R. S. AVTAR SINGH AND COMPANY v. BHARAT HEAVY ELECTRICAL LIMITED
1985-05-31
M.K.CHAWLA
body1985
DigiLaw.ai
M K. Chawla ( 1 ) THE impugned award under challenge is a non-speaking one. Shri M. S. Iyengar made and published the award on 15-3-1982 reading as under:- "claimants Claims No. 1, 2, 3, 4, 5, 6, 7, 8, 10,11, 12,13,14 and 15 I hold that the claimants M/s. R. S. Avtar Singh and Co. are entitled to a sum of Rs. 1, 42, 24, 894. 00 (Rupees one crore forty four only) against all their claims and I also hold that the claimants are entitled for interest and I there fore award a sum Rs. 1, 42 24,894. 00 (Rupees one crore forty two lacs twenty four thousand eight hundred and ninety four only) in favour of the claimants with interest @ 12% per annum on the said amount of the award from 6-1-1981 till the date of payment or decree whichever is earlier, Claimants Claim No. 9 As this claim was withdrawn by the claimants in the hearing held on 12-9 and 13-9-1981, no award is made against this claim, Respondents Counter Claims Nos. 1, 2 and 3. I hold that the respondents M/s. Bharat Heavy Electricals Ltd. are entitled to a sum of Rs. 56,420. 00 (Rupees fifty six thousand four hundred and twenty only) against all their counter-claims and I, therefore, award a sum of Rs. 56,420. 00 (Rupees fifty six thousand four hundred and twenty only) in favour of the respondents. The parties are left to bear their own costs. This disposes of claimants claim No. 16 regarding costs. The above award is made and published by me on this day of 15th March 1982 at Gandhinagar. This award is sought to be challenged on all conceivable grounds including the objections that it is not a reasoned award; based on no evidence; suffers from arbitrariness; no jurisdiction to award interest prior to date of the start of arbitration proceedings; no reasonable person could have come to the conclusion, as the arbitrator has reached in this case; that error of law is apparent on the face of the award or any document appended thereto, and above all the misconduct of the learned arbitrator. Before the objections to the award are considered, in will be advantageous to keep in mind the basic settled propositions of law and fact, which can be made the basis for setting aside the award.
Before the objections to the award are considered, in will be advantageous to keep in mind the basic settled propositions of law and fact, which can be made the basis for setting aside the award. The first decision in the series is reported as Champsey Bhara and Co. v. Jivraj Ballo Spinning and Weaving Company Ltd. 1 The relevant portion reads as under: - "where a cause or matters in difference are REFERRED TO to an arbitrator, whether a lawyer or a layman, he is constituted the sole and final judge of all questions both of law and of fact. The only exceptions to that rule are cases where the award is the result of corruption or fraud, and one other, which though it is to be regarded is now, firmly established, viz. where the question of law necessarily arises on the face of the award or upon some paper accompanying and forming part of the award. An error in law on the face of the award means that you can find in the award or a document actually incorporated thereto, as for instance, a not appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can say is erroneous. "this very proposition was reaffirmed in the judgment reported as M/s. Alopi Parsad and Sons Ltd. v. Union of India. 2 In this judgment it was further observed: "if, however, a specific question is submitted to the arbitrator and be answers it, the fact that the answer involves an erroneous decision in point of law, does not make the award bad on its face so as to permit of its being set aside. "the Supreme Court in a later decision reported in Smt. Santa Sila Devi and another v. Dhirendra Nath Sen and others. 3 laid down the following four golden principles which the Courts are required to keep in mind at the time of deciding the objections for setting aside the award:- "where an award given by the arbitrator is filed in Court and it is challenged on the ground of its incompleteness, the Court has to bear in mind certain basic positions.
