1. This original petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the award passed by the second respondent dated 14.06.2000 in Arbitration Case No. 13 of 1998.

2. The factual matrix culminating into the present petition filed under Section 34 of the Arbitration and Conciliation Act 1996, is as follows:

(a) The first respondent was appointed by the petitioner as a tenderer for supply of rice to various godowns in Tamil Nadu Civil Supplies Corporation Limited in the State of Tamil Nadu and the first respondent has agreed to supply 18503 Mts. of rice (14003 Mts. of boiled rice and 4500 Mts. of raw rice). An agreement was entered into on 20.07.1996 and 17.10.1996 and the first respondent has supplied 18643 Mts. of rice as against the ordered quantity of 18503 metric tonnes and completed the supply as per the agreement. According to the petitioner Corporation, as per the conditions stipulated in the agreement, the first respondent has to supply gunnies with rice, but the gunnies supplied by the first respondent are not in accordance with the B-Twill specification. As per the terms and conditions of the agreement, apart from new bale of B-Twill gunnies, the tenderer was allowed to supply the stocks in once used new bale of gunnies. As per the Bureau of Indian Standard specification IS 2566/1984 B-Twill gunnies are of two types. The superior quality type is known as 2.25 lbs gunnies weighing 1020 grams for 100 Kg capacity and 845 grams for 75 Kg capacity. The next type is called 2 lbs gunnies of B-Twill category for which no specification has been prescribed by the Bureau of Indian Standards. According to the petitioner Corporation, when the first respondent supplied rice to the petitioner from Andhra Pradesh, the gunnies available in the open market of Andhra Pradesh were B-Twill type of gunnies of 2 lbs quality. The supply of rice in the said gunnies by the first respondent was detected by the staff of the petitioner at the loading point itself. The rice packed in 2 lbs gunnies resulted in dropping/spilling of rice during handling operations.

(b) It is the case of the petitioner that the first respondent requested the "officials to accept the gunnies and gave an undertaking in writing agreeing for imposition of gunny cut in order to avoid huge loss of transport charges, handling charges, demurrage and wharfage charges, etc. It is the further case of the petitioner that the first respondent has executed an undertaking on Rs. 10/- Non-Judicial stamp paper, agreeing for imposition of gunny cut by the petitioner. It was based on the said undertaking, the petitioner Corporation has accented the consignment with the said gunnies of inferior quality and subsequently made the gunny cut to the tune of Rs. 6,07,621.90, which was recovered. It is the case of the petitioner that the gunny cut was done in accordance with Clauses 19 and 11 of the tender conditions and agreement respectively. The first respondent, after receiving the bills, filed the above claim petition after lapse of two years.

3. Based on the dispute raised by the first respondent, the second respondent was appointed as a sole arbitrator, before whom the first respondent filed a claim, for which the petitioner filed counter and the first respondent filed reply, to which a rejoinder was also filed by the petitioner. After hearing the arguments on both sides, the second respondent, the sole Arbitrator has passed an award on 14.06.2000, stating that no gunny cut shall be made in respect of gunnies, viz., new bale, once used new bale, sound serviceable A-Twill or B-Twill 100. Kgs. or 75 Kgs. Capacity supplied with rice on and upto 03,09.1996. Holding that there is no violation of tender or agreement conditions, the sole Arbitrator directed that out of the total amount of Rs.S,07,621.90, after retaining 25% amount of gunny cut in respect of gunnies supplied on and from 34.09.1996, remaining amount shall be paid to the first respondent as expeditiously as possible. However, the Arbitrator did not interfere with the order of recovery of the amount for supply of rice in Serviceable with Patches (SWP) gunnies, since the supplying of rice in SWP gunnies is in violation of tender and agreement conditions. Accordingly, the claim of the first respondent was partly allowed without any order in respect of payment of interest claimed by the first respondent.

