ORIENTAL STRUCTURAL ENGINIRING PRIVATE LIMITED v. CHAIRMAN, INTERNATIONAL AIRPORT AUTHORITY OF INDIA
1996-07-16
M.K.SHARMA
body1996
DigiLaw.ai
M. K. SHARMA ( 1 ) THIS is a petition under Section 14 and 17 of the Arbitration Act preferred by the petitioner seeking a direction to the arbitrator to file his award and to make the award a Rule of the Court. In the petition the petitioner further seeks for a direction to grant interest on the awarded amount to the petitioner from the date the award is made a Rule of the Court at 21 % per annum with quarterly rests and for costs. ( 2 ) THE petitioner entered into a contract with respondent No. 1 for construction of Indira Gandhi Rashtriya Uran Academy at Fursatgang, Rae Bareli, U. P. During the execution of the contract certain disputes and differences arose between the parties with regard to the claims of the petitioner company arising out of and in relation to the said contract. The petitioner, therefore, requested the respondent no. 1 to refer the said differences and disputes to the arbitration in terms of clause 25 of the arbitration agreement entered into between me parties, subsequent to which the respondent No. l appointed Shri S. C. Gupta, Chief Engineer (Engineering Cell), Border Security Force (BSF) as the sole arbitrator to decide the disputes and differences between the parties and to make the award. ( 3 ) THE arbitrator entered into reference and made his award on 29. 12. 1990 accepting the claim of the petitioner to the extent of Rs. 2,1-3,852. 64 being the amount recovered from the bills of the petitioner. The respondent No. 1 sought to recover the aforesaid amount of Rs. 2,13,852. 64 from the bills of the petitioner on the ground that the cost of earth was not arranged and supplied by the claimants. The contention of the petitioner on the other hand was that the aforesaid payment was towards cost of earth filling made by the petitioner in executing the aforesaid contract and the same was also measured by the respondent No. 1 and paid for in all the running bills and final bill of the petitioner for item No. 22 of the agreement. ( 4 ) AFTER receipt of notice of the aforesaid petition the respondent No. 1 appeared and filed his objection incorporating therein various grounds of objection to the award made by the arbitrator.
( 4 ) AFTER receipt of notice of the aforesaid petition the respondent No. 1 appeared and filed his objection incorporating therein various grounds of objection to the award made by the arbitrator. Both the petitioner as also the respondent No. 1 filed their evidence by way of affidavits which are on record. ( 5 ) THE learned counsel appearing for the parties have painstakingly taken me through the aforesaid documents. ( 6 ) THE learned counsel appearing for respondent No. 1, in support of the objections submits that there is violation of the principles of natural justice by the arbitrator in accepting the evidence produced by the petitioner/claimant behind the back of the respondents. In this connection he drew my attention to the letter dated 15. 11. 1990 written by the petitioner company to the arbitrator enclosing therewith 3 letters, which according to him were produced without notice to the respondents, and therefore, acceptance of the same by the arbitrator and passing of award on the basis thereof accepting the claim the petitioner is in violation of the principles of natural justice which amounts to a legal misconduct. ( 7 ) THE next submission of the learned counsel for the respondent is that no independent evidence was either produced by the petitioner not considered by the arbitrator although the arbitrator by his order dated 27. 10. 1990 directed the petitioner to produce the records to establish that the earth in dispute was brought by the petitioner from outside. ( 8 ) IN reply to above the learned counsel appearing for the petitioner drew my attention to the various correspondences made between the arbitrator and the petitioner on the one hand and also in between the respondent No. 1 and the arbitrator. The learned counsel appearing for the petitioner further submits that this court, while considering the objections filed by the respondent cannot sit as an appellate authority and also does not have the power to reappraise the evidence in order to find out whether the award is legal and valid.
The learned counsel appearing for the petitioner further submits that this court, while considering the objections filed by the respondent cannot sit as an appellate authority and also does not have the power to reappraise the evidence in order to find out whether the award is legal and valid. According to him the only power that is vested in this court in an application under Section 20 is to find out as to whether there is an error apparent on the face of the record or not, and if on the face of the record it is found that an error is apparent on the face of the record this court would be justified to interfere with the award. He further submits that the arbitrator appointed by the respondent in the instant case was a Chief Engineer who is a technical person and that he was appointed to act as an Arbitrator in the present dispute by the respondents themselves as per clause 25 of the agreement. According to him when the arbitrator is an expert like a senior officer of the Government, his award is not likely to be interfered with. ( 9 ) I have gone through the award passed by the Arbitrator as also the record of the proceedings before the Arbitrator and have given my anxious consideration to the submissions made by the learned counsel for the parties. On going through the records I find that the work awarded to the petitioner was completed by him on 20. 3. 1987 and he submitted his final bills on 22. 2. 1988. The respondent No. 1, after checking the measurements made payment of the final bills to the petitioner on 3. 3. 1988. Thereafter, after expiry of more than 4 months i. e. on 22. 7. 1988 the respondents for the first time wrote to the claimant about an overpayment made to the petitioner to the tune of Rs. 2,13,852. 64. It further transpires from the record that there were in all three hearings before the Arbitrator attended to by both the parties and the last hearing had taken place before the Arbitrator on 27. 10. 1990. The order dated 27. 10.
