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Delhi High CourtIndian Cases

Municipal Corporation Of Delhi vs Cycle Equipment (P) Ltd. on 12 November 1997

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Delhi High Court
Municipal Corporation Of Delhi vs Cycle Equipment (P) Ltd. on 12 November, 1997
Equivalent citations: 1997(43)DRJ686
JUDGMENT

C.M. Nayar, J.

(1) This Judgment will dispose of the objections filed under Sections 30 and 33 of the Arbitration Act, 1940 by the petitioner for setting aside the Award dated 29th May, 1984.

(2) The facts which are incorporated in the application are referred to in paragraphs 1 to 5 which may be reproduced as follows:- “`1.That on the request of the Respondent No. 1 load of 1707 Kv for power and 9.5 Kv for lighting total 1716.5 Kv was sanctioned as per revised agreement dated 15th November 1977. 2. That it was agreed between the parties that the Tariff Schedule Lip will be applicable. 3. That one of the gadgets described in the Test notice submitted by the Respondent No. 1 was electric are furnace which as per specifications given in the test notice was rated as 1400 Kw and as is the practice, the same was accepted as correct. 4. That on inspection by the Enforcement Department of Desu on 4th August 1978 a load of 2080 Kwa of the arc furnace besides load of 194.17 Hp for other installations was found which was in excess of the sanctioned load. Therefore, a notice for the levy of 25% surcharge was served on the Respondent No. 1 vide letter dated 29.8.1978. Another notice was served on the Respondent No. 1 on 16.12.1978 in which detailed reasons for levy of 25% surcharge was given. It is submitted that the Respondent No. 1 deliberately underrated the capacity of arc furnace as 1400 Kw with a view to reduce the billing demand. 5. That the Respondent No. 1 did not make payment of 25% surcharge amounting to Rs. 15,49,357.11 inspite of notice.”

(3) The disputes, therefore, arose between the parties and the matter was referred to the sole arbitration of Shri S.K.Basu, respondent No. 2 who gave his Award and declined the claim of the petitioner. The Arbitrator gave the reasons for his findings after hearing both the parties. The following points which arose for determination have been referred to in the Award:- “1.What is the capacity of the arc furnace installed in the factory of the claimant in Kva as well as in KW? 2. Whether the claimant had connected load in excess of the sanctioned limit? 3. If the levy of the 25% surcharge by Desu on account of above is justified and, if so, what amount is due to Desu from the claimant?”

