State of Rajasthan Through Sec P W D Jaipur v. Barmer Golden Transport Company, Barmer, Barmer Station Road, Barmer
2019-12-03
PUSHPENDRA SINGH BHATI
body2019
DigiLaw.ai
JUDGMENT Pushpendra Singh Bhati, J. - This appeal under Section 39 of the Arbitration Act has been preferred claiming the following reliefs: "It is, therefore, prayed that this appeal may be allowed, impugned order and decree dated 24.11.98 and Award dated 31.7.97 may be set aside and quashed. And the claim petition of non appellant may be dismissed with costs." 2. Brief facts of this case, as noticed by this Court, are that the non-appellant is a registered Partnership Firm situated at Barmer. The non-appellant was given a contract valuing Rs.70,93,133/- for construction of the guide Bund over Luni River Bridge on Barmer-Sanchore Road kms from 595/6 to 597 of National Highway No.15 (Job. No.162 RJ 15) and was to be completed on 15.09.1977. However, the job was completed on 05.06.1978. 3. The difference of payment resulted into the dispute being referred to the Sole Arbitrator. The non-appellant submitted his claim, in which it was mentioned that he had started the above work and completed the same. However, it was alleged that he had been paid less amount than claimed for the said work. 4. As the pleaded facts would reveal, for claim No.1, the non-appellant claimed that he had used the hard clay and claimed Rs.6226/-, whereas the payment was not made accordingly. For claim No.2, he had stated that the actual water level was upto 339 fts. and he claimed Rs.1,14,149/-, but payment was made while treating the water level upto 337 fts. For claim No.3, the non-appellant claimed Rs.1,46,289/-. For claim No.4, a sum of Rs.33,331/- was claimed. For claim No.5, a sum of Rs.2,54,334/- was claimed. For claim No.6, a sum of Rs.1,13,000/- was claimed. For claim No.7, a sum of Rs.1,88,469/- was claimed. For claim No.8, a sum of Rs.13,531/- was claimed. For claim No.9, a sum of Rs.6539.52/- was claimed. For claim No.10, Rs.7,24,946.05 was claimed. In this way, a total sum of Rs.15,00,813/- was claimed by the non-appellant from the appellants. For claim No.11, interest amounting to Rs.70,06,710/- was claimed. 5. The appellant, as pleaded in this appeal, submitted reply to the aforesaid claim and denied all the claims in the following manner: "1. For claim No.1, it was stated that the classification of excavation was to be decided by the Engineer and his decision had to be final.
For claim No.11, interest amounting to Rs.70,06,710/- was claimed. 5. The appellant, as pleaded in this appeal, submitted reply to the aforesaid claim and denied all the claims in the following manner: "1. For claim No.1, it was stated that the classification of excavation was to be decided by the Engineer and his decision had to be final. Since the extra item slip submitted by the Assistant Engineer was not according to the work done by the non-appellant, and therefore, the payment on this head was not made. 2. As regards claim No.2, it was specifically replied that saturated soil level was 337 fts and not 339 fts and thus, the payment was not liable to be made on this head. 3. As regards claim No.3, it was replied that the soil was found suitable for use on guide. But since the non-appellant had already completed the embankment of the guide bund and he could not use the same, therefore, he poised this claim. 4. For claim No.4, it was stated that the non-appellant had done the earth work cutting for Ch.2 and 16 only and not Ch. 2 to 25 and the payment was made accordingly. 5. For claim No.5, it was replied that extra work done by the non-appellant was cut out by the non-appellant's labour and put in the guide bund and therefore, there was no question of making payment for this item. 6. Claim No.6 was replied in this manner that as per the agreement the payment is being made for the item of pitching in break up separately for supply of stone, kts carriage and labour charges and thus, the claim was misconceived and baseless. 7. For claim No.6 reply was given that the contractor had been paid as per the relevant clause 305.7. 8. For claim No.8, it was replied that non-appellant was instructed to supply on jhinkra and carriage of jhinkra and metal. He was neither instructed nor he supplied the stone metal and pitching stone. The payment has been made according to the approved extra item slip. 9. For claim No.9, it was replied that recovery of transportation charges of Dozer was rightly debitable to the contractor as they were transported from Jaipur workshop. 10.
