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1996 DIGILAW 255 (HP)
PAWAN KUMAR AND ASSOCIATES v. THE H. P STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD.
1996-12-10
SURINDER SARUP
body1996
JUDGMENT Surinder Sarup, J. (Oral): The facts giving rise to this arbitration matter are that M/s Pawan Kumar and Associates, plaintiff-claimants in this suit were allotted the work of "Development of Industrial Area, Baddi under Self Finance Scheme (SH - Providing complete sewerage system)" by the H.P. State Industrial Development Corporation Ltd., hereinafter called the Corporation. Later on, the dispute regarding the works and payment in respect thereof developed between the parties. Consequently, on the application of the plaintiff-claimant, one Shri S. S. Juneja, Superintending Engineer, Arbitration, HP PWD, Solan was appointed as the Sole Arbitrator by the Managing Director of the Corporation vide his office Memo. No. HP SIDC/Engg/117/85-4357 dated 30.08.1993 to decide and make award regarding claims and counterclaims of both the parties. 2. The said Arbitrator entered upon the reference on 15-09-1993 vide letter No.SE-ARB-58/93-1173-76 dated 15-09-1993, conducted hearings and concluded the case on 04-04-1994. The time for announcement of award was extended upto 03.06.1994 on the request of both the parties. Ultimately, the arbitrator gave his award, on 03-06-1994, the date until which the time had been extended. 3. Thereafter, the Arbitrator sent his award dated 3.6.1994 vide registered letter No.SE-ARB-Award-Court/94-1705-07 dated 30-06- 1994 to this Court to be made a rule of the Court. After the original award alongwith the record of the arbitration proceedings had been received in this Court, notices were issued to both the parties. They have put in appearance and the Corporation filed objections against the award, being OMP No. 178/95. The objections were filed under sections 30/33 of the Arbitration Act. 4. In the objection petition, various objections have been taken, which in the present case and the Arbitrator has misconducted himself in awarding an amount of Rs.40,052/- under claim No. 1 and Rs.31,215/- under claim No.2 on the basis of clause 10-C; that the Arbitrator has misconducted himself in not scrutinising the evidence before him and rejecting the objections of the corporation on the ground that he is not to act as an auditor; that the Arbitrator has misconducted himself in allowing a claim of Rs.47,598/- on account of excavation and extra lift etc.
and reasons given in support of the same are against the evidence on record; that the details and measurements were supplied to the Arbitrator for the excavation in septic tank and as per details supplied to him, the quantity of earth work in excavation in Septic tank works out to Rs.3062.63 Cum and not 4,327.06 cum. as awarded; that he had misinterpreted the clause 12 of the contract agreement; that he has misconducted himself in awarding a sum of Rs.5,040/- on the ground of measurement of the work in question, especially as the measurement of the work already done was accepted by the plaintiff-claimant on 28.03.1988 and 04.01.1988 without any observation and that he has misconducted himself in applying different yardsticks regarding the interpretation of clause 8 A of the contract agreement. 5. In the reply filed by the plaintiff-claimant to the objections of the Corporation, preliminary objections have been taken that the objections are time-barred; that the objections do not disclose any legal ground for setting aside the award etc. On merits, it has been stated that notwithstanding the undertaking given by the plaintiff-contractor dated 02.03.1987 to the effect that he would not claim any benefit under Clause 10-C of the Agreement, the Arbitrator acted within his jurisdiction in giving an amount under this claim; the impugned award has been made on the appreciation of the material placed before the Arbitrator by both the parties and no misconduct, as alleged, has been done by him. It has been also objected that the Court has no jurisdiction to re-appraise and re-appreciate the evidence. There has been no misinterpretation of any term of the agreement between the parties. It has also been stated in the reply that majority of objections relate to the dispute between the parties which are not to be gone into by this Court, especially when the Arbitrator has made his award after considering the relevant record. 6. The impugned award has been supported by pleading that some of the claims of the plaintiff-claim ant have been rejected on the ground that they had not been made before this Court earlier, when an appointment of the Arbitrator was prayed for to decide the dispute between the parties. 7. On the pleadings of the parties, the following issues have been framed: "1. Whether the objection petition has been filed within the prescribed period of limitation? OP Objector. 2.
