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Kirpal Singh Khurana v. Union Of India .
Case Summary — K.S. Gupta, J.
Factual and Procedural Background
M/s. Kirpal Singh Khurana & Sons filed a petition under Section 14 of the Arbitration Act, alleging it had entered into a contract with the Union of India (respondent No. 1) through the Executive Engineer, PWD Division No. 26 (DA), New Delhi, for the construction of a Home for Mentally Retarded Children and Adults, Dormitory and kitchen with connecting corridor including internal water supply and sanitary installations at Avantika (Rohini) (Phase III). An agreement bearing No. 22.EE/84-85 was executed between the parties.
Disputes under the contract were referred to respondent No. 2 (the arbitrator) on or about August 17, 1989. Respondent No. 2 entered upon the reference on October 11, 1989 and made an award dated December 6, 1990. Notice of that award was received by the petitioner on or about December 13, 1990. The petitioner initially prayed that the arbitrator be directed to file the award and arbitration proceedings so that the award could be made the rule of the Court.
After the award was filed in Court, respondent No. 1 filed objections (I.A. No. 8994/91) under Sections 30 and 33 of the Arbitration Act seeking to set aside the award dated December 6, 1990, and also filed I.A. No. 456/93 under Section 5 of the Limitation Act for condonation of delay in filing I.A. No. 8994/91. One ground raised in I.A. No. 8994/91 was that respondent No. 1 had separately filed counter-claims which the arbitrator did not consider when making the award.
On August 29, 1997, Shri Sanjay Poddar appearing for the petitioner stated that because the counter-claims raised by respondent No. 1 were not considered and decided by the arbitrator, the award should be set aside and the matter remitted to the arbitrator for fresh decision.
Legal Issues Presented
- Whether the award dated December 6, 1990 should be set aside and the matter remitted to the arbitrator because the award left undetermined the counter-claims raised by respondent No. 1 (relying on Clause (a) of Section 16 of the Arbitration Act).
- Procedural questions arising from objections under Sections 30 and 33 of the Arbitration Act and the application under Section 5 of the Limitation Act (raised by respondent No. 1).
Arguments of the Parties
Petitioner's Arguments
- Initially sought an order directing the arbitrator to file the award and arbitration proceedings so the award could be made the rule of the Court.
- Subsequently, through counsel Shri Sanjay Poddar, conceded that the arbitrator had not considered respondent No. 1's counter-claims and requested that the award be set aside and the matter remitted to the arbitrator for fresh decision on all matters.
Respondent No. 1's Arguments
- Filed objections (I.A. No. 8994/91) under Sections 30 and 33 of the Arbitration Act seeking to set aside the award dated December 6, 1990.
- Asserted that it had filed separate counter-claims which were not considered by the arbitrator when making the award.
- Also filed I.A. No. 456/93 under Section 5 of the Limitation Act for condonation of delay in filing the objections.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court's analysis is concise and follows from the procedural facts before it. The court observed that the arbitrator had not considered or decided the counter-claims raised by respondent No. 1. Clause (a) of Section 16 of the Arbitration Act authorises the Court to remit an award to an arbitrator where the award has left undetermined any of the matters referred to arbitration. Relying on that provision, and on the concession made on behalf of the petitioner, the court concluded that the appropriate remedy was to set aside the award and remit the matter to the arbitrator so that the omitted counter-claims could be decided.
In addition, the court invoked sub-section (2) of Section 16 to impose a time limit on the arbitrator's reconsideration and directed that the arbitrator decide the matter within two months from the date of receipt of a copy of the court's order. The Registry was directed to send a copy of the order to the arbitrator forthwith.
Holding and Implications
AWARD SET ASIDE AND REMITTED TO THE ARBITRATOR
Holding: The court set aside the award dated December 6, 1990, and remitted the matter to Sh. N.H. Chandwani, Arbitrator (address as recorded in the opinion), with a direction to decide the counter-claims preferred by respondent No. 1.
Direct Consequences: The arbitrator was directed under sub-section (2) of Section 16 to decide the matter within two months from receipt of the copy of this order. The Registry was ordered to send a copy of the order to the arbitrator immediately.
Broader Implications: The opinion does not discuss broader legal implications or establish new precedent; it addresses the remedial step of remission in the specific circumstances where matters referred to arbitration were left undetermined by the arbitrator.
K.S Gupta, J.:— M/s. Kirpal Singh Khurana & Sons filed petition under Section 14 of the Arbitration Act alleging that it entered into a contract with the Union of India respondent No. 1 through the Executive Engineer, PWD Division No. 26 (DA), New Delhi, for execution of the work of “Construction of Home for Mentally Retarded Children and Adults, Dormitory and kitchen with connecting corridor i/c internal water supply and sanitary installations at Avantika (Rohini) SH: Phase III and an agreement bearing No. 22.EE/84-85 was executed between the parties. Disputes having arises between the parties in respect of the contract were referred in terms of arbitration Clause to respondent No. 2 on or about August 17, 1989. Respondent No. 2 entered upon the reference on October 11, 1989 and made the award on December 6, 1990. Notice of the award having been made was received by the petitioner on or about December 13, 1990. It was prayed that respondent No. 2 may be directed to file the award with arbitration proceedings for making the same the rule of the Court.
2. After the award was filed by respondent No. 2 in Court, in response to the notice respondent No. 1 filed objections (I.A No. 8994/91) under Sections 30 and 33 of the Arbitration Act for setting aside the award dated December 6, 1990 and also application being I.A No. 456/93 under Section 5 of Limitation Act for condonation of delay in filing I.A No. 8994/91. One of the grounds taken in I.A No. 8994/91 is that in addition to opposing the claims made by the petitioner, respondent No. 1 also filed counter-claims separately but the same were not considered by the arbitrator-respondent No. 2 while making the award dated December 6, 1990. On August 29, 1997 when the matter came up for hearing Shri Sanjay Poddar appearing for the petitioner made the statement that since the counter-claims raised by respondent No. 1 were not considered and decided by the arbitrator, award in question may be set aside and the case remitted to the arbitrator for deciding afresh in accordance with law. Clause (a) of Section 16 of the Arbitration Act authorises the Court to remit the award to an arbitrator where the award has left undetermined any of the matters referred to arbitration.
3. Consequently award dated December 6, 1990, is set aside and the matter is remitted with direction to Sh. N.H Chandwani, Arbitrator, (0-55, Lajpat Nagar-I, New Delhi) to also decide the counter-claims preferred by respondent No. 1. Under sub-section (2) of said Section 16, Arbitrator is further directed to take decision in the matter within two months from the date of the receipt of the copy of this order. Let a copy of this order be sent by the Registry to the Arbitrator forthwith.
4. Award set aside
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