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2017 DIGILAW 173 (CAL)

Debendra Bijoy Ghosh v. Union of India

2017-02-14

SANJIB BANERJEE, SIDDHARTHA CHATTOPADHYAY

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JUDGMENT : 1. The Court : Sufficient grounds have been made out as to why the appellant was not represented on January 5, 2017, when the appeal and the connected application under Section 5 of the Limitation Act, 1963 were dismissed for default. The order dated January 5, 2017 is recalled and GA No.3754 of 2016 and APO No.348 of 2016 are restored to the file. 2. The restoration application, GA No.397 of 2017, is allowed as above, but without any order as to costs. 3. In view of the good grounds shown in the application under Section 5 of the Act of 1963, the marginal delay in preferring the appeal is condoned and the appeal is taken up on merits. 4. The appellant, who was engaged for refurbishing the waiting halls at nine railway stations, challenges an order under Section 34 of the Arbitration and Conciliation Act, 1996 setting aside a portion of the amount awarded by the arbitral tribunal. By the order impugned dated November 3, 2016, the claim on the relevant head has been reduced from Rs.23.10 lakh to Rs.8.93 lakh. 5. It is evident from the award that in course of the reference before the tribunal, fresh measurements were directed to be taken. The tribunal desired that to the extent the railways agreed with the contractor as to the claim, the same should be recorded and a separate column should be made in course of the measurement, noting the non-agreed issues. The measurement was carried out according to such directions. The tribunal found that the claim of the contractor included claims for at least four other stations that were not within the scope of the work. The tribunal deducted a sum of about Rs.1.53 lakh on such account and allowed the balance claim of the contractor on the ground that the work of the total value as claimed by the contractor was found to have been done, but the railways claimed that a part of such work had not been done by the contractor but had been executed by some other agency. 6. The arbitral tribunal noticed that there was an order of this Court restraining the balance work to be done or completed by any agency other than the contractor herein. 6. The arbitral tribunal noticed that there was an order of this Court restraining the balance work to be done or completed by any agency other than the contractor herein. The arbitral tribunal noticed the date of completion of the work and came to a conclusion that such part of the work which the railways claimed had been completed by another agency had, in fact, been executed by the contractor herein. 7. The arbitral tribunal also dealt with the contention of the railways that the additional payment which the contractor sought and which was denied by the railways was in respect of excepted matters. The tribunal referred to the relevant clause 45 of the general conditions governing the contract and opined that the circumstances had not arisen for such matter to be regarded as an excepted matter. 8. It is necessary, at this stage, to notice the discussion in the award on such aspect of the contractor’s claim: “Sr DEN/East vide his undated letter raised the plea that non-agreeable measurements are ‘excepted matter’ in term of Clause 63 of GCC read with Clause 6 of the GCC and as per rulings of SC in case between GM/NR Vs. Sarvesh Chopra, tribunal cannot consider these. After reading these documents, the arbitrators are of the view that the documents do not substantiate the presumption of Respondent that payment for non-agreed measurements as ‘excepted matter’. At the first place the whole of Clause 45 is not excepted matter. Only Clause 45(a) is an excepted matter in terms of clause 63 of GCC. As far as non-agreeable measurements are concerned, these measurements are taken for the first time after this AT was constituted and upon its directions. Thus the situation contemplated under Clause 45(a) has never reached as far as the measurements are concerned. Thus the Respondent’s plea cannot be given any cognizance. From the details given by Respondent it is observed that these non-agreeable works were executed either from 19/10/00 to 03/3/03 when the Claimant’s contract was effective or in the period when Court’s injunction was effective except that appearing under W/O No.185 E/KGP/03-04, thus it was not possible to get work done by other contractors. So the plea is not tenable and arbitrators are of the opinion that station wise following payments are to be allowed against non-agreeable measurement.” 9. So the plea is not tenable and arbitrators are of the opinion that station wise following payments are to be allowed against non-agreeable measurement.” 9. While dealing with the claim of the contractor on such account, the single Bench reduced the quantum awarded from Rs.23.10 lakh to Rs.8.93 lakh on the following ground: “However, it appears from the minutes of the meeting dated 14th July, 2008 that on a joint measurement the claim on account of non-agreeable payment was reduced to Rs.8.93 lakhs. The evidence does not conclusively show that the claimant had completed the work in respect of non-agreeable payments fully and the tribunal has proceeded on the basis that in view of the order of injunction passed by the High Court, it shall be presumed that the said work was completed only by the claimant and not by any other agency. However, there was no direct evidence before the arbitral tribunal that the work worth Rs.23.13 lakhs as claimed by the claimant on account of non-agreeable payment has been duly executed by the claimant. The discrepancy in the old measurement book and the joint measurement undertaken by the parties pursuant to the direction of the arbitral tribunal is easily noticeable. The claimant can be only entitled to claim the amount for which he has actually done the job. An error in the measurement book cannot benefit the claimant with an inflated amount. The tribunal has also taken not of such discrepancy but brushed it aside by observing that it is for the railway authorities to have taken appropriate action against errant officials. The fact, however, remains that even for the non-agreeable payment, the claimant admittedly has done work to the tune of Rs.8.93 lakhs and accordingly an award for Rs.8.93 lakhs could have been awarded on admission as against the claim of Rs.23.13 lakhs. This aspect of the matter, however, appears to have been ignored by the tribunal leading to perversity and on that limited ground the award in so far as it allowed the claim of Rs.23.1 lakhs on account of non-agreeable payment is set aside and reduced to Rs.8.93 lakhs.” 10. While dealing with an arbitral award under Section 34 of the Act, the Court does not reappraise the matter in the sense that a first Appellate Court may do. While dealing with an arbitral award under Section 34 of the Act, the Court does not reappraise the matter in the sense that a first Appellate Court may do. Broadly speaking, the Court seeks to assess whether there is an error of jurisdiction in the adjudication or there is such glaring and obvious error that leads to an absurdity or serious prejudice. Ordinarily, errors within the jurisdiction of the arbitral tribunal’s domain are not corrected in course of proceedings for setting aside an arbitral award, unless they are patently illegal or perverse on the face of the award. 11. In this case, the tribunal considered the claim of the appellant on merits and found that the extent of the construction appeared to have been admitted, but the railways attributed the execution of the work to another agency. There does not appear to have been any evidence of such work being undertaken by any other agency. In any event, the order of injunction precluded the work being completed by another agency. 12. The tribunal repelled the railways’ argument that such part of the claim had to be regarded as an excepted matter by reading the relevant clause and noticing the circumstances in which the claim was made. There does not appear to be any perversity in the award to such extent or any material error apparent from the face of the award in such regard. In any event, even if it was an error committed by the arbitral tribunal; such error was within the jurisdiction of the tribunal. 13. Accordingly, the order impugned dated November 3, 2016 insofar as it reduced the amount awarded under the relevant head to the appellant from Rs.23.10 lakh to Rs.8.93 lakh cannot be sustained and the same is set aside. The other modification of the interest by the order impugned is left untouched. 14. APO No.348 of 2016 and GA No.3770 of 2016 are disposed of without any order as to costs. 15. Urgent certified website copies of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.