Date of Decision: August 03, 2007

SUBJECT : ARBITRATION AND CONCILIATION ACT, 1996

OMP No. 257/2007

Mr. R.K.Bhandari - Petitioner

Through: Mr. Rakesh Tikku, Advocate, Advocate.

Versus

Shri Satish Jassal

(through his legal representatives/heirs) - Respondents

Through: Mr. Harish Malhotra, Sr. Advocate with Mr. Sanjeev Goel and Ms. ArtiBansal, Advocates

VIPIN SANGHI, J (ORAL)

1. The present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the award passed by the learned Arbitrator on 27th January, 2007 in arbitration proceedings between the parties.

2. Sh. Satish Jassal, the original claimant (since deceased) who is represented by his legal representatives entered into an agreement with the respondent and his sister on 20th March, 1996. Under this agreement, the claimant, Mr. Satish Jassal agreed to renovate the existing first floor and raise further construction on the first floor of property bearing No. 5/12, Shanti Niketan, New Delhi for the petitioner herein. After having renovated the existing construction and raising further construction in terms of the agreement, the said Sh. Satish Jassal was to raise his own construction on the second floor, the rights whereof were acquired by him from the petitioner, Sh. R. K. Bhandari and his sister.

3. The fact that the parties had entered into an such agreement is not in dispute. It is also not in dispute that the claimant, Sh. Satish Jassal had to be paid the amounts expended towards renovation of and further construction on the first floor by the petitioner. It is also undisputed that the renovation and construction work was undertaken by the claimant.

4. Under the agreement, the first floor premises was to be handed over to the petitioner herein upon payment of the amounts expended at the rates specified in the agreement. It was claimed by the claimant that while he was out of the country, after the renovation and construction on the first floor was completed, the possession of the first floor was illegally taken over by the petitioner herein, and he let out the same to a tenant without making payment to the claimant under the terms of the agreement. Admittedly, no amount was paid to the claimant by the petitioner when the possession was taken over.

5. The petitioner disputed the amounts payable by setting up altogether different rates of renovation and construction than those claimed by the claimant. While as per the claimant, the agreed rate under the agreement was Rs.650/- per square feet for renovation and Rs. 800/- per square feet for new construction, apart from the cost incurred towards painting, polishing/construction of the garage, boundary wall and painting of gates etc., the rates set up by the petitioner herein were Rs.100/- per square feet for renovation and Rs. 600/.- for new construction. On the basis of the rates claimed by the claimant, Sh. Satish Jassal, he raised a demand of Rs. 24,72,315.10 from the petitioner herein. Since the dispute with regard to the rates applicable remained unresolved, the matter was referred to the arbitration in terms of the arbitration agreement between the parties with the appointment of the sole Arbitrator by this Court vide order dated 8.10.2007 in proceedings under Section 11 of the Arbitration and Conciliation Act.

6. Before the Arbitrator, the claimant filed its statement of claims to which the petitioner herein filed his counter statement and counter claim. That counter claim of Rs. 45 Lakhs was made on the ground that the works carried out by the claimant were of sub-standard quality. It was further claimed that there was delay of about 10 months in completion of the works and consequently damages were claimed @ Rs.2 lakhs per month for a period of 10 months. Other heads of claim were also enumerated.

7. The first and foremost issue that arose before the Arbitral Tribunal was to determine as to which of the construction agreement, the one set up by the claimant or one set up by the petitioner herein, was genuine. Both had produced photocopies. It was the claimant´s case that the agreement had been prepared and printed out on the computer of one Shri Inder Kumar Khosla, PW-3, the cousin brother of the petitioner, and that he was provided only a photocopy. On the other hand, the case of the petitioner was that the agreement was typed out on a manual typewriter in the office of PW-3, and that he was much later, i.e. , on 28.5.1997 faxed a copy by PW-3. The claimant, the petitioner, and PW.3, Mr. Inder Kumar Khosla, the cousin brother of the petitioner herein appeared as witnesses to determine this issue.

8. Learned Arbitrator has in his award in detail dealt with the evidence led before him, and concluded that the agreement set up by the claimant was the genuine agreement whie that set up by the petitioner was a forged document. So far as the counter claim of the petitioner was concerned, he observed that the petitioner had failed to substantiate its counter claim and therefore rejected the same.

9. The petitioner has assailed the award of the Arbitrator, firstly on the ground that the learned Arbitrator has failed to notice the contradiction in the evidence of the claimant and PW-3.

10. It is argued that PW-3 had, inter alia, stated that he was not aware who has drafted the agreement which was brought on the floppy to his office. The floppy was put in the computer and print out taken. As opposed to this PW-4, the claimant, in his cross examination had stated in response to the question "As per you where were the original drafted and typed out?", that "It was in the office of Mr. Inder Khosla (PW-3) on his computer".

