Research › Browse › Judgment

Himachal Pradesh High Court · body

1983 DIGILAW 39 (HP)

CHAUDHRY NURUDIN & BROS. v. STATE OF HIMACHAL PRADESH

1983-08-17

V.P.GUPTA

body1983
JUDGMENT V. P. Gupta J.— The plaintiff/contractor was given the work for the construction of the bridge over Katour Khad vide office letter No PWB/CB/ Tender/4/79/10528-35, dated 30-11-1979. An agreement was executed between the parties for the execution and completion of this work. Under clause-25 of the agreement all questions and disputes relating to the contract were to be referred to an Arbitrator, 2 Some disputes relating to the contract arose between the parties, therefore the plaintiff/contractor applied for arbitration. Firstly Shri M. L. Bansal Superintending Engineer, was appointed as an Arbitrator by the Chief Engineer but later on Shri S. K. Gautam, Superintending Engineer, Arbitration Cell, was appointed as an Arbitrator to decide the disputes between the parties. 3. The Arbitrator Shri S. K. Gautam entered upon the reference and gave his award on 18th of September, 1982. 4. The Arbitrator filed the award in this Court on 15-12-1982, so that the same be made rule of the Court. 5. Notices of the filing of the award were issued to the parties. The defendant-objector filed the objections under Sections 30 and 33 of the Arbitration Act to this award. It is alleged in the objection/petition that the Arbitrator has erred in awarding Rs. 7,735/- for side-shuttering in favour of the plaintiff/contractor and that it is an error apparent on the face of the award which constitutes a mis-conduct on the part of the Arbitrator. It is alleged that this claim of the plaintiff-contractor could not be allowed. 6. The next objection is that the plaintiff/contractor could not be allowed Rs 34 507 61 on account of increase of labour charges under clause 10-C of the agreement. It is alleged that under clause 10-C of the agreement, the decision of the Superintending Engineer is final and binding on the contractor and the Arbitrator has no jurisdiction to decide the matters covered under clause 10-C. It is alleged that no claim was ever submitted by the plaintiff/contractor to the Superintending Engineer and the Arbitrator has infact misconducted himself in awarding this amount to the plaintiff-contractor. The award is alleged to be invalid and without jurisdiction, 7. Reply to the objections was filed on behalf of the plaintiff-contractor and the allegations of the defendant-objector are denied. The defendant-objector filed a replication and re-asserted the allegations made in the objection petition, 8. The award is alleged to be invalid and without jurisdiction, 7. Reply to the objections was filed on behalf of the plaintiff-contractor and the allegations of the defendant-objector are denied. The defendant-objector filed a replication and re-asserted the allegations made in the objection petition, 8. On the pleadings of the parties the -.following issues were framed on 3-5-1983 : 1. Whether the arbitrator had no jurisdiction to adjudicate, as alleged ? O. P. Objector, 2. Whether the Arbitrator has mis-conducted himself and the proceedings, as alleged ? O. P. Objector, 3. Relief. The parties led evidence in the nature of affidavit. 9. I have heard the learned counsel for the parties and have also gone through the records of the case. Issue No. 1, 10. Shri P. N. Nag, learned counsel for the defendant-objector contends that the Arbitrator had no jurisdiction to award any amount under clause 10-C of the agreement and the amount of Rs. 34,507.61 could not be allowed to the plaintiff-contractor. He contends that under clause 10-C of the agreement the decision of the Superintending Engineer is final and binding and the disputes under this clause are not covered under clause 25 of the agreement, 11. Shri Chhabil Dass, learned counsel for the plaintiff contractor contends that clause 25 is wide enough to cover all types of disputes and differences and the present claim is also covered under Rule 25. He has referred to the Division Bench judgment of this High Court, Union of India etc, v. Vishwa Nath Sud etc. [ILR 1977 PH 543]. 12. Shri Chhabil Dass, learned counsel for the plaintiff contractor contends that clause 25 is wide enough to cover all types of disputes and differences and the present claim is also covered under Rule 25. He has referred to the Division Bench judgment of this High Court, Union of India etc, v. Vishwa Nath Sud etc. [ILR 1977 PH 543]. 12. Now clause 25 and clause 10-C of the agreement read as follows; "Clause 25,—Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other questions, claim, right, matter or thing whatsoever, in any way arising out of are relating to the contract, designs, drawings, specifications, estimates, instruction, orders or these conditions or otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, Himachal Pradesh Public Works Department, within six months from the payment of final bill or from the date of leistered letter issued to the contractor that the final bill is ready for payment. