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2011 DIGILAW 119 (JK)

Mohd. Din v. Chief Engineer, PWD & Another.

2011-03-15

J.P.SINGH

body2011
J. P. Singh, J.:- Disputes arising out of the Contract allotted to Mohd. Din. by the Jammu and Kashmir State Government, in respect of Improvement and Development of formation widening Batote - Kishtwar NIHP by way of earth work and walling in­cluding construction of breast walls parapets and V shape drain in Km. 14/980-46/350 Khelani zigs were referred to the sole Arbi­tration of the Chief Engineer, PWD (R & B), Jammu, in terms of the Contract Agreement between the parties. 2. Aggrieved by the conduct of the Arbi­trator, Mohd. Din approached this Court by his Arbitration Application No. 34/98 seek­ing the removal of the Arbitrator and ap­pointment of another Arbitrator in his place. 3. His plea was allowed by the Court, and vide order dated 16-8-2000. Sh. A. N. Saraf, Retired District and Sessions Judge was ap­pointed Arbitrator to adjudicate upon the dis­putes between the parties. 4. Sh. Saraf entered upon the Reference, who on finding that the Chief Engineer and other functionaries of the State Government were not co-operating with the arbitration proceedings proceeded to adjudicate the dis­putes referred to him, setting the State ex-parte. 5. After the State was set ex parte. Mohd. Din-Contractor, lodged additional claim seeking its adjudication as well by the Arbitraor. 6. The learned Arbitrator allowed the claims and the additional claim vide his Award of November 23, 2001. 7. The Award having been filed in the Court, notices were issued to the parties to file objections, if any, thereto. 8. Responding to the notice issued on the Arbitrator's Award, the State-respondents sought setting aside of the Award on various grounds. 9. The memo of objections filed by the State in this regard has been registered as CMP No. 57/2004. 10. Taking the pleadings of the parties on the State-respondents' challenge to the Award in consideration, the parties were not to issues, which read thus : 1) Whether the Arbitrator has mis-con­ducted himself or the proceedings? OP Objector. 2) Whether Award is otherwise invalid? OP Objector. 3) Relief. 11. The evidence on the issues was led by the parties by Affidavits. 12. Learned counsel appearing for the State respondents questioned the Award on three grounds, viz. 1. The Award was nullity in law and li­able to be set aside for having been made and published, after the time prescribed for the purpose under the Jammu and Kashmir Arbitration Act, 2002. 2. 12. Learned counsel appearing for the State respondents questioned the Award on three grounds, viz. 1. The Award was nullity in law and li­able to be set aside for having been made and published, after the time prescribed for the purpose under the Jammu and Kashmir Arbitration Act, 2002. 2. In case the Award was held to have been filed within the time allowed by the Court, it was, even otherwise, liable to be set aside in that the additional claim allowed by the arbi­trator, without allowing opportunity of hear­ing to the State therein, amounted to Arbitrator's misconduct rendering the Award invalid as a whole for violation of the prin­ciples of Natural Justice. 3. The interest allowed on the award be­ing excessive and unconscionable, the award needed modification. 13. I have considered the submissions of the learned counsel for the parties and pe­rused the records. 14. The perusal of the records of the Ar­bitrator indicates that vide this Courts order of September 24, 2001 on CMP No. 66/2001, the Arbitrator was allowed last extension of four months to make and publish the award condoning the intervening delay. 15. The arbitrator, thus, having made and published the award on 29-11-2001 was within the time allowed by the Court and there is, therefore, no merit in the first sub­mission of the learned State counsel, which is, accordingly, rejected. 16. Insofar as the second submission of the learned State counsel is concerned, I find sufficient force therein, for, after having set the State respondents ex parte, the learned Arbitrator had the jurisdiction to deal with only Claims, which stood referred to him and on no other fresh claim, unless he had heard the State on fresh claim. 17. It was admitted by the parties that the additional claim was lodged after the respon­dents were set ex parte and no notice was issued by the Arbitrator to the State-respon­dents for their response thereto. 18. In these circumstances, the arbitrator had, therefore, acted beyond his jurisdiction in making the award on the Contractor's ad­ditional claim. The error committed by him in making the award on the additional claim, without following the principles of natural justice is, thus, apparent on the face of records. 19. The additional claim of Rs. 1,50,000/- along with interest thereon, as allowed by the Arbitrator, cannot thus be sustained. 20. The error committed by him in making the award on the additional claim, without following the principles of natural justice is, thus, apparent on the face of records. 19. The additional claim of Rs. 1,50,000/- along with interest thereon, as allowed by the Arbitrator, cannot thus be sustained. 20. As the claims allowed by the Arbitra­tor are clearly separable, so only that por­tion of the award which allows the additional claim would require setting aside as arbitrator's misconduct in respect of other claims, as alleged, has not been proved, and that is why not agitated, and rightly so at the time of hearing of the case. 21. The plea of the learned State counsel that whole of the award was liable to be set aside because of the arbitrator's misconduct in allowing the additional claim of Rs. 1,50,000/-, is, however, not found tenable, in that, looking to the nature of the miscon­duct for violation of the principles of natural justice in allowing the additional claim, it is only that claim which would becomes un­sustainable and not rest of the award of the arbitrator, which is not found suffering from any misconduct. 22. Insofar as the third submission of the learned State counsel is concerned, suffice would it be to say that the Arbitrator had the jurisdiction to award interest and the finding recorded by him allowing 12% interest on the amount awarded, may not be open to challenge in these proceedings, which are not in the nature of appeal against the findings and award of the arbitrator and additionally because the rate of interest awarded by the arbitrator, looked from any angle, does not appear unconscienable as argued by the learned State Counsel. 23. CMP No. 57/2004 of the State respon­dents, therefore, needs to be allowed to the extent indicated hereinabove. 24. Accordingly, the Award dated 23-11-2001 made by Sh. Amar Nath Saraf, Retired District and Sessions Judge, is set aside to the extent it allows Claim No. 4 of Rs. 1,50,000/- in favour of Mohd. Din claimant. The interest allowed on this amount too would stand set aside. 25. Rest of the award for an amount of Rs. 4,00,000/- along with interest @ 12% per annum, therefore, sustains for making it a rule of the Court. 26. The award made by the arbitrator for an amount of Rs. 1,50,000/- in favour of Mohd. Din claimant. The interest allowed on this amount too would stand set aside. 25. Rest of the award for an amount of Rs. 4,00,000/- along with interest @ 12% per annum, therefore, sustains for making it a rule of the Court. 26. The award made by the arbitrator for an amount of Rs. 4,00,000/- along with in­terest @ 12% per annum is, therefore, made a Rule of the Court. 27. Registrar to draw decree accordingly. A. A. No.62/2001 and CMP No.57/2004 are disposed of accordingly. Order accordingly.