R. C. Lahoti ( 1 ) THE petitioner had entered into a works contract with therespondent. Disputes having arisen between the parties, the same were referred toadjudication by arbitration. The Arbitrator has given his award dated 30. 6. 1989. On the award having been filed in the Court, proceedings for making it a rule of thecourt were initiated. The parties were noticed. The respondent Union of India hasfiled its objections to the award. The controversy raised is confined to the awardmade by the Arbitrator under claim No. 4. ( 2 ) THE petitioner had claimed an amount of Rs. 40,000. 00 under Clause 10-C ofthe Contract on account of increase in labour rates. The Arbitrator has given areasoned award. The gist of his finding is summarised in the next para. ( 3 ) ACCORDING to the Arbitrator, the document Exhibit C-30, which is anotification dated 25. 4. 73, proves the statutory increase in wages. Tender wasaccepted on 23. 6. 1973. The increase had taken place prior to acceptance of thetender but after the submission of the tender. Clause 19-B of the contract referredto a fair wage schedule, wherein the labour rates, were quoted. If increase in wageshad taken place, the claimant was entitled to reimbursement. The Arbitrator hasassessed the claimant entitled to an award of Rs. 20,000. 00 and not Rs. 40,000. 00 asclaimed. Accordingly, Rs. 20,000. 00 have been awarded under Claim No. 4. ( 4 ) THE objection of the respondent-Union of India is that the increase in ratesof wages had taken place prior to the acceptance of the tender and certainly notduring the progress of the work and so the Arbitrator could not have awarded anyclaim on account of increase in labour rates. The award made by the Arbitratorruns contrary to the terms of the contract. IT is not only an error apparent on the face of the award but also misconducton the part of the Arbitrator. It is also submitted by the learned Counsel that if onlythe Arbitrator would have applied his mind to the documents available on record,he could not have allowed the impugned claim to the petitioner. ( 5 ) IN reply, the contractor-petitioner has submitted that the provisions ofclause 10-C of the contract were applicable to the case and the claim of thepetitioner was justly upheld by the Arbitrator.
( 5 ) IN reply, the contractor-petitioner has submitted that the provisions ofclause 10-C of the contract were applicable to the case and the claim of thepetitioner was justly upheld by the Arbitrator. ( 6 ) CLAUSE 10-C of the contract provides as under: "if during the progress of the work, the price of any materials incorporated inthe works (not being a materials supplied from the Engineer-in-charge sstores in accordance Clause 10 hereof) and / or wages of labour increases as adirect result of the coming into for of any fresh law, or statutory rule or order (but not due to any changes in sales tax) and such increase exceeds ten per centof the price and/or wages prevailing at the time of receipt of the tender for thework, and the contractor thereupon necessarily and properly pays in respectof that material (incorporated in the works) such increased price and/or inrespect of labour engaged on the execution of the work such increased wages,then the amount of the contract shall accordingly bevaried, provided alwaysthat any increase so payable is not, in the opinion of the Superintendingengineer (whose decision shall be final and binding) attributable to delay inexecution of the contract within the control of the contractor. " (underlining by me) ( 7 ) THE letter dated 22. 6. 76 issued by the petitioner himself to the respondentconstitutes a part of the contract. Therein itself, the petitioner has mentioned thedate of tender as 18. 5. 93. ( 8 ) EXHIBITS C-30 filed before the Arbitrator is the notification dated 25. 4. 1973issued by the Government of India, Ministry of Labour and published in thegazette of India (Extra-ordinary) which has entailed revision in labour rates. ( 9 ) A bare perusal of the contract and the notification dated 25. 4. 73 puts itbeyond any shadow of doubt that revision in labour rates, the benefit whereof wasclaimed by the petitioner had taken place before the date of tender. The wages oflabour had not increased during the progress of the work. The increase in the wagesof labour was not occasioned as a direct result of the coming into force of any freshlaw or statutory rule or order during the progress of the work. If the increase hadtaken place before the date of entering into the contract between the parties, thenit was not a dispute arising out of the contract.
