ORDER
Arun Mishra, J.
1. The award passed by the arbitrator on 25-8-1990 has been made rule of the Court and objections filed by the appellants under Sections 33, 15 and 16 of the Arbitration Act have been rejected by judgment dated 25-7-1994 of the District Judge, Bhopal.
2. Facts shorn of details indicate that M/s. S. Pal & Co., the appellant, was appointed as sole selling agent for sale of Narmada lottery tickets. This lottery was being run by the Government of Madhya Pradesh and agreements dated 20-10-1983, 28-12-1984 and 17-4-1985 were reached between the parties signed by the Director of State Lotteries on behalf of State of Madhya Pradesh and the agreement contained an arbitration clause that in the event of dispute, it was to be referred for decision to the Secretary to Government of Madhya , Pradesh, Finance Department, Bhopal. Disputes as to payment or adjustment arose between the parties which were referred for arbitration to the Finance Secretary. After conducting an inquiry and hearing both the sides, he passed the award dated 25-8-1990.
3. Case of the appellant before the arbitrator was that enforcement of bank guarantee of Rs. 36,00,000.00 was illegal and contrary to the terms of the agreement. The appellant claimed Rs. 23,05,458.00. The arbitrator, after considering the case of both parties and looking into the accounts submitted before him, passed the award dated 25-8-1990 and awarded a sum of Rs. 1,94,600.00 in favour of M/s. S. Pal & Co., the appellant, and also directed the State of Madhya Pradesh to release the earnest money of Rs. 2,00,000.00 to the appellant. The appellant contended that the arbitrator had committed misconduct.
4. State of Madhya Pradesh raised a counter claim of Rs. 48,54,934.63.The arbitrator also found that sum of Rs. 19.03 lacs claimed by the appellant on account of bonus was not justified as per terms of the agreement, as the appellant did not produce the counter-foils which were necessary as per rules. The appellant alleged that the amount of Rs. 19,03,908.00 disallowed by the arbitrator on account of bonus on sales of tickets due to non-furnishing of counter-toils is not justified as there was no obligation under the agreement to submit the counter-foils. There was also no obligation on the part of the appellant to furnish any further evidence to show the purchase of prize winning tickets. As the tickets were released to the appellant on advance payment, there is no rule which provides an obligation on the part of the appellant to submit counter-foils. Prayer was made to modify and set aside the award in respect of claims 1 to 10 and remand the case to an independent arbitrator. It was further prayed that judgment be pronounced for Rs. 1,94,000.00 in terms of the award.
5. Respondents contended that bank guarantee was rightly enforced as held by the arbitrator and that there was an obligation on the part of the appellant under the contract to submit counter-foils to claim bonus and the agreements are subject to the M.P. State Lottery Rules, 1969 and instructions/guidelines issued by the Director of Lotteries from lime to time.
6. The learned District Judge has come to the conclusion that the claim of the Director of Slate Lotteries was for Rs. 48,54,934.63. Out of this amount, the Director had allowed a sum of Rs. 7,03,570.18 and the amount which remained in dispute was Rs. 41,08,933.72. Thus, the arbitrator has not exceeded jurisdiction and has not committed any misconduct by adjudication on a larger sum. Considering the fact that dispute raised was for Rs. 41,08,933.72 by the State, the counter claim for Rs. 34,05,888.15 has been allowed by the arbitrator and adjusted against bank guarantee of Rs. 36,00,000.00 furnished by the appellant and encashed by the Director of Lotteries. Thus, no force was found in the submission that the arbitrator had exceeded the jurisdiction. Second objection as to non-furnishing copies of certain documents filed before arbitrator has been deal with in Paragraph 7 of the judgment and on facts it has been found that copy of the statement which was prepared, was furnished to the appellant and acknowledged by him on 6-7-1980. The third objection regarding amount of bonus has been overruled on the ground that he did not furnish the counter-foils to the Director of Lotteries, as required by Rule 19 of the M.P. State Lottery Rules, 1969.