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he had to deal with the matter to which the contract relates and that in the course of his duties as Government servant he had expressed views on all or any of the matters in dispute of difference. The arbitrator unto whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason the Chief Engineer, Himachal Pradesh Public Works Department at the time of such transfer vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with reference from the stage at which it was left by his predecessor. Such person shall be entitled to proceed with reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by Chief Engineer, Himachal Pradesh Public Works Department, should act as arbitrator and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. Subject as aforesaid the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being inforce shall apply to the arbitration proceedings under this clause. The arbitrator(s) may from time to time with the consent of the parties enhance the time for making and publishing the award." "Clause 10-C.—If during the progress of the works, the price of any materials incorporated in the works (not being a material supplied from the Engineer-in-charges stores in accordance with clause 10 thereof) and/or wages of labour increases as a direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any charges in sale tax) and such increase exceed ten percent of the price and/or wages prevailing at the time of acceptance of the tender for the work, and the contractor thereupon necessarily and properly pays in respect of that materials (incorporated in the works) such increased price and/or in respect of labour engaged on the execution of the work such increased wages, then the amount of the contract shall accordingly be varied; provided always that any increase so payable is not, in the opinion of the Superintending Engineer (whose decision shall be final and binding) attributable to delay in the execution of the contract within the control of the contractor. If during the progress of the works, the price of any material incorporated in the works (not being a material supplied from the Engineer in-charges stores in accordance with clause 10 hereof) and/or wages of labour is decreased and a direct result of the coming into the force of any fresh law or statutory rub or order (but not due to any changes in sales tax) and such decrease exceeds ten per cent of the prices and/or wages prevailing at the time of acceptance of the tender for the work. Government shall in respect of materials incorporated in the work (not being materials supplied from the Engineer-in-charge stores in accordance with clause 10 thereof and/or labour engaged on the execution of the work after the date of the coming into force of such law, statutory rule or order be entitled to deduct from the dues of the contractor such amount as shall be equivalent to difference between the prices of materials and/or wages as they prevailed at the time of acceptance of tender for the work minus ten per cent thereof and the prices of materials and/or wages of labour on the coming into force of such law; statutory rule or order. The contractor shall for the purpose of this conditions, keep such books of account and other documents as are necessary to show the amount of any increase claimed or reduction available and shall allow inspection of the same by a duly authorised representative of Government and further shall, at the request to the Engineer-in- charge furnish, certified in such a manner as the Engineer-in- % charge may require, any documents so kept and such other information as the Engineer-in-charge may require The contractor shall, within a reasonable time of his becoming aware of any alteration in the price of any such material and/or wages of labour, given notice thereof to the Engineer-in-charge stating that the same is given pursuant to this condition together with all information relating thereto which he may be in a position to supply." In Union of India v, Vishwa Nath etc. [supra], a Division Bench of this Court- was considering the scope of clause 25 for a dispute which was covered under clause 2 of the agreement. Clause 2 of the agreement is reproduced below : "Clause 2.—The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be the essence of the contract on the part of the contractor and shall be reckoned from the fifteenth day after the date on which order to commence the work is issued to the contractor. The work shall throughout the stipulated period of the contractor be proceeded with all due diligence and the contractor shall pay as Compensation an amount equal to one per cent, or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the amount of the tendered amount of the whole work as shown in the tender, for every day that the work remains uncommented or unfinished, after the proper dates. And further to ensure good progress during the execution of the work, the contractor shall be bound in all dates in which the time allowed for any work exceeds one month (save for special jobs to complete one fourth of the whole of the work before ore-fourth of the whole time allowed under the contract has elapsed; one half of the work before one half of such time has elapsed, and three-fourth of the work, before three-fourth of such time has elapsed. However, for special jobs if