S. Manonmony, (Contractor) v. Union of India rep. by its Chief Engineer/Construction/West, Southern Railway, Egmore, Chennai
2019-07-30
C.V.KARTHIKEYAN, VINEET KOTHARI
body2019
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JUDGMENT : C.V. KARTHIKEYAN, J. 1. This Original Side Appeal had been filed under Section 37 of the Arbitration and Conciliation Act 1996 read with Clause 15 of the Letters Patent by the Contractor S.Manonmony, who was the petitioner in O.P.No. 532 of 2008, which Petition had been filed under Section 34 of the Arbitration and Conciliation Act seeking to set aside the award dated 12.03.2007 passed by the Arbitral Tribunal in a Claim Petition filed by the appellant. 2. O.P.No. 532 of 2008 came up for consideration before the learned Single Judge of this Court on 23.01.2018 and by Order of even date, the Original Petition was dismissed holding that the Court could not act as an Appellate Authority while exercising powers under Section 34 of the Arbitration and Conciliation Act 1996. 3. The appellant Manonmony claimed to be a Standing Civil Engineering Contractor doing construction work for Southern Railway. 4. Southern Railway had called for an open tender for construction works in its Tender Notice No. 31/CE/CN/2001 dated 05.12.2001. The offer of the appellant was accepted by letter dated 21.04.2002. The total value of the contract was Rs.69,72,041/- and the period fixed for completion of works was six months from the date of acceptance. The work primarily consisted of a proposed reconstruction of minor bridges. Since it was found that the appellant had not completed the reconstruction even within the extended period, an order of termination was passed. The appellant then sought recourse to settle the dispute through arbitration and filed a Claim Petition before the Arbitral Tribunal raising 14 claims against the respondent, Southern Railway. The respondent also filed three counter claims. The Arbitral Tribunal held that the termination order was wrong and passed an award granting some of the claims raised by the appellant. The counter claims of the respondent were rejected. 5. The following tabular column gives the summary of awards granted by Arbitral Tribunal:- S. No. Nature of Claim Claim amount Rs. Amount Awarded Rs. 1. Whether the claimant is entitled to get Rs.8200 towards the expenditure met with for repairing the temporary girder 8200 8200 2. Whether the claimant is entitled to get Rs.12,500/- towards the expenditure met with for trucking out the temporary girder from the unloading point to the bridge site 12,500 Nil 3. Whether the claimant is entitled to get 40% for precast RCC box segments 45,500 Nil 4.
Whether the claimant is entitled to get Rs.12,500/- towards the expenditure met with for trucking out the temporary girder from the unloading point to the bridge site 12,500 Nil 3. Whether the claimant is entitled to get 40% for precast RCC box segments 45,500 Nil 4. Whether the claimant is entitled to get Rs.7000/- towards extra expenditure met with for dismantling existing bridge masonry 7,000 Nil 5. Whether the claimant is entitled to get Rs.5,38,841/- towards losses on account of non-execution of work on account unwanted termination 5,38,841 2,69,420 6. Whether the claimant is entitled to get Rs.1,04,000/- for the losses on account of materials collected at site but not used and since idling at site 1,04,000/- 20,000 7. Whether the claimant is entitled to get Rs.4,68,000/- for the damages suffered due to idling of machines tools and plants etc. 4,68,000 Nil 8. Whether the claimant is entitled to get Rs.1,60,000 for the losses suffered through damage to shuttering materials 1,60,000 40,000 9. Whether the claimant is entitled to get Rs.3,14,175/- for the loss sustained by way of idling of labourers 3,14,175/- Nil 10. Whether the claimant is entitled to get Rs.12,000/- for the loss sustained by way of under utilization of temporary sheds 12,000 Nil 11. Whether the claimant is entitled to get Rs.18,000 for the balance work done. 18,000 18,367 12. Whether the claimant is entitled to get Rs.35,460/- for payment of interest to the money borrowed from bank 35,460 Nil 13. Whether the claimant is entitled to get Rs.95,490/- towards establishment and other overhead charges to a tune of 3% to the balance work to be executed 95,490 Nil 14. Whether the claimant is entitled to get Rs.1,63,725 as interest at 18% p.a from November 2002 to April 2003 ie., the date of termination 1,63,725 54575 Total 411562 6. Questioning denial of award of some of the claims and also the quantum awarded, the appellant herein, aforesaid, filed O.P.No. 532 of 2008 under Section 34 of the Arbitration and Conciliation Act 1996. 7. In the Order of the learned Single Judge, it had been stated that the counsel for the appellant had restricted the challenge to the award only to claim Nos. 2, 5 and 6. The relevant portion of the order of the learned Single Judge with respect to claim Nos. 2, 5 and 6 are extracted below for ready reference:- “4.