(4) The findings are recorded as follows:- “1.That the capacity of the arc furnace in Kva may be taken as 2080 as per the rating of the transformer and in Kw is 1500 Mx. respectively as per the information supplied by the Manufacturer. 2. When the tariff is based on Kva Max demand charge, there is no relevance of 0.85 p.f. The consumer is automatically penalised for low p.f. as the Kva demand increases. Desu should have advised the consumer to improve its p.f. as it is beneficial to both. P.F. of an electric arc furnace is of the order of 0.6 to 0.7 normally. 3. Computation of Kw Max. demand from Kva Max. demand recorded in the meter by multiplying with 0.85, is not technically justified when Kw, Max. demand meter is installed in the consumers premises. The actual Kw Max. demand is available from the meter. It may be acceptable when there is no Kw Max. demand meter and the charges are on Kw demand basis. 4. Computation of Kw Max. demand from Kva Max. demand reading and imposing surcharge thereon if it exceeds, sanctioned load tentamounts to “double penalty” as he is paying on actual Kva Max. demand recorded. It is, therefore, awarded that:- i) No surcharge to be levied for excess load unless the Kw Max. demand indicator installed in the consumer’s premises indicate reading in excess of sanctioned Kw load. Computation of Kw demand from Kva Max. demand reading by multiplying it with 0.85 p.f. is not correct. ii) Desu should make efforts to motivate the consumer to improve its p.f. by installing capacitors, as it will be beneficial to him because the Kva demand charges will go down. iii) The consumer should correctly indicate the rating of the furnace as 1500 Kw max, if it wants to use it to its full capacity, and take additional, sanction of lead to avoid surcharge while exceeding sanctioned load.”
(5) The Petitioner, has raised the following pleas which are stated in the objections in paragraphs 6(a) to 6(e) which read as under:- “6(A)The capacity of the arc furnace was accepted as 2080 Kva by the learned Arbitrator but he added that in Kw is 1500 Mx as per the information supplied by the Manufacturer. He also stated that the Tariff is based on Kva demand charge and that there is no relevance of 0.85 p.f. This view of the learned Arbitrator is erroneous. According to Clause (f) of the Tariff Schedule Lip (Large Industrial Power) and Clause 14 of the agreement 2080 Kva will be multiplied by 0.85 p.f. to convert it into Kw which would come to 1768 KW. Adding to it the loads of other installations i.e. 20.4 KVA+194HP which is equivalent to 17.34 KW+144.85 Kw respectively, the total comes to 1920.19KW which is far in excess of the sanctioned load of 1716.5 KW. As such 25% surcharge was validly levied under Clause (1) of Tariff schedule L.I.P. b) The connected load found during the inspection of Enforcement squad on 4.8.67 was 2100.4 Kva plus 194.17hp which again exceeds the sanctioned load of 1716 KW. As such surcharge at 25% can be charged validly. c) From the Mdi reading for three years it would be seen that the maximum demand in Kw has been violated since July 1978 onwards. The maximum demand in Kw had even gone to the level of 1950 Kw, 1900 Kw, 1940 Kw in February, March and September, 1980. About 300 Kw load was shown for various installations other than arc furnace. Deducting 300 Kw from the maximum load of 1950 Kw the capacity of arc furnace alone would be 1650 KW. Thus the total connected load comes to 1650KW+20.4KVA+194.17HP — 1650KW 17.10KW+144KW total is 1812.19 KW. In this manner also the surcharge can be levied. d) According to Clause (c) of Tariff Schedule, demand charges for first 500 Kw = 588.24 Kva of billing demand are chargeable @ 20.00 per Kw or part thereof, next 1000 Kva @ 16.50 per Kva or part thereof and next 5000 Kva @ 16.00 per Kva or part thereof. The demand was worked out accordingly. e) The view of learned Arbitrator that no surcharge is to be levied for excess load unless Kw maximum demand indicator installed in the consumers premises indicates reading in excess of sanctioned Kw load has been expressed without looking into the merits of the case. Since the Respondent No. 1 has been found using excess load by Enforcement Department on 4.8.78 and violating contract demand, he is liable to pay surcharge.”

(6) The learned counsel for the petitioner has contended that the sanctioned load of the respondent was 1716.5 Kv on 15th November, 1977 whereas on inspection which was carried on 4th August, 1978 the connected load was found at 2080 Kv plus 194.17 HP. Therefore, the respondent is liable to pay in terms of the Tariff as fixed for the years 1978-79 and 1979-80. Reference is first made to the `definition of `connected load’ and `contract demand’ which are defined in sub-clauses (v) and (vi) of Clause 5 of the Tariff for the year 1978-79 (Exhibit-D5) which read as under:- `(V)`Connected Load’ shall mean the sum of the rated capacities of all the energy consuming apparatus including portable apparatus in the consumer’s installation. This shall include the standby or spare energy consuming apparatus installed, notwithstanding that the consumer may have installed the change over switch for the standby or spare energy consuming apparatus. Apparatus which has no fitted cables or wiring connecting it to the supply shall not be included in the connected load. (vi) Contract Demand shall mean- (a) the demand in K.V.A./K.W. for which the Undertaking makes specific commitment to supply energy from time to time subject to the governing terms and conditions; or (b) Where no such specific commitment is made by the Undertaking, the total connected load of the consumer. (vii) The maximum Demand shall mean- the highest average load measured in Kilovolt ampere during any 30 minutes consecutive period of the month.”

