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1997 DIGILAW 106 (HP)

RAM NARAIN MADAN v. STATE OF H. P.

1997-04-08

SURINDER SARUP

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JUDGMENT Surinder Sarup, J.— The work for the construction of Civil Hospital building at Una (Block A) was allotted by the State of H.P. through the Executive Engineer (B&R), H.P.P.W.D., Una to the contractor M/s. Ram Narain Madan Contractors and Engineers, 313, Mahesh Nagar, Ambala Cantt (Haryana) against agreement No. 8 of 1981-82. The said agreement has an arbitration clause being clause No. 25. Subsequently, a dispute arose regarding the execution of the work between the parties giving rise to claims and counter claims between them. 2. In pursuance of the arbitration clause No. 25 in the said agreement, the Engineer-in-Chief, H.P.W.D., Shimla, vide his office memo, dated 19-12-1989 referred the dispute between the parties for arbitration to the Superintending Engineer, Arbitration, H.P.P.W.D., Solan. Initially, Shri R.P. Malhotra, Superintending Engineer (Arbitration), H.P.P.W.D., Solan entered upon the reference on 22-1-1990 and on his transfer, Shri R.K Kaura took over the charge. On his transfer Shri D. N. Handa took over the charge and on the transfer of the latter, Shri S.S. Juneja took over the charge. He also resigned. Ultimately, Shri R.C. Gupta was appointed as Arbitrator, being the Superintending Engineer (Arbitration) by the Engineer-in-Chief vide office Memo, dated 22-8-1994. 3. He entered upon the reference on 8-9-1994 and conducted hearings and concluded the case on 22-4-1995. The time for conducting the hearing and signing/publishing of award was extended upto 20-6-1995 on the request of both the parties. Ultimately, he made is award on 8- 6-1995. As a result thereof, he has awarded a sum of Rs. 5,47,238 plus interest at the rate of 12% per annum simple from 9-7-1985 to the date of realisation of payment or the date of decree whichever is earlier. 4 The said award has been sent by him under his registered cover No. SE ARB-AWARD-Court/95-2320-23, dated 20-6-1993 to this Court for being made a rule of the Court alongwith the arbitration file. 5. After the said award had been received in this Court, notices were issued to both the parties. They have put in appearance and out of them, the State has filed objections under sections 30 and 33 of the Indian Arbitration Act (hereinafter to be referred to as the Act’). The contractor filed reply to the same and thereafter the objector tiled a rejoinder On their pleadings, the following issues have been framed : “1. They have put in appearance and out of them, the State has filed objections under sections 30 and 33 of the Indian Arbitration Act (hereinafter to be referred to as the Act’). The contractor filed reply to the same and thereafter the objector tiled a rejoinder On their pleadings, the following issues have been framed : “1. Whether the arbitrator has misconducted himself and the proceedings, as alleged ? OPD. 2. Whether the award is without jurisdiction, as alleged. If so, its effect? OPD, 3. Whether the award is otherwise invalid as alleged ? OPD. 4. Relief.” 6. Out of the two parties, the claimant contractor has not led any evidence, He has relied on the affidavit filed In support of his reply The evidence in the shope of affidavit has been filed on behalf of the objector. 7. I have heard Shri V.K. Verma, learned Assistant Advocate General on behalf of the objector and Shri J.S. Bhopal, learned Counsel for the contractor and have also gone through the records of the case. My finding, issue-wise is as under : Issues No. 1, 2 and 3 : 8. All these issues are being taken up together as they are interconnected. Though a number of objections have been taken in the objection petition, yet the learned Assistant Advocate General, at the time of hearing has confined himself to the following : (i) he has challenged the award on the ground that it is a lump sum award. (ii) according to him, claims No. 25 to 27 were barred under clause 10-C of the agreement which provided that if contrary claims regarding statutory increase in the minimum wages of labour or other costs of materials etc. it would be referable to the Engineer-in-Charge, whose decision shall be final and binding on the parties. 9. This precise question was referred to a Division Bench vide my order dated 25-7-1996 in Civil Suit No. 151 of 1994 Moti Lal v. State of H.P. Ultimately, the Division Bench consisting of Hon’ble Ms Justice Kamlesh Sharma and myself decided the reference on 8-1-1997 by holding that where the contract agreement between the parties provides for final adjudication of any dispute or claim between the parties inter se by the authorities so designated under the said agreement, as Clause 10-C in the present case, the jurisdiction of the Arbitrator is barred in toto. 10. 