3 laid down the following four golden principles which the Courts are required to keep in mind at the time of deciding the objections for setting aside the award:- "where an award given by the arbitrator is filed in Court and it is challenged on the ground of its incompleteness, the Court has to bear in mind certain basic positions. These are: (1) a Court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal; (2) unless the reference to arbitration specifically so requires the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award. The legal position is clear that unless so specifically requited an award need not formally express the decision of the arbitrator on each matter of difference. (3) unless the contrary appears the Court will presume that the award disposes finally of all the matters in difference; and (4) where an award is made de premissis (that is, of and concerning all the matters in dispute REFERRED TO to the arbitrator), the presumption is, that the arbitrator intended to dispose finally of all the matters in difference; and his award will be held final, if by any intendment it can be made so. "in a subsequent case, the Supreme Court in a judgment reported as Jivarajbhai Ujamshi Sheth and others v. Chintamanrao Balaji and others,4 has gone to the extend of holding that the Court in dealing with an application to set aside an award has not to consider whether the view of the arbitrator on the evidence is justified. The arbitrator s adjudication is generally considered binding between the parties, for the he is a tribunal selected by the parties and the power of the Court to set aside the award is restricted to case set out in Section 30 of the Arbitration Act of 1940. It is not open to the Court to speculate, where no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion. I assume that the arbitrator must have arrived at his conclusion by certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or wrong.
It is not open to the Court to speculate, where no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion. I assume that the arbitrator must have arrived at his conclusion by certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or wrong. It is not open to the court to attempt to probe mental process by which the arbitrator had reached his conclusion where it is not disclosed by the terms of his award. The last in the series is the judgment of this Court, reported as Delhi Development Authority v. M/s. Alkaram 5 This judgment in nut-shell settles the various types of objections which cannot be looked into while dealing or upholding the validity of the award. The relevant observations are as under: - "as a sole tribunal, the arbitrator is entitled to decide rightly and wrongly. Where an arbitrator makes a mistake either in law or in fact in determining the matters REFERRED TO, but such mistake does not appear on the face of the award, the award is good notwithstanding the mistake, and with not be remitted or set aside. The general rule is that, as the parties choose their own arbitrator to be the Judge in the disputes between them, they cannot, when the award is good on its face, object to his decision, either upon the law or the fact. His decision may be right or wrong. But it is not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error is one of fact or of law and whether or not his finding of fact are supported by evidence. It is never possible to set aside the award merely because there was no evidence supporting a particular finding, unless it appears from the award itself that there is no evidence to support the finding, subject thereto the findings of the arbitrator are final and it is of no avail to state on the grounds for setting aside the award that the findings were erroneous. . . . . . . . . . . . . The difficulty cannot be get over by tracing the matter up under the heading "perversity". The general rule therefore is that the award is final as to both fact and law. . . . . . .
. . . . . . . . . . . . The difficulty cannot be get over by tracing the matter up under the heading "perversity". The general rule therefore is that the award is final as to both fact and law. . . . . . . . . . . . . . . What reasons are sufficient in any particular case must, of course, depend upon facts of the case, I approach the matter in this way: that reasons are not deficient merely because every process of reasoning is not set out. I further think that reasons are not insufficient merely because they fail to deal with every point raised before the arbitrator at the hearing. No universal generalisation can be made. Everything depends on the subject-matter. In deciding a controversy the arbitrator works in an environment which is quite different from that of the Judge. He is not bound by the technical rules of evidence. The "ropes and pulleys" that he uses in the arbitral process are different from the foot rules and set squares that we use in the judicial process. From the arbitrator what is wanted is "a practical decision on the disputed issues. "this judgment has been followed, and approved in number of other cases. In facts and in substance this judgment, prima jacie, leave no scope for interference in the award, either on question of facts of laws, except when the error is apparent on the face of the award. With this background, let us now examine theobjections of the respondents, to find out if they have been able to bring out a case beyond the purview of judicial pronouncements, for setting aside the award. At the outset the learned Solicitor General expressed his unhappiness over the conduct of the learned arbitrator in not giving reasons in support of his award. Taking the clue from the observation of H. L. Anand, J. in the case of M/s. Bhilwara Synthetics Ltd. v. Delhi Hindustani Mercantile Association and others,6 he wished and hoped that in future the right to know the reasons will be given a statutory recognition, as in England.
