A. B. ODAK v. EXECUTIVE ENGINEER, REC CONSTRUCTION CELL
1997-10-22
P.K.PALLI
body1997
DigiLaw.ai
JUDGMENT P. K. Palli, J. - An amount of Rs. 3,44,441.00 has been awarded to the claimant/plaintiff by the Arbitrator. The award is impugned by the objector/respondent and the objections filed under Section 30 read with Section 33 of the Indian Arbitration Act are proposed to be disposed of in this judgment. 2. The claimant was awarded work for construction of Girls Hostel on October 30, 1990 for a sum of Rs. 84,50,967/-. It is said that the time for the completion of the job was fixed at two years and the work was to be started within fifteen days from the allotment of the work and in any case, on or before November 13, 1992. 3. The building work comprised four blocks independent of each other. The construction was to be carried out block-wise as is being urged by the objector. It is said in the objections that as per Clause 2 of the agreement 1/8th of the work was to be completed before 1/4th of the whole time and 3/8th before 1/2 of the time lapsed. Reliance is being placed on various letters by the objector wherein contractor was time and again told to accelerate the speed of work, but with no fruitful result. 4. As the contractor, according to the objector, did not resume the work, the action was taken to forfeit the security amount of Rupees one lac. Measurements were recorded by the Assistant Engineer on October 7, 1993 and duly accepted by the representatives of the claimant work was rescinded under Clauses 3(b) and 3(c) of the agreement and losses were ordered to be recovered from the claimant. It is being urged that the Arbitrator has mis-conducted himself in ordering the refund of security deposited under Claim No. 1. The amounts awarded under the various heads, are also said to have been wrongly arrived at and no case was made out for the award of interest at the rate of 15%. 5. Mr. K. D. Sood, learned Counsel appearing for the objector, has raised two-fold contentions. The first is that the Arbitrator has mis-conducted himself in the proceedings and there are errors apparent on record. In further support of the contentions, my attention has been brought to the various paragraphs of the objections raised. 6. In reply, Mr.
5. Mr. K. D. Sood, learned Counsel appearing for the objector, has raised two-fold contentions. The first is that the Arbitrator has mis-conducted himself in the proceedings and there are errors apparent on record. In further support of the contentions, my attention has been brought to the various paragraphs of the objections raised. 6. In reply, Mr. J. S. Bhogal, learned Counsel appearing for the claimant, contends that no case has been made out by the objector for setting aside of the award and the objections raised are wrong on merits and this Court while exercising its jurisdiction under Section 30 of the Arbitration Act, has not to reappraise the evidence nor this Court has to act as Appellate Court to disturb the findings recorded by the Arbitrator. It is being argued from the side of the claimant that there was nothing on record to suggest even remotely that the Arbitrator has travelled beyond his jurisdiction or has mis-conducted himself in the proceedings. It is being high-lighted that there was no delay on the part of the claimant in the execution of the work and the dispute arose between the parties on account of the breach of the contract on the part of the objector whereby the claimant was prevented from completing the job within the stipulated period of the agreement. 7. It may be stated here that after framing of the issues, the parties have not placed any evidence on the records of this case and in the affidavit filed by both the parties, reliance is being placed on the records of the arbitration proceedings and the respective pleas which they have taken in the objections and its reply. 8. After hearing the learned Counsel for the parties at length and on careful perusal of the impugned award and the proceedings, I do not find any merit in the objections raised by the objector. 9. Law in this respect has been well-settled by several decisions of the Apex Court as well as of the various High Courts in the country that except legal misconduct of the Arbitrator, the award cannot be set aside merely on the ground of misreading, misconstruction or mis-appreciation of the material on record. Law is further clear on the point that the Court is not required to make its own assessment even if an alternative view is possible.
Law is further clear on the point that the Court is not required to make its own assessment even if an alternative view is possible. The powers of the Appellate Court to reverse findings of fact are alien to the scope and ambit of challenge of an award under the Arbitration Act. 10. It may also be noticed that the error of law on which the award is attacked, should appear from the award itself or from some piece of evidence placed on record. The Court is not expected nor it is permissible to travel beyond this scope to interfere unless the award is shown to be vitiated by an error of law which is apparent on the face of it. Keeping in view all these settled principles, the award needs to be examined. 11. While discussing Claim No. 1 in respect of the refund of the security deposit, it has been found by the Arbitrator, on appreciation of evidence, that the delay on the part of claimant occurred on account of late handing over of the site and further delay on the part of the objector in making available drawings and designs. It has also been found that the change was made in the structure of the contract and the payments were not made timely. It has also been observed that there was denial of secured advance as well as delay in issuance of material under Clause 43 of the agreement. The site of Block No. 1 was given in February, 1991 and the rest in August, 1991. It has also been found that there were trees on the site in Block No. 2 which were removed in January, 1992 only and the stumps were removed even when the contract was rescinded. In respect of Block No. 3, it has been observed that the site development work started after the work was allotted and the site development was still in progress when the contract was rescinded by the objector. 12. Interestingly, in respect of Block No. 4 it has been found that the site could not be handed over even after the expiry of the stipulated date of the completion or the date of rescinding the work.
