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2007 DIGILAW 1479 (DEL)

V. U. SEEMON v. NTPC

2007-07-25

SANJAY KISHAN KAUL

body2007
SANJAY KISHAN KAUL, J. ( 1 ) THE petitioner was assigned the work of construction of boundary wall and chain link fencing at Auraiya Gas Power Project in pursuance to the Telex of award dated 30. 04. 1987. The Letter of Award was subsequently issued on 25. 05. 1987. The project was to be completed within a period of 18 months in phases. No escalation was payable during this period of time in view of the following clause :- "1. TERMS IN TELEX OF AWARD :. . . . . . . . . . . . . . . . . . . . . . . . CC. The aforesaid contract price is inclusive of all taxes, duties, levies and other incidental expenses of whatsoever nature that may be incurred by you in connection with this work / contract and will not be subject to any escalation due to increase in labour cost, material cost and due to increase in he incidence of tax / levies or any other change in cost elements. " ( 2 ) THE project could not be executed within the specified period and there was a delay of about 22 months. The petitioner claimed compensation for the delay. ( 3 ) IN view of the arbitration clause between the parties, the designated authority of the respondent appointed Mr. N. S. Chaudhary, the then AGM (I/c) of the Auraiya Gas Power Project as the Sole Arbitrator. The Arbitrator continued the arbitral proceedings even though he subsequently assumed the office of executive Director (JV and C) and made and published the Award dated 01. 12. 2004 the said Award has been filed in Court. ( 4 ) THE respondent has filed objections to the said Award, which are required to be adjudicated. ( 5 ) THERE are two aspects, which must be kept in mind at the very inception itself. Firstly, the Arbitrator is a person who has technical qualifications and was looking after the project. He was a senior person of the respondent and ultimately came to occupy the post of Executive Director of the respondent. The arbitrator was appointed by the respondent. Firstly, the Arbitrator is a person who has technical qualifications and was looking after the project. He was a senior person of the respondent and ultimately came to occupy the post of Executive Director of the respondent. The arbitrator was appointed by the respondent. It is settled position of law that where such a Technical Member goes into a matter of disputes, the Court should not substitute its own view with that of an Arbitrator unless the decision of the Arbitrator is manifestly perverse or has been arrived at on the basis of wrong application of law. In this behalf, the judgment of this Court in DDA v. Bhagat Construction Co. Pvt. Ltd. and Anr. , 2004 (3) Arb. LR 548 can be referred to. ( 6 ) THE second aspect is that the scope of the objections under Sections 30 and 33 of the Arbitration Act, 1940 ( for short, 'the said Act' ). The Supreme court has held that it is not the function of this Court to re-appreciate the evidence or interfere with an Award merely on the basis that this Court would have come to a different conclusion on the material available before the arbitrator. It is only in the eventuality of the Award being perverse that an interference is called for. Reference may be made to the judgments of the Apex court in Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. and Anr. , AIR 1989 SC 973 , Food Corporation of India v. Joginderpal mohinderpal and Anr. , (1989) 2 SCC 347 and Arosan Enterprices Ltd v. Union of india and Anr; 1999 (3) Arb. LR 310 to be reminded of the caution given by the apex Court that unless an award is contrary to law and misconduct of the arbitrator is with reference to either his personal conduct or misconduct of law, an award ought not to be interfered with. In the absence of an award being absurd, reasonableness is not a matter to be considered. ( 7 ) THE Supreme Court held in M/s. Hindustan Tea Co. v. M/s K. Sashikant and Co. AIR 1987 SC 81 that the arbitrator is made the final arbiter of disputes between the parties and the award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the facts. v. M/s K. Sashikant and Co. AIR 1987 SC 81 that the arbitrator is made the final arbiter of disputes between the parties and the award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the facts. In State of U. P. v. Allied Constructions, (2003) 7 SCC 396 , it was held that section 30 of the said Act is restrictive in its operation and the Arbitrator is a Judge chosen by the parties whose decision is final. An error apparent on the face of the record would not imply closer scrutiny on the merits of the documents and the material on record. Once it is found that the view of the arbitrator is a plausible one, the Court should refrain from interfering with the Award. ( 8 ) IF the aforesaid parameters are kept in mind, in my considered view, the objections of the respondent cannot be sustained. The respondent has, in fact, filed the objections like an appeal seeking reappraisal of evidence and the material on record. This is not permissible. ( 9 ) LEARNED counsel for the respondent has strenuously sought to contend that the respondent should not be made to suffer the consequence of disturbance at site when the disturbance was not caused by the respondent, but by land-owners. I am unable to accept this plea for the reason that if the project gets delayed, then the petitioner must be compensated for the delay, which is not occasioned for any fault of his, but is for the reasons which are in the knowledge and control of the respondent. It was the duty and obligation of the respondent to make available the site free from disturbance. ( 10 ) THE second aspect urged by learned counsel for the respondent is that the petitioner was aware of the problem at site and, in fact, the respondent had put the petitioner to notice about the same. Learned counsel submits that the knowledge of the petitioner is obvious from its letter dated 04. 12. 1987. In my considered view, the factum of the problem being brought to the notice of the respondent by the petitioner does not imply that the petitioner should suffer the consequences thereof. There is, thus, no merit in this plea. Learned counsel submits that the knowledge of the petitioner is obvious from its letter dated 04. 12. 1987. In my considered view, the factum of the problem being brought to the notice of the respondent by the petitioner does not imply that the petitioner should suffer the consequences thereof. There is, thus, no merit in this plea. ( 11 ) LASTLY, learned counsel for the respondent contends that the contract itself provided for there being no escalation in view of the clause referred to aforesaid and the Arbitrator being a creature of the contract cannot go beyond the same. Once again, I am unable to accept the plea of learned counsel for the respondent for the reason that what is excluded is escalations including taxes and duties. The same is during the currency of the contract. The contract was for 18 months. This would not in any manner preclude the damages being awarded to the petitioner under Section 73 of the Indian Contract Act, 1873 and that is precisely what the Arbitrator has done. ( 12 ) I find no infirmity with the Award or merit in the objections. The objections are dismissed and the Award dated 01. 12. 2004 of Mr. N. S. Chaudhary as the Sole Arbitrator is made Rule of the Court leaving the parties to bear their own costs. ( 13 ) IT is made clear that the petitioner would also be entitled to simple interest @ 8% p. a. from the date of the Award till the date of realisation. ( 14 ) DECREE-SHEET be drawn up accordingly.