Taking the clue from the observation of H. L. Anand, J. in the case of M/s. Bhilwara Synthetics Ltd. v. Delhi Hindustani Mercantile Association and others,6 he wished and hoped that in future the right to know the reasons will be given a statutory recognition, as in England. The relevant observations of the judgment are as under:- "while the rule that the arbitrator need give no reason for the award may have had its importance at one time, there is little doubt that the power to make a non-speaking award must have given unoue protection to considerable incompetence, arbitrariness and even dishonesty in the arbitral process. It is important to remember that duty to give reasons enlightens the party, who is affected by the decision as to why the decision was unfavourable to it, illumines the part of the appellate authority, controls the Tribunal itself and constitutes a built-in safeguard against arbitrariness. In the expending horizon of natural justice and the development of administrative law when every judicial, quasijudicial, executive and administrative body, charged with the duty to make a decision affecting rights and obligation, is considered under a duty to give reasons for its decision, it is quite anachronistic that an arbitrator in India is immune from any such obligation. "on the basis of these weighty reasons, the learned Solicitor General submits that the impugned award of the arbitrator without reasons, should be held bad in law and set aside. I entirely agree with his suggestion, and share his anxiety. In awards like the present, it is desirable that the arbitrator should be required to give reasons for his conclusions. Keeping the trend in view, in some of the agreements it has been made obligatory on the part of the arbitrators to give reasons in case the award is to exceed a particular amount. Unfortunately, in the present reference the learned arbitrator was not specifically required to deal with each claim or matter separately or to give reasoned award. In that view of the matter, it is not possible for this Court to bold the award bad on this score only. The next contention of the learned Solicitor General is that in the award itself various clauses of the contract entered into between the parties have been specifically REFERRED TO to.
In that view of the matter, it is not possible for this Court to bold the award bad on this score only. The next contention of the learned Solicitor General is that in the award itself various clauses of the contract entered into between the parties have been specifically REFERRED TO to. In fact, according to him, clauses 5 and 6 in particular have been REFERRED TO, which clearly falls within the expression "document appended" and the Court can conveniently go into the merit of the controversy and re-appraise the oral as well as documentary evidence to find out the validity of the award. In support of his submission, reliance has been placed on the judgment reported as F. R. Absalom Limited v. Great Western (London) Garden Village Society, Limited, The relevant portion of the judgment which applies to to facts of the present case reads as under:- "there still remains the question whether this error of law is apparent on the face of the award. I think it is. The award recites the contract and refer in terms to the provisions of condition 30. Condition 30 accordingly is incorporated into and forms port of the award just as if the arbitrator had set it out verbatum and had not proceeded to state the construction which he placed upon it. "in the latter portion of the judgment it was also observed that the award recites the contract between the parties and refer in terms to certain conditions of the contract, namely. Clauses 26, 30 and 32; though these clauses are not set out in full, they must, on the other hand, be taken to be incorporated; the award is expressly based on the provisions of clauses 26 and 30 and hence the position here is quite different from that in Champsey Bhara and Co. v. Jivraj Balloo Spinning and Weaving Company Ltd. (Supra) where the termes of the contract were held not to be incorporated. According to the learned Solicitor General this very observation was approved by the Supreme Court in a judgment reported as M/s. Alien Berry and Co. Pvt. Ltd. v. The Union of India. In view of these findings, the court is entitled to took at the clauses of the contract to ascertain for itself whether the contraction placed by the learned arbitrator was erroneous. I am afraid, this argument has no force.
