SEEMAX CONSTRUCTION PVT. LTD. v. EXECUTIVE ENGINEER, H. P. KRISHI VISHVAVIDAYALAYA, PALAMPUR
1997-06-06
P.K.PALLI
body1997
DigiLaw.ai
JUDGMENT P.K. Palli, J.—The award has been received by this Court for making it the rule of the Court. Objections have been filed by the Himachal Pradesh Krishi Vishvavidalaya under sections 30 and 33 of the Arbitration Act with the prayer to set aside the award and remit the matter for fresh decision in accordance with law. Reply to the objections has been filed by the claimant followed by rejoinder by the objector. 2. After framing of the issues on May 7, 1977, the learned Counsel for the parties stated that they would rely on the record of the arbitration proceedings in support of their objections and reply No evidence has been placed by them on record and consequently, the case comes up for final disposal. 3. While opening his address for the objector, Mr. Bhogal, learned Counsel contends that the work related to the construction of College for Vetenary and Animal Science Department at University campus, Palampur and a formal agreement came to be executed between the parties which was No. 10 of 1987-88 Clause 25 of the said agreement pertains to arbitration in case of any dispute 4. It is said that the Vice-Chancellor had the exclusive right and authority to appoint Arbitrator. Since the dispute had arisen, the then Vice-Chancellor, on the request of the claimant, nominated Shri R.K. Kaura, the then Superintending Engineer, (Arbitration Cell), Solan and on his transfer, Shri D.N. Nanda was appointed who by that time had come to be appointed as Superintending Engineer (Arbitration), Solan He too could not complete the proceedings and consequently, the Superintending Engineer ‘Arbitration Cell), Solan by designation was appointed as the sole Arbitrator on June 14, 1993. It is said that Shri S.S. Juneja was the then Superintending Engineer (Arbitration Cell), Solan and he entered upon the arbitration proceedings in that capacity. Before the proceedings came to be finalised. Shri Juneja vas transferred from Arbitration Cell to 3rd Circle H.P.P.W.D., Solan He wrote a letter to the Vice-Chancellor on August 2, 1994 for his appointment by name The Vice Chancellor vide letter dated October 10, 1994, placed on record as Annexure 0.6, entrusted the matter to Shri S.S. Juneja by name The argument is that the Vice-Chancellor having once-appointed the Arbitrator by designation, could not re-appoint the same Officer by name on his transfer to another Circle.
It is sought to be contended that the appointment afresh could not be made unless the authority of the appointed Arbitrator was revoked with the leave of the Court. Section 5 of the Arbitration Act has been pressed in further support of this contention. Mr Bhogal contends that the Arbitrator could not be permitted to be substituted as it would be against Clause 25 of the agreement. 5. The next argument which the learned Counsel has advanced is that the Arbitrator misconduct himself inasmuch as new claims, which were not initially mentioned by the claimant, were added during the arbitration proceedings and this could not be permitted to be done. A challenge in particular has been made to the amount awarded under claim 18 at page 14 of the award which relates to loss of profits, 6. Learned Counsel appearing for the claimant, in reply, has adopted the same reasoning which have been given by the Arbitrator in the impugned award. It is further argued that the Vice-chancellor, in the given situation, was fully competent to authorise Shri S. S. Juneja to continue with the arbitration proceedings and it was not a case of fresh appointment and, as such, there no violation of the mandate given in section 5 of the Act. It is further said that the parties to the agreement had agreed for the reference as contemplated by section 4 of the Act and no fault could be found with the order given by the Vice-Chancellor to Shri S.S. Juneja to continue with the proceedings. 7. Learned Counsel further contends that as many as 20 claims and counter-claims were filed by both the parties and further additional claims came to be filed on May 9, 1992 and July 9f 1992 It is being specifically argued that there was no misconduct on the part of the Arbitrator to award the amount under claim 18 for loss of profits as the claimant had made out a case for the grant of that benefit My attention has been brought to the additional claims so filed as well as to the letter of request seeking appointment of the Arbitrator by the claimant which is dated November 24, 1990 and has been placed on record by the objector as Annexure 0.1.