12. Interestingly, in respect of Block No. 4 it has been found that the site could not be handed over even after the expiry of the stipulated date of the completion or the date of rescinding the work. It has been clearly observed in the award by the Arbitrator that the site was not developed when the work was awarded and it was not handed over to the claimant which prevented him from planning the awarded work. The submissions, thus, being made by Mr. K. D. Sood, learned Counsel for the objector, cannot be appreciated that time was the essence of the contract and the work was rescinded on that score. On a reading of Clause 2 and Clause 5 of the agreement, I find that the time could be extended in certain contingencies and penalties could be imposed for the delay in execution of the job. 13. It is not, thus, difficult to arrive at the finding that it was on account of the act and conduct of the objector that the delay was caused in the completion of the work and it is of that account that there was breach of contract on the part of the objector. Interestingly, at page 6 of the award it has been observed that the objector has not disputed the allegations of the claimant for not handing over complete drawings. It was concluded that there was breach of the contract on the part of the objector and in the sequence of events, an action under Clause 3(a) was wholly uncalled for. 14. Under Claim No. 2, the contractor claimed an amount of Rs. 7 lacs against which Rs. 38,807/- have been allowed in respect of payment of material left by the claimant at site. The case of the claimant is that while rescinding the contract, the objector withheld certain material which was there on the site and for which no secured advances had been given. The case of the objector that the entire material for which no secured advances were issued, was removed by the claimant and taken away. On careful perusal of the material, it has been found that the claimant was allowed to lift the material lying at site and certificate was issued as per list prepared by the Local Commissioner appointed by the Court. It has been found that he was not allowed to lift the entire material.
On careful perusal of the material, it has been found that the claimant was allowed to lift the material lying at site and certificate was issued as per list prepared by the Local Commissioner appointed by the Court. It has been found that he was not allowed to lift the entire material. The plea raised by the objector has been found to be false. It was also found that the credit given to the claimant for unused material is at lesser rate and reliance was in this respect placed on the bills/cash memos, showing the particulars on which the material was purchased by the claimant. An amount of Rs. 38,807/- was found to be due to the claimant under this head and in my considered view, it stands rightly allowed and nothing has been brought to my notice to take a different view than the one arrived at by the Arbitrator. 15. The third claim is in respect of final bill and its payment. According to the claimant, measurements were not taken in his presence and he was entitled to a further payment of Rs. one lac. Interestingly, the objector disputed the correctness of the claim raised by the claimant and instead has come out with the counter-claim of Rs. 5,05,435.56 P. and the same is sought to be recovered from the claimant by the objector. The Arbitrator has appreciated this point at pages 10 to 15 of the Award. It has been found that an amount of Rs. 2,25,762.30 P. is to be paid as per final bill passed by the objector and Rs. 96,383.24 P. are the recoveries in respect of the material. 16. Under the head "Other Recoveries", an amount of Rs. 1,82,870.37 P. has been arrived at. After adding penalty and cost of material consumed for the secured advance, the total recoveries are Rs. 8,33,694.74. After giving credit of the recoveries and cost of material, the net amount found recoverable from the contractor has been worked out at Rs. 5,05,435.56. Interestingly, at page 12 it has been observed, "there is no dispute about the amount of work done, i.e., Rs. 2,25,762.30". Each and every item has been taken into consideration, for example, recovery of the material and steel, shortage charges and labour recoveries.
5,05,435.56. Interestingly, at page 12 it has been observed, "there is no dispute about the amount of work done, i.e., Rs. 2,25,762.30". Each and every item has been taken into consideration, for example, recovery of the material and steel, shortage charges and labour recoveries. After the calculation of the debit and credit, the net position has been projected at page 15 and the claimant has been held entitled to Rs. 33,840.00 under this head. 17. In respect of the claim for charges on account of breach of contract on Claim No. 4 though the contractor claimed Rs. 8,20,000/- against which the Arbitrator has allowed to the claimant Rs. 1,20,000 only. Nothing has been brought to my notice that the figure arrived at is incorrect or on the higher side. 18. Lastly, the learned Counsel for the objector has urged that the simple interest at the rate of 15% per annum allowed by the Arbitrator under Claim No. 6, is wholly arbitrary and no interest can be allowed unless so stipulated in the agreement. I am not impressed with the argument as this point too is now well settled that the Arbitrator is competent to award interest. The work was rescinded by the objector on September 23, 1993, the final bill was to be prepared on or before March 31, 1994. Interest for this period, in my view, has been correctly awarded and appears to be reasonable. 19. Once it is found that the amount under the various beads is due to the claimant, the counter-claim raised by the objector looses its entire significance. The Arbitrator appears to have rightly rejected the counter-claim view of the findings recorded under several heads in the impugned award. In the last line at page 17, it has been observed that the Executive Engineer has not produced any evidence that any notice was issued to the claimant about the detail of any recovery which was sought to be made from him. It has further been found that no detail of work awarded was filed on record of the arbitration proceedings. In this situation, it was found that the objector was not entitled to any counter-claim since no such claim had been established by any evidence. 20. In view of what has been said above, the objections are wholly devoid of any merit and are consequently ordered to be dismissed.
In this situation, it was found that the objector was not entitled to any counter-claim since no such claim had been established by any evidence. 20. In view of what has been said above, the objections are wholly devoid of any merit and are consequently ordered to be dismissed. On analysis, the award is made rule of the Court. The parties are left to bear their own costs. Petition dismissed.