Pvt. Ltd. v. The Union of India. In view of these findings, the court is entitled to took at the clauses of the contract to ascertain for itself whether the contraction placed by the learned arbitrator was erroneous. I am afraid, this argument has no force. These two very judgments on which much reliance has been placed, came in for consideration in case Suit No. 61a of 1972 Union of India v. India Hard Metal Pvt. Ltd. , decided by Avadh Behari Rohtagi, J. on June 6, 1974. In the said judgment, the operative portion of the award, read as under:- "after carefully considering the facts of this case in the light of clause 18 (b) (i) and (ii) read with clauses 18 (i)and18 (m), I am of the view that the claimants claim of Rs. 4,19,863. 80p based on the difference of LME price of Wolframe Ore and the rate of customs duty, it is legally not tenable. The claimants claim of Rs. 4,19,863. 80 is therefore, rejected. The claimants claim for interest is also rejected. "it is a non-speaking award. The argument was advanced that in rejecting the claim of Hard Metal the arbitrator committed an error of law which is disclosed on the face of the award. Numerous questions, requiring consideration were passed by the Judge, such as; Are clauses 18 (d) (i) and (ii), 18 (i) and 18 (m) incorporated in the award? Has the arbitrator given reasons? Has the arbitrator enunciated a legal proposition which can be said to be erroneous? Has the arbitrator tied himself form to a legal proposition which is unsound? Did the arbitrator make an error of law or an error of fact. These very arguments were repelled by the learned Judge by holding: "in the case in hand, neither reasons are given nor has any legal proposition been propounded to which exceptions can be taken. The reference to the clauses of the contract is introductory or preparatory to the arbitrator s decision. The arbitrator was merely saying that be had considered the particular clauses of the contract to which his attention appears to have been invited in the course of the arguments. But his actual decision is contained in the words. " "the claimant s claim is not legally tenable and, therefore, rejected". For this conclusion the arbitrator has not given any reasons or grounds.
But his actual decision is contained in the words. " "the claimant s claim is not legally tenable and, therefore, rejected". For this conclusion the arbitrator has not given any reasons or grounds. The clauses are REFERRED TO to generally in the award or in matters introductory to the finding. I do not find here that the arbitrator on the face of his award based his decision on the construction of any particular term in the contract. The clauses are mentioned in what is in effect the conclusion or the order which the award makes. If you merely have in a recital or narrative to an award a reference in general terms to a document then the court is not entitled to look at the document itself upon an application to set aside the award as being bad in law on the face of it. . . . . . . I, therefore, bold that there is no incorporation of the clauses of the contract and a mere reference to those clauses does not amount to incorporation". In support of this finding reliance was placed and preference was given to Champsey Bhara and Co. v. Jivraj Balloo Spinning and Weaving Co. Ltd. 8 over the judgments relied upon by the learned counsel, for the objector such as Giaoomo Csta Fu Andrea v. British Italian Trading Co,9 and Allen Berry and Co. v. Union of India. 10 The case in hand is on much better footings than the case of India Hard Metals (supra ). In the award, the learned arbitrator has not incorporated clauses 5 and 6 of the contract. He has not enunciated a legal proposition nor has tied himself down to a legal proposition which can be said to be under sound. He has not come to a finding on the wording of the contract or its clauses. In fact, these clauses have been REFERRED TO to in the issues which were framed on the basis of the claim of the claimant and the counter claim of the respondents. In view of these circumstances, the objectors cannot take advantage of the mere mention of various clauses in the issues itself. The next submission of the learned Solicitor General is that the award on the face of it is perverse one, and cannot stand the test of validity qua claim Nos.