4. The petitioner has challenged the award of the Arbitrator in so far as it relates to the award of the Arbitrator directing the petitioner to refund the entire amount of gunny cut recovered from the first respondent for the period upto 03.09.1996 and also to refund 75% without interest, after retaining 25%, in respect of gunny cut recovered for the period after 4.9.1996. According to the petitioner, the inclusion of non-standardisation charges and under-loading charges with the award amount is also against the provisions of the agreement as well as the conditions of tender. The award is challenged by the petitioner Corporation on the following grounds:

(i) The Arbitrator has misconstrued the facts by referring to the counter claim, as if the same has been filed by the petitioner, while the petitioner has in fact not filed any such a counter claim;

(ii) The allegation which has been made by the first respondent at the time of making the claim that the letter of undertaking was obtained from him by the petitioner Corporation by compulsion or coercion, has not been proved by the first respondent;

(iii) As per the Document No. 3, the first respondent has accepted the quality of gunny cut imposed by the petitioner in each and every bill;

(iv) As per Clause 11 of the agreement, the Managing Director of the petitioner Corporation is entitled to modify the terms of the agreement with the written consent of the contractor,- and the written undertaking of the first respondent dated 11.09.1996, agreeing for the imposition of gunny cut, has to be construed as the consent of the first respondent, and therefore, the-finding of the Arbitrator that there is no mention regarding the quality of gunny cut in the agreement is not correct;

(v) The Arbitrator has misconducted himself in. not appreciating the documentary evidence produced by the petitioner Corporation, by which the first respondent has acknowledged the supply of gunnies of 2 lbs in the stock receipt acknowledgement and in such circumstances, the first respondent cannot dispute the quality of gunnies supplied.

(vi) The Arbitrator has failed to appreciate that the first respondent before filing the claim petition has at no point of time raised his objection as if the undertaking was obtained under compelling circumstances and therefore, the award stating that the undertaking was obtained under compelling circumstances is un-warranted; and

(vii) The Arbitrator, having decided that gunnies of the said quality are not available in Andhra Pradesh, was not correct in stating that it should be presumed that the first respondent had supplied the goods in quality of gunnies, viz., 2.25 lbs B-Twill as per the agreement.

5. In spite of service of notice, the first respondent, who was the claimant in the arbitration case, has not chosen to appear either in person or through counsel.

6. Mr. V. Kangarajan, learned Counsel appearing for the petitioner Corporation would submit that the Arbitrator has not chosen to give any reason to arrive at the conclusion that the undertaking has been obtained by the petitioner Corporation either under duress or compulsion. It is his further contention that when the violation in respect of quality of gunnies has been admitted by the first respondent, the ultimate decision is to be taken by the petitioner Corporation as per Clause 11 of the agreement. It is also his contention that even though the preliminary inspection for quality has to be made by the Quality Control staff of the petitioner Corporation, in the final inspection,, if a defect is found in quality by the Quality Control staff of the petitioner Corporation at rail heads, it is always open to the petitioner Corporation to deduct the amount in respect of deficiency of quality and therefore, according to the learned counsel, the conduct of the petitioner Corporation in deducting a sum of Rs. 6,07,721.90 is as per the contract, and the Arbitrator has failed to consider the same,, therefore, the award is to be set aside.

7. In deciding about the validity of the arbitration award, the law is well settled that an award can be set aside only if there is an error of jurisdiction and not in the exercise thereof, as held in H.P. State Electricity Board v. R.J. Shah and Co. . While dealing with the jurisdiction of the Arbitrator, the Supreme Court has laid down the law in the following manner:

26. In order to determine whether the arbitrator has acted in excess of jurisdiction what has to be seen is whether the claimant could raise a particular dispute or claim before an arbitrator, if, the answer is in the affirmative then it is clear that the arbitrator would have, the jurisdiction to deal with such a claim. On the other hand if the arbitration clause or a specific term in the contract or the law does not permit or give the arbitrator the power to decide or to adjudicate on a dispute raised by the claimant or there is a specific bar to the raising of a particular dispute or claim then any decision given by the arbitrator in respect thereof would clearly be in excess of jurisdiction. In order to find whether the arbitrator has acted in excess of jurisdiction the court may have to look into some documents including the contract as well as the reference of the dispute made to the arbitrators limited for the purpose of seeing whether the arbitrator has the jurisdiction to decide the claim made in the arbitration proceedings.

