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CASE NO.: Appeal (civil)  3534-3535 of 2001

PETITIONER: M/s. P.R. Catering Co. & Anr

RESPONDENT: Oil and Natural Gas Corporation Ltd. & Ors

DATE OF JUDGMENT: 13/03/2008

BENCH: TARUN CHATTERJEE & HARJIT SINGH BEDI

JUDGMENT: J U D G M E N T

CIVIL APPEAL NOs. 3534-3535 OF 2001

HARJIT SINGH BEDI,J.

1.              These appeals arise out of the following facts. 2.       The respondent, the Oil and Natural Gas  Corporation Ltd. (hereinafter called the "ONGC") invited  tenders from qualified persons for providing catering  services and house-keeping facilities in two drilling sites at  Dimapur, in Nagaland.  The appellants, M/s. P.R. Catering  Company and several others submitted their quotations.  As  the rates submitted by the appellants were acceptable, its  tender was accepted and an agreement entered between the  parties on 21st September 1991 for the purpose of providing  the necessary facilities for a period of two years starting     1st October 1991.  One of the unsuccessful tenderers, Hotel  Paradise however instituted a Civil Suit before the  Additional District Judge at Jorhat on which the appellants  were restrained ad-interim from acting in terms of the letter  of intent issued by the ONGC and the ad-interim order  granted was made absolute on 28th May 1992.  The ONGC  filed an appeal before the appellate court which vacated the  injunction on 17th July 1992.  The case of the ONGC is that  vide letters dated 1st October 1992 and 28th May 1993 the  ONGC had asked the appellants to provide the necessary  services at two drilling sites whereas the case of the  appellants is that they were in fact already providing  necessary facilities as per terms and conditions of the  contract and had accordingly submitted bills from time to  time totaling Rs.56,42,940/-  and through the ONGC had  received the bills, it had refused to make any payment in  response thereto.  The appellant thereafter approached the  High Court for a direction for the payment of its dues but  the said writ application was dismissed on 18th May 1993.   The appellant then  filed an application in the Civil Court at  Jorhat for appointment of an arbitrator as per terms of the  contract and vide order dated 22nd May 1994 Justice S.P.  Rajkhowa, a retired Judge of the High Court, was in fact  appointed as the arbitrator.  An appeal filed by the ONGC  against the order dated 22nd May 1994 was dismissed by  the High Court on 30th January 1996.  The arbitrator  thereafter made his award on 6th February 1996 granting

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the full amount claimed by the appellants along with the  interest at 16% per annum.  The ONGC thereupon filed an  application for the setting aside of the award  before the  Civil Court at Jorhat which was dismissed and the award  made a rule of the court and a decree passed accordingly.   This order was challenged before the High Court on the  following grounds:

"(1)   That the learned arbitrator while  making the award totally ignored vital  documents which has resulted in a  faulty decision amounting to total  perversity;

(2)  That there was non-application of  mind by the learned arbitrator and he  has thus committed legal  misconduct;

(3) That the respondents were  prevented by injunction issued by the  court from rendering services during  the period from 1.10.1991 to  23.7.1992 and as such even if any  service was taken or given as claimed  by the respondents, it was de  hors/beyond  the contract and the  learned arbitrator has no jurisdiction  to pass any award for that period."  

3.              The High Court observed that the award given by  the arbitrator was a reasoned and a speaking one and that  Section 30 of the Arbitration Act itself visualized its setting  aside on only three limited grounds (1) that the arbitrator or  umpire had misconducted himself; (2) that the award had  been made after the supersession of the arbitration or the  proceedings becoming invalid; and (3) that it had been  improperly procured or was otherwise invalid.  It was also  observed that in the light of the well settled principles of the  law, proceedings under Section 30 of the Act did not visualize  a drastic reappraisal of the findings of the arbitrator unless  there was a total perversity in the award and that if two views  were possible the one taken by the arbitrator was not liable to  be interfered with.  The court then went on to the specific case  put up by the parties and observed that the ONGC had  questioned the provision of services w.e.f. 1st October, 1991 as  being impossible on account of the injunction granted by the  Civil Court and the fact that the services had not been  provided earlier was clear from the letters dated 1st October  1992 and 28th May 1993 directing the appellants to move to  the site  and to provide the necessary services and as these  two letters which went to the root of the matter ( as to date  when the services started ) had not been considered by the  arbitrator, interference by the court was called for.  It was  further observed that as per the terms of the contract the  appellants were under an obligation to maintain a common  register indicating therein a date wise, individual wise and  meal wise account of those persons who had been given the  required services per day and that every employee receiving  such benefit was required to put his signature on it as a token  of its correctness and that even this important piece of

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evidence had been withheld by the appellants and had not  been produced before the arbitrator.  The court accordingly  concluded that the arbitrator had without any evidence  presumed that the appellants had  provided  the   necessary    services w.e.f. 1st October, 1991 itself and once again wound  up its decision citing a large number of judgments and  observing that as the two letters and the common register were  material documents which had not been considered by the  arbitrator there was a manifest error apparent on the face of  the record and having held above, remitted the case to the  arbitrator for a fresh decision.  Aggrieved thereby, the service  provider is the appellant before us in this appeal. 4.              We have heard Mr. Vijay Hansaria, the learned  senior counsel for the appellants and Mr. K.P.Pathak, ASG for  the respondents.  We find that several arguments have been  raised by Mr. Vijay Hansaria in the course of the hearing  pointing out that the appeal did not justify interference by the  High Court inasmuch as the findings of fact recorded by the  arbitrator were based on a proper assessment of the evidence  that included the monthly bills raised by the appellants duly  certified by officers of the ONGC and also letters dated           5th October 1992 and 23rd June 1993 from the ONGC that the  bills submitted by the appellants  were under consideration  pending payment and it had never been the case of the ONGC  except in proceedings before the arbitrator and the High Court  that the bills submitted were fake.  The learned counsel for the  ONGC respondents has, however, supported the order of the  High Court. 5.              We are of the opinion that it would not be proper to  labour the matter any further in view of the fact that we intend  to maintain the order of the High Court and to make any  comment on the merits could prejudice the case of one of the  parties.   We accordingly dismiss the appeals but request the  arbitrator to complete the arbitration proceedings within three  months from the date of the supply of the copy of this order.   There will be no order as to costs.