In view of these circumstances, the objectors cannot take advantage of the mere mention of various clauses in the issues itself. The next submission of the learned Solicitor General is that the award on the face of it is perverse one, and cannot stand the test of validity qua claim Nos. 1, 3, 6 and 14, 15, the total value of which, if deducted, then nothing shall remained to be paid to the claimant. His argument is that the arbitrator has reached a conclusion which no person, acting judicially and properly instructed in the law could reach, and as such he must be held to be guilty of misconduct. Furthermore, if it is based on a complete miconception of law or is based on no evidence or that no reasonable person would have come to the conclusion to which the arbitrator had. The question of perversity, according to the learned counsel is independent of any question of error of law on the face of the award. The question of perversity is not a question of reasonableness of reasons or sufficiency of evidence. The award under challenge is such as no reasonable person could have come to the conclusion and/or that it is based on no evidence whatsoever. (Reliance was placed on the judgment of Pioneer Shipping Limited, 1981 (2) All England Report 1030. The relevant portion reads as under ; "that no person acting judicially and properly instructed as to the relevant law, could have come to the determination under appeal. . . . . . . . . They have reached a conclusion which no reasonable person could, on the facts which they have found, have reached. ")IN support of these propositions, the learned counsel for the objector challenged the findings or of the awarding of the amount against claim No. 1, variation in quantity; Claim No. 3-additional payment on account of lead; Claim No. 6 -double supervision of work and finally Claim No. 14-Prolongation of work in view of the amount already claimed under Claim No. 2, i. e. variation in time clause. All these claims if are found unsupported on any ground whatsoever, then the figure of Rs. 1,42. 24,294. 00 in the award do not find any basis and the award has to be set aside or remitted, as being perverse and a species of misconduct.
All these claims if are found unsupported on any ground whatsoever, then the figure of Rs. 1,42. 24,294. 00 in the award do not find any basis and the award has to be set aside or remitted, as being perverse and a species of misconduct. Prima facie, in view of the non speaking nature of the award the court is not required to go into the findings of facts. The arbitrator has decided the dispute between the parties in a manner which apeared to him most just and reasonable. It is not open to the court speculate, where no reasons are given by the arbitrator, as to what impelled him 10 arrive at a particular conclusion. It is presumed that the arbitrator must have arrived at his conclusion by a certain process of reasoning. It is also well established principle of law that it is not open to the Court to attempt to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of his award. The Court cannot re-examine and re-appraise the evidence which has been considered by the arbitrator and sit in appeal over the conclusions of the arbitrator in proceeding to set aside the award. The mere descent by a Court from arbitrator s conclusion is not enough to set aside the award unless it can be shown by anything appearing from the face of the award that the arbitrator has tied himself down to some legal proposition which is unsound. In this case admittedly the learned arbitrator has afforded adequate opportunity to the parties to place their case. In fact this settles the objections and the award must be held to have become final and conclusive. However, despite the obstacles which come in the way of the Court to look in to the evidence of the various claims with a view to find out if the amount awarded is fair and proper, I am inclined to look into the grievances of the objectors also. Before attempting to dispell the doubts of the objector, it may be mentioned that the learned arbitrator fully heard the parties. In fact, the parties have not raised any grievance on this aspect. He not only held number of sittings but also kept detailed minutes of the discussions held at those meetings.
Before attempting to dispell the doubts of the objector, it may be mentioned that the learned arbitrator fully heard the parties. In fact, the parties have not raised any grievance on this aspect. He not only held number of sittings but also kept detailed minutes of the discussions held at those meetings. The copies of the synopsis of the arguments advanced by each party in respect of each claim were supplied to the parties. Those synopsis contain not only the gist of the arguments of both sides, but also the summary of proceedings related to the events happened on each and every hearing. From the aforesaid synopsis of the arguments it can safely be concluded that the learned arbitrator heard the parties at length on questions of fact and law and almost on all the aspects of the claims. Let us now examine the various claims, made the basis of the ground of attack for he setting aside of the award. Claim No. 1 Under this claim, the arbitrator was required to determine whether the claimants are entitled to additional payment of Rs. 1,64,06,280. 00 as claimed by them or to any other amount on the basis of clause 5 relating to "variation in quantity" of the letter of acceptance dated July 7, 1977. This claim was subsequently reduced to a figure of Rs. 1,47,79,312. 00 during the course of the arbitration proceedings dated June 27, 1981. This claim was the subject matter of discussion before the learned arbitrator on various dates for which detailed proceedings were racorded incorporating submissions of both the parties. Clause 5 of the contract reads as under : "variation in Quantity.-Variation of total gross value of the contract shall be 25% (Twenty five per cent) in case of increase or decrease beyond the above stipulated quantum a sum equivalent to 2% (two per cent) on your quoted rate for every ten per cent increase or decrease shall be paid by us. "before the learned arbitrator it was the contention of the claimant that they were bound to do the work with their quoted rates upto a variation of 25% and once the quantities exceeds the outward limit the claimants were entitled for additional payment for the entire quantity of work done.
