EXECUTIVE ENGINEER, RURAL ENGINEERING DIVISION v. JAGADISH CHANDRA BUDHARAJA
1980-12-17
R.N.MISRA
body1980
DigiLaw.ai
JUDGMENT : R.N. Misra, A.C.J. 1. This is an appeal u/s 39 of the Arbitration Act challenging the order of the learned Subordinate Judge, Bbubaneswar, making an award a rule of the Court after overruling the objections thereto filed by the present Appellant. 2. The Respondent-Contractor undertook the construction of Raghunath Sagar M.I.P. within Sankbemedi block in the district of Ganjam and entered into a contract in the prescribed F-2 form. Initially Executive engineer, Minor Irrigation Division, Ganjam, was the Officer-in-charge of the execution of the work Later, the work was transferred to the Executive Engineer, Rural Engineering Organisation, Ganjam. When dispute arose at' the instance of the contractor, the Chief Engineer appointed an arbitrator in exercise of powers conferred under the arbitration clause. The arbitrator gave an award after hearing parties visiting the spot and considering the documents placed. Objection was raised to the award when an application was filed before the learned Subordinate Judge to make it a rule of the Court on the ground that the arbitrator had not considered all the documents placed before him and claim admitted on certain heads was not admissible. Challenge was also to the award of interest and the rate thereof. The learned Subordinate Judge overruled the objections by holding that the award was not a reasoned one and the documents did not form part of it. Therefore, the Court had no jurisdiction to look into the documents which were not part of the award and find fault with the arbitrator. The learned Subordinate Judge quoted with approval the observations of this Court in the case of Executive Engineer, Ganjam (Roads & Buildings) Division v. Sri Sankar Maharana 45 (1978) C.L.T. 43 where it had been said: It is well settled that when parties constitute an Arbitrator as the sold and final Judge of any dispute between them, they bind themselves as a rule to accept the award as final and conclusive. The award is liable to be corrected, modified or set aside only under the limited scope of the provisions made under Sections 15 and 30 of the Act. Unless the mistake is evident on the face of the a ward or in some paper accompanying the forming part of he award, the Court has no jurisdiction to touch the award....
The award is liable to be corrected, modified or set aside only under the limited scope of the provisions made under Sections 15 and 30 of the Act. Unless the mistake is evident on the face of the a ward or in some paper accompanying the forming part of he award, the Court has no jurisdiction to touch the award.... The learned Subordinate Judge dealing with the question of interest stated: I find that the Arbitrator has granted interest as claimed by the Plaintiff at the rate of 18% per annum from due date of payment till payment is actually made to the claimant. Section 29 of the Arbitration Act provides that the Court can order interest from the date of decree to be paid on the principal sum adjudged by the award and confirmed by the decree. Thus, the Arbitrator has no power to make an award granting interest after the decree. In the result, the interest given by the Arbitrator till the payment is actually made cannot be sustained.... and, therefore, the Court ordered: the award with the above modification is made rule of the Court. The Petitioner shall get interest at the rate of 12% per annum on the principal sum from the date of decree till payment. 3. Mr. B. Nayak learned Additional Government Advocate in support of the appeal raised three contentions. The claim under Item No. 19 was based upon enhancement of wage rate and escalation on such a ground was not admissible. He relied upon the ration of the decision of the Supreme Court in the case of Alopi Parshad and Sons Ltd. Vs. Union of India (UOI). in support of this contention. As I find, the said decision was rendered in a civil appeal involving the interpretation of the Contract Act. The question for consideration now is as to whether the Arbitrator was entitled to quantify compensation by escalating the claim of the contractor for enhancement of the wage rate. The Supreme Court decision is not relevant for the point in issue. As already pointed out, the award is an unreasoned one. The entire dispute had been referred to the Arbitrator and he was entitled to fix the compensation claimed by the contractor. I do not think that the claim admitted on the ground of enhancement of wage rate of labour is not open to attack.
As already pointed out, the award is an unreasoned one. The entire dispute had been referred to the Arbitrator and he was entitled to fix the compensation claimed by the contractor. I do not think that the claim admitted on the ground of enhancement of wage rate of labour is not open to attack. The second contention is in regard to item No. 3. It is said to have been founded upon the basis that in making departmental supplies, there was unusual delay. According to Appellant's counsel such delay under the contract was to end up in securing extension of time for execution of the war k as provided in Clause 9(b) of the agreement and not in giving rise to compensation for the contractor. Here again, no reasons have been given in the award. Clause 9(b) in the agreement, as contended on behalf of the Executive Engineer, was intended to provide for extension of time where there was delay in complying with the obligations undertaken by the State and its officers, but there was no bar to providing compensation for undue delay. There is no condition that compensation cannot be claimed on that score. The entire dispute had been referred to arbitration and the at arbitor had jurisdiction to award compensation. I do not think, the award on this head can be vacated on that ground. The third contention raised before me in appeal is as to payment of interest. In the award, it has been stated that interest at 18% per annum on the amount withheld from the due date of payment till payment is actually made, was admissible. The learned Subordinate Judge has rightly confined the payability of interest till that date of decree in terms of the award and has fixed interest at 12% from the date of the decree till recovery the power to award interest by an arbitrator is now beyond dispute. No authority need be cited for such clear proposition. No special reason has been given by the arbitrator to fix interest at 18 per cent though some cases have been cited where 18 per cent interest has been granted and upheld. The learned Subordinate Judge has been of the view that 12% interest should be justified from the date of the decree.
No special reason has been given by the arbitrator to fix interest at 18 per cent though some cases have been cited where 18 per cent interest has been granted and upheld. The learned Subordinate Judge has been of the view that 12% interest should be justified from the date of the decree. Intending to make no distinction between the award of interest for the pendente lite period and the post-decree period when I suggested to counsel for the claimant-Respondent that it would be equate, he greed. In that view of the matter, the decree of the learned Subordinate Judge is affirmed subject to the condition that interest shall be admitted at twelve per cent for the entire period from the due date till the date of award under the award, and from the date of the decree till realisation under the decree. Award of interest is a severable item and variation does not affect the award in any manner. Subject to this slight modification, the appeal fails and is dismissed with costs. Hearing fee is assessed at Rs. 250/(Two hundred and fifty). Final Result : Dismissed