SEA HAWK CARGO CARRIERS PRIVATE LIMITED v. INT. AIRPORT AUTHORITY OF INDIA
2002-12-05
S.MUKERJEE
body2002
DigiLaw.ai
S. Mukerjee ( 1 ) THE main petition has been filed under Sections 14 and 17 of the Arbitration Act, 1940 praying for the award dated 10. 4. 1996 to be filed in the court, and for decree to be passed in terms of the said award by making the same rule of the Court. ( 2 ) THE respondent (Airport Authority of India) has preferred objections under sections 30 and 33 of the Arbitration Act, 1940, being LA. No. 11711 /96. Reply was filed to the saidobjectionson5. 5. 1997,and rejoinder was also filed by the respondent/ objector. The record of the Arbitrator has been received in this Court. ( 3 ) THERE is a connected petition being OMP No. 154/1997 whereby directions of this Court have been sought for extension of time, for making and publishing the award under Section 28 of the Arbitration Act, 1940. This petition OMP No. 154/ 1997 has been filed after the award. Reply dated 9. 8. 1997 has been filed by the airport Authority of India. Separate orders have been passed on the file of OMP No. 154/1997. ( 4 ) IN relation to main case, being Suit No. 1112a/1996, both parties have also filed their respective evidence by way of affidavits. ( 5 ) THE brief facts of this case, to the extent relevant for the purposes of appreciating the points in issue, are that the petitioner was awarded the job work of loading and unloading of export and import cargo at Delhi Airport. ( 6 ) TWO formal contracts were signed/awarded. The first contract was dated 19. 11. 1987, duration of which was 3 years from 1. 5. 1986 to 30. 4. 1989. The second contract was dated 3. 7. 1990, but was applicable from the beginning of that financial year i. e. from 1. 4. 1990 onwards, lasting upto31. 3. 1992. However, the quoted tenders for the second contract had been received by the respondents as early as in April, 1989. ( 7 ) IN between these two periods, there was a gap of about 11 months, being the period from 1. 5. 1989 to 31. 3. 1990, during which period petitioner continued to perform/render the services in the form of the job work, at the asking and instance of the respondent, but with no formal contract having been signed qua this specific intervening period.
5. 1989 to 31. 3. 1990, during which period petitioner continued to perform/render the services in the form of the job work, at the asking and instance of the respondent, but with no formal contract having been signed qua this specific intervening period. Before the expiry of first contract the petitioner had submitted his tendered rates in April, 1989, which were finally accepted by respondents after more than a year in July, 1990. ( 8 ) THE main claim of the petitioner, is in relation to the rate per tonnage for the services rendered during the said intervening period. This was claim No. 1 out of total 8 claims which were submitted by the petitioner for adjudication by arbitration. ( 9 ) THE contention of the petitioner is that during the said intervening period, the minimum wages went up by about 91%, and yet the payments were made by the respondent only at the old rate, which was applicable during the period 1. 5. 1986 to 30. 4. 1989 (viz. first contract), and which rates became otiose due to drastic increase in the wages component. ( 10 ) THE Arbitrator, has, in the award, granted to the petitioner the same rate as was applicable in relation to the subsequent period contract viz. rate operative from the period 1. 4. 1990 to 31. 3. 1992 (i. e. second contract ). The award of Sole arbitrator is a reasoned award. ( 11 ) THE learned Arbitrator has held that the petitioner would be entitled to those rates, as reasonable rates in the absence of formal signed contract applicable in relation to the intervening period, and on this basis, he has awarded a sum of Rs. 20,05,135/- for the job work admittedly done and completed by petitioner during the relevant period to the petitioner, against his Claim No. 1. All other claims have been disallowed by the Arbitrator. ( 12 ) MS. Maldeep Sidhu, learned Counsel for the respondent has argued only the following objections: (I) the award, is claimed to be barred by time, since it was made and published about 20 months beyond the date of the last extension; (II) the amount of Rs.
All other claims have been disallowed by the Arbitrator. ( 12 ) MS. Maldeep Sidhu, learned Counsel for the respondent has argued only the following objections: (I) the award, is claimed to be barred by time, since it was made and published about 20 months beyond the date of the last extension; (II) the amount of Rs. 20,05,135/- had been awarded in favour of the petitioner in relation to the intervening period which was not actually covered by any of the two written contracts, and therefore there was no arbitration agreement in existence, and as such the Arbitrator has misconducted himself by extending his jurisdiction in that behalf; (III) on aspect No. (ii), a linked further contention has been argued to the effect that the award is beyond the reference, since according to respondent, the dispute which was referred pursuant to the communication of the petitioner invoking arbitration, and also in terms of the communication of the Chairman of the Airport Authority actually appointing the Arbitrator, both did not envisage any claim towards reasonable payment in relation to the intervening period. ( 13 ) THE aspect of award being time-barred may be dealt in the first instance. In this case, the arbitration proceedings took about five years. The last date of hearing was 10. 3. 1995, while the award was passed on 10. 4. 1996. In the submission of Ms. Sidhu, learned Counsel for the respondent, the delay of one year is fatal and makes the award time barred. ( 14 ) IT is noted from the record that upto the stage of final arguments, for which both parties were present before the Arbitrator on 10. 3. 1995, both parties had duly participated in the proceedings, without any objections on account of a lapse of stipulated period, and therefore they had clearly acquiesed in the proceedings till that date. Thereafter, a period of about one year was taken by the Arbitrator (who was an employee of the respondent Airport Authority and had reserved the award), whereafter it was in his domain when to pronounce the same later on. ( 15 ) CLEARLY the petitioner cannot be penalised for the delay on the part of the arbitrator the time taken by him for pronouncing the award.