"before the learned arbitrator it was the contention of the claimant that they were bound to do the work with their quoted rates upto a variation of 25% and once the quantities exceeds the outward limit the claimants were entitled for additional payment for the entire quantity of work done. The additional payments were to be paid to the claimant by the respondents at the flat rate of 2% for every unit of 10% increase or decrease. The submission on the part of the respondent was that 2% payment on the quoted rates were applicable only for the quantities in excess of 25% and that the 2% payment for every 10% increase as contemplated in this clause was applicable only to an incremental basis and not on flat basis. These contentions were not only supported by the documentary evidence but the relevant law on the subject was also cited and relied upon by the learned counsel for the parties. In case the contention of the claimant was to be accepted then they were entitled to a figure of Rs. 1,47,79,312. 00 and if the contention of the respondent had any weight then the claimants would only be entitled to a figure of Rs. 5. 182. 00 lacs. It was a question of interpretation of clause 5 of the contract and at this stage, it is just not possible to speculate as to which interpretation found favour with the award as to whether any specific amount against this claim was allowed or not. Prima facie, the interpretation of clause 5 as suggested by the claimant appears to be reasonable, genuine and correct one. Under no circumstances, it can be said to be a perverse. In fact, while making payment to the claimant in respect of enabling works, the respondents had themselves interpreted and applied this very clause in other contracts between the parties in the same manner, for which the payments were made without any objection. In any case, howsoever the perverse, the learned arbitrator may have interpreted this clause, this Court will not sit in appeal and reassess the evidence and come to a contrary conclusion. This settles the objection/controversy of claim No. 1. Claim No. 3 Under this claim the learned arbitrator posed the question as, to whether the claimants are entitled to an additional payment of Rs. 1,40,54,784.
This settles the objection/controversy of claim No. 1. Claim No. 3 Under this claim the learned arbitrator posed the question as, to whether the claimants are entitled to an additional payment of Rs. 1,40,54,784. 00or to any other amount on account of lead in the item of excavation and back filling in view of the respective contentions of the parties. Clauses 8 and 9 of the contract are the relevant provisions concerning this claim. It is not disputed that original stipulated rate for 100 metre lead was Rs. 150. 00. There is also no difference on the interpretation of the additional 100 metres as per clause 4a of Section VIII of the schedule of quantities of the contract. The claimants were being paid on this rate by the respondents till the meeting held on March 1, 1978. The minutes of the said meeting indicate that the question of payment of lead for the earth work came in for consideration. Considering the distance involved in carrying the excavated earth it was suggested that uniform flat rate should be evolved for the payment of the lead for this earth work. The minutes further show that it was mutually agreed and decided between the parties that a flat rate of Rs. 47. 00 per cubic metre for the excavated material will be paid as lead chargesirrespective of the actual distance involved each time. It was also agreed that this rate would be applicable from 100 metres upto 5 KMS. of lead. This flat rate of Rs. 47. 00 per cubic metre was also agreed to be applicable for any other excavation to be done in the power house area. The controversy between the parties before the learned arbitrator was as to whether the claimants were entitled to the payment of leads as per the contract rate or the understanding reached in the meeting held on March 1, 1978. The contention of the claimant, in brief, was that the claimants had given their consent to reduce the rate from Rs. 150. 00 to Rs. 47. 00 under undue influence and coercion when the respondent threatened to withhold payments of Rs. 22,50,000. 00 as by that time they bad already executed the item of earth work and lead to the extent of 15,000 cubic metres.
