. It is difficult for us to take a view that there has been a deliberate departure or conscious disregard of the contract to say that the arbitrator misconducted h....
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....ourt and it cannot reappreciate the material on record. The Court further proceeded to state that an award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts, but if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court will interfere with the award. In the said case reference was made to Rajasthan State Mines and Minerals Ltd. (supra) and certain pas- sages were quoted. We think it seemly to reproduce the said paragraphs:- "22. ... The rates agreed were firm, fixed and binding irrespective of any fall or rise in the cost of the work covered by the contract or for any other reason or any ground whatsoever. It is specifically agreed that the contractor will not be entitled or justified in raising any claim or dispute because of increase in cost of expenses on any ground whatsoever. By ignoring the said terms, the arbitrator has travelled beyond his jurisdiction as his existence depends upon the agreement and his function is to act within the limits of the said a....