Om Metals and Minerals Pvt. Ltd. Vs. State of Bihar, Through the Secretary, Water Resources Department and ors. - Court Judgment

Vikramaditya Prasad, J.

1. This miscellaneous appeal arises out of the judgment/order dated 17.1.1996 passed by the sub-ordinate Judge-I, in Title Suit No. 99 of 1992, whereby and where under in a proceeding under Section 20 of the Indian Arbitration Act, 1940 (hereinafter referred to as the Act), he refused to direct the opposite party-State of Bihar to file the Arbitration agreement dated 25.2.1990 in Court and for appointment of an Arbitrator to adjudicate the dispute and differences having arisen in between the parties and to refer the dispute and differences as has been arisen in between the parties to the Arbitrator so appointed on the ground, inter alia, that there were sufficient cause shown by the State of Bihar against non-filing of the award. While passing this order the learned Court below also considered that there were several overwriting, additions. Insertions and interpolations made in the tender documents as also in the agreement and the plaintiff had acted as per the letter of the Superintending Engineer , dated 25.2.1990 and consequently the learned trial Court found that the over-writings, additions, insertions and interpolations made in the agreement makes the agreement inoperative.

2. Undisputedly many other issues were framed and decided. There is no real controversy with regard to other Issues but the real controversy was raised in this Court on this point that though there was no sufficient cause shown by the opposite parties, yet the Court found that there was sufficient cause shown by the State of Bihar for not filing the original agreement in the Court. The learned trial Court while deciding the issue No. 7. 'Are there overwriting, additions, insertions and interpolations made in the agreement No. 17/89-90 dated 25.2.1990 which makes the agreement inoperative:', in paragraph 19, found 'that from perusal of the tender document and the agreement it is evident that two sets of bill of quantity for the work of design, manufacturing, supplying, erection, painting and commissioning of gates of Ajoy Barrage were purchased by the plaintiffs company.'

3. While going through the impugned judgment, this Court found that the trial Court, while deciding the issue No. 7 framed by it, took into consideration the original and duplicate copy of the Arbitration agreement and on comparing them, Court below found certain interpolation and insertion in the duplicate, but no specific examples were given. The order sheet does into show that the original or the duplicate was filed or even in this case it is not available on record for perusal by this Court. While examining the copy of the tender that was filed, it was apparent on the face of it that the original estimated cost of the project was Rs. 7.4 crores, which was penned through and was made Rs. 8.04 crores. Furthermore, there were penning through with regard to the date of submission of the tender, when the new date was inserted, which prima facie shows that some interpolations had been made, when the existing records were examined. There is one corrigendum issued by the Executive Engineer, which shows that by this corrigendum, the estimated cost of the work was raised to Rs. 8.4 crores and by this corrigendum itself, the date of submission and receipt of the tender was also changed. Therefore, it appears that there were penning through and the insertion of new dates and the new estimated cost as aforesaid are in conscience of that corrigendum. These by themselves do not constitute a fraud by interpolation. Then a question will arise as to what is the effect of the letter of the Superintending Engineer which was issued on the same date on which the agreement was executed. If that letter is quite against the terms of the contract and the parties are claiming on that or if on the basis of that letter if some interpolation has been mad in the original document, which is not signed by both the parties then in that case, a fraud will be apparent on the face of the record.

4. Next question will be as to from whose possession the duplicate in which the interpolation was alleged to have been made had been produced - whether from the possession of the State or from the possession of the plaintiff. Another question is whether at any relevant time the plaintiff had access to that document so as to make any interpolation therein and another question is as to who whether the plaintiff will be benefited by playing the fraud: if it does not benefit, the plaintiff despite interpolation etc, fraudulent intention cannot be read. These aspects are required to, be examined which were not answered by the Court below.

5. When an Arbitration agreement is referred to an Arbitrator, it is the duty of the Arbitrator only to make an award and not to decide the fraudulent nature of agreement. Therefore, Section 20 has been inserted so that while referring it to the Arbitration, the Court is satisfied that there is no sufficient cause for not referring this. Therefore, when the matter has been decided against the plaintiff, it must be on consent evidence and for solid reasons; otherwise, it will defeat the rights of a person under the agreement.

6. Therefore, in the aforesaid circumstances, finding of the issue Nos. 7 and 8 are set aside and the trial Court is directed to re-examine both the issues when the parties will co-operate in filing the original and duplicate agreement and will prove their cores according to law as prescribed under the provisions of the Arbitration Act. If the defendants want to amend DWs by giving particulars of the fraud, they will be entitled to do so. Both the parties may amend pleadings particularly the State. This exercise must be completed, within the consent of the parties, within four months and by writing a fresh judgment.