In this letter 20claims have been enumerated by the claimant and towards the end it is said, "We reserved our right claim further for the stems not anticipated. Items not included or the work done not measured so far and the amount of compensation if levied and security deposit deducted from our bills.” 8. Lastly, it is argued that the award is absolutely just and reasonable and the same is based on proper appreciation of the record and be, therefore made rule of the Court. 9. After hearing the learned Counsel for the parties at length and after going through the objections, reply, rejoinder and the record, I find that there is no force in the contentions raised by the learned Counsel for the objector. 10. The work in dispute was awarded on February 6, 1988. Work was to be started on February 11, 1988. The stipulation in respect completion of the work was fixed as August 10, 1989. As the work was not completed within the time, a penalty came to be imposed on September 18,1990. The contract was rescinded by the objector on November 6, 1990. These dates and facts are not disputed. 11. A narration of the events given in the earlier part of this judgment would show that several Arbitrators came to be appointed one after the other but the proceedings never reached finality. Shri R.K Kaura though entered upon the reference on October 4, 1991, yet did not conduct any proceedings. The matter thereafter was entrusted to Shri D.N. Handa, Superintending Engineer (Arbitration), Solan. This was done by the Vice-Chancellor vide order dated August 31, 1992 Shri Handa, admittedly, did not enter upon the reference. On the transfer of Shri Handa, Superintending Engineer (Arbitration Cell). Solan was appointed as sole Arbitrator to decide the controversy. It is not denied that Shri S.S. Juneja was then holding the charge as Superintending Engineer (Arbitration Cell), Solan. This is again an admitted position that he entered upon the reference on July 13, 1993 and held some hearings also. When the case was nearing completion, Shri S.S. Juneja came to be transferred to another cell at Solan and in the given situation, a letter was written by him to the then Vice-Chancellor to appoint him as Arbitrator by name and on this letter, the then Vice-Chancellor made an order dated October 10, 1994 vide Annexure 0-6 on record. 12.
When the case was nearing completion, Shri S.S. Juneja came to be transferred to another cell at Solan and in the given situation, a letter was written by him to the then Vice-Chancellor to appoint him as Arbitrator by name and on this letter, the then Vice-Chancellor made an order dated October 10, 1994 vide Annexure 0-6 on record. 12. In his letter dated August 2, 1994, Shri S.S. Juneja, who by that time bad come to be appointed as Superintending Engineer III-Circle, H.P.P.W.D., Solan on transfer, staled to the Vice-Chancellor that he had already entered reference and conducted hearings and the case was hearing finalisation. It was further stated in the; letter that he had already charged fee from both the parties and one-third out of it stood deposited in the Government Treasury and ten perfect charges had been given to the ministerial staff and in the given situation, he could not now resign from the case. It was also clarified that the amount received by him had already been included in his Income Tax return for the year 1993-94 and tax had already been paid accordingly. A request was made to permit him to conclude the case and appointment was desire to be made by name so that the proceedings could be concluded and award announced. The order of the Vice-Chancellor dated October 10, 1994 has been placed on record as Annexure 0-6. This order appears to have been passed in sequence of the letter of request sent by Shri S.S. Juneja. It has been said therein that Shri Juneja Superintending Engineer (Arbitration) has since been transferred as Superintending Engineer 3rd Circle, Solan and since the proceedings are in advanced stage, it is therefore considered expedient to request Shri Juneja to continue with the above case and conclude it. Towards the concluding part of this order, it is said that in view of the above circumstances, the appointment orders of Arbitrator issued on June 14, 1993 are hereby modified to the extent that the words appearing in the said appointment order as "Superintending Engineer Arbitration, H.P.P.W.D, Solan" be read as "Sh. S.S. Juneja Superintending Engineer". 13.
Towards the concluding part of this order, it is said that in view of the above circumstances, the appointment orders of Arbitrator issued on June 14, 1993 are hereby modified to the extent that the words appearing in the said appointment order as "Superintending Engineer Arbitration, H.P.P.W.D, Solan" be read as "Sh. S.S. Juneja Superintending Engineer". 13. Notice may now be taken of Clause 25 of the agreement which deals with the appointment of Arbitrator, It is reproduced as under : "Clause 25 —Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right matter or thing whatsoever, in any way arising out of or relating to the contract, designs drawings, specifications, estimates, instruction, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Vice Chancellor, H.P.K.V.V, It will be no objection to any such appointment that the arbitrator so appointed is a H.P.K.V.V servant, that he had a deal with the matters to which the contract relates and that in the course of his duties as Government servant he had expressed views on all or any of the matters in dispute of difference. The arbitrator upto whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, the Vice-Chancellor, H.P.K.V.V. at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by Vice Chancellor, H.P.K.V.V. Should act as arbitrator and, if for any reason, that is not possible, the matter is not to be referred to arbitration at all.
It is also a term of this contract that no person other than a person appointed by Vice Chancellor, H.P.K.V.V. Should act as arbitrator and, if for any reason, that is not possible, the matter is not to be referred to arbitration at all. Subject as aforesaid the provisions of the Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause, The arbitrator(s) may from time to time with the consent of the parties enlarge the time for making and publishing of award”. 14. In my considered view, the order of the Vice-Chancellor modified the appointment, earlier made by him by designation, into one by name It was not a case of fresh appointment and no leave of the Court was required as is sought to be projected by the learned Counsel for the objector. 15. The matter can be viewed from another angle also. The dispute had arisen in 1988 itself and the claimant had been requesting the Vice-Chancellor time and again for the appointment of the Arbitrator. The claim had been submitted vide Annexure 0-1 on November 24, 1990. The first appointment of the Arbitrator came to be made on August 26, 1991.
