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2004 DIGILAW 709 (PNJ)

State Of Punjab Through District Collector v. Ramesh Kumar

2004-07-16

SURYA KANT

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Judgment Surya Kant, J. 1. The State of Punjab and its authorities have come up with this civil revision impugning the order dated 19.10.1987 passed by Sub Judge 1st Class, Sangrur, allowing the application of respondent-Ramesh Kumar filed by him under Section 14 of the Arbitration Act, 1940 and also the judgment dated 8.12.1989 passed by Additional District Judge, Sangrur, dismissing their appeal against the order dated 19.10.1987 of Sub Judge 1st Class, Sangrur. Vide the aforementioned order, the learned Civil Court set aside the award dated 11.2.1985 passed by the Arbitrator and directed appointment of the then Superintending Engineer of Construction Circle, PWD (B&R), Sangrur as a new Arbitrator in terms of Clause 25-A of the agreement entered into between the parties to hold fresh arbitration proceedings. As stated earlier, the aforementioned judgment was also upheld by the Additional District Judge, Sangrur. 2. The respondent-contractor was assigned some work in relation to S.R. Raj Higher Secondary School for boys at Sangrur. Certain disputes arose in relation to execution of the said work between the contractor and the authorities of PWD (B&R) Government of Punjab. This led to the appointment of an arbitrator, namely, the then Superintending Engineer, Construction Circle PWD (B&R), Sangrur to act as an Arbitrator in terms of agreement No. 5/79-80 entered into between the parties. The contractor had claimed a total payment of Rs. 1,15,351.49 under seven heads of claims before the Arbitrator. On a consideration of his claim, the learned Arbitrator vide his impugned award dated 11.2.1985 rejected six of the claims and only one claim, namely, claim No. 6 was partly accepted to the tune of Rs. 550/- and consequently an award of Rs. 550/- was passed in favour of the contractor against the claim of Rs 1,15,351.49. While the authorities of the State Government wanted that the award be made rule of the Court, the Contractor raised certain objections against the same. The learned Civil Court vide its impugned order dated 19.10.1987 held that the award was totally non-speaking and did not reflect application of mind on the part of the Arbitrator and that "allegations of the petitioner seem to have a ring of truth. It is not,therefore, wrong to say that the Arbitrator misconducted himself..." Based upon these findings, the award dated 11.2.1985 was set aside and since the Arbitrator had by that time been transferred, his successor, Sh. It is not,therefore, wrong to say that the Arbitrator misconducted himself..." Based upon these findings, the award dated 11.2.1985 was set aside and since the Arbitrator had by that time been transferred, his successor, Sh. J.S. Kaila, Superintending Engineer, Construction Circle PWD (B&R), Sangrur, was directed to be appointed to act as an Arbitrator in terms of Clause 25-A of the agreement in question. The State of Punjab and its authorities were aggrieved of the aforementioned order and preferred an appeal. This too met with the same fate when it was dismissed vide impugned judgment dated 8.12.1989. Aggrieved by both these judgments and orders the present civil revision has been filed. 3. 1 have heard Mrs. Rupinder Wasu, learned Additional Advocate General, Punjab on behalf of the petitioners and Sh. Arvind Mittal, learned counsel for the respondent (contractor), and have also perused the record, particularly, award dated 11.2.1985. Mrs. Wasu has contended that merely because the award is non-speaking and does not support its conclusions with reasons, is no ground to set aside the same, inasmuch as, the forum of arbitration for redressal of disputes as a speedy and summary forum does not necessarily require passing of a reasoned judgment like a Court of law. She has placed reliance upon the judgment of the Apex Court in State of Orissa vs. Lall Brothers,1 AIR 1988 2018, and Arosan Enterprises Ltd. vs. Union of India and Ors.,2 JT 1999(7) SC 122. On the other hand, Sh. Mittal contends that even if the award is not illegal per se for want of detailed or self-speaking reasons in support of conclusions drawn therein, the same has rightly been set aside in the present case, inasmuch as there is absolutely nothing in the award which may divulge as to how and on what basis the claim of the respondent-contractor, particularly in relation to claims No. 1 to 5 and 7 have been rejected. He further contends that in the present case, the arbitrator exceeded his jurisdiction as he went beyond the terms and conditions agreed between the parties and as such misconducted himself. 