150. 00 to Rs. 47. 00 under undue influence and coercion when the respondent threatened to withhold payments of Rs. 22,50,000. 00 as by that time they bad already executed the item of earth work and lead to the extent of 15,000 cubic metres. Immediately after the signing of the minutes the claimant repudiated the agreement and elaborated the circumstances under which their representative was forced to sign the minuts. The claimant further contend that the respondent continued to pay the amount and in fact paid a sum of Rs. 60. 00 lakhs at the rate of Rs. 150. 00 per cubic metre, even after the minutes of the meeting dated March 1, 1978 were confirmed. In this behalf they preferred TO to file the affidavit of Shri Swaranjit Singh detailing the circumstances under which he was forced to sign the minutes. The contention of the respondent was that once the claimant agreed to charge Rs. 47. 00 per cubic metre, there was no occasion to deviate from the said undertaking. It is also contended that the affidavit of Mr. Swaranjit Singh is of no avail to the claimant as it is not in accordance with the provisions of Order 18 Rule 1 of the Code of Civil Procedure, inas-much as it does not give the particulars of the undue influence and coercion which was exercised on him at the time of the signing of the minutes of the meeting dated March 1, 1978. The learned arbitrator according to the learned Solicitor General was not justified in relying on the affidavit of Shri Swaranjit Singh. I do not propose to refer to the legal propositions urged during the course of arguments before me as these very submissions were the subject matter of discussion before the learned arbitrator. From the persual of the arbitration proceedings, I find that this matter came in for consideration on as many as 10 hearings wherein the scope of the original agreement, the under-taking given on March 1, 1978 and the relevant law on the subject were REFERRED TO and discussed, the respondents were also given a chance to lead any counter evidence by way of filing affidavits or producing any witness to rebut the contentions of the claimant. The respondents did avail of this generous offer and filed the counter affidavit.
The respondents did avail of this generous offer and filed the counter affidavit. From the proceedings it is also clear that on one of the hearings the claimants brought Mr. Swaranjit Singh before the arbitrator and tendered him for cross-examination but the respondents, for reasons best known to them, did not avail of this opportunity. Finally, the learned arbitrator was asked to consider both the affidavits and documents. In fact, there was enough material before the learned arbitrator to decide this claim, one way or the other and now it cannot be urged that there was no evidence or the learned arbitrator misconducted himself in relying on the affidavit of Mr. Swaranjit Singh or allowing the claim. The evidentiary value of this affidavit was also taken note of and considered while making and publishing the award. Under no circumstances, the consideration of the evidence on this aspect can be said to be a misconduct on his part. Claim No. 6 The half hearted attempt was made to challenge the correctness of the amount of Rs. 57,30,000. 00 as claimed on account of alleged double supervision of the works. The position was clarified by the learned counsel for the claimant that this claim did not relate to the double supervision but in fact was towards the damages on account of idle labour, idle machinery, wastage material, infructuous establishment and other recurring expenditure because of the confusion of the two authorities i e. Maharashtra State Electricity Board and the supervision of the respondents. It appears that heading of the claim is misleading. Prom the arbitration proceedings, it appears that the parties have REFERRED TO to and relied upon number of letters in this behalf. The explanation, in fact, settles the objection. Claim No. 14 This claim reads as under :- "whether the claimants are entitled to the damages of Rs. 90. 00 lakhs as claimed by them or any other amount due to alleged prolongation of work. "clause 6 of the agreement is the relevant, which reads as under :- "the price quoted by you is firm and a period of 30 months from the start of work, if for any reasons, for are not responsible, the contract period gets extended beyond 30 months, the rate quoted by you for the balance undone on that date will be increased by 5% of the rate.