( 15 ) CLEARLY the petitioner cannot be penalised for the delay on the part of the arbitrator the time taken by him for pronouncing the award. Furthermore in the separate orders passed on OMP No. 154/1997, the time for making and publishing the award has been extended upto the date of award i. e. upto 10. 4. 1996, following the judgment of the Apex Court reported as State of Punjab v. Hardyal, AIR 1985 SC, 920, holding that Courts have the power to extend time even post-factor, and, one of the grounds for the Court to extend time under Section 28 of the Arbitration Act, 1940, would be that the parties acquiesed in the proceedings till the last date of arguments held on 10. 3. 1995. ( 16 ) IN this view of the matter, nothing survives in this objection of the award being liable to be set aside as allegedly bared by time. ( 17 ) AS regards the other objections of the Airport Authority of India, I find that the award of enhanced amount to the petitioner by learned Arbitrator by adopting a reasonable rate was only by incorporation of the same rate which was applicable qua the immediately succeeding, comparable and proximate time period of 1. 4. 1990 onwards (being the very next contiguous period ). The issue has been analysed and considered by the Sole Arbitrator, who has assigned his reasons for allowing the claim. It cannot be said that the finding of the Arbitrator on this aspect, is in any manner perverse. ( 18 ) THE submission of learned Counsel for the respondent is that since Airport authority was insisting on the same terms and conditions as were payable under old contract dated 19. 11. 1987, as such that would remain applicable for the intervening period as well. This contention of respondent has been rejected by the sole Arbitrator after detailed consideration of the issue by him. ( 19 ) HOWEVER the communications exchanged by the parties as on record, would show that while the petitioner no doubt continued to work during the intervening period, and till the formal contract was executed for the next period, and while the petitioner did agree to work on all other same terms and conditions as had prevailed under the expired contract but not so in relation to the rates to be applicable.
Learned Counsel for respondent/objector has not been able to establish that the records conclusively or even overwhelmingly suggest that the petitioner had accepted to do the work at old contract rates of the expired contract. ( 20 ) FURTHERMORE and in any case, the rate as earlier prevailing, for calculating the per tonnage rate which was linked to minimum statutory wages of different categories of workers, became totally inoperative by the drastic change of circumstances resulting from the abnormal increase of minimum wages to the extent of 91% during the said intervening period. This issue has been analysed and considered by the Sole Arbitrator in his reasoned award. ( 21 ) THE view taken by the Arbitrator is at the very least, a possible view to be taken. Reference in this connection may be made to judgment of the Supreme Court reported as AIR 1985 SCC 107, Central Coal Fields Ltd. v. State of Bihar and Ors. , wherein it was held that the contractor is entitled, in similar circumstances, to receive extra payment, wherever, as in the present case, there is no final agreement between the parties, as regards what would be the applicable rates in relation to the intervening period. ( 22 ) FURTHERMORE while considering objections to an award, this Court will not sit as if Court of Appeal, or re-hear contentions on the merits of the disputes adjudicated by way of award. Nor will this Court sit in judgment over the Arbitrator s reasoning or his thought process, as held by the Division Bench of this Court, reported as Delhi Development Authority, New Delhi v. M/s. Alkaram, New Delhi, AIR 1982 Delhi 365. Same view of the Apex Court is reflected in cases reported in 1988 (4) SCC153; State of Orissa and Others v. M/s. Lall Brothers, 1994 (6) SCC117; Bijendra Nath Srivastava v. Mayank Srivuslava and Ors. , AIR 1987 SC 81 ; M/s. Hindustan Tea Co. v. M/s. K. Sashikant and Co. and Another. ( 23 ) ONE need not ponder further with the innumerable other precedents, but reference can be made to the case of Arosan Enterprises Ltd. v. Union of India and Anr. , VIII (1999) SLT 104=iv (1999) CLT 341 (SC= (1999) 9 SCC 449 .
