M/S. P.R. Catering Co. &
ANR Vs. Oil and Natural Gas Corporation Ltd. & Ors [2008] INSC 454 (13 March
2008)
Tarun Chatterjee & Harjit
Singh Bedi
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 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:
-
"That the learned arbitrator while making the award totally ignored
vital documents which has resulted in a faulty decision amounting to total
perversity;
-
That there was non-application of
mind by the learned arbitrator and he has thus committed legal misconduct;
-
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 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.
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