(7) Reference is next made to Clauses 3 B and 3 (2) (f) 2(1), 2(n) which may be reproduced as under:- 3.B. Large Industrial Power (L.I.P.): (a) Availability: Available as primary power to Large Industrial Consumers having connected load above 100 K.W. (b) Character of Service: A.C.50 cycles, 3 phase, 11 K.V. (c) Tariff: Demand Charges: First 500 K.W. of billing demand for the month Rs. 20.00 per K.W. `Next’ 1000 Kva of billing demand for the month Rs. 16.50 per Kva Next 5000 Kva of billing demand for the month Rs. 16.00 per KVA. All in excess of above billing demand plus Energy Charges: First 5,00,000 units per month at 24.5 paise per unit. Next 5,00,000 units per month at 24.0 paise per unit. Next 10,00,000 units per month at 23.5 paise per unit. All above 20,00,000 units per month at 23.0 paise per unit. Subject to :- 1. An adjustment of energy charges as under:- (i) The above energy charges are based on the basic average fuel and purchase cost of 15.25 paise per KWH. (ii) The actual cost of fuel used during any period shall be the amount in rupees of the cost of all types of fuel burnt in the Undertaking’s Thermal Generating Plants in that period. (iii) The actual cost of energy purchased shall be the amount paid in rupees for import of energy for that period. (iv) The cost of energy per Kwh sold shall be the quotient on dividing the sum of (ii) and (iii) by the Kwh sold during the period. (v) The increase or decrease in cost of per Kwh sold shall be the difference of (iv) & (i) above and accordingly shall be added or subtracted to the above energy rates. Final adjustment on account of variation in energy charges will be made as soon as possible after the close of the period of account but adjustment as may be provisionally fixed by the Desu Management from time to time will be incorporated as a part of the monthly bill and shall be payable by the consumer. Such provisional rates as and when finalised shall have retrospective effect from the beginning of that financial year. 2. A maximum overall rate of 35 paise per Kwh without prejudice to minimum payment as laid down in the item (h) below and adjustment clause as (1) above. (d) Demand Assessment: The billing demand shall be the highest of the following: (i) The maximum demand during the month as already defined; (ii) 75% of the highest maximum demand during the preceding 11 months; (iii) 75% of the contract demand; (iv) 50% of the connected load.” 2(f) Power Factor Adjustment: All consumers are required to maintain the average power factor of not less than 0.85. In the event of power factor being less than 0.85 the maximum demand in K.W. shall be adjusted for power factor, where the demand is charged for in K.W. multiplying by 0.85 and dividing by the power factor actually established and such adjusted value shall be used in determining the billing demand. (l) In case of unauthorised load, a surcharge of 25% shall be levied on the total amount of the bill from the billing month of the date of excessive connected load. The surcharge so levied shall be without prejudice to any action as may be called for under the Rules/Regulations. (n) Where the demand exceeds 5% of the contractual demand, a surcharge of 25% shall be levied on the total amount of the bill. The surcharge so levied shall be without prejudice to any action as may be called for under the Rules/Regulations.”

(8) On the above basis it is contended that the Arbitrator has misconducted himself as firstly he has failed to consider the provisions as contained in the Tariff Regulations and secondly he has adopted the basis of assessment which is not permissible in law as he has no jurisdiction to alter the Tariff Regulations. Strong reliance is placed on the Division Bench judgment of this Court as reported in M/s Matsaya Metal Udyog (P) Ltd. Vs. Municipal Corporation of Delhi (DESU) and reference is made to paragraph 19 of the judgment which reads as follows: “19.The contention of the learned counsel for the petitioners that clause (i) at page 17 of the Tariff indicates that unless the maximum demand indicator meter indicates excess demand the provision is not retracted is not tenable. Clause (i) at page 17 is related to the connected and sanctioned load and not necessarily to the recorded consumption. It is true that determination of excess demand with reference to actual consumption is also possible but the type of industry with which we are dealing with is such where there is large scale of theft of energy and in these circumstances the interpretation put by the respondent is valid. The interpretation is that if the equipment installed is capable of exceeding the demand then the respondents are entitled to levy the load violation charges till the excess load is removed. The term `demand’ has been defined, inter alia in clauses (vii); (viii) and (ix) at pages 2 and 3 of the Tariff with reference to load. Keeping in view the context in which these clauses have to be interpreted and the object sought to be achieved. The only conclusion is that clause (i) at page 17 of the tariff is related to the connected and sanctioned load and not necessarily to the recorded load.”