v. M/s. K. Sashikant and Co. and Another. ( 23 ) ONE need not ponder further with the innumerable other precedents, but reference can be made to the case of Arosan Enterprises Ltd. v. Union of India and Anr. , VIII (1999) SLT 104=iv (1999) CLT 341 (SC= (1999) 9 SCC 449 . Once again the question for consideration was as to whether even if the Court were to come to a tentative conclusion which is contrary to that of the Arbitrator, then still would that be a ground to set aside the award or not. The answer was in the negative, and the Supreme Court concluded: "36. Be it noted that Dy reason of a long catena of cases, 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 proceedings 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 exists 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. The common phraseology "error apparent on the face of the record" does not itself, however, mean and imply closer 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 herein cannot be examined. " ( 24 ) THAT leaves the only surviving contention No. (iii) viz. as to whether there could be a reference to arbitration in the absence of a written contract containing an arbitration clause in relation to the intervening period.
If the view of the Arbitrator is a possible view the award or the reasoning contained herein cannot be examined. " ( 24 ) THAT leaves the only surviving contention No. (iii) viz. as to whether there could be a reference to arbitration in the absence of a written contract containing an arbitration clause in relation to the intervening period. ( 25 ) IN this context, it may be noted that the present case is covered by arbitration Act, 1940 and in relation to said Act, in was not mandatory for the arbitration agreement to be in writing between the parties. Furthermore, it is otherwise also clear from the correspondence exchanged between the parties, that all other terms and conditions of the earlier contract, except in relation to the rate applicable, stood finalised as per earlier prevailing terms in relation to the intervening period as well. ( 26 ) THE arbitration clause as contained in the terms of the said earlier agreement, would therefore quite obviously be applicable to the intervening period as well. This issue has been considered by the Sole Arbitrator also, who has taken note of the peculiar circumstances of this case. The Sole Arbitrator has noted that tendered rates of the second contract, were received by respondents in April, 1989, i. e. before expiry of first contract. The rates quoted for second contract have been accepted in July, 1990. ( 27 ) AFTER expiry of period of first contract, the work has been ordered on terms and conditions contained in the Contract, which also contains clause for reimbursement for enhancement of wages. Learned Sole Arbitrator, in allowing the claim of petitioner, has considered all these factors, and has inter-alia also concluded that respondents cannot be allowed to say that they are not bound by the arbitration Clause. In this context, it is to be noted that the interim period is taken into consideration as 1. 5. 1989 to 31. 3. 1990, during which period respondents had extended the contract from time to time under same terms and conditions. This is all so held on the basis of record and evidence before the learned Sole Arbitrator. These observations have not been contested by the respondent as being perverse. As the Hon ble Apex Court speaking through Hon ble Sujata V. Manohar and hon ble R. C. Lahoti, JJ.
This is all so held on the basis of record and evidence before the learned Sole Arbitrator. These observations have not been contested by the respondent as being perverse. As the Hon ble Apex Court speaking through Hon ble Sujata V. Manohar and hon ble R. C. Lahoti, JJ. observed in State of Orissa v. Asis Ranjan Mohanty, 1999 (9) scc 249 : "it was for the Arbitrator to examine the merits of the claims raised by the respondent and to give a suitable award. We cannot examine the merit or otherwise of all these claims. " ( 28 ) AT the fag end of the submissions, learned Counsel for the respondent raised a further contention to the effect that a perusal of the reference order made by the Chairman of Airport Authority, reveals that the arbitration is in the context of agreement dated 3. 7. 1990 (i. e. in the context of the second agreement for the subsequent period ). She has also referred to letters of the petitioner, to try to contend that this aspect of reasonable rates for the intervening period, was not a subject matter of reference at all, ( 29 ) TO my mind, that is a hyper-technical plea which does not stand the test of law or fairness. There is no denial that at every stage, parties were aware of the dispute being primarily on this account of rate per tonnage for this intervening period being dependent on the minimum wage component, and arising from the abnormal increase of 91% therein. ( 30 ) BOTH parties participated in the proceedings before the Arbitrator on this basis. It is the respondent s case that during the proceedings before the Arbitrator, the respondent did try to persuade the Arbitrator to confine himself to disputes arising out of the agreement dated 3. 7. 1990,but the Arbitrator did not accede to this objection. ( 31 ) IN this view of the matter, the parties having gone to adjudication on this very aspect of rate per tonnage being dependent on the minimum wage component and the abnormal increase in the minimum wages by 91 %, it is neither equitable nor permissible in law to permit the respondent to take shelter between hyper-technical pleas after the award has been rendered. Moreover, and in any case it is not in the domain of these proceedings to rehear or reappraise the case.
Moreover, and in any case it is not in the domain of these proceedings to rehear or reappraise the case. ( 32 ) THE respondents did not argue/press any other objection during the final arguments in this case. ( 33 ) IN this view of the matter, the objections of the respondent, being IA No. 11711 /96, are dismissed. The award is made Rule of the Court with interest at 12% per annum. Parties are however left to bear their own costs.