Rajasthan Rajya Vidyut Utpadan Nigam Ltd. , Jaipur v. M/s National Building Construction Ltd. , New Delhi
2001-03-16
J.C.VERMA
body2001
DigiLaw.ai
JUDGMENT 1. 1. This misc. appeal is preferred against the order of Additional District Judge No.3, Kota whereby the award dated 16.8.93 passed by the Arbitrator has been made rule of court and the same has been challenged by Rajasthan State Electricity Board now substituted by the name of Rajasthan Rajya Vidyut Utpadan Nigam (hereinafter to be called as "Nigam"). 2. A contract was entered into between the Nigam and National Building Construction Ltd. (hereinafter to be called as "company") to construct/ erect RCC chimney for Kota Thermal plant. the agreement was signed on 6.11.79 and the work was to be completed upto October, 1980. There arose certain disputes between the parties. The Nigam was asked to appoint the Arbitrator under the clause of Arbitration agreement. The claim and counter claim were filed before the Arbitrator. The Arbitrator had passed the award on 26.8.93 allowing the claim for an amount Rs. 18,33,167.22. The counter claim of Nigam was also accepted to the tune of Rs. 3,67,665.00. The Arbitrator had awarded the amount Rs. 14,65,502.00 after adjustment with the interest of 12% per annum from 5.6.90 to 26.8.93, thereafter the simple interest at the rate of 6% pa till payment or the date of decree, whichever is earlier. 3. The award of the Arbitrator was challenged before the Civil Court i.e. District Judge under Section 14 & 17 of the Arbitration Act. The objections were filed by the Nigam to the effect that the Arbitrator had committed misconduct. Vide impugned order dated 21.8.99 the objections were dismissed and the award was made rule of court. The Nigam has come up to challenge the award as well. The challenge is being made on the following grounds : 1. The Arbitrator had not given speaking award on each clause of claim, whereas the Arbitration clause emphasise the need of making speaking award, 2. The clause-wise objections have not been discussed and that court has given sketchy and superficial findings for making the award Rule of Court; 3. The award of escalation on account of labour charges could not have been claimed after 31.10.80. 4. In the award dated 26.8.93, the Arbitrator had dealt with as many as 17 claims put by the company and 5 counter claims put by the Nigam. The claim No.11 & 15 were rejected, whereas claim No.4 & 5 were allowed. 5.
The award of escalation on account of labour charges could not have been claimed after 31.10.80. 4. In the award dated 26.8.93, the Arbitrator had dealt with as many as 17 claims put by the company and 5 counter claims put by the Nigam. The claim No.11 & 15 were rejected, whereas claim No.4 & 5 were allowed. 5. The Civil Court vide order dated 21.8.99, after considering the objections had made the award Rule of Court. The appellant had confined the objections to claims No.1, 3, 7, 7 (sic ?) & 13 only and other objections were not pressed. The civil court after going through the record had observed that the jurisdiction of Civil Court was confined only to the limited scope and to the effect whether there was any finding given beyond the record and not to act as an appellate court. The court had dealt with the oint that escalation on account of labour charges could only be granted upto p 31.10.80 and not for later period, but had found that vide Ex.52 the Nigam had extended the period upto 31.3.84 and then it was found by the civil court that the when the Nigam itself had extended the period upto 31.3.84, the contention of Nigam cannot be accepted that the escalation on account of labour charges could be granted only upto October, 80. In regard to height of the raft from 25 meter to 28 meter, it was found that the raft which was constructed by the company was in accordance with the specification given by Central Electricity Authority which stood proved on record. The contention in regard to escalation in the price of the material having been awarded by the Arbitrator and the challenge by Nigam was also rejected. It was found by the Arbitrator that because of the delay caused by the Nigam the construction company was entitled to the escalation price of the material as well. Relying on number of authorities, the court had found that no illegality has been committed by the Arbitrator as to bring it within the definition of misconduct. 6. The record was also called for. 7.