(9) On second question the learned counsel has referred to the judgment as referred to in Mcd (DESU) Vs. Asian Art Printers from which paragraph 12 may be reproduced as follows : “12.This question has been examined by the learned Single Judge in the manner that according to the tariff the mode of billing has been changed in the new tariff and clause (d) has been introduced to the effect that the amount of the demand charges shall be based on the Kva of the billing demand. Kva of billing demand would be committed load. Tariff is not liable to be assailed before the arbitrator. As such the arbitrator has no jurisdiction to decide about the legality of the tariff.”

(10) Similarly it has been argued on the basis of the judgment as reported in M/s. Suri & Suri (P) Ltd. Vs. Delhi Electric Supply Undertaking and others Air 1992 Delhi 351 to reiterate the proposition that the charges have to be levied for the supply of energy at the rates to be fixed by the Delhi Electric Supply Committee. This power is statutory and legislative in character though it is subject to the provisions of any law for the time being in force and the exercise of such powers cannot be controlled or curtailed by a contract. The learned counsel for the petitioner has contented that the Arbitrator has misconducted himself as he has failed to consider the relevant documents such as the Tariff Regulations as stated above and, therefore the Award is liable to be set-aside or remitted and the Arbitrator must be directed to complete the proceedings after considering such documents. Reference is made to the judgment of the Supreme Court in this regard as reported in K.P.Poulose Vs. State of Kerala and another . The learned counsel next cites the judgment as reported in M/s. Kapur Air Products Vs. Municipal Corporation of Delhi Air 1988 Delhi 26 wherein paragraph 26 has been relied upon which reads as follows:

“26.In “Government of Kelantan v. Duff Development Company Ltd.”, 1923 Ac 395, it was held :- “……I think it follows that, unless it appears on the face of the award that the arbitrator has proceeded on principles which were wrong in law, his conclusions as to the construction of the deed must be accepted. No doubt an award may be set-aside for an error of law appearing on the face of it; and no doubt a question of construction is (generally speaking) a question of law. But where a question of construction is the very thing referred for arbitration, then the decision of the arbitrator upon that point cannot be set-aside by the Court only because the Court would itself have come to a different conclusion. If it appears by the award that the arbitrator has proceeded illegally – for instance, that he has decided on evidence which in law was not admissible or on principles of construction which the law does not countenance, then there is error in law which may be ground for setting aside the award; but the mere dissent of the Court from the arbitrator’s conclusion on construction is not enough for that purpose……”
“The above passage was quoted with approval by the Supreme Court in Thawardas Pherumal (supra) in para 11 relied upon by the appellants. It was observed that if a question of law is specifically referred, the Courts will not interfere but there is authority for the view that the Courts will interfere if it is apparent that the arbitrator has acted illegally in reaching his decision, that is to say, if he has decided on principles of construction that the law does not countenance or something of that nature. The consideration of transmission and distribution losses was outside the scope of the reference and by indirect method could not be brought into the Tariff in place of the units sold. This illegality is writ large in the award of arbitrator.”
(11) The decision of the Arbitrator, it is argued, on the issues arising are contradictory to each other which will show total non-application of mind and the Award is liable to be set-aside on that ground. Reliance is placed on the judgment of this Court as reported in M/s. Bombay Ammonia Pvt. Ltd. Vs. Union of India Air 1987 Delhi 148.

(12) The learned counsel for the respondent has argued that : (A)The Arbitrator has elaborately dealt with the issues arising in the case and given cogent grounds to hold that no claim was maintainable against the respondent. Therefore, it will not be open for this Court to reappraise evidence on record and arrive at a contrary conclusion as the law is well settled on this question ; (b) The Arbitrator has considered the provisions of the Tariff for the years 1978-79 and 1979-80 and decided the matter by properly applying these provisions. The Award is not in violation of the statutory regulations nor can it be held that the Arbitrator has not considered the matter in accordance with law.

(13) At this stage reference may be made to the provisions of the Tariff for the years 1979-80 (Exhibit-D6) to the methodology and basis of demand assessment. Paragraph 3 (2)(d) may be reproduced as follows :- “(D)Demand Assessment: The billing demand shall be the highest of the following: (i) The maximum demand during the month as already defined; (ii) 75% of the highest maximum demand during the preceding 11 months; (iii) 75% of the contract demand; (iv) 50% of the connected load.”

