State of Rajasthan through the Secretary, Public Health & Engineering Department v. Devendra Construction Company
2017-02-03
ARUN BHANSALI
body2017
DigiLaw.ai
ORDER : Arun Bhansali, J. 1. Heard learned counsel for the parties. 2. This appeal is directed against the order dated 08.04.2015 passed by the Additional District Judge No.1, Jodhpur Metro, whereby the application filed by the appellants under Section 34 of the Arbitration Conciliation Act, 1996 ('the Act') has been rejected. 3. On account of dispute having arisen between the appellants and the respondents, the dispute was referred to the Arbitral Tribunal. The Tribunal by its award dated 06.04.2008, awarded certain sums as indicated at page-61 of its award. 4. Feeling aggrieved, the appellants filed application under Section 34 of the Act, questioning the legality and validity of the award. The District Judge by his impugned order dated 08.04.2015 came to the conclusion that the challenge laid by the appellants was factual and on that count the award cannot be set aside under Section 34 of the Act and, consequently, relying on certain judgments of Hon'ble Supreme Court, dismissed the application. 5. It is submitted by learned counsel for the appellants that the learned District Judge committed error in dismissing the application filed by the appellants, inasmuch as, the material available on record clearly indicated that it was the respondent - Contractor, who was responsible for the delay and, therefore, the appellants were justified in imposing penalty of Rs.22.04 Lakhs. Further submissions were made that the Arbitrator was not justified in awarding interest @ 12% per annum. 6. Learned counsel appearing for the respondents supported the order impugned. It was submitted that the parameters for interference under Section 34 of the Act has been laid down by the Hon'ble Supreme Court in M/s. J.G. Engineers Pvt. Ltd. v. Union of India & Anr. : 2011 AIR SCW 2849 and as the submissions made by learned counsel for the appellants, do not fall within the said parameters, the District Judge was justified in dismissing the application. Further submissions were made that there is no substance in the appeal filed by the appellants and, therefore, the appeal deserves to be dismissed. 7. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 8. Based on the pleadings of the parties, the Arbitrator framed several issues including the main issue as under:- 1.
7. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 8. Based on the pleadings of the parties, the Arbitrator framed several issues including the main issue as under:- 1. Whether in view of the detailed averments contained in the claim petition the imposition of the penalty amounting to Rs. 22.04 lacs by the Finance Committee and communicated to the claimants vide their letter dated 28.9.2002 is absolutely arbitrary, unreasonable and against the factual position and amounts to colourable exercise of power which is against the principle of natural justice and moreover the delay has not caused any loss to the non-petitioners respondents? 9. Evidence was led by the parties and after analysing the entire oral and documentary evidence available on record, the following finding was recorded by the Arbitrator:- The sum and substance of the aforementioned discussion clearly depicts that the order of the Finance Committee Ex.C-27A and order of the Addl. Chief Engineer, PHED dated 28-9-2002 marked as Ex.C-26A are arbitrary, unjust and amount to colorable exercise of power by them and moreover they are totally against the principles of natural justice and established principles of law and hence unsustainable in the eye of law and moreover in absence of proof of loss to the department this penalty of Rs.22.04 lacs recovered as compensation under clause 2 of Ex.R1 could not have been imposed and consequently it is set aside and issue No.1 is decided in favour of the claimant and against the respondents. 10. A bare look at the issue as well as the finding recorded by the Arbitral Tribunal clearly indicates that the same is based on the evidence available on record and once the finding in this regard has been arrived at, the nature of challenge laid by the appellants requiring investigation into the evidence led before the Arbitral Tribunal cannot be made subject matter of an application under Section 34 of the Act and, therefore, the Tribunal was justified in coming to the conclusion that the nature of objections raised by the appellants do not fall within the parameters laid down by Hon'ble Supreme Court. 11.
11. So far as the argument pertaining to the award of interest @ 12% per annum is concerned, there is apparently no material placed by the appellants so as to seek a variation in the said rate of interest awarded by the Arbitral Tribunal. In view of the above discussion, no case for interference is made out, there is no substance in the appeal, the same is, therefore, dismissed.