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1998 DIGILAW 131 (PAT)

STATE OF BIHAR v. RAMESHWAR PRASAD

1998-02-12

PRASUN KUMAR DEB

body1998
JUDGMENT JUDGMENT P. K. Deb, J 1. This appeal has been preferred against the judgment and decree dated 21-12-1994 and 4-1-1995 passed by the Subordinate Judge-II, Chaibasa, in Title Suit No. 18 of 1989. The admitted position remains that the respondent, being a registered contractor, had filed his tender for repairing of Chaibasa-Jaintgarh Road from 6-8 miles as advertised by the Public Works Department of Chaibasa in the year 1977-78. The tender of the respondent contractor was accepted for a value of Rs. 94,241/- for the work and a bilateral agreement was arrived at on 17-8-1997. As per the agreement, work was to be completed by 19-5-1978. According to the contractor, the work was completed within time frame, but no measurement had been done from the side of the Department and as such he submitted his bills on the basis of his own measurement on 19-1-1980. It appears that before that there was notice from the side of the PWD on 2-3-1979 stating that the work was not completed within the time-frame and then by letter dated 26-11-1980 the agreement was rescinded from the aside of the State. But these are pleas taken from the side of the PWD. Out of them, price of the work to the tune of Rs. 26,000/- was paid as running bill from time-to-time. When the claim of the contractor was not being satisfied, then the contractor gave a notice on 9-4-1984 as contemplated under Section 23 of the Arbitration Act for appointment of the Arbitrator as per Arbitration Clause of the Agreement, but even then, the Department did not pay any heed. Then again, a notice was sent by the contractor on 19-8-1989, but no Arbitrator was appointed, nor the dispute regarding the claim was resolved from the side of the Department. Then the contractor as plaintiff filed Title Suit No. 18/1989 under Section 20 read with Section 8 of the Arbitration Act. On receipt of summons from the Court, the appellant-State appeared and filed a petition stating therein that there is no existence of claim as per the agreement itself as the same had long ago been repudiated on 26-11-1980 and that the claim of the contractor was barred by limitation. On receipt of summons from the Court, the appellant-State appeared and filed a petition stating therein that there is no existence of claim as per the agreement itself as the same had long ago been repudiated on 26-11-1980 and that the claim of the contractor was barred by limitation. The point was considered by the learned Court below and by order dated 21-5-1993, it was held that the contention of the State was not maintainable at that stage and if the claim of the contractor was barred by limitation, the same can be well construed or considered by the Arbitrator and as such by allowing the petitioner under Section 20 read with Section 8 of the Arbitration Act, the whole dispute alongwith the limitation had been referred to the independent Arbitrator. In the arbitration proceeding, the State appellant on behalf of the PWD had submitted to the jurisdiction of the Court and raised their counter-claims for refund etc. together with the plea of repudiation of claims of the contractor plaintiff it being barred by limitation. It appears that the Arbitrator after hearing both the parties passed the award alongwith past interest, interest pendente lite and future interest. In the award no reasonings have been given by the Arbitrator for arriving at his decision, although it appears that there was total application of mind by the Arbitrator in allowing the claim of the contractor which had been reduced to a greater extent and the claim had been restricted below the price of the word done. 2. After the award was passed and filed in the Court, then a petition was made under Section 17 of the Act for making the award the Rule of the Court. Objection was raised from the side of the State both on facts and also on the point of limitation and grant of interest. On all these points, under Section 30 of the Act, the learned Subordinate Judge gave his finding in the impugned judgment which is now under challenge. 3. Mr. Prakash Chandra, J.C. to Standing Counsel No. 1 appearing on behalf of the State submitted that the whole award should be rejected on the ground of misconduct as the Arbitrator had not considered the vital point of limitation, nor has he given any reasons as to how the limitation matter was disposed of by him. 3. Mr. Prakash Chandra, J.C. to Standing Counsel No. 1 appearing on behalf of the State submitted that the whole award should be rejected on the ground of misconduct as the Arbitrator had not considered the vital point of limitation, nor has he given any reasons as to how the limitation matter was disposed of by him. His further contention is that the grant of future interest pendente lite is beyond the jurisdiction of the Arbitrator and so the award must be rejected as being tainted with misconduct. 4. Mr. Sen, Counsel, appearing on behalf of the respondent contractor, has averred all the submissions made on behalf of the appellant and supported the impugned judgment by referring to the laws enunciated by the Supreme Court of India. 5. Let me first of all take up the case of limitation. According to the appellant, the work was to be completed by 19-5-1978 and the bill of own measurement was submitted by the contractor on 19-1-1980. After that the contractor slept over the matter, although in the meantime request was made on behalf of the appellant to complete the work and ultimately the contract was rescinded. Long after the i.e., on 9-4-1984, notice was sent by the contractor for referring the dispute to the Arbitrator under Section 23 of the Act. But in that notice also, the contractor did not mention his claims or any details. Then, again notice was sent on 19-8-1989 under Section 23 of the Act and there being no response from the side of the State, suit was filed alongwith petition under Section 20 read with Section 8 of the Arbitration Act, for appointment of and Arbitrator. 