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2007 DIGILAW 485 (ORI)

State of Orissa v. Maguni Charan Pani

2007-06-26

M.M.DAS

body2007
JUDGMENT M. M. DAS, J. : This appeal has been filed under Section 39 of the Arbitration Act, 1940 against the award dated 30.6.1998 passed by the Arbitration Tribunal, Orissa and the order dated 25.2.2002 passed by the learned Second Additional Civil Judge (Sr. Division), Cuttack in Misc. Case No. 108 of 2000 as well as the judgment dated 28.2.2002 passed in T.S. No. 4325 of 1998 by the said learned Civil Judge. 2. The respondent who is a licensed Special Class Contrac¬tor under the Government of Orissa, entered into a F-2 contract with the Executive Engineer, Cuttack Minor Irrigation Division on 14.5.1982 for execution of construction work of Nimajhar Minor Irrigation Project under Tangi-Choudwar Block in the district of Cuttack. The estimated amount of the contract work was to the tune of Rs.15,73,399/-. As per the agreement, the work was to be completed by 31.12.1983. The respondent thereafter proceeded with the work. However, he could not complete the work within the time stipulated. The respondent claimed that he has executed certain extra items of work on verbal instruction of the Executive Engi¬neer for which there was no estimate nor any approved rate was fixed. The respondent in this regard wrote a letter to the Execu¬tive Engineer on 8.2.1993 for approval of the extra items of work done by him. According to the respondent, the said letter was ignored and the Executive Engineer threatened to rescind the contract if the respondent insists upon the same. Thereafter, the contract was rescinded and certain charges were leveled against the respondent. The final measurement of the work done by the respondent was made on 30.9.1983 which, according to the respond¬ent, was without notice to him. As according to the respondent, the final bill was also not prepared in accordance with the work executed by him; a dispute arose between the parties. Since there was an arbitration clause in the agreement, the respondent filed T.S. No.25 of 1991 before the learned Civil Judge (Sr. Division), Cuttack under Section 20 of the Arbitration Act, 1940 for refer¬ence of the dispute for arbitration. 3. A written statement was filed by the appellant-State disputing the claim of the respondent and contending that in view of amended Section 41-A of the Arbitration Act, 1940, the dispute is to be referred to the Arbitration Tribunal. Ultimately, the said suit being tried by the learned Addl. Civil Judge (Sr. 3. A written statement was filed by the appellant-State disputing the claim of the respondent and contending that in view of amended Section 41-A of the Arbitration Act, 1940, the dispute is to be referred to the Arbitration Tribunal. Ultimately, the said suit being tried by the learned Addl. Civil Judge (Sr. Divi¬sion), Cuttack who upon coming to the conclusion that a dispute has arisen between the parties which is arbitrable under Clause 11 of the Agreement, he referred the matter to the State Arbitra¬tion Tribunal, Orissa. After completion of the arbitration pro¬ceeding, the Arbitration Tribunal passed the impugned award on 30.6.1998 which was thereafter filed before the learned Addl.Civil Judge (Sr. Division), Cuttack under Section 14 of the Arbitration Act, 1940 for making the award a rule of the Court which was registered as T.S. No. 435 of 1998. On getting notice of the said suit, the appellant - State filed an objection chal¬lenging the award, inter alia, on the ground of lack of jurisdic¬tion of the Arbitral Tribunal who passed the award. The said objection was registered as Misc. Case No. 108 of 2000 and by an elaborate order dated 25.2.2002, the Second Additional Civil Judge (Sr. Division), Cuttack after discussing all the conten¬tions raised by the appellant recorded a finding that the award passed by the Tribunal is valid and legal and is liable to be made a rule of the Court. Relying upon the said order, a judgment was passed in T.S. No. 435 of 1998 on 28.2.2002 decreeing the said suit and making the award filed by the Tribunal, a rule of the Court. Being aggrieved, the appellant-State has preferred the present appeal. 4. It appears from the grounds set-forth in the memorandum of appeal that the challenge to the judgment passed by the learned Civil Judge as well as to the award primarily relates to factual aspects. 5. During the course of hearing, learned counsel for the appellant - State submitted that the agreement was executed on 14.5.1982 with a stipulation to commence the work from 14.6.1982 and complete the same by 13.12.1983. But the respondent did not execute the work as per the stipulation and on the date of the measurement, it was found that he has executed only 15% of the work for which the agreement was executed and notice was given to the respondent no. But the respondent did not execute the work as per the stipulation and on the date of the measurement, it was found that he has executed only 15% of the work for which the agreement was executed and notice was given to the respondent no. 23.9.1983 to be present at the work site for final measurement on 30.9.1983. But the respondent did not appear on the said date. The final bill was prepared on the basis of the measurement, for an amount of Rs.2,28,209/- which is only 15% of the value of the work though the respondent consumed 80% of the time. Learned counsel for the appellant-State, therefore, submit¬ted that the Tribunal should not have interfered with the matter under these circumstances, for which, the award is liable to be set aside. He further submitted that the Tribunal acted illegally in granting Rs.1,95,930/- towards excess earth work and the learned Court below should have set aside the same. Similarly, learned counsel for the appellant-State also challenged the other amounts awarded in favour of the respondent on different heads solely on the ground that the respondent acted contrary to the terms of the agreement and, therefore, he was not liable to any amount as awarded. 6. Mr. Patnaik, learned counsel for the respondent, on the contrary, submitted that in the order passed in T.S. No.25 of 1991, i.e., the application under Section 20 of the Arbitration Act, 1940, the learned Civil Judge categorically came to the conclusion that a dispute exists between the parties and that there being a clause for arbitration in the agreement, the matter should be referred for arbitration. Relying upon the contention of the State taken in the written statement filed in the said suit, that in view of the amended Section 41-A of the Arbitration Act, 1940, the matter should be referred to the Arbitration Tribunal, Orissa, the learned Court referred the matter to the said Tribunal and, therefore, it is too late in the date to submit that in view of the non-compliance of the terms of the agreement by the respondent, there was no dispute raised for referring the matter for arbitration and the respondent is not entitled to any amount as awarded by the Tribunal. 7. In the case of State of Rajasthan v. Puri Construction Co. 7. In the case of State of Rajasthan v. Puri Construction Co. and another (1994) 6 SCC 485 , the Supreme Court held that on the materials on record, even if a different view can be taken than what has been expressed by the Arbitrator, the award is not to be struck down and error apparent on the face of record does not mean that on a closer scrutiny of the documents and the materials, the finding arrived at by the learned Arbitrator can be held to be erroneous. In other words, it was laid down that an error of law and facts found in the award by itself does not constitute misconduct warranting interference with the award. All the grounds taken by the appellant - State in the present appeal are factual in nature and on perusal of the impugned award as well as the orders passed by the learned Court below, this Court is of the view that no illegality or improprie¬ty can be attributed to the said orders passed by the learned Court below as well as the impugned award in which the Arbitra¬tion Tribunal has taken all materials facts into consideration before arriving at the amounts to which the respondent is enti¬tled to and has also assigned reasons for its conclusion. More¬over, as per the decision, in the case of State of Rajasthan (supra), this Court cannot sit in appeal over the award passed by the Tribunal. In other words, even if a different conclusion can be arrived at on the facts of the case and the materials produced before the Arbitration Tribunal, this Court should not interfere with the factual findings given in the award like an appellate authority. 8. As no impropriety or illegality is found in the im¬pugned orders as well as in the award, this Court finds no reason to interfere with the same. The appeal is accordingly dismissed, but in the circumstances, without any cost. Appeal dismissed.