7. On the pleadings of the parties, the following issues have been framed: "1. Whether the objection petition has been filed within the prescribed period of limitation? OP Objector. 2. Whether the Arbitrator has misconducted himself and the proceedings, as alleged, OP Objector. 3. Relief." 8. The learned counsel for the parties have been heard and the impugned award alongwith the record of the case has been perused with their assistance. The findings, issuewise are as under: Issue No. 1 9. This issue does not survive for decision now in view of the law laid down by the Apex Court in Secretary to Govt. of Karnataka & anr. v. V. Harishbabu (1996) 5 S.C.C. 400. It has been held therein that limitation for filing objections seeking the setting aside of an arbitration award commences from the date of service of notice issued by the Court upon the parties regarding filing of award in Court. In the present case, admittedly, the limitation ground has been taken on the basis that notice was given to the parties by the Arbitrator vide his letter dated 30.06.1994, copies of which he had endorsed to both the parties. However, it is not disputed that the objections are within time from the date of issue and service of notice of the filing of the award by this Court on the parties, including the objector- corporation. In this view of the matter, and the proposition of the law laid down by the Apex Court in the above-mentioned case, it is held that the objections are within time and this issue is decided accordingly in favour of the objector. Issue No.2 10. Although a number of grounds have been taken in the objection petition, as narrated and discussed in detail hereinabove, Shri K. C. Rana, learned counsel for the objector has confined himself to the following objections. He has firstly submitted that in view of the letter of the claimant at page 84 of the arbitration proceedings, the claimant had waived his right to claim benefit under clause 10-C. A perusal of this letter, written by the plaintiff-claimant to the Superintending Engineer of the Corporation, which is dated 02.03.1987 shows that he had given a definite undertaking that he will not claim any benefit under clause SO-C of the agreement.
Moreover, it has been submitted ©n behalf of the Corporation by its learned counsel that in view of this waiving of his claim, clause 10-C has been scored off and was not applicable in the present case. Therefore, allowing the claim under the said clause amounts to misconduct by the Arbitrator. It has also been submitted in this context that this very conduct of the Arbitrator gives rise to the unescapable inference that the award has been improperly procured in this case. 11. In reply, the learned counsel for the plaintiff-claimant has submitted that the clause 10-C did not come into play in the present case as escalation charges were claimed and awarded after stipulated period of completing the work allotted to him was over. This is clear, according to the learned counsel from a perusal of the award itself, where, while discussing claim No. 1 at page 5 of the impugned award, it has been mentioned by the Arbitrator that the contractor is entitled for escalation on the quantity and amount of work done after the stipulated contract period and in the extended period on the plea that respondents while granting time extension had not held the claimants responsible for the delay. 12. This court finds force in the argument of the learned counsel for the plaintiff-claimant inasmuch as admittedly, the escalation chares in respect of the allotted work did not relate to the stipulated period within which the same had to be completed. It relates to the subsequent period which was extended by the Corporation when time was granted to the plaintiff-claimant to complete the work allotted to him and in view of what has been mentioned in the impugned award, which cannot be challenged in these proceedings, the arbitrator had not held the plaintiff- claim ant responsible for delay in executing the work. This being the situation, the escalation has not been given either in terms of clause 10-C, which would not apply having been waived of on the undertaking given by the plaintiff-claimant on 02.03.1987. The escalation has been granted for the extended period which shall not be governed by clause 10-C because the delay, if any, was not attributed to the plaintiff-claimant by the Corporation. In this connection, the learned counsel has cited the case of M/s Metro Electric Co. New Delhi v. Delhi Development Authority, New Delhi AIR 1980 Delhi 266.