a time schedule has been submitted by the contractor and the same has been accepted by Engineer-in-charge, the contractor shall comply with the said time-schedule, In the event of the contractor failing to comply with this condition, he shall be liable to pay as compensation an amount equal to one per cent or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide on the said tendered amount of the whole work for every day that the due quantity of work remains incomplete ; Provided always that the entire amount of compensation to be paid under the provisions of this clause shall not exceed ten per cent, on the tendered amount of the work as shown in the tender." It was held by the Division Bench that the arbitrator under clause 25 has the widest powers in regard to the disputes referred to him. He can decide both whether the contractor has incurred any liability of compensation at all on account of the delay in the commencement of the work or in its completion and also if such liability is established, what should be the quantum of compensation. The statement in clause 2 that the decision of the Superintending Engineer is final merely constitute a declaration that no officer in the department can, disturb the quantification. The statement in clause 2 that the decision of the Superintending Engineer is final merely constitute a declaration that no officer in the department can, disturb the quantification. This finality cannot be construed as excluding the jurisdiction of the arbitrator under clause 25. Before the Division Bench, it was contended that the decision of the Superintending Engineer under clause 2 was final and for this reason the same could not be a subject matter of arbitration under clause 25. This argument, however, did not find favour with the Division Bench and was repelled. 13. In the present case also the only contention of the learned counsel for the defendant-objector is that the decision of the Superintending Engineer is final and binding under clause 10-C of the agreement and for this reason the arbitrator has no jurisdiction to decide the dispute under clause 25 of the agreement The judgment of the Division Bench is applicable to the facts of the present case and in view of this judgment the contention of the learned counsel for the defendant-objector cannot be accepted. Clause 25 infact covers all questions and disputes relating to the contract and it will necessarily cover a question and dispute with respect to the claim on account of increase in the labour wages. In view of this discussion issue No, 1 is decided against the defendant objector and it is held that arbitrator had jurisdiction to decide the dispute. Issue No, 2. 14. Shri P. N. Nag, learned counsel for the defendant-objector contends that the plaintiff-contractor had given an undertaking in writing on 28-11-1979 that he would not claim any amount for side shuttering. It is contended that due to this written undertaking the arbitrator could not allow him any amount for side-shuttering. 15. The learned counsel for the plaintiff/contractor contends that the award is a non-speaking award and it does not give any reasons. It is contended that the arbitrator has not misconducted himself or the proceedings and the amount has rightly been allowed. 16. A perusal of the award shows that it is a non-speaking award which does not give any reasons. Even if it is believed that the plaintiff claimant had given an undertaking not to claim any amount on account of side-shuttering, still it was for the arbitrator to have considered this aspect of the case. 16. A perusal of the award shows that it is a non-speaking award which does not give any reasons. Even if it is believed that the plaintiff claimant had given an undertaking not to claim any amount on account of side-shuttering, still it was for the arbitrator to have considered this aspect of the case. A dispute had arisen between the parties regarding this claim and the arbitrator had jurisdiction to decide this dispute. It was for the arbitrator to consider the various facts for deciding the dispute. The arbitrator naturally after considering the various facts has given the award. No mis-conduct on the part of the arbitrator or in the proceedings was pointed out to me. It cannot be presumed that the arbitrator did not consider the evidence or the contentions of the defendant objector during the arbitration proceedings. In view of the afore said discussions, I decide issue No. 2 against the defendant-objector and hold that the arbitrator has not misconducted himself or the proceedings.Relief. 17. A perusal of the award shows that there is no error of law or facts apparent on the face of the award. The award is otherwise legally valid. Hence the objections of the defendant/objector are dismissed and the award is made the rule of the Court. The plaintiff-contractor has also claimed future interest. After taking into consideration the various facts and circumstances of the case, I allow future interest at the rate of Rs. 10 per cent per annum on the decretal amount i e., 44,492.61 paise from the date of the decree till the realisation of the decretal amount. A judgment and decree shall follow accordingly. Order accordingly.