(14) The learned counsel for respondent no. 1 on the basis of the reading of the provisions contends that there is no infirmity in the findings of the Arbitrator as the billing has to be made in the manner as indicated above. The learned counsel for the petitioner/objector has argued that the billing has to be on the basis of the connected load which was found to be 2080 Kv plus 194.17 Hp in an inspection carried on 4th August, 1978 and the Arbitrator acted beyond jurisdiction and not considered the provisions which have been referred to in the Tariff Regulations. The levy of surcharge is, accordingly justified and the respondent is liable to pay the amount which has now been raised. This contention is rather misconceived as the Arbitrator assessed the facts and obviously took into account the provisions of the Tariff for considering the mode of assessment. He has clearly noted that the respondent had made a payment of Rs. 4,22,767.54 for the months of October, 1978, February 1980, March 1980, August 1980 to October 1980 during which period M.D.I. (Maximum Demand Indicator) demand of the consumer in Kw had exceeded the sanctioned limit. Therefore, it is obvious that the billing was on the basis of the provisions as contained in clause 3(2)(d) relating to “demand assessment”. The Arbitrator has correctly concluded that no surcharge could be levied for excess load unless the Kw maximum demand indicator installed in the consumer’s premises indicated reading in case of sanctioned Kw load. The petitioner has merely made the claim on the basis of the connected load and has not even made any allegation of fraud allegedly practised by the respondent consumer nor has taken the plea that the respondent has consumed the electricity beyond the reading as indicated in the maximum demand indicator. The law as laid down by the Supreme Court in Belwal Spinning Mills Ltd. & Others Vs. U.P.State Electricity Board and another may be stated. Paragraphs 47 and 48 of this judgment may be referred to – 47.On a conjoint reading of various sub-sections of Section 26 of the Electricity Act, it is evident that consumption of electricity or electrical quantity in the supply, shall be ascertained by means of a correct meter and the meter and other apparatus for recording the consumption of electricity by a consumer will be deemed to be correct if the recording is within the permissible limit of error as prescribed. If a dispute as to the correctness of the meter is raised by any party for reference, such dispute can be decided only by the Electrical Inspector and both the licensee and the consumer have to accept the estimate of supply of electricity to the consumer as may be determined by the Electrical Inspector for the statutory period referred to in sub-section (6) of Section 26. 48. Although the licensee is clothed with the power to maintain a correct meter installed at the premises of the consumer and for such purpose can enter the premises of the consumer and the licensee can also repair or alter the meter and other electrical apparatus if found defective on checking or testing by the licensee, but if the dispute as to the correct status of the meter or other electrical apparatus is raised either by the licensee or by the consumer by making reference to the Electrical Inspector under sub-section (6) of Section 26, then such dispute can be determined only by the Electrical Inspector and the meter or apparatus cannot also be changed by the licensee unless the dispute is resolved by the Electrical Inspector. If there is a dispute as to the proper functioning of the meter or check meter or other electrical apparatus under sub-section (6) of Section 26, the Electrical Inspector upon entering the reference would determine the dispute as to the proper functioning of the meter and other electrical apparatus and in the event the Electrical Inspector comes to the finding that the meter ceased to be correct, he is to determine the quantum of the electricity consumed during the statutory period referred to in sub-section (6) but for any other period anterior to the statutory period, the legislature, in no uncertain terms has indicated in the latter part of sub-section (6) of Section 26 that reading registered in the disputed meter will not only be presumed to be correct but such reading shall be conclusive proof of the quantity of electricity consumed or the amount of electricity supplied to the consumer provided no fraud has been practised by the consumer. In appreciating the intention of the legislature, the provision for treating the recording of the disputed meter to be the conclusive proof of the amount of quantity supplied to the consumer in the absence of fraud where a dispute is raised by either of the parties about the functioning of the meter, cannot be overlooked. Sub-section (6) has been amended and the legislature has introduced a conscious departure by deleting the requirement of assessing the quantity of electricity consumed for the entire period during which the Electrical Inspector or the competent authority was of the opinion that the meter had ceased to be correct. In our view, by limiting the period for estimation to be made by the Electrical Inspector by the amendment of sub-section (6) and further providing that for the anterior period, in the absence of fraud, the register of the meter shall be conclusive proof of the supply of the electricity it is quite evident that even if it transpires that the installed meter ceased to be correct, then for the period anterior to the statutory period for which the estimation is not to be made by the Electrical Inspector, the register of the meter about the consumption of the electricity supplied to the consumer shall be binding between the parties by treating such recording as conclusive proof of the consumption in the absence of any fraud practised by the consumer. By the amendment of sub-section (6) the Electrical Inspector has been purposely absolved from the duty to determine as to from which point of time beyond the said statutory period, the meter had ceased to function so that for such entire period, the estimation of the supply of electricity need not be made. Such amendment of sub-section (6), in our view, only means that beyond the statutory period, in the event of dispute between the parties so as to the proper functioning of the meter and other electrical apparatus, the consumer has liability to pay the estimated amount indicated by the Electrical Inspector limiting the estimate up to the statutory period and not beyond that but for the other anterior period the consumer is required to pay according to the consumption of electricity registered in the disputed meter provided there is no fraud practised by the consumer because dispute of such anterior period remains unresolved by the change introduced by the amendment.”