In the Order of the learned Single Judge, it had been stated that the counsel for the appellant had restricted the challenge to the award only to claim Nos. 2, 5 and 6. The relevant portion of the order of the learned Single Judge with respect to claim Nos. 2, 5 and 6 are extracted below for ready reference:- “4. Insofar as Claim No.2 is concerned, a sum of Rs.12,500/- was claimed. Learned counsel appearing for the petitioner would submit that the Tribunal has not taken into consideration the case of the petitioner as projected. For this claim, the first respondent did give a reply. The Tribunal considered both the case of the petitioner and the first respondent and rejected the claim. For coming to the conclusion, the Tribunal held that there was no extra work involved in view of the work other than the works specified in the schedule. The petitioner cannot claim as a matter of right that the running of the train should be stopped, slowed down or to be done during the night time. Having understood the terms of the contract, it cannot be raised as a claim as a matter of right. The Tribunal rejected the claim as not sustainable. As the said decision of the Tribunal is based upon facts, no interference is required. 5. Insofar as Claim No.5 is concerned, a sum of Rs.2,69,420/- was awarded. While dealing with this, the Tribunal was pleased to hold that the petitioner was also responsible in not taking appropriate effort to place box segment. Therefore, the negligence or mistake as the case may be is attributed to both the petitioner as well as the first respondent. Merely because the termination order was found to be wrong, the petitioner is not entitled for the amount as claimed by it. After all, the petitioner is also expected to act in a responsible manner and therefore, there is nothing wrong in the Tribunal granting lesser amount, after having found that the petitioner did not take any action to mitigate the circumstances resulting in loss. 6. Similarly, while dealing with Claim No.6, the Tribunal, on fact, found that the petitioner did not bring any cement for the work to be carried out for Bridge No.67. Therefore, on that factual premise, a sum of Rs.20,000/- was awarded for the transportation and re-transportation and the loss of material.” 8.
6. Similarly, while dealing with Claim No.6, the Tribunal, on fact, found that the petitioner did not bring any cement for the work to be carried out for Bridge No.67. Therefore, on that factual premise, a sum of Rs.20,000/- was awarded for the transportation and re-transportation and the loss of material.” 8. The learned Senior Counsel Mr. K.V.Subramaniam, who appeared for the appellant raised a point that claim No. 5 as presented before the Arbitral Tribunal consisted of three parts and the Tribunal had not answered each one of them. The learned Senior Counsel therefore argued that on that score, the matter must be remanded back before the Arbitral Tribunal. 9. We disagree. 10. As stated by the learned Single Judge, the negligence or mistake with respect to the claim No.5 is concerned, is attributable to both the appellant and the respondent. The reason given by the learned Single Judge that the appellant did not take any action to mitigate the circumstances resulting in loss as a finding of fact is justified and we are not inclined to interfere with the same. However, it is also seen that the Arbitral Tribunal had actually examined claim No. 5 in totality. Claim No. 5 was for loss on account of non execution of work on account of unwarranted termination. It had been found as a fact that the work involved reconstruction of fifteen minor bridges. Out of these fifteen bridges, four bridges have to be done by cut open method. It had been found as a fact that these four bridges can be executed during mega block period by cut open method. The mega block period means total closure of train service. It has been further found as a fact that the appellant had not placed the segments of three bridges in position when the train services were in operation. It was found by the Tribunal that both the appellant and the respondent deliberately avoided to execute those work in line block. It was also found as a fact that for the remaining eleven bridges, the appellant’s progress with one temporary girder was poor. It was further found that the appellant had not optionally used the temporary girder supply to ensure progress. Consequently, the Arbitral Tribunal had granted 50% of the claim amount.