Relying on number of authorities, the court had found that no illegality has been committed by the Arbitrator as to bring it within the definition of misconduct. 6. The record was also called for. 7. In case of (1) B.V. Radha Krishan v. Sponge Iron India Ltd., JT 1997(3) SC 327, it was held that the High Court cannot substitute its own opinion in place of Arbitrator's view and High Court cannot sit as an appellate court under Section 30 of the Arbitration Act. It was observed as under : "8. This finding of the Arbitrator was upset by the High Court by going into the question as if sitting in appeal to render a contrary view. This, according to the learned counsel, is not the jurisdiction of the High Court as this is not an error apparent on the face of the record. He further argued that it is settled law that the Court while exercising power under Section 30 of the Arbitration Act cannot re-appreciate all the materials on the record for the purpose of recording a finding whether in the facts and circumstances of a particular case the award in question could have been made. In support of this contention he placed reliance on Hindustan Construction Company Ltd. V. Governor of Orissa and others JT 1995(2) 561 = (1995)3 SCC 8 . " 8. In case of (2) Hindustan Construction Company Ltd. V. Governor of Orissa and others JT 1995(2) 561 on the scope of interference by the Court, it was held as under : "It is well known that the court while considering the question whether the award should be set aside, does not examine the question as an appellate court. While exercising the said power, the court cannot reappreciate all the materials on the record for the purpose of recording a finding whether in the facts and circumstances of a particular case the award in question could have been made, such award can be set aside on - any of the grounds specified in Section 30 of the Act." 9.
While exercising the said power, the court cannot reappreciate all the materials on the record for the purpose of recording a finding whether in the facts and circumstances of a particular case the award in question could have been made, such award can be set aside on - any of the grounds specified in Section 30 of the Act." 9. In case of (3) M/s. Arosan Enterprises Ltd. V. Union of India & Anr., reported in JR 1999(7) SC 122 , it was held that when the contract itself provides for extension of time, the same cannot be termed to be the essence of the contract and default however, in such a case does not make the contract voidable either. It becomes voidable provided the matter in issue can be brought within the ambit of the first paragraph of Section 55. 10. In the case of M/s. Arosan Enterprises Ltd. (supra) it was held that it is now a well settled principle of law that reappraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the Court to reappraise the evidence is unknown to a proceeding under Section 30 of the Arbitration Act. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event, however, there are reasons the interference would still be not available within the jurisdiction of the court unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law. In the event, however, two views are possible on a question of law as well, the court would not be justified in interfering with the award. It was held as under : "The common phraseology 'error apparent on the face of the record' does not itself, however, mean and imply loser scrutiny of the merits of documents and materials on record: The court as a matter of fact, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of the arbitrator is a possible view the award or the reasoning contained therein cannot be examined." 11.
If the view of the arbitrator is a possible view the award or the reasoning contained therein cannot be examined." 11. In the case of (4) Himachal Pradesh State Electricity Board v. R.J. Shah and Company, JT 1999(3) SC 151 , it was held that the dispute before the arbitrators, therefore, dearly related to the interpretation of the terms of the contract. The said contract was being read by the parties differently. The arbitrators were, therefore, dearly called upon to construe or interpret the terms of the contract. The decision thereon, even if it be erroneous, cannot be said to be without jurisdiction. It cannot be said that the award showed that there was an error of jurisdiction even though there may have been an error in the exercise of jurisdiction by the arbitrators. The arbitrators were called upon to construe the contract in order to determine whether the contractor was entitled to claim revision of rate and if so what should be the revised rates; the construction placed on the contractor cannot be said to an implausible one. Even if the arbitrators construed the terms of the contract incorrectly it cannot be said that the award was in excess of their jurisdiction. Their jurisdiction dearly was to construe the terms of the contract and their decision thereon was final and binding on the parties. 12. In case of (5) State of Rajasthan V. Puri Construction Co. Ltd. and another, 1995(22) ALR (Arbitration Law Reporter) page 1 , it was held that the court can set aside the award only if it is apparent from the record that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous. 13.