(15) The judgment in the case of M/s. Matsaya Metal Udyog (P) Ltd. Vs. Municipal Corporation of Delhi (DESU) will be of no application to the facts of the present case as the Court in that case was merely taking into account the concept of connected and sanctioned load in comparison to recorded load in an industry where there was large scale theft of energy. The Bench did not give any reasons nor considered or interpreted the provisions as contained in clause 3(2)(d) as referred to above. Moreover the Division Bench was deciding the questions of law as raised in the writ petitions and left it open to the parties to claim reference in terms of clause 25 of the agreement.

(16) The law is well stated in the judgment of the Supreme Court as reported in Union of India Vs. A.L. Rallia Ram which defined the powers of the Court to interfere in the findings as recorded by the Arbitrator. Paragraph 13 of this judgment may be referred to as under :- “13.The High Court held that the Government of India having agreed to refer differences to arbitration and having taken part in the proceeding before the arbitrators and the umpire, had waived the objection as to the illegality of the contract and could not therefore raise any such objection in application for setting aside the award. We are unable to agree with that view. The requirements of Section 175(3) of the Government of India Act are mandatory, and the fact that the Government of India did not contend before the arbitrator that there was in law no arbitration agreement on which the arbitrator was competent to act would not invest the arbitration agreement with any validity. It is from the terms of the arbitration agreement that the arbitrator derives his authority to arbitrate: if in law there is no valid arbitration agreement, the proceedings of the arbitrator would be unauthorised. Every contract to bind the Government must comply with the requirements of Section 175(3) of the Government of India Act, 1935, and waiver will not preclude the Government from pleading absence of a contract in consonance with the law. An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decide a dispute submitted to him is ordinarily not liable to be challenge on the ground that it is erroneous. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary Courts. The Court is also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors, or decision on questions not referred which are severable from those referred. The Court has also power to remit the award when it has left some matters referred undetermined, or when the award is indefinite, or where the objection to the legality of the award is apparent on the face of the award. The Court may also set-aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or wilful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. But it is now firmly established that an award is bad on the ground of error of law on the face of it, when in the award itself or in a document actually incorporated in it, there is found some legal proposition which is the basis of the award and which is erroneous. An error in law on the face of the award means “you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous. It does not mean that if in a narrative a `reference is made to a contention of one party, that opens the door to setting first what that contention is, and then going to the contract on which the parties’ rights depend to see if that contention is sound”: Champsey Bhara and Co. v. Jivraj Balloo Spinning and Weaving Co., Ltd., 50 Ind App 324: (AIR 1923 Pc 66). But this rule does not apply where questions of law are specifically referred to the arbitrator for his decision; the award of the arbitrator on these questions is binding upon the parties, for by referring the specific questions the parties desire to have a decision from the arbitrator on those questions rather than from the Court, and the Court will not, unless it is satisfied that the arbitrator had proceeded illegally, interfere with the decision.”

