Executive Engineer, H. P. Housing and Urban Development Authority v. R. N. Madan
2012-12-21
V.K.AHUJA
body2012
DigiLaw.ai
JUDGMENT V.K. Ahuja, J.(Oral): This order shall dispose of the objections filed by the objector under Section 34(3) of the Arbitration and Conciliation Act, 1996, hereinafter referred to as the Act, against the award, dated 15.5.2009, passed by arbitral tribunal comprising of Shri T.L. Sharma (Retired Engineer-in-Chief). 2. Briefly stated, the facts of the case are that the matter was referred to the Arbitrator for arbitration in respect of the disputes relating to the work of “C/o Residential Complex below BCS (Phase-II), New Shimla (SH: Providing external sewerage connection to various types of houses and plots including C/o septic tank). Agreement No.15 of 1993-94.” The Arbitrator entered upon the reference on 25.8.2007 and various sittings were held by the Arbitrator and vide award dated 15.5.2009, the Arbitrator passed the award in respect of different claims put up before the Arbitrator. The award was filed in this Court and objections under Section 34 of the Act were filed by the Objector. Reply was filed by the non-objector/claimant. 3. I have heard the learned counsel for the parties and have gone through the record of the case. 4. The first and the main submission made by the learned counsel for the objector was that the Arbitrator had entered into reference and statement of claim was filed on 19.9.2002. Further, revised claim was submitted by the claimant on 17th hearing i.e. on 10.7.2008, which was entertained by the Arbitrator by invoking the provisions of Order 6 Rule 17 CPC. However, it was submitted that the Arbitrator had not considered the question that provisions of Order 6 Rule 17 CPC were not attracted to the proceedings under the Act and there was no provision for submission of the revised claim after lapse of sufficient time and, therefore, the Arbitrator was not justified in considering the revised claim or awarding the claim, which was against the public policy and as such was liable to be set aside under Section 34 of the Act. 5. According to the provisions of Section 34 of the new Act, the arbitral award can be set aside if the party making the application furnishes its proof that the award was in conflict with the public policy of India.
5. According to the provisions of Section 34 of the new Act, the arbitral award can be set aside if the party making the application furnishes its proof that the award was in conflict with the public policy of India. It could be set aside on the ground that the arbitration agreement was not valid, no proper notice was given or the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration. 6. On the other hand, the learned counsel for the respondent had tried to justify the award made by the Arbitrator on the ground that the post of Arbitrator was vacant for some time and, therefore, the revised claims were put up before the Arbitrator. 7. To consider the plea raised by the learned counsel for the respondent, facts of the case have to be considered. As per the Award, initially Superintending Engineer, Arbitration Circle, HP PWD, Solan, was appointed as Arbitrator, vide letter dated 12.2.2002. Thereafter, vice notification dated 2.7.2003, the Superintending Engineer (North), H.P. Housing Board, Shimla was appointed as an Arbitrator to make award regarding claims/disputes under Clause 25 of the agreement. He held some sittings and thereafter it appears that he tendered his resignation. Thereafter, Shri T.L. Sharma was appointed as sole Arbitrator vide letter dated 25.8.2007. He started the proceedings further and concluded the hearings on 2.4.2009. Revised claim was submitted by the claimant on 10.7.2008. Respondent had not consented to the revised claim as per Section 23 of the Act and objections were filed in this regard also. Reply was filed by the claimant to the objections for taking on record the revised claims. 8. It was alleged by the claimant that the claimant had received final payment and copy of the final bill was submitted by him on 14.10.2003. Therefore, he had submitted his claims on the basis of final bill. This was alleged in the replication to the revised/amended claim of the claimant submitted before the Arbitrator during the 17th hearing held on 10.7.2008. This clearly shows that the copy of the bills had already been received by the claimant alongwith final payment on 14.10.2003. Therefore, there was no justification to submit the revised claim on 10.7.2008. The original claim was for Rs.28,87,656/- and the revised claim submitted after about five years was for Rs.50,61,814/-.
This clearly shows that the copy of the bills had already been received by the claimant alongwith final payment on 14.10.2003. Therefore, there was no justification to submit the revised claim on 10.7.2008. The original claim was for Rs.28,87,656/- and the revised claim submitted after about five years was for Rs.50,61,814/-. The claimant has himself alleged in his written submission as under: “That it is submitted on behalf of the claimant that claims after several revisions were on record of this Hon’ble Tribunal, which were ultimately revised and submitted on 10.7.2008. The claimant further submits that even as per the showing of the respondent, the original claim was filed on 9.9.2002 and the final bill was submitted by the respondent before this Hon’ble Tribunal on 14.10.2003 i.e., after a lapse of more than one year. As such, the claims were revised and submitted on 10.7.2008.” 9. The statement of claims and defence has to be filed under Section 23 of the Act. These were already submitted before the Arbitrator and thereafter, they were amended, as mentioned above. The revised claim could have been filed with the consent of the other party or in case the arbitral tribunal considered it appropriate to allow the amendment or supplement it having regard to the delay in making it. As I have already mentioned above that the original claim was made on 19.9.2002, the post of Arbitrator was vacant for some time and the present Arbitrator was appointed vide latter dated 25.8.2007. The revised claim was submitted by the claimant on 10.7.2008, after a lapse of six years and after the new Arbitrator had conducted the proceedings after 25.8.2007 upto to the date of filing of the revised claim on 10.7.2008. 10. It cannot be said that the reason for non-filing of the revised claim was that the post of the Arbitrator was vacant, which was vacant for some time but the present Arbitrator had held many hearings before the date when the revised claim was filed on 10.7.2008. The provisions of Civil Procedure Code were not attracted to the present facts and there is no provision for filing of revised claim except with the consent of other party or when the Arbitrator allows the application in this regard. 11.