4. With a view to appreciate the controversy, it will be profitable to reproduce the award in question in ex-tenso, which reads as under;- AWARD IN THE MATTER OF an arbitration between Sh. 4. With a view to appreciate the controversy, it will be profitable to reproduce the award in question in ex-tenso, which reads as under;- AWARD IN THE MATTER OF an arbitration between Sh. Romesh Kumar Contractor and Executive Engineer, Provincial Division PWD B&R Sangrur regarding the work of S/R Raj Higher Secondary School for Boys at Sangrur. Whereas in an agreement No. 5/79-80 made between Sh. Romesh Kumar Contractor and the Punjab Government through the Executive Engineer, Provincial Division PWD B&R Sangrur for the work of S/R Raj Higher Secondary School for Boys at Sangrur. Sh. Romesh Kumar contractor referred to me, J.S. Kaila,PSE-I, Superintending Engineer, Construction Circle PWD B&R Sangrur for the arbitration under clause 25A of the matter of difference between them concerning the following;- Claim of the Contractor Claim No. I. Refund of Security money Rs. 1800.00 Claim No. II. Interest @ 18% p.a. on the amount due to be paid to me with effect from 15.9.80 as the amount remained with the Department. Claim No. III. Rs. 10000/- for pursuing the case as the department failed to make payment. Rs. 10,000/- Claim No. IV. Damages caused by the Department to my profession as contractor by way of inflicting financial hardship upon me. Rs. 50,000/-. Claim No. V. The work done by me but not included in my so called final bill. Rs. 39,384.24 Claim No. VI. Unjustified recoveries effected from my final bill Rs. 12,674.05 Claim No. VII. Recovery for carrying out the work at the risk and cost. Rs. 1493.20 Total Rs. 1,15.49 Now, I the said J.S. Kalia, Circle PWD Superintending Engineer, Construction Circle PWD Sangrur having considered the whole matter submitted to me, do hereby make my award as follows;- Claim No. I Claim withdrawn. Claim No. II I award Rs. Nil Claim No. III I award Rs. Nil Claim No. IV I award Rs. Nil Claim No. V I award Rs. Nil Claim No. VI I award Rs. 550.00 Claim No. VII I award Rs. Nil Total award in favour of Sh. Romesh Kumar contractor is Rs. 550.00 (Rs. Five hundred and fifty only). Net amount to be paid to the contractor by the Executive Engineer, Provincial Division Sangrur is Rs. 550.00 (Rs. Five hundred and fifty only). The cost of stamp papers required for award amounting to Rs. 15/- (Rs. Nil Total award in favour of Sh. Romesh Kumar contractor is Rs. 550.00 (Rs. Five hundred and fifty only). Net amount to be paid to the contractor by the Executive Engineer, Provincial Division Sangrur is Rs. 550.00 (Rs. Five hundred and fifty only). The cost of stamp papers required for award amounting to Rs. 15/- (Rs. Fifteen only) shall be borne by the Executive Engineer, Provincial Division PWD B&R Sangrur. In witness whereof, I the said J.S. Kaila PSE-I, Superintending Engineer, Construction Circle PWD B&R, Sangrur the Arbitrator, have hereto signed at Sangrur, the 1 1th Feb.,One thousand nine hundred and eighty five).Pronounced Sd/- (J.S. Kaila) Arbitrator 5. It is apparent that while the learned Arbitrator took notice of certain claims raised by the contractor, he has brushed aside the same without any reason in support of his conclusions. There is nothing in the award which may serve as a clue as to what led to the rejection of the claim of the contractor. It is true that an Arbitrator is not required to prepare and pass a "judgment" like civil Court in terms of Order 20, Rules 1,3 and 5 read with Section 2 (9) of Code of Civil Procedure, yet the bare principles of fair and just play are not alien to the arbitration proceedings. Even the administrative authorities are required to speak through their orders. The least that can be expected from an arbitrator, therefore, is to come out with brief reasons in support of rejection and/or acceptance of the rival claims.Unfortunately not a single word has been stated in the impugned award which could prima facie show the application of mind on the part of the Arbitrator. The judgments relied upon by Mrs. Wasu are distinguishable on facts, inasmuch as, the awards in those cases were not as perfunctory as in the present case. However, I find no justification for the Courts below to hold that merely by passing a non- speaking award the learned arbitrator misconducted himself. The connotation "misconduct" is well defined and amounts to causing aspersions on ones character. Passing of erroneous order per se is no ground to hold that the arbitrator misconducted himself. The findings recorded by the Courts below to this extent cannot be appreciated and are liable to be set aside. 6. For the reasons aforementioned, the present civil revision petition is dismissed. Passing of erroneous order per se is no ground to hold that the arbitrator misconducted himself. The findings recorded by the Courts below to this extent cannot be appreciated and are liable to be set aside. 6. For the reasons aforementioned, the present civil revision petition is dismissed. However, the impugned order dated 19.10.1987 and the judgment dated 8.12.1989 passed by the Courts below are modified to the extent of recording a finding in relation to the misconduct of the Arbitrator. Further directions, namely, appointment of a new Arbitrator by virtue of the office, he being a holder of the office of Superintending En- gineer,Construction Circle PWD (B&R), Sangrur, are upheld. The petitioners-State is directed to appoint a new Arbitrator forthwith who will make it sure that arbitration proceedings are concluded within a period of three months from the date of his appointment. No order as to costs.