(17) In another judgment as reported in M/s. Tarapore and Company Vs. Cochin Shipyard Ltd. Cochin and another the Court clearly held that “even if the decision of the arbitrator does not accord with the view of the Court, the award cannot be set-aside on the sole ground that there is an error of law apparent on the face of it”. It was further held in this judgment that “On principle it appears distinctly clear that when a specific question of law is referred to an arbitrator for his decision including the one touching upon the jurisdiction of the arbitrator, the decision of the arbitrator would be binding on both the parties and it would not be open to any of the two parties to wriggle out of it by contending that the arbitrator cannot clutch at or confer jurisdiction upon himself by misconstruing the arbitration agreement.”

(18) Lastly, the scope of interference in a reasoned award is very limited and the error of law must appear from the Award itself or from any document or note incorporated to it or appended to it. Paragraph 20 from the judgment as reported in Trustees of The Port of Madras Vs. Engineering Constructions corporation Limited may be referred to as follows:- “20.The proposition that emerges from the above decisions is this: in the case of a reasoned award, the Court can interfere if the award is based upon a proposition of law which is unsound in law. The erroneous proposition of law must be established to have vitiated the decision. The error of law must appear from the award itself or from any document or note incorporated in it or appended to it. It is not permissible to travel beyond and consider material not incorporated in or appended to the award. Now let us examine the award concerned herein from the above point of view and see whether it suffers from any error of law apparent on the face of the award. We have gone through the award of the learned umpire, a man of great learning and eminence, Dr. P.V.Rajamannar – very carefully. All that the learned umpire has done is to refer extensively to the correspondence that passed between the parties and the other material placed before him and infer therefrom that the appellant-Board did never make a firm commitment nor did it ever undertake to import and supply the machinery within a particular period much less within a period of six months. The learned umpire remarked: “There is no mention of this period of six months in the relevant minutes of the meetings of the Tender Committee; but it is fairly clear that this period was mentioned during the discussions. The Board’s case which we find set out in some of their letters is that the period of six months was only an approximate time within which they expected the plant and machinery might be available. But the Board would not and did not undertake definitely to supply the plant and machinery not later than six months from 6-10-1958, the date of the order to commence work. There is no oral evidence relating to this matter and there is no sufficient material in the correspondence to warrant the conclusion that there was a term of the contract which bound the Port Trust to deliver to the contractors the plant and machinery within six months. Even at the time when the two alternative proposals were placed before the contractors, it was impressed on them that the proposals for the Board itself to import the plant and machinery would involve delay. Obviously, it was not for the Board to be certain of the extent of the delay. The Board might have thought that it would not take longer than six months for the arrival of the equipment. I am unable to find any default or remissness on the part of the Board in taking steps to get the equipment. It was as much to their interest as to the contractors that the plant should be available as early as possible. Otherwise, the completion of the work would be delayed. There is no suggestion of any mala fide act or negligence on the part of the Board in the procurement of the equipment. It should also be mentioned that the Contractors themselves took some time before they could give detailed specifications. Taking all the circumstances into consideration, I hold that there has been no breach of any term of the contract committed by the Board because of the late arrival of the plant and machinery.”

(19) The law is, therefore, settled that when the reasons have been recorded by the Arbitrator in making the Award the Court cannot examine the reasonableness and sufficiency of the reasons. M.L.Mahajan Vs. Delhi Development Authority & another, . The Arbitrator is the sole Judge of the quality as well as the quantity of evidence and it will not be open for this Court to take upon itself to reappraise evidence and arrive at different conclusions which have been supported by cogent reasons as assessed by the Arbitrator. In the present case the Arbitrator, it has been brought to my notice, is a former General Manager of the petitioner Authority and is duly qualified to make his assessment by taking into consideration the technical aspects of the matter. It will not be open for this Court to reconsider the issues and arrive at different conclusions by reassessing the findings as recorded by the Arbitrator.

(20) For the aforesaid reasons, the objections filed by the petitioner are dismissed and the Award dated 29th May, 1984 is made rule of the Court. Let decree be drawn accordingly. There will be no order as to costs.