6. Mr. Chandra, learned Counsel for the appellant-State, submits that the limitation cannot be considered from 19-8-1989 when the last notice was given by the contractor, as when the notice was given by the contractor, his claim had already been barred by limitation, as the same was beyond the period of limitation. He has referred to the judgment of the Apex Court as reported in Rajan v. State of Kerala ( AIR 1992 SC 1918 ). That case was decided on the petition under Section 20 of the Arbitration Act. The suit was filed and registered on the basis of the petition under Section 20 of the Arbitration Act for appointment of Arbitrator. That case was decided on the petition under Section 20 of the Arbitration Act. The suit was filed and registered on the basis of the petition under Section 20 of the Arbitration Act for appointment of Arbitrator. The State of Kerala came up with objection that the whole claim was barred by limitation, but ignoring that position, the learned lower Court including the High Court held that the point of limitation should also be referred to the Arbitrator. The Apex Court held that apparently on the face of it, if the claim is barred by limitation, then there is no existence of the dispute in the eyes of law, and there is no scope of application of Section 20 or of Section 8 of the Arbitration Act, and there is no scope for the Court on a barred claim to refer it to the Arbitrator giving him liberty to decide the limitation point also. In reply to it, Mr. Sen, Counsel for the respondent/ contractor, has referred to the judgment of the Supreme Court as reported in AIR 1975 SC 230 in which it was held that when the point of limitation was raised, then also without challenging the same in the proper forum, the party concerned had submitted to the jurisdiction of the Arbitration and if the Arbitrator gave a non-speaking award, then it should be construed that the Arbitrator had considered the limitation also in making the award, and afterward the same cannot be challenged under Section 30 of the Act while petition was pending under Section 17 of the Act for making the award the Rule of the Court. 7. In the present case, although the limitation matter was raised from the side of the appellant the same was referred by the Court below to the Arbitrator and against that order, the appellant remained silent and did not agitate the matter before the higher Court and as such the position remains that the Arbitrator was asked by the Court to consider the limitation matter also. When such specific direction was given by the Court, then it must be inferred that the limitation had been considered by the Arbitrator. As it is a non-speaking award, there is no scope to hold that the Arbitrator had not considered the point of limitation. When such specific direction was given by the Court, then it must be inferred that the limitation had been considered by the Arbitrator. As it is a non-speaking award, there is no scope to hold that the Arbitrator had not considered the point of limitation. If the appellant had a grievance that the limitation matter was not being considered by the Arbitrator then it had the forum to challenge it or to get away from the arbitration, but the State did not do so. They were present all along before the Arbitrator submitting to its jurisdiction and raised counter-claims. In that view of the matter, it cannot be said or challenged now that the Arbitrator had not considered the point of limitation and the claim of the contractor was barred by limitation. I do not find any force in the submission made on behalf of the State on this score. 8. Regarding the non-speaking award, it has become a settled principle of law that the Arbitrator is not bound to give reasons in his award, unless there is specific direction from the Court or is a term of the agreement itself. In the present case, the arbitration agreement does not include any such direction for giving speaking award and there was also no direction specifically by the Court while referring the dispute to the Arbitrator to give a reasoned award. Hence for a non-speaking award, the law having been settled, the appellant cannot have any grievance. Regarding interest, there was contradictory findings by different High Courts as to whether the Arbitrator has got the jurisdiction to include interest in the award retrospectively, pendente lite and future interest. This point as to the jurisdiction of the Arbitrator has been set at rest by the Supreme Court as reported in State of Orissa v. B. N. Agarwala ( AIR 1997 SC 925 = 1997(1) Arb. LR 612), wherein it was held considering the different provisions of the Arbitration Act as also Section 3 of the Interest Act that the Arbitrator has jurisdiction to pass order for interest on the claim together with interest pendente lite and even if future interest is given by the Arbitrator, then also the award cannot be challenged, but regarding future interest confirmation of the Court is necessary. In view of such judgment of the Supreme Court, I do not find any force in the submission of the learned Counsel for the appellant. Regarding interest matter also, from the impugned, judgment it appears that the Subordinate Judge did not specifically state anything about future interest, but when the whole award has been confirmed, it means that future interest as also been given by the Arbitrator has been allowed. 9. The points raised in this appeal have no force as per the discussions made above. Accordingly, this appeal is dismissed, but without cost. Appeal dismissed.