"the submission of the learned Solicitor General on behalf of the respondent is that claim No. 2 and 14 overlap each other and in order to realise the amount under this the claimants were required to prove the damages as per Section 74 of the Contract Act and at the most a sum of 12. 00 lakhs could have been awarded. Prima facie, the argument on the face of it is devoid of any substance as the bare reading of the statement of claim of the claimant under claim No. 14 clearly indicate that it was, in fact, a price escalation clause and not a penalty clause under which the claimants were required to prove the liquidated damages These two claims do not overlap each other. This interpretation, appears to have weighed with the learned arbitrator which on the face of it cannot be said to contrary to the contract or legally not tenable. Claim No. 15 Under this claim, the learned arbitrator has awarded interest @ 12% per annum on the amount of the award from January 6, 1981 till the date of payment or decree which ever is earlier. According to the learned Solicitor General unless and until there was a specific reference for the award of interest before the learned arbitrator, he has no jurisdiction to award interest. At themost he could have awarded the interest from the date he entered reference but under no circumstances, prior to the said date. At the outset it may be mentioned that in the statement of claim before the learned arbitrator the claimant asked for the award of interest @ 12% per annum. The relevant clause reads as follows :- "1. Presuit interest. Interest @ 12% per annum on the amount due from the date, the same has become due till the date of entering upon reference. 2. Pendente lite interest. The claimants are further entitled to interest @ 12% p. a. on the amounts due from the date of entering upon reference till the payment is made or the award is made rule of the court, which-ever is earlier. "for the claim of pre-suit interest as well as interest on escalation, learned counsel for claimant pointed out that vide their letter dated January 6, 1981 the claimants informed the respondents about the charging of interest and requiring them to appoint an arbitrator.
"for the claim of pre-suit interest as well as interest on escalation, learned counsel for claimant pointed out that vide their letter dated January 6, 1981 the claimants informed the respondents about the charging of interest and requiring them to appoint an arbitrator. That may be so, but the fact remains that the learned arbitrator entered upon the reference and started arbitrator proceedings as from March 12, 1981 and under no circumstances he could award interest from the date of the letter of the claimant to the respondent BHEF for the appointment of an arbitrator. Admittedly, by the time, the appointment of the arbitrator was not in existence. There appears to be no justification for awarding interest as from January 6, 1981. At best, the interest could have been awarded from the date the learned arbitrator entered upon the reference i. e. March 52, 1981. The rate of interest is not in dispute as under clause 19 of the agreement the parties agreed to the payment of interest @ 12% per annum. No other point has been urged nor requires going into. The discussion in the various claim clearly indicate that there was enough valid and legal evidence before the learned arbitrator which could be taken into consideration to arrive at a particular conclusion. It is not a case of to evidence, as alleged nor it can safely be said that no reasonable person could have come to the conclusion, as the learned arbitrator has reached in this case. As observed earlier, the award under challenge being a non-speaking one, this court is bound by the arbitrators findings of fact and cannot review this unless they are unsupported by evidence and unless it appears from the findings, which is not a case here. So the arbitrator cannot be said to be guilty of misconduct. As a result of the above discussion, I see no force in the objections. The same are hereby dismissed. The award of learned arbitrator its made the rule of the Court with the modification that the claimant shall be entitled interest @ 12% per annum from March 12, 1981 till the date of the decree. The claimant shall also be entitled to future interest @ 12% P. A. from the date of the decree till realisation, in case the award amount is not paid within two months from today.
The claimant shall also be entitled to future interest @ 12% P. A. from the date of the decree till realisation, in case the award amount is not paid within two months from today. This order disposes paid within two months from today. This order disposes of the main suit and the respondents objections I. A. No. 2830 of 1982.