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2007 DIGILAW 439 (PNJ)

Punjab Housing Board v. Roshan Lal Ghai And Sons

2007-03-14

HEMANT GUPTA

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Judgment Hemant Gupta, J. 1. The challenge in the present revision petition is to the order passed by the learned first "Appellate Court on 31.10.1990 whereby appeal against the order dated 5-1985 dismissing the objections of the petitioner was dismissed. 2. The dispute between the parties was referred to Shri J.L. Mahajan Arbitrator appointed to adjudicate the dispute. The arbitrator announced his award on 12.3.1983. The petitioner filed objections to the said award which were initially dismissed as beyond the period of limitation but this Court in Civil Revision No. 1422 of 1986 decided on 7.1.1987 held that the objections are within the period of limitation and consequently the matter was remitted back to learned trial Court. 3. The learned trial Court did not find any merit in the objections and consequently dismissed the same on 9.5.1989 and made award dated 11.03.1983 as rule of the Court. The appeal filed against the said award has also been dismissed. 4. Vide the aforesaid award dated 11.3.1983, a sum of Rs. 1,39,560.10 was found payable to the respondent and a sum of Rs. 37,005.88 as amount payable to the petitioner and consequently the net amount payable to the respondent amount to Rs. 1,02,554.12 was announced to be awarded in favour of the respondent contractor. 5. At the time of motion hearing of the revision petition, an argument was raised that in an application under Section 20 of the Arbitration Act, 1940 (hereinafter to be referred as the Act"), the respondent has claimed refund of earnest money of Rs. 5,300/- or in the alternative 10% compensation of the total value of the contract i.e. Rs. 31,500/-. Therefore, it was argued that the award granting a sum of Rs. 1,39,000/- to the contractor is unjustified as the arbitrator cannot enlarge the scope of the reference. 6. In an application under Section 20 of the Act, the contractor has claimed to the following effect: That the plaintiffs vide their registered Ad letter dated 15.4.1980 addressed to the Punjab Housing Board through the Divisional Engineer (Construction) Housing Board, Amritsar, expressing therein for the refund of their earnest money amount to Rs. 5,300/- or in the alternative demanded 10% compensation of the total value of the contract i.e. Rs. 31,500/- for their breach of contract. 7. 5,300/- or in the alternative demanded 10% compensation of the total value of the contract i.e. Rs. 31,500/- for their breach of contract. 7. On such application filed by the contractor under Section 20 of the Act, Shri R.N. Moudgil, Sub Judge, 1st Class, Pathankot, vide his order dated 8.1.1982 appointed Superintending Engineer of the Punjab Housing Development Board as an arbitrator. Subsequently, Shri J.L. Mahajan was appointed as arbitrator. Since reference was made in terms of the order, the scope of arbitration could not be enhanced by the arbitrator himself. 8. In view of the averments contained in the application under Section 20 of the Act, an award of Rs. 1,39,560/- to the contractor is wholly unjustified. In fact, Honble Supreme Court in Orissa Mining Corporation Limited V/s. Prannath Vishwanath Rowley A.I.R. 1977 S.G. 2014 has taken a view that the arbitrator cannot enlarge the scope of reference without the orders of the Court. Since the arbitrator, has found a sum of Rs. 37,000/- payable to the Board, it is apparent nothing can be claimed by the contractor as he has restricted his claim to Rs. 31,500/- in the application seeking appointment of arbitrator. 9. Thus, the impugned orders passed by the learned courts below are liable to be set aside as the awarded amount is beyond the claim received by the respondent. 10. Consequently, present revision petition is allowed and the impugned orders passed by the Courts below are set aside.