The increase in the wagesof labour was not occasioned as a direct result of the coming into force of any freshlaw or statutory rule or order during the progress of the work. If the increase hadtaken place before the date of entering into the contract between the parties, thenit was not a dispute arising out of the contract. It was certainly not a disputereferable to Clause 10c of the Contract. The Arbitrator could not have therefore,awarded the claim by reference to Clause IOC abovesaid. 9a. Placing reliance on M/s. Hind Builders v. Union of India, AIR 1990 S. C. 1340, M/s. Sudershan Trading Co v. The Govt of Karela, AIR 1989 SC 890 and M/s. Hindustan Tea Co. v. K. Shashikant and Co. ( AIR 1987 SC 81 ) Counsel for thepetitioner submitted that merely because the Arbitrator might have reached awrong conclusion or might have committed a mistake in appreciation of facts oreven if he might have formed a wrong opinion on question of facts or law thatwould not be enough for this Court to interfere with the award of the Arbitrator. Each of the cases cited by the Counsel for the petitioner proceeds on its own factsand law laid down therein does not apply to the facts of the case at hand. ( 10 ) THE Arbitrator has clearly recorded a finding that increase had taken placeprior to the acceptance of the tender. He has nowhere upheld the entitlement of thepetitioner to the award of the claim by reference to Clause 10c of the Contract. Onthe contrary, as the award shows he has proceeded to apply his own reasoning anequitable one, that if any increase in wages had taken place the claimant wasentitled to reimbursement. This is not permissible. ( 11 ) IN Associated Engineering Co. v. Govt of Andhra Pradesh, JT 1991 (3) S. C. 123, their Lordships have held that if their be an error in the construction of acontract then the error was within the jurisdiction of the Arbitrator; however, if hegoes outside the contract, he commits jurisdictional error. Their Lordships haveheld:- "a dispute as to the jurisdiction of the arbitrator is not a dispute within theaward, but one which has to be decided outside the award.
Their Lordships haveheld:- "a dispute as to the jurisdiction of the arbitrator is not a dispute within theaward, but one which has to be decided outside the award. An umpire orarbitrator cannot widen his jurisdiction by deciding a question not referred to him by the parties or by deciding a question otherwise than in accordancewith the contract. " (emphasise supplied)In Associated Engineering Co v. Govt of A. P. , 1991 (2) ALR 180, also their Lordshipsof the Supreme Court have held that an award outside the terms of the contract would be an award without jurisdiction disclosing an error apparent on its facebecause the Arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. ( 12 ) THE learned Counsel for the respondent-Union of India has rightly pointedout that the letter dated 22. 6. 73 affixed as an allonge with the contract and signedby the petitioner clearly indicates the tender having been given on 18. 5. 73 while theschedule of rates on the basis whereof extra charges were claimed was dated25. 4. 73, the copy of the notification being available on record (marked C-30) and ifonly the Arbitrator would have noticed these documennts, his award would nothave been what it is and this amounts to an error apparent on the face of the record. ( 13 ) IN K. P. Paulose v. State of Karela, AIR 1975 SC. 1259 , their Lordships of thesupreme Court have held it to be a misconduct on the part of the arbitrator withinthe meaning of Sec. 30 (a) of the Arbitration Act if he arrives at a decision by ignoringvery material documents. In Govt. of Kerala v. V. P. Jolly, AIR 1992 Kerala 187, afull Bench of the High Court of Kerala has held that by ignoring the Arbitrator torefer to supplemental agreement in award which prohibited grant of additionalcompensation and extra rate amounted to misconduct on his part requiring settingaside of the award. It has further been held :- "even non speaking award are liable to set aside if the award are contrary tothe basic or rather obvious features of the contract or traverse beyond theobvious terms of such contracts and so long as such decisions can be arrivedat without interpreting or construing the terms of the contract. The violationmust be evident from a mere look at the terms of the contract. " ( 14 ) THE award of Rs. 20,000.
