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2012 DIGILAW 485 (PAT)

Airport Authority of India v. Ramakant Singh

2012-03-20

SHAILESH KUMAR SINHA

body2012
Shailesh Kumar Sinha, J. – The appeal is directed against the order dated 28th of October, 2010 passed by the Subordinate Judge-I, Patna in Misc. Case No.41 of 2006 dismissing the miscellaneous case filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act’) for setting aside the arbitral award dated 27th of August, 2006 passed by the sole Arbitrator, who was appointed by the nominated Judge of the Hon’ble the Chief Justice, High Court of Judicature at Patna in Request Case No.16 of 2004. 2. The short facts are that an agreement was entered into between the appellant-Airport Authority of India and the respondent-Contractor with respect to the construction of shoulders, widening of turning pad and construction of perimeter road at Jai Prakash Narain International Airport, Patna. As per the terms of the contract, a period of six months was allowed for completion of the above work. However, since the work was not being completed within the aforesaid period of six months, the contract was rescinded. Thereafter the Contractor approached this Court through a writ petition vide CWJC No.7226 of 2003, which was disposed of on 12.12.2003, whereby one month’s further time was allowed for completion of the aforesaid work. The appellant-Airport Authority of India preferred an appeal, vide L.P.A. No.30 of 2004, which was disposed of by order dated 31st of March, 2004. However, the dispute between the parties could not be sorted out and thereafter the Contractor filed a Request Case No.16 of 2004 for appointment of the Arbitrator in terms of the arbitration agreement between the parties. The nominated Judge of the High Court of Judicature at Patna appointed the Arbitrator as per the order dated 4th of May, 2005. Before the Arbitrator, the parties placed their respective cases. During the arbitration proceedings, the petition of the Contractor was to the effect that the machines and equipment as required in connection with the aforesaid works were being retained by the Airport Authority and the same were not being released even for its maintenance.The Arbitrator accordingly as per the interim award directed for release of the aforesaid equipment. The same having not been done, further award by way of interim award amounting to Rs.1,19,34,240/- was given. The Airport Authority against the aforesaid interim award filed Miscellaneous Case No.6 of 2006 in the court of the Subordinate Judge-I, Patna. The same having not been done, further award by way of interim award amounting to Rs.1,19,34,240/- was given. The Airport Authority against the aforesaid interim award filed Miscellaneous Case No.6 of 2006 in the court of the Subordinate Judge-I, Patna. However, during the pendency of the case, the arbitration proceedings continued and ultimately final award was given by the Arbitrator on 27th of August, 2006 incorporating the interim award as well to the tune of Rs.2,00,61,726/-. The said award was sought to be set aside on a petition under Section 34 of the Act filed on behalf of the Airport Authority of India, as noticed above. The same, on contest, being rejected, the present appeal is preferred. 3. Mr. K.N. Choubey, learned Senior Counsel appearing on behalf of the appellant, assisted by Junior Counsel Mr Arun Prakash, submits, inter alia, that even though the Contractor did not complete the work within the prescribed period, the Arbitrator allowed the award on various items without giving cogent reason in support of final award and the remunerations were also charged by him excessively on the higher side. It is further submitted that the Arbitrator ought to have remained within his jurisdiction and he has no authority in law to pass any award contrary to the agreement; more so the award is shocking and suffering from non-consideration of the case in its correct perspective. Besides, it is submitted that no compensation/damages, which could arise, as claimed by the Contractor, could have been allowed for the alleged loss of profit etc. in the light of Section 28(2) read with Section 31(3) of the Act as well as Section 73 of the Contract Act, 1872. 4. On the other hand, Mr. J.S. Arora, learned counsel appearing on behalf of the respondent submits that the arbitral award could not have been set aside under Section 34 of the Act save and except on the grounds mentioned in Section 34 of the Act. It is submitted that none of the grounds as advanced on behalf of the appellant for setting aside the award is available in terms of the provisions of Section 34 of the Act. It is submitted that none of the grounds as advanced on behalf of the appellant for setting aside the award is available in terms of the provisions of Section 34 of the Act. It is further submitted that the award as given by the Arbitrator clearly dealt with the dispute between the parties in respect of the agreement in question relating to the aforesaid work and no other claim, which did not arise from the said arbitration agreement, was dealt with under the award and, as such, the Arbitrator has given his award on a dispute raised between the parties and not beyond the scope of the dispute. The learned counsel submits that the award was perfectly justified and the reasons have also been given by the Arbitrator in support of his award and as such, it cannot be said that the award suffers from lack of reasons. It is submitted that the contention of behalf of the appellant that the award is not a reasoned one is incorrect factually as well as on law. The claim, which has been allowed on account of loss claimed by the Contractor for not allowing him to carry out the work on the part of the Airport Authority of India, was well within the scheme for such refusal to carry out the work. Mr. Arora submits that the interim award has finally merged with the final award as would be appearing from perusal of the award that the total award given by the Arbitrator is of Rs.2,61,00,726/- inclusive of the interim award for Rs.1,29,34,240/- and as such, after dismissal of the present miscellaneous case challenging the final award, the earlier Miscellaneous Case No.6 of 2006 against the interim award has become infructuous. 5. Having considered the rival submissions of the parties and their respective cases as made out in the memo of appeal as also the counter affidavit, it would appear that the appeal could succeed only provided it could be shown that the award was liable to be set aside under any of the provisions of Section 34 of the Act. 5. Having considered the rival submissions of the parties and their respective cases as made out in the memo of appeal as also the counter affidavit, it would appear that the appeal could succeed only provided it could be shown that the award was liable to be set aside under any of the provisions of Section 34 of the Act. The decisions cited on behalf of the appellant for the proposition that the Arbitrator should have confined within his jurisdiction could not have passed award contrary to the law, the award could not be shocking to the conscience of the Court nor should lack any consideration of matter in issue or absence of any reason in support of the award. The law settled in the decisions cited on behalf of the appellant are not controverted in any manner by the learned counsel for the respondent, however, submits that in the facts and circumstances as also on perusal of the award it would appear that none of the ingredients is attracted since the Arbitrator had given the award with respect to the dispute between the parties and was perfectly within his jurisdiction as also the award is a well reasoned award and cannot be said to be shocking in any manner. The contention on behalf of the respondents cannot be said to be incorrect. The submission of the appellant that the Arbitrator was charging his fees and enhancing his fees unilaterally was controverted by other side and it was submitted that it was done in presence of both the sides and as such, the appellant could not make any grievance. In my opinion, notwithstanding those controverted facts, the same cannot be a ground for setting aside the award. 6. For the reasons and the discussions above, I do not find any merit in this appeal. It is, accordingly, dismissed. No costs.