7. We have heard learned counsel for parties at length. Learned counsel Shri Pabir Roy Choudhary, Senior Advocate, submits that the arbitrator has entered into a dispute about bonus of Rs. 19 lacs which was not agitated by the State of M.P. as a dispute before him, hence the arbitrator had misconducted himself by entering into the arena of the validity of payment of bonus of Rs. 19 lacs. He submits that State has approved the scheme making payment without production of counter-foils and no warning was given thatthe appellant could not claim the bonus without submitting the counter-foils. It is also urged that statement of accounts was submitted before arbitrator about bonus deduction on account of non-production of counter-foils behind the back of the appellant resulting in serious prejudice to him. Shri N. Nagrath, Government Advocate for the respondents submits that it is a case of adjustment made and that accounts were submitted. As a matter of fact, appellant was claiming a sum which was not found by the Director of State Lotteries to be refundable on the ground that for want of production of counter-foils, it was not entitled for bonus. Thus, it was clearly a dispute before the arbitrator whether the amount could be demanded by the appellant which was adjusted by the Director of Lotteries. Hence, the arbitrator had not exceeded authority in law in view of the agreement and Rule 19 of the M.P. State Lottery Rules, 1969. It is clear that in order to claim bonus, the counter-foils should have been filed by the appellant. Thus the arbtirator has not committed any illegality.
8. The claim which was submitted by the appellant before the arbitrator, was for Rs. 36 lacs along with interest and this amount was denied in the reply filed by the Director of State Lotteries before the arbitrator. In the rejoinder filed by the appellant, we find that the appellant has denied the claim of Rs. 41,08,933.72 and the plea taken was that the Director had not disclosed any particulars of the account of the alleged defaults by the appellant. It is not in dispute that bonus was disallowed by the arbitrator as there was failure on the part of the appellant to file the counter-foils.
9. The contention raised was that certain documents were filed before the arbitrator, particularly statement of accounts, copy of which was not supplied which fact is not borne out from the record. On 6-7-1980, in the presence of the appellant, statement of account up to 1996, i.e., last draw was filed and it was acknowledged. Time was sought which was granted. Correctness of accounts submitted was not disputed before arbitrator by filing any reply. After hearing arguments, the award was passed on 25-8-1990.
10. It is contended that before the arbitrator, it was not disputed whether the appellant could claim bonus of Rs. 19 lacs. We find from the reply filed by the Director and from the rejoinder filed by the appellant, that the State had adjusted certain amounts validity of which was questioned in rejoinder filed by the appellant on the ground that the Director had not shown the basis or details on which such amounts were adjusted- State thereafter had filed statement which contained particulars of the counter-foils, not filed by the appellant to enable it to make payment of bonus and on behalf of the appellant, time was taken before the arbitrator, but the statement was not controverted and the arbitrator has disallowed the bonus of Rs. 19 lacs as counter-foils were not filed which were required to be submitted by the appellant.
11. Clause 26 of the agreement provides that the sole selling age abide by the M.P. State Lottery Rules, 1969, and instructions/guidelineby the Director from time to time. Rule 19 of the M.P. State Lottery Rules,1969, as amended in 1973 reads as under:
'19. In respect of the tickets winning the prizes, Govt. may fix a bonus which will be distributed to the agent and the actual seller of the ticket in such proportion as may be determined by Govt. The amount of bonus shall be fixed by the Government as a percentage of the prize money and the prize winner shall be paid the prize money after deduction from it the bonus amount.
The agent or seller entitled to bonus can claim the amount within 30 days from the date of the draw, by making an application in the form M-P-S-L-3. The seller shall have to enclose the relevant counter-foil of the prize winning ticket with his application whereas the agent will have to produce the invoice issued to him by the Treasury Officer/Sub-Treasury Officer/Sale Supervisor, M.P. Emporium, Delhi and Calcutta to Director at the time of purchase of ticket in token of proof that the prize winning ticket was issued to him.'
12. Bare reading of the rule would make it clear that the seller shall have to enclose the relevant counter-foils of the prize winning tickets with the application to claim bonus. In the instant case, the counter-foils of the tickets were not filed.