Ltd. and another, 1995(22) ALR (Arbitration Law Reporter) page 1 , it was held that the court can set aside the award only if it is apparent from the record that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous. 13. In case of (6) Hyderabad Municipal Corporation v. M. Krishnawami Mudaliar and another, AIR 1985 Supreme Court 607 , it was held as under : "Where under the terms of the contract the work was to be completed by the contractor within a period of one year but due to financial difficulties - less budget having been provided for in the said year the contractor was requested by the authorities to spread over the work for two years more, i.e. to complete the same in three years but the contractor was agreeable to spread over the work for two years more as suggested on condition that extra payment will have to be made to him in view of increased rates of either material or wages and the Govt. did not intimate to the contractor that no extra payment on account of increased rates would d to him or that he will have to complete the work on the basis of oribe ates, and only when after completion of work the contractor submitted his final bill claiming 20 per cent extra over and above the rates originally agreed upon between the parties the Government state that he was not entitled to increased rates, it was held that both in equity and in law the contractor was entitled to receive extra payment." 14. In case of (7) P.M. Paul v. Union of India, AIR 1989 Supreme Court 1034 , it was held that the award of the Arbitrator allowing escalation in contract amount was justified and did not amount to any misconduct. 15. In case of (8) U.P. Hotels etc. v. U.P. State Electricity Board, AIR 1989 Supreme Court 268 , it was held that the possible view can be taken by arbitrator relying upon earlier Supreme Court decisions is not to be interfered with. 16. Counsel for respondent also relies on the judgment in case of (9) Steel Authority of India Limited v. J.C. Budharaja, Government and Mining Contractor, JT 1999(6) SC 429 on the scope of interference by the High Court. 17.
16. Counsel for respondent also relies on the judgment in case of (9) Steel Authority of India Limited v. J.C. Budharaja, Government and Mining Contractor, JT 1999(6) SC 429 on the scope of interference by the High Court. 17. In case of (10) Food Corporation of India v. M/s. ANPO Shipping Co. Ltd. and others, AIR 1996 Bombay 189 , it was held that there was no error of law apparent on the face of the award inasmuch as no legal proposition of law has been set out in the Award itself making the basis, thereof, which can be said to be erroneous. It was held as under: "Unless the arbitration agreement provides for giving of the reasons by the arbitrator, it is not obligatory for the Arbitrator to give reasons for making of an Award and as such, since the arbitration agreement between the parties did not provide for the Arbitrators to give reasons for the Award, the Award under challenge though non-speaking Award cannot be said to be bad in law. There is no error of law apparent on the face of the record inasmuch as no legal proposition of law has been set out in the Award itself making the basis thereof which can be said to be erroneous." 18. Per contra, the only argument of counsel for the appellant is that as per Black's Law Dictionary and Shorter Oxford Dictionary, the award means to grant, concede or adjudge to. To give or assign by sentence or judicial determination or after careful weighing of evidence to decide or determine after consideration or deliberation. Counsel for the appellant submits that the term of the award itself includes the giving of reasons. 19. As per agreement, which has been produced before me the clause No.8.11 prescribe the extension of time, whereas the clause No.9.10 prescribe the change and specify the contract and quantity etc. and clause No.9.16 prescribe the reference to the Arbitrator. The agreement is binding on the parties. 20. The record has been called for. The record is voluminous. The Arbitrator has passed the award considering the arguments of both the parties. Learned counsel for appellant has not shown that any of the claim of award of the Arbitrator was beyond the term of the reference or it is not based on evidence or it is beyond the evidence produced by parties.
The record is voluminous. The Arbitrator has passed the award considering the arguments of both the parties. Learned counsel for appellant has not shown that any of the claim of award of the Arbitrator was beyond the term of the reference or it is not based on evidence or it is beyond the evidence produced by parties. The law is well settled now that the arbitrator may not record the reasons for allowing the award if it is not so required by the relevant clause of agreement. Even otherwise, the award has been passed on evidence produced by parties.In view of the above said judgments and the law well settled, I fully agree with the order of the civil court and the present appeal is dismissed at admission stage. No order as to cost.Appeal dismissed. *******