IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8268 OF 2010
[Arising out of SLP(C) No.19500/2008]
NEW GRAMIN MILK COOPERATIVE SOCIETY LTD.
.......APPELLANT
Versus
THE GENERAL MANAGER,
DELHI MILK SCHEME, GOVERNMENT OF INDIA
.....RESPONDENT
ORDE
Leave granted. Heard.
2.
The appellant, M/s. New Gramin Milk
Cooperative Society Ltd. was a contractor with the Delhi
Government in regard to its Delhi Milk Scheme. Certain
disputes having arisen between the parties, the appellant
sought arbitration in regard to the following claims:
(i)
Damages for losses sustained
by the appellant
Rs.9,54,000/-
(ii)
Release of Security Deposit Rs.1,90,431/56
(iii)
Liquidated damages
Rs. 9,000/-
(iv)
Interest at 18% per annum
The disputes were referred to arbitration by order dated
25.9.1995. The sole Arbitrator made a non-speaking award
dated 6.5.1996. The arbitrator rejected claims (i), (iii)
and (iv). He allowed only claim (ii) for the refund of
security deposit withheld, namely, Rs.1,90,431.56p. No
interest was awarded.
.......2.
3.
Being under the impression that the award
could be directly executed, the appellant filed an
execution petition on 5.7.1996. By order dated 31.10.1998,
the Executing Court rejected the execution petition on the
ground that the matter was governed by Arbitration Act,
1940 and under the provisions of the said Act, the award,
unless made into a rule of the Court, could not be
executed. Thereafter, on 12.1.1999, the appellant filed an
application under Section 14 and 17 of the Arbitration Act,
1940 for making a decree in terms of the award. He also
filed an application under Section 5 of the Limitation Act,
1963 supported by an affidavit giving reasons for the
delay. If the time spent by the appellant in prosecuting
the execution proceedings between 5.7.1996 and 31.10.1998
is excluded, the delay was hardly about a month. Learned
District Judge, by his judgment dated 8.12.2000 dismissed
the application filed by the appellant on the ground that
the delay of one month and twelve days was not
satisfactorily explained. Even though, there was no
application under Section 30 read with Section 33 of the
Arbitration Act, 1940, learned District Judge also went
into the merits of the award in a casual manner and held
that the arbitrator had erred in making the award. The
appeal filed by the appellant was dismissed by the High
......3.
Court by the impugned judgment dated 25.3.2008. The High
Court was of the view that the reason given for condonation
of delay was not satisfactory.
4.
As noticed above, the main part of the delay
was on account of the pendency of the execution
proceedings. Under the Arbitration and Conciliation Act,
1996 (and the ordinance proceeding) it is not necessary to
make the award a rule of the Court before execution. It is
clear that the appellant was under the bonafide wrong
impression that it could execute the award directly being
under the impression that the matter was governed by the
new law. Therefore, the period spent in pursuing the
execution proceedings has to be excluded. On such
exclusion, the delay is hardly one month and twelve days.
The appellant has satisfactorily explained the said delay
with reference to the illness of his counsel.
We find
that the delay has been satisfactorily explained and
deserved to be condoned. The learned District Judge and
the High Court were not justified in dismissing the
application on the ground of delay.
5.
In this case, no application was filed by the
respondent under Section 30 read with Section 33 of the Act
for setting aside the award. In the absence of such an
......4.
application, the Court ought to have made the Award a rule
of the court unless it was patently illegal [See Madan Lal
Vs. Sunderlal & Anr., 1967 (3) SCR 147 and Forasol Vs. Oil
& Natural Gas Corporation, 1984 Supp. SCC 263] The fact
that security deposit was given by the appellant is not in
dispute and the award of the arbitrator was a non-speaking
award. In the circumstances, there was no ground for
interference with the award.
6.
Therefore, we allow this appeal, set aside
the judgments of the High Court and of the District Judge
and make the award dated 6.5.1996, a rule of the Court.
The award amount will carry interest at 6% per annum from
the date of the award to date of payment. The respondent
shall also pay costs of Rs.10,000/- to the appellant.
......................J.
( R.V.
RAVEENDRAN )
New Delhi;
......................J.
September 24, 2010.
( H.L. GOKHALE )