The violationmust be evident from a mere look at the terms of the contract. " ( 14 ) THE award of Rs. 20,000. 00 under claim No. 4 cannot therefore besustained. ( 15 ) FACED with this situation, the learned Counsel for the petitioner attemptedat setting up a stumble block to the entertainability itself of the objection petitionfiled by the Union of India by submitting that the objection having been filedbeyond the period of limitation prescribed by Article 119 of the Limitation Act, thiscourt should dismiss the objection petition as barred by time without any adjudication on merits. Plea as to limitation has not been raised in the pleadings. It hasbeen flung up during the course of hearing. By reference to Section 3 of thelimitation Act, the learned Counsel for the petitioner submitted that the objectionpetition was liable to be dismissed though the limitation was not set up as a defenceand it was obligatory on the part of the Court to do so. Forceful reliance was placedby the learned Counsel on Makbool Ahmad v. Onkar Pratap Narain Singh (AIR1935 PC 85) and Tek Chand Madan v. M/s. Shyam Kamal Agencies (ILR 1971 (1)Delhi 348 ). ( 16 ) IT is true that an application filed beyond the prescribed period oflimitation shall have to be dismissed although limitation was not set up as adefence. However, the rule has application when the bar of limitation is attractedon admitted facts or facts beyond controversy. The rule is not attracted when theplea of limitation is founded on such facts as are disputed, without adjudicationwhereof the Court cannot determine whether the bar of limitation was attracted ornot. In such a case, the party relying on the bar of limitation has to allege the facts,on proof whereof, the Court shall apply the bar of limitation. ( 17 ) IN Pandurang v. Maruti ( AIR 1966 S. C. 153) their Lordships of thesupreme Court have held that a plea of limitation is a plea of law, which concernsthe jurisdiction of the Court trying the proceedings and finding on the plea infavour of the party raising it would oust the jurisdiction of the Court.
( 17 ) IN Pandurang v. Maruti ( AIR 1966 S. C. 153) their Lordships of thesupreme Court have held that a plea of limitation is a plea of law, which concernsthe jurisdiction of the Court trying the proceedings and finding on the plea infavour of the party raising it would oust the jurisdiction of the Court. In Banarsidass v. Kanshi Ram ( AIR 1963 SC 1165 ) their Lordships have held that a plea oflimitation which was not purely one of law, but was a mixed question of law andfacts should not have been allowed to be raised for the first time at the stage ofarguments. In Central India Chemicals Pvt. Ltd v. Union of India (AIR 1962 MP301) a Division Bench of the High Court of Madhya Pradesh has drawn adistinction between a case where limitation is an arguable point and therefore hasto be pleaded and one where it is patent and non-controversial on the proved facts. In Mst. Imam Bandi v. Hargovind Ghosh (1848 (4) Moor IA 403) also the questionof limitation emerged out of the facts and the same not having been put in issue bythe pleadings, was not allowed to operate upon the case. Order 8 Rule 2 CPCenjoins fora plea of limitation, if raising issues of fact, to be raised and facts pleadedspecifically failing which it shall not be taken note of. ( 18 ) IN the case at hand, the notice of filing of the award was issued to therespondent by the Court on 4. 10. 1989. On the backside of the notice, there is anacknowledgement made- received, Sd/- 2,11,89". Below it is affixed the officialseal of the respondent. This is followed by an endorsement of the process serverdated 2. 11. 89 certifying the service. Somewhere at the top of the back side of thenotice, there appears an illegible unidentifiable signature dated 20. 10. 89 which, inthe submission of the learned Counsel for the petitioner, must be deemed to be thedate of service. This contention of the learned Counsel has to be rejected outright. There is absolutely no basis for assuming or holding this signature dated 20. 10. 89to be of anyone receiving the notice or representing the respondent. If only a pleato that effect would have been raised by the petitioner, then it could have beeninquired into. The objection on behalf of the Union of India was filed in the Courton 29.
There is absolutely no basis for assuming or holding this signature dated 20. 10. 89to be of anyone receiving the notice or representing the respondent. If only a pleato that effect would have been raised by the petitioner, then it could have beeninquired into. The objection on behalf of the Union of India was filed in the Courton 29. 11. 89. Calculated from 2. 11. 89, it was filed within limitation. In the facts andcircumstances of the case, the plea of limitation raised by the petitioner without anyfoundation in the pleadings cannot be entertained. ( 19 ) FOR the foregoing reasons, the objection petition is allowed. The awardgiven by the Arbitrator under Claim No. 4 is set aside. The rest of the award, ismade the rule of the Court. In terms of the award to the extent to which it has beenmaintained, the respondent Union of India is directed to pay an amount of Rs. 5,183. 12p. with interest @ 12% p. a. from the date of award till the date of paymentto the petitioner. Costs of these proceedings shall be borne by the parties asincurred.