13. The arbitrator has given reasons and has considered the material which was furnished by the parties before him for arriving at the conclusion. Even otherwise, as held in the case of Hindustan Construction Company Ltd. v. Governor of Orissa and others [(1995) 3 SCC 8], the Court does not sit in appeal on award, it can not examine the correctness of the award except in a case where the arbitrator has not considered the documents.
14. In case of Dandasi Sahu v. State of Orissa (AIR 1990 SC 1128), it is held that though the arbitrator is not bound to disclose as to what interpretation he has made and what inference he has derived from the documentary evidence, he is bound to refer in the award that he had considered all the documents placed before him, no matter he relies on them or discards them from consideration. Here it is a case where the arbitrator has considered the matter in detail and there is no such infirmity in the conclusion drawn by him so as to warrant an interference. It can not be said that the award passed is in contravention of the stipulation between the parties. Rule 19 of the M.P. State Lottery Rules, 1969 expressly requires that the seller shall have to enclose the relevant counter-foils of the prize winning tickets along with the application. We find no patent error on the face of the award. Hence, the award is not liable to be set aside. It can not be said that the arbitrator has exceeded the jurisdiction while making the award.
15. In case of B.V. Radhakrishna v. Sponge Iron India Limited [(1997) 4 SCC 693], it has been laid down that even if two views are possible,interference with the arbitration award is not permissible. Hence, we find no such infirmity with the award so passed by the arbitrator. The matter of bonus was clearly the question before the arbitrator. There is nothing on record to show that the State had, at any point of time, accepted that it was not necessary for the appellant to submit the counter-foils. Rule 19 of the Rules clearly provides that such counter-foils had to be produced. Thus, we find no error in the judgment of the learned District Judge in making the award rule of the Court.
16. Learned counsel for the appellant has placed reliance on the decision of the Supreme Court in case of Continental Construction Co. Ltd. v. State of Madhya Pradesh (AIR 1988 SC 1166), in which it has been laid down that extra claim in the event of price rise was barred under the specific clauses of the contract and awarding of such costs by the arbitrator without considering the objections of the State Government was held to be illegal. In the instant case, the facts indicate that Rule 19 has been applied by the arbitrator which makes it necessary to file counter-foils of the prize winning tickets to claim bonus.
17. Learned counsel has further relied on the decision in case of Renusagar Power Company v. General Electric Company (AIR 1988 SC 860) in which principle of unjust enrichment was considered by their Lordships of the Apex Court. The Apex Court has come to the conclusion that the plea could not succeed as the enrichment complained of must lead to enforcement of the award and not merits thereof. In view of limited scope of enquiry in proceedings for enforcement of foreign award under the Foreign Awards Act. In the facts of the instant case, this decision is of no help to espouse the cause of the appellant.
18. Learned counsel has also relied on the decision of the Apex Court in case of K.P. Poulose v. State of Kerala and another (AIR 1975 SC 1259) to contend that misconduct under Section 30(a) has not a connotation of moral lapse. It comprises legal misconduct which is complete if the arbitrator on the face of the award, arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundantight on the controversy to help a just and fair decision. In the instant case, we do not find any inconsistent conclusion arrive at by the arbitrator. It is not a case of ignoring material documents to decide the controversy.
19. It was submitted that matter of bonus was not in issue before the arbitrator. As a matter of fact, it appears that the appellant was claiming certain amount from the State and the State was denying its liability to pay the amount claimed by the appellant and had adjusted certain amounts. One of the adjustments made by the State was with respect to the amount of bonus for want of production of counter-foils. Thus, the State has advanced material before the arbitrator in order to satisfy him of the adjustments so made. In the rejoinder, the plea taken by the appellant was that the State has not shown the basis of adjusting such an amount which basis was made clear by the State by filing statement of account which was not objected to or controverted and thisfact has not been disputed before us that counter-foils of the prize winning tickets were not submitted.
20. Thus, we are of the opinion that the arbitrator could definitely enter into the question when the entire settlement of dispute was done as to what amount is payable to the appellant which could be done only after adjusting the amount claimed by the State, and we find no error committed on the face of record by the arbitrator.
Consequently, the appeal has no merit and the same is dismissed.
21. Misc. Appeal dismissed.