The provisions of Civil Procedure Code were not attracted to the present facts and there is no provision for filing of revised claim except with the consent of other party or when the Arbitrator allows the application in this regard. 11. I have already mentioned above that the respondent had never consented to the revised claim and the learned Arbitrator invoked the provisions of Order 6 Rule 17 CPC in allowing the revised claim, which approach of the Arbitrator cannot be said to be correct. As in case of limitation, once the post of Arbitrator was vacant, the application for filing of revised claim could have been filed by the objector on the first date of hearing when the new Arbitrator started the proceedings. At the most, as in the case of civil court vacations, the appeal or suits are to be filed immediately on the next day when the courts open. In case the objector had the knowledge that the proceedings are going to be held by the Arbitrator, he could have filed the revised claim on the very first day or if he had no knowledge of the first day, he could have put up appearance and filed claim on next hearing. However, he put up the revised claim after many hearings had been held by the new Arbitrator and without the consent of the other party and, therefore, it is clear that the Arbitrator was not competent to consider the revised claim after a lapse of more than six years. 12. The original claim under various heads, as could be deciphered from the record, is as under: Item No. Amount 1. Rs.6,97,813/- 2. Rs.1,00,000/- 3. Rs.74,084/- 4. Rs.53,750/- 5. Rs.1,43,691/- 6. Rs.96,718/- 7. Rs.2,03,575/- 8. Rs.14,88,025/- 9. Rs.30,000/- Total: Rs.28,87,656/- 13. The revised claim submitted by the claimant is as under: Item No. Amount 1. Rs.12,77,378/- 2. - 3. - 4. - 5. Rs.2,36,329/- 6. Rs.8,40,807/- 7. Rs.2,68,325/- 8. Rs.21,82,140/- 9. - Total: Rs.50,61,814/- 14. It is clear from above discussion that the claimant though had received the final bills, as mentioned above, long ago and submitted the claim totaling Rs.28,87,656 and by filing the revised claim, he increased the figure to Rs.51.00 lacs approximately.
Rs.12,77,378/- 2. - 3. - 4. - 5. Rs.2,36,329/- 6. Rs.8,40,807/- 7. Rs.2,68,325/- 8. Rs.21,82,140/- 9. - Total: Rs.50,61,814/- 14. It is clear from above discussion that the claimant though had received the final bills, as mentioned above, long ago and submitted the claim totaling Rs.28,87,656 and by filing the revised claim, he increased the figure to Rs.51.00 lacs approximately. Thus, by allowing the revised claim, the claimant was permitted to enhance the claim by about Rs.22.00 lacs, though it was not permissible and was not required to be allowed in view of the facts mentioned above. Therefore, the claims considered under Item Nos.1 and 5 to 8 are not sustainable and accordingly, the impugned award under these various heads for which revised claim was submitted can be said to be against the public policy and was not permitted by law. 15. Coming to the another important question as to whether individual claims under various heads could be segregated by the court and claims under various heads could be considered, I have specifically put up a question to the learned counsel for the objector as to whether this could be done and he had referred to a decision of the Apex Court in J.G. Engineering Private Limited versus Union of India and another, (2011) 5 Supreme Court Cases 758, in which following observations were made in para 25: “It is now well settled that if an award deals with and decides several claims separately and distinctly, even if the court finds that the award in regard to some items is bad, the court will segregate the award on items which did not suffer from any infirmity and uphold the award to that extent. As the award on Items 2, 4, 6, 7, 8 and 9 was upheld by the civil court and as the High Court in appeal did not find any infirmity in regard to the award on those claims, the judgment of the High Court setting aside the award in regard to claims 2, 4, 6, 7, 8 and 9 of the appellant, cannot be sustained. The judgment to that extent is liable to be set aside and the award has to be upheld in regard to Claims 2, 4, 6, 7, 8 and 9.” 16. From the above discussion, it is clear that court can see the award under different heads and consider its validity.
The judgment to that extent is liable to be set aside and the award has to be upheld in regard to Claims 2, 4, 6, 7, 8 and 9.” 16. From the above discussion, it is clear that court can see the award under different heads and consider its validity. Therefore, the award made under item Nos.1 and 5 to 8 is liable to be set aside since the award was made after considering the revised claims, which was not permitted under law. In so far as the remaining items are concerned, i.e. Items at Sl.No.2 to 4 and 9, these can be considered by the court. In regard to Item No.2, no submissions were made as to how the award at Claim No.2 was against the public policy or deserves to be set aside. In regard to claim No.3, reasons have been given in the award and therefore, there is no justification in this regard to reconsider the record and give findings. Therefore, the claim under Item No.3 is also affirmed. Under Item No.4, reasons for making the award have also been given and these do not call for an interference by this court. Qua claim under Item No.9, the Arbitrator had only assessed the arbitration charges which cannot be said to have been awarded wrongly. 17. In view of the above discussion, the objections filed by the petitioner are partly allowed and the award made qua claims under Item Nos.1 and 5 to 8 is set aside, while for claims under Item Nos.2 to 4 and 9, the award passed by the Arbitrator is affirmed. The case is remitted to the Arbitrator for reconsideration and in case the Arbitrator is not available, it is for the claimant to file an application for appointment of fresh Arbitrator. In case, the same Arbitrator is available, it shall be remitted to him, who shall consider the record again and make his award in view of the above discussion, on the Items mentioned above. The question of fee of the Arbitrator shall be considered subsequently when the award is made by the Arbitrator or before remitting the case. 18. The case stands disposed of in the aforesaid terms.