It was also found as a fact that for the remaining eleven bridges, the appellant’s progress with one temporary girder was poor. It was further found that the appellant had not optionally used the temporary girder supply to ensure progress. Consequently, the Arbitral Tribunal had granted 50% of the claim amount. It is thus seen that the Arbitral Tribunal had actually applied its mind to the entirety of the facts under claim No.5 and consequently, we find no infirmity in the order of the learned Single Judge rejecting the challenge to the same. 11. As correctly pointed out by the learned Single Judge, the decision of the Tribunal was based on facts and consequently no interference is possible and also not required. As also correctly pointed out by the learned Single Judge, the Court under Section 34 of the Arbitration and Conciliation Act cannot act as an Appellate Authority. The scope of Section 34 of the Act is very narrow and re-appreciation of evidence and substitution of opinion would be highly improper and unwarranted. 12. However in the grounds of appeal, the appellant had also stated that he had not instructed his counsel to restrict the challenge to the award to only claim Nos. 2, 5 and 6. In this connection, an affidavit had also been filed by the appellant. In view of the same, though the scope of examination of facts in an appeal under Section 37 of the Act is very limited, we also examine the reasoning of the Arbitral Tribunal with respect to the other claims. A perusal of the summary of awards show that the appellant’s claim Nos. 3, 4, 7, 9, 10, 12 and 13 had been totally rejected and a reduced amount had been granted for claim Nos.8, 11 and 14. 13. With respect to claim No.3, the Tribunal had clearly found that the appellant would become eligible for the amount only after launching and placing the pre-cast box segment in total which work had not been executed. Consequently, it is a finding on fact and no interference is required. 14. With respect to claim No. 4, the Tribunal had concluded that there was no ambiguity relating to dismantling of stone masonry in lime mortar and had not granted any compensation. This is also a finding of fact based on evidence and we hold it requires no interference. 15.
14. With respect to claim No. 4, the Tribunal had concluded that there was no ambiguity relating to dismantling of stone masonry in lime mortar and had not granted any compensation. This is also a finding of fact based on evidence and we hold it requires no interference. 15. With respect to claim No.7, the Tribunal had found that there were material evidence had not been adduced to substantiate the claim relating to damages suffered due to idling of machines, tools and plant etc.,. Since no evidence had been adduced by the appellant before the Tribunal, this claim has also rejected by us. 16. With respect to claim No.8 which related to loss suffered through damage to the appellant’s shuttering materials, it had been found that the reason for not executing the bridges fell equally on both the appellant and the respondent and the Tribunal had granted 1/3rd of the cost of materials as a reasonable compensation. We hold that the Tribunal’s finding on this aspect does not warrant any interference. 17. With respect to claim No.9, it had again been held by the Tribunal that there was no material evidence to prove that labour were kept idle for five months. Again since there no evidence had been adduced by the appellant, we hold that the rejection of the claim requires no interference. 18. With respect to claim No. 10, the Tribunal had considered it as a part of contract work and consequently did not award any compensation. This also being a finding of fact does not warranted any interference. 19. With respect to claim No.12, the Tribunal has specifically found that the loss suffered by the appellant due to loss of payment of interest for money borrowed from Bank cannot be laid on the respondent. The reasoning is fully justified and does not require interference. 20. With respect to claim No.13, it was specifically found by the Tribunal that the appellant had not maintained any establishment when there was no work and consequently did not grant any compensation. Again, we hold that the reasoning was fully justified and does not require interference. 21. With respect to claim No.14, the Tribunal had awarded interest at the rate of 8% and since the same cannot be held to be perverse, we hold it does not require interference. 22.
Again, we hold that the reasoning was fully justified and does not require interference. 21. With respect to claim No.14, the Tribunal had awarded interest at the rate of 8% and since the same cannot be held to be perverse, we hold it does not require interference. 22. We have taken up the exercise of examining the claims which had not been answered by the learned Single Judge only because the appellant had filed an affidavit stating that he had not instructed his advocate to restrict the arguments with respect to claim Nos. 2, 5 and 6 alone before the learned Single Judge. 23. We are convinced that the findings of the Tribunal are based only on facts and does not warrant any interference. 24. In (2004) 5 SCC 109 [Bharat Coking Coal Ltd., Vs. L.K.Ahuja], the Hon’ble Supreme Court had held as follows:- There are limitations upon the scope of interference in awards passed by an arbitrator. When the arbitrator has applied his mind to the pleadings, the evidence adduced before him and the terms of the contract, there is no scope for the court to reappraise the matter as if this were an appeal and even if two views are possible, the view taken by the arbitrator would prevail. So long as an award made by an arbitrator can be said to be one by a reasonable person no interference is called for. However, in cases where an arbitrator exceeds the terms of the agreement or passes an award in the absence of any evidence, which is apparent on the face of the award, the same could be set aside. 25. In this case, the Tribunal had considered the evidence on record and had passed a well considered award, based evidence adduced and we hold there is no scope to reappraise the matter. 26. In view of the above reasons, we hold that the Appeal is devoid of merits and consequently, the Appeal is dismissed. No order as to costs.