15. The matter can be viewed from another angle also. The dispute had arisen in 1988 itself and the claimant had been requesting the Vice-Chancellor time and again for the appointment of the Arbitrator. The claim had been submitted vide Annexure 0-1 on November 24, 1990. The first appointment of the Arbitrator came to be made on August 26, 1991. Two Arbitrators came to be appointed one after the other and the proceedings remained stand still till the third Arbitrator Shri S.S. Juneja came to be appointed by designation on June 14, 1993, He immediately entered upon the reference on July 13, 1993, i.e. within one month of the passing of the order appointing him as an Arbitrator and also conducted a few hearings when his transfer order was received and In the given situation, he requested the Vice-Chancellor to suitably amend the order so as to appoint him by name, This letter was written on August 2, 1994 whereafter formal orders came to be passed by the Vice-Chancellor on October 10, 1994 The proceedings had already been delayed for no fault of the claimant and in the given set of circumstances, even if there was any irregularity, though there is none, the same could be ignored It has been clearly stipulated by the Vice Chancellor in his final order Annexure 0-6 that the appointment orders issued earlier on June 14, 1993 were modified to be read as "Shri S.S Juneja, Superintending Engineer" instead of "Superintending Engineer Arbitration Solan", 16. The next point urged by Mr. Bhogal also does not advance his case any further. The claimant in his claim petition (Annexure 0.1) had clearly indicated that it reserved its further claim for such items which were not anticipated. The measurement books were not read, the penalty had not come to be imposed by then and nothing had been stated that the security deposited stood deducted from the bills. It is also not disputed that the additional claims came to be filed by the claimant on May 9, 1992 and July 9, 1992. These were supplementary claims in respect of the security deposit, cutting and straightening, compensation and in respect of penal recovery 17.
It is also not disputed that the additional claims came to be filed by the claimant on May 9, 1992 and July 9, 1992. These were supplementary claims in respect of the security deposit, cutting and straightening, compensation and in respect of penal recovery 17. It deserves to be noticed at this stage that the penalty came to be imposed by none-else but the Executive Engineer who was incharge of the work at the site and is a party to the agreement. Be that as it may 18. It is too well-known that the Court, on the basis of the material placed on record by the parties, if comes to a conclusion that the claimant is entitled for a just relief, even if it was not initially prayed for by him, shall not deny the same and it would be allowed to the claimant in the given set of circumstances. A perusal of the award shows that the labour of the claimant remained sitting idle for want of material which was to be supplied by the objector. The claimant has been writing to the department time and again for the release of the material but with no improvement on their part. In one of the representations in that respect it was stated that they had already completed much of the work and for want of supply of material, they were suffering for which they had a right to claim Rs 5,000/per day from the department. The Arbitrator has taken full care to take note of every such representation and replies sent by the department while dealing with claim No.18 in the award. The Contractor had claimed an amount of Rs. 2,10,000/- and relied on the statement of facts and details of claims and other material on record. It has been conclusively found by the Arbitrator that the department contributed towards the breach of the agreement and this was on account of their failure to arrange and issue material under Clause 43 of the agreement and further on account of the delayed payments thereby stopping the continuity of the execution of the work. 19. It is, of course, correct that the claimant had not placed any documentary evidence giving details of the actual loss of profit incurred by him but the Arbitrator was fully justified in allowing Rs.
19. It is, of course, correct that the claimant had not placed any documentary evidence giving details of the actual loss of profit incurred by him but the Arbitrator was fully justified in allowing Rs. 1,05,000/- to the claimant under this claim as reasonable amount to cover the Joss of profit. This amount has been awarded as the claimant suffered on account of delay and negligence on the part of the department to supply the desired material inspite of repeated requests and reminders by the claimant. To grant profit at the rate of 10% can, in no way, be said unreasonable or arbitrary. This judgment need not be burdened further with all the facts and circumstances of which notice has already been taken carefully by the Arbitrator to calculate this amount 20. The award is exhaustive and the Arbitrator has taken meticulous care to deal with all the points raised before him and is further based on sound appreciation of evidence and reasoning. 21. It may also not be lost sight of that the objector never raised these objections before the Arbitrator and these have been taken for the first time in the objections filed in this Court laying challenge to the award. 22. For the reasons given above, I find no force in the objections and the same are ordered to be dismissed Resultantly, the award is ordered to be made rule of the Court. There shall, however, be no order as to costs. Order dismissed.