10. Lastly, it has been urged on behalf of the State by the learned Assistant Advocate Genera! that claim No. 29 was withdrawn by the claimant and the same could not be considered while giving the impugned award. 11. As regards the first objection regarding the lump sum award, the matter is not res Integra It has already been decided long time back by the Apex Court in case of The Union of India v. Jai Narain Misra, AIR 1970 SC 753, it has been held in that case as under : "The arbitrator is not bound to give an award on each point. He can make his award on the whole case An arbitrator may award one sum generally respect of all money claims submitted to him, unless the submission requires him to award separately on some one or more of them .” This case has subsequently been followed la the case reported as State of Rajasthan v. Puri Construction Co. Ltd and another, (1994) 6 SCC 483. It has been held therein : "There is no merit in the contention that computation of lump sum damage in the absence of any material showing actual loss suffered by the contractor is patently unjust and improper warranting interference by the Supreme Court. It is not necessary to indicate in the award computation made for various heads and it is open to the arbitrator to give a lump sum award.” This being the legal position and no authority to the contrary having been cited at the Bar on behalf of the State, I hold that making of a lump sum award is well within the parameters and jurisdiction of the Arbitrator as has been done in this case. 12. Under Claims No. 25 to 27, reference has been made to Clause 10-C and an amount of Rs 65,775, Rs. 31,252 and Rs 1,23,970 respectively, has been claimed under these claims However, an amount of Rs. 4,06,294 has been awarded and it cannot be said with certainty that all these claims have been included in the said lump sum award. As regards this aspect of the case, the legal position is again weir settled by a decision of the Apex Court in the case of State of Andhra Pradesh and another v. R.V. Rayanim etc , AIR 1990 SC 626. As regards this aspect of the case, the legal position is again weir settled by a decision of the Apex Court in the case of State of Andhra Pradesh and another v. R.V. Rayanim etc , AIR 1990 SC 626. It has been held in that authority as under: “From the award, it was clear that the arbitrator has considered the claim made on the basis of escalation and damages but he has awarded a total sum insofar as he finds admissible in respect of the aims which the arbitrator has adjudged, if speaks further. Held: that, In such a situation it could not be said that there was any exercise of jurisdiction by the arbitrator beyond his competence,. Only in a speaking award, the Court can look into the reasoning of the award. It is not open to the Court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion.” 13. It is thus clear that there is a lump sum award and it is not possible to find out as to which claim has been omitted and which included in making the lump sum award. In such a situation it cannot be said that the arbitrator has travelled beyond his jurisdiction. He has to give reasons, only in a speaking award, it may be mentioned that since he had not been directed for giving a reasoned award, he has not given any reasons in support thereof and he was not legally enjoined to do so. 14. Now coming to the last objection i.e. withdrawal of claim No 29. The same finds mention in para 9 of the rejoinder In the said para, it has been pleaded that claims under Item Nos. 3, 8, 9, 10, 17, 18, 20, 23 and 29 which were withdrawn daring the course of proceedings, have also been included in the award. Here again, the same question arises that the award being a lump sum award, it cannot be said as to which claim has been considered and which omitted by the arbitrator. It would be deemed that the claims having been withdrawn, the arbitrator has not awarded any sum thereunder, 15. No other point has been pressed or urged before me. 16. It would be deemed that the claims having been withdrawn, the arbitrator has not awarded any sum thereunder, 15. No other point has been pressed or urged before me. 16. In the result, I hold that the arbitrator has neither misconducted himself nor the proceedings, as alleged. Consequently, the award is not without jurisdiction nor is it otherwise invalid, All these three issues are decided against the objector Relief: 17. For the reasons recorded above, the objections are without any force and the same are dismissed Consequently, the award made by the Arbitrator and submitted to the Court is hereby made a rule of the Court. Decree be prepared accordingly, As regards interest, the rate described by the arbitrator is to continue till the date of realisation. Appeal allowed.