The escalation has been granted for the extended period which shall not be governed by clause 10-C because the delay, if any, was not attributed to the plaintiff-claimant by the Corporation. In this connection, the learned counsel has cited the case of M/s Metro Electric Co. New Delhi v. Delhi Development Authority, New Delhi AIR 1980 Delhi 266. That was a case in which the award of the Arbitrator was challenged on the ground that there was an error apparent on the face of the award. Negativing this contention, it was held by the Delhi High Court that no contract for electrification of Delhi Development Authoritys building providing for payment of enhanced rates in case of rise in prices of material and wages during progress of work, there was a failure to complete the work by prescribed date due to non- completion of building by stipulated date, the clause which was similarly worded as clause 10-C in the present case, was held to be not attracted. It was further held that awarding of damages on account of enhanced rates because of rise in prices was proper. This decision of the Delhi High Court is on all fours with the facts of die present case. Consequently, there is no merit in the objection of the learned counsel for the Corporation. This Court accordingly holds that in view of the undertaking given by the plaintiff-claimant by his letter dated 2.3.1987, Clause 10-C was not applicable in the present case, and admittedly it was scored off therefore, the impugned award in respect of escalation for the extended period of time, regarding which delay was not attributed to the plaintiff-claimant by the Corporation, was fully justified and in order. 13. The second ground of attack against the impugned award by the learned counsel for the plaintiff claimant is that no interest was admissible in view of the delay as per para 8 of the objection petition. A perusal of this objection shows that it has been stated therein that the plaintiff was required to submit his rates under clause 12-A of the agreement within 7 days of the receipt of the order for executing the extra items which individually exceeded the quantities stipulated in the contract agreement.
A perusal of this objection shows that it has been stated therein that the plaintiff was required to submit his rates under clause 12-A of the agreement within 7 days of the receipt of the order for executing the extra items which individually exceeded the quantities stipulated in the contract agreement. Since the contractor failed to submit the same within 7 days and continued to execute the work at the approved rates and the final payments were accepted by him on 19.8.1988, his claim of Rs.1,20,000/- before the Arbitrator through rejoinder dated 20.11.1993, was made almost 5 years and 3 months of the acceptance of final claim and subsequently the claimant- contractor amended this claim to Rs.6,20,000/-, which included 24% interest also. It has also been mentioned in the objection petition that the Arbitrator has misconducted himself in disallowing the claim of the respondent-Corporation to the extent of Rs.55, 165/-. 14. In reply, the learned counsel for the plaintiff-claimant says that while deciding claim No. 8, the Arbitrator has held that it is proved that claimant-Contractor has not offered his rates under clause 12-A after becoming aware of the deviated quantities and as such this claim was not a matter of dispute which is further clear from the fact that this claim was not placed before the High Court for appointment of arbitrator. > In view of this the Arbitrator disallowed this claim and awarded no amount in favour of the claimant contractor against the Corporation. He also decided not to award anything to the Corporation regarding its counter claim on the same ground. This being the situation, obviously the objection of the Corporation is misconceived as nothing has been awarded regarding interest on the amount claimed after the expiry of a long period of time. Moreover, the learned counsel for the claimant has cited the reported case decided by the Apex Court in M/s Hindustan Tea Co. v. M/s K, Sashikant and Co. AIR 1987 SC 81 wherein it has been held that under the law, the arbitrator is made the final arbiter of the dispute between the parties and the award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts.
v. M/s K, Sashikant and Co. AIR 1987 SC 81 wherein it has been held that under the law, the arbitrator is made the final arbiter of the dispute between the parties and the award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts. It was further held that where the award, which was a reasoned one was challenged on the ground that the arbitrator acted contrary to the provisions of section 70 of the Contract Act, it was held that the same could not be set aside. 15. The same position prevails in the present case where each and every claim of the plaintiff-claimant has been decided on merits on the basis of the material on record and after giving reasons in view of the law laid down in the said authority by the Apex Court, this award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the facts. Even, as per Hindustan Tea Cos case (supra) mis-interpretation of the law of contract by the Arbitrator while while giving his award is not open to challenge. 16. No other point has been urged. 17. This Court accordingly holds that the Arbitrator has neither misconducted himself nor the proceedings. Accordingly, this issue is decided in favour of the plaintiff-claimant and against the Corporation. Relief 18. In view of the findings and reasons recorded above, the objections of the Corporation are dismissed. The Award of the Arbitrator dated 3.6.1994 is made a Rule of the Court. However, in the circumstances of the case, there will be no order as to costs. Decree-sheet be prepared accordingly.[ 1996 DIGILAW 255 (HP) · digilaw.ai ]