8. The law is also clear that the Arbitrator is a sole Judge of the quantity and quality of the evidence adduced and the Court should approach the award with a desire to support it than to destroy it. The Court cannot examine the award as a. regular appellate Court, The reasons given by the Arbitrator cannot be gone into by the Court by means of probing into the mental process of the Arbitrator. It was held in Army Welfare Housing Organisation v. Gautam Construction & Fisheries Ltd. that when the Arbitrator has come to the conclusion based on some evidence, it is not for the Court to appreciate the same, in the following words:

5. ...It is not possible for us to re-appreciate the evidence produced before the Arbitrator and then ourselves coming to the conclusion whether a certain amount claimed was towards 'firm liability' or in the 'nature of anticipated expenses'. Once the Arbitrator had held that the claim would be in the 'nature of anticipated expenses', it is difficult for us to hold the same otherwise....

9. Based on the above said broad legal spectrum, when the award passed by the Arbitrator is considered, it is clear that the Arbitrator, after elaborate discussion of factual position has come to the conclusion that an undertaking has been obtained from the first respondent on 11.09.1996 and found that the same cannot be said to be an undertaking given by the first respondent of its free will. In this regard the Arbitrator has factually come to the conclusion that the staff of the petitioner Corporation were aware of the prevalence of two categories of gunnies, viz., 2 lbs and 2.25 lbs weight of gunnies and of other specifications and in spite of the same, such specifications were not incorporated in the tender conditions and in the agreement, but the petitioner insisted the same by way of undertaking in the midst of transaction. In fact, the Arbitrator has further found that even assuming that the undertaking was voluntarily given, after such undertaking, there was no time for the first respondent to complete the supply of rice, since the first respondent had to adhere to the time frame. The Arbitrator also found that at the time of supply, the Senior Manager (Quality Control) of the petitioner Corporation was camping at Vijayawada, who had admitted that 2.25 lbs gunnies were not available in Andhra Pradesh and the same were available only in Calcutta. This is clearly a factual finding given by the Arbitrator, which cannot be reappreciated by this Court while deciding about the validity or otherwise of the award.

10. In respect of the quality of gunnies, the Arbitrator in categoric terms, based on the tender conditions and agreement clause, has decided that neither the tender conditions nor agreement clauses give full specifications of gunnies such as their weight, whether 2 lbs. or 2.25 lbs., and the quality of gunnies was raised for the first time on 02.09.1996 only, when the Senior Manager (Quality Control) of the petitioner Corporation who was camping at Vijayawada sought for a clarification from the Head Office through fax message. While the tender conditions were given in June, 1996 and agreement was entered into on 20.07.1996, the undertaking is stated to have been given by the first respondent on 11.09.1996. It is also relevant to point out that the Arbitrator has factually found that on the request made by the Senior Manager (Quality Control), the Chairman-cum-Managing Director of the petitioner Corporation gave a clarification permitting him to accept the rice packed in B-Twill N.B. or O.U.N.B. of 2 lbs. and 100 kg capacity gunnies with 800 to 900 grams weight with a gunny cut of Rs. 2,66 per piece and B-Twill N,B. or O.U.N.B,. of 2 lbs. and 7 5 kg capacity gunnies with 650 to 750 grams weight with a gunny cut of Rs. 2.10 per piece. It was only after the clarification given by the Chairman-cum-Managing Director in the above said manner, the first respondent has given an undertaking on 10.09.1996 and therefore, on the factual circumstances stated above, I am of the considered view that the Arbitrator has correctly come to the conclusion that the undertaking, which never formed part of either the terms and conditions of the tender or the agreement entered in July, 1996, can be presumed to have been obtained out of compulsion.

11. In view of the above said facts and inasmuch as the Arbitrator has decided the issue based on the factual circumstances and evidence, I do not see any reason to interfere with the award passed by the Arbitrator. According, the original petition is dismissed. No costs.