2,13,852. 64. It further transpires from the record that there were in all three hearings before the Arbitrator attended to by both the parties and the last hearing had taken place before the Arbitrator on 27. 10. 1990. The order dated 27. 10. 1990 was passed by the arbitrator has been brought to my notice and I find therefrom that the arbitrator has specifically recorded that the respondents were unable to clarify as to how the balance quantity of earth i. e. to the quantity of 4476. 83 Cu. m. could be measured if not supplied by the claimants from elsewhere/outside. The arbitrator,has further noted in the said order that the respondents were unable to clarify as to how the excess earth of 8903. 44 Cu. m. could be measured and paid for if not arranged by claimants/petitioners from elsewhere/ outside and as no other departmental excavated earth was available for filling. The said order further spells out that the respondents were requested during the hearing to produce incontrovertible evidence indicating that the measurements recorded in Measurement Books in respect of item No,22 are fictitious as respondents are denying me supply of earth by claimants though measurements ,for the same have been recorded in Measurement Books at the time of execution of the work. By the said order the arbitrator also directed the claimant/petitioner to submit by 15. 11. 1990 the copies of the books of accounts and other records to establish that the earth in dispute was brought by them. from outside. It further transpires from the record that the respondents by letter dated 14. 11. 1990 wrote to the arbitrator giving certain clarifications therein. Similarly, the; petitioner also by letter dated 15. 11. 1990, which is referred to earlier gave certain clarifications annexing therewith three letters which are referred to earlier. Subsequent thereto there exists a letter dated 14. 12. 1990 written by the arbitrator to the parties requesting them to furnish stamp papers and in pursuance thereof in the month of December, 1990itself the parties supplied stamp papers and on 29. 12. 1990 the award was made by the arbitrator. Accordingly, therefore, the respondents never raised any objection nor requested for any opportunity of hearing before the arbitrator during the aforesaid period i. e. till the award was passed.
12. 1990 the award was made by the arbitrator. Accordingly, therefore, the respondents never raised any objection nor requested for any opportunity of hearing before the arbitrator during the aforesaid period i. e. till the award was passed. It is also disclosed from the award passed by the arbitrator that the technical , audit which was the basis on which recovery was made from the bills of the petitioner that the allegation of over-payment for cost of excavation and filling up workwas also not produced before the arbitrator in respect of specific order thereto by the Arbitrator. ( 10 ) THE award, on the face of it, is a speaking award and detailed reasons have been given by the arbitrator for arriving at his conclusions. The arbitrator, apparently relied upon the entries made in the Measurement Book which is the most authentic record of measurements. The said measurement books disclose the initial level and the final level on the basis of which the excess earth supplied by the petitioner could be measured and paid for, for the difference thereof could not be proved by the respondents as available with them in the site and therefore, must have been brought from outside by the petitioner. Be that as it may, the arbitrator, on consideration of the evidence on record came to a definite conclusion that the onus of providing incontrovertible evidence that measurements recorded in the measurement books were fictitious lay with the respondents and that the said respondents failed to produce the same. The arbitrator also came to a definite conclusion that the respondents failed to indicate how the excess quantity of earth could be. measured and paid for in case it was not supplied by the claimants as the respondents had no other earth available with them for filling under item No. 22. On a careful perusal of the award it is apparent that the said award is based on evidence/documents produced by the parties. The appreciation of the evidence and the conclusions deductible therefrom are the matters within the exclusive domain of the arbitrator in terms of the law applicable and cannot be subject matter of an objection petition against the award under the Arbitration Act, as held in M/s. Sudershan Trading Co. Vs. Govt.
The appreciation of the evidence and the conclusions deductible therefrom are the matters within the exclusive domain of the arbitrator in terms of the law applicable and cannot be subject matter of an objection petition against the award under the Arbitration Act, as held in M/s. Sudershan Trading Co. Vs. Govt. of Kerala and Another; AIR 1989 SC It is also held by the Supreme Court that this court cannot sit in appeal over the views of the arbitrator by re-examining and re-assessing tine material on record as is conclusively laid down in Pun Const. Pvt Ltd. Vs. Union of India; AIR 1989 SC 777, ( 11 ) THE learned counsel for the Objector/ respondent placed reliance on the decision of this court in Wazir Chand Koran Chand Vs. Union of India and another; AIR 1989 Delhi 175 to bring horn the point about violation of the principles of natural justice. On the facts of the said case the court held that except in a few cases where exceptions are unavoidable both sides must be heard each in the presence of the other and if the arbitrator departs from the rules and hears one party in the absence of the other he is guilty of misconduct. In my opinion, there is no dispute with the legal principle laid down in this decision. However; on the facts of the present case, the ratio of the said decision is not applicable to the facts and circumstances ofthis case. The learned counsel relied upon a decision ofthis court in R. S. Avtar Singh and Co. Vs. NPCC Ltd. ; 1992 (47) DLT 599 . In my opinion the said decision is not at all applicable to the facts and circumstances of the present case and has no applicable at all. ( 12 ) THEREFORE, on an overall consideration of the entire facts and circumstances of the case I hold that there is no error apparent on the face of the award passed by the arbitrator and that the objections raised by the respondents have no merit at all. The objections, therefore, stand rejected. The award is made a Rule of the Court. In addition it is ordered that the petitioner shall also be entitled to future interest @ 18% per annum from the date of the decree till the date of payment. Let a decreed be drawn in the aforesaid terms.
The objections, therefore, stand rejected. The award is made a Rule of the Court. In addition it is ordered that the petitioner shall also be entitled to future interest @ 18% per annum from the date of the decree till the date of payment. Let a decreed be drawn in the aforesaid terms. The petitioner shall also be entitled to costs, which I assess at Rs. 1,000. 00.