11. It is further argued that the approach of the learned Arbitrator was erroneous in as much as, he did not allow the petitioner to withdraw a statement which was mistakenly made by him in the course of his cross examination. The petitioner in his cross examination in reponse to the query "This agreement now exhibited as DW-1/1 filed along with the affidavit is a forged document" answered by stating "The document shown to me is filed by the claimant. This document marked Ex. DW.1/! is a forged one". It is argued that the petitioner, who is 75 years of age, had mistakenly stated that exhibit DW-1/1 is a forged document, whereas it is the case of the petitioner that the document filed by the claimant was the forged agreement and that filed by him, i.e., Ex. DW-1/1 is the genuine one. It is also argued that the photocopy filed by the claimant could not have been accepted or read in evidence by the learned arbitrator. He places reliance on Section 65 of the Evidence Act to state that in case the original was not produced, the claimant ought to have led secondary evidence wich he failed to do. It is also argued that in view of the fact that both the agreements produced before the learned Arbitrator were only photocopies, the Arbitrator ought to have ignored the same and proceeded to independently arrive at the cost of construction. The cost of construction of the second floor built by the claimant was much less as is evidenced by his cross examination.

12. In my view, there is no force in any of these submissions of the petitioner, Learned Arbitrator has given detailed reasons for arriving at his findings of facts which are based on cogent evidence recorded by him. It is not for this Court to sit in appeal over the findings of facts arrived at on a scrutiny of the evidence by the learned Arbitrator. The Arbitral Tribunal is not bound by the laws of evidence or the Indian Evidence Act. Section 19 of the Arbitration and Conciliation Act specifically says so. Consequently, Section 65 of the Evidence Act cannot be invoked by the petitioner.

13. The application made by the petitioner for withdrawing his statement has also been duly considered by the Arbitrator in his award on Page 21 of the award. He has concluded that the ground taken by the petitioner for seeking the correction of the answer given by him in the course of this cross examination is an after though. In any event, I find from the perusal of the award that the learned Arbitrator has not proceeded merely on the statement of the petitioner that exhibit DW-1/1 is a forged document. He has relied on the testimony of Mr. Inder Kumar Khosla. PW-3, the cousin brother of the petitioner.

14. Admittedly, the agreement between the parties was prepared and signed in the office of PW3 and was witnessed by him and his Secretary. Mr. Khosla had categorically stated that the agreement prepared in his office was printed on a printer through the computer and that he did not have any manual typewriters in his office at the relevant time. Te agreement as set up by the petitioner is generated from a manual typewriter. The arbitrator takes note of the stand taken by petitioner in his letter dated 29.8.2002 to inspector Virender Singh, that the original construction agreement was handed over to Mr. Inder Kumar Khosla, PW-3, so that he could give a copy to Mr. Satish Jassal. The learned Arbitrator notes that according to the petitioner he was sent a fax of the construction agreement by Mr. Khosla on 28.5.1997, i.e. even after the construction on the first floor was completed a possession taken. Even the fax received by the petitioner was not produced. The learned arbitrator therefore drew and adverse inference against the petitioner. The learned arbitrator also comments on the demeanor of the witnesses examined before him. I cannot accept the submission of the learned counsel for the petitioner that an arbitrator cannot be influenced by the demeanor of a witness examined in his presence. Apart from stating the proposition, no material in support thereof has been produced by the petitioner. The learned Arbitrator has relied on the testimony of PW-3 who has proved Ex. P-3 i.e. the agreement produced by the claimant. PW-3 has also stated that it is a matter of surprise for him, how his signatures are there on the photocopy of the alleged agreement produced by the petitioner, when the same was printed from a computer and not on a manual typewriter. He also stated that his statement made to the police, that he had handed over the original o the agreement to the petitioner was correct and that he would stand by it. He has also explained how, possibly, the fax of the agreement set up by the petitioner was possibly generated.

15. The Arbitrator has also taken note of the fact that the construction/renovation on the first floor was completed in March, 1997 and he gives a finding that the respondent took forcible possession of the premises in May, 1997 when the claimant was not in India. Only thereafter he sought to dispute the claim of the claimant. To my mind, it is not open to the petitioner in these proceedings to pull out one question, and the answer given by the witness to that question, to seek to challenge his testimony. The learned arbitrator has examined the entire evidence laid before him and given cogent reasons for his findings, based on an overall assessment of the evidence before him. He is the final judge of facts and his findings cannot be disturbed, particularly when it is not even the petitioner's case that this is a case of no evidence at all. The Arbitrator has given a finding of fact that the agreement set up by the claimant was genuine, and that being a position, the parties were bound by the rates for renovation and construction as contained in the said agreement. It was therefore wholly irrelevant to consider any other rates for construction, including the rates for construction of the second floor of the property.

16. It is also argued that the rate of interest awarded by the Arbitrator is excessive. The Arbitrator Has awarded interest @ 24% per annum from 1.6.1997 till 15.12.2002 which is the date after which he was entered upon the reference. Thereafter he has awarded interest @ 18% per annum on the principal amount of Rs. 24,72,315.10 from 16.12.2002 till the date of realisation. The Arbitrator has merely awarded the agreed rate as per the agreement while awarding 24% interest from the date the amount was due, i.e., 1.6.1997 till the date of the Arbitral proceedings, i.e., 15.12.2002. He has granted pendente lite and future interest @ 18% per annum as per Section 31(7)(b) of the Arbitration and Conciliation Act, 1996.

17. Consequently, I find no error in the award of interest by the Arbitrator at the rate given by him. Accordingly, these objections being without any merit are dismissed.

Sd/- VIPIN SANGHI, J.