He was neither instructed nor he supplied the stone metal and pitching stone. The payment has been made according to the approved extra item slip. 9. For claim No.9, it was replied that recovery of transportation charges of Dozer was rightly debitable to the contractor as they were transported from Jaipur workshop. 10. For claim No.10, it was replied that item No.10 of the G schedule provides only for stone weighing not less than 40 KG each after blasting at quarry site for pitching and soren." 6. Thereafter, on 30.05.1997, the learned Arbitrator passed the following Award: "1. The respondents shall pay to the claimant a sum of Rs.12,52,525/- only. 2. The claimant's claim for past interest is rejected. 3. The respondents shall further pay to the claimant interest pendente lite on Rs.12,52,525/- @ 18% p.a. for the period from 1.11.1993 till decree or payment whichever is earlier. 4. The claimant will get Rs.11,000/- only from the respondents towards cost of arbitration proceedings." 7. The appellants submitted detailed objections and prayed the court not to make the Award as rule of court. It was specifically mentioned in the objections that the learned Arbitrator has misconducted himself and has ignored the terms and conditions of the agreement and it was also prayed that the amount has been awarded in utter disregard of the terms of the agreement and the same was further contrary to the record. 8. Thereafter, the matter was taken up for final hearing on 21.12.1998 and the Award dated 30.05.1997 was made rule of court, and apart from the interest awarded by the learned Arbitrator, further interest from the date of decree till realization was also awarded @ 18% per annum. 9. Aggrieved by the aforementioned judgment and decree dated 21.12.1998 and the award dated 30.05.1997, the present appeal has been preferred. 10. Learned counsel for the appellants submitted that this Hon'ble Court passed the following order on 07.02.2005, which summarized the developments in the case, after filing of the appeal: "The matter comes up on second stay application. The appeal was initially filed on 17.3.99 and it was going on for admission. In the meantime, on 30.3.2000, an adjournment was sought on the side of respondent, and while adjourning the case to 4.4.2000, execution proceedings were ordered to be stayed. Thereafter, vide order dated 25.8.2000, the appeal was dismissed summarily.
The appeal was initially filed on 17.3.99 and it was going on for admission. In the meantime, on 30.3.2000, an adjournment was sought on the side of respondent, and while adjourning the case to 4.4.2000, execution proceedings were ordered to be stayed. Thereafter, vide order dated 25.8.2000, the appeal was dismissed summarily. That order was challenged before the Hon'ble Supreme Court, and I am informed that while granting special leave petition, condition was imposed on the appellant to deposit Rs.10 lacs, which the appellant has deposited, and that amount has been paid to the respondent. Thereafter, vide order dated 23.8.2002, the appeal was allowed by Hon'ble Supreme Court on the ground that order dismissing the appeal does not contain reasons, while the High Court was under an obligation together with duty to deal with the matter with some reasoning. Thereafter, on 13.1.2004, appeal was admitted, and then second stay application was filed, seeking stay of recovery proceedings. With a view to satisfy about the prima facie error in the award and/or of the Judgment of learned trial court, the learned counsel for the parties were heard. The first objection raised was that the claim of the claimant was barred by time, and Arbitrator has wrongly taken the claim to be in time. The learned counsel for the appellant, read to me the finding of the Arbitrator, starting from page 20 of the Award, and after reading page 23, wherein the Arbitrator had found that there is long drawn correspondence between the parties, and the Arbitrator was appointed by the Chief Engineer of the appellant vide order dated 1.11.93, and that in between the correspondence continued from both the sides, and there is nothing on record to show that claim of the claimant was ever rejected. On reading this finding, the learned counsel submitted that for the present purposes, leaving the question of limitation, prima facie rather ex-facie error appears in the findings of the Arbitrator, while deciding claim no.10, inasmuch as, controversy involved in claim no.10, was about the entitlement of the Contractor to receive the payment @15/- per cubic meter as the cost of using random rubble stone of size not less than 40 kg each for doing stone pitching of the guide bund. While according to the Contractor, payment has been made treating it to be soling stone @8/- per cubic meter.
While according to the Contractor, payment has been made treating it to be soling stone @8/- per cubic meter. According to learned counsel for the appellant, as a matter of fact, payment was not paid to the Contractor @ 8/- per cubic meter, but was made @ 12/- per cubic meter. Thus even if the Contractor is entitled to receive the payment @ 15/- per cubic meter, calculation was required to be made for making the payment considering the payment made to the Contractor which has been paid @ 12/- per cubic meter. For the present purposes, taking the above ground at its face value, what it comes to it, that under item no.10, Arbitrator has found the contractor entitled to Rs.724946/-, and if calculation was to be made according to learned counsel for the appellant, amount would come to something around Rs.3.05 lacs. In these circumstances, it is directed that recovery of amount under impugned orders, to the extent of Rs.4.5 lacs, along with interest shall remain stayed, provided the appellant pays the entire remaining amount within a period of six weeks from today, as no other dispute was raised for the purpose of stay." 11. Learned counsel for the appellants makes three basic submissions. Firstly, that the claim arose after the job was completed in 1978, whereas the dispute has been raised only in 1994. Secondly, that the quantum, which has been allowed by the learned Arbitrator, is going against the basic GSR Rates, which are available on record in the shape of additional affidavit. Thirdly, that the appointment of the Arbitrator itself was wrong, as there was no arbitration clause in the agreement between the parties. 12. Learned counsel for the appellants relied upon the precedent law laid down by the Hon'ble Supreme Court in State of Tripura and Ors. Vs. Arabinda Chakraborty and Ors. (Civil Appeal No.1322 of 2007 decided on 21.04.2014, relevant portion of which reads as under: "13. It is a settled legal position that the period of limitation would commence from the date on which the cause of action takes place. Had there been any statute giving right of appeal to the respondent and if the respondent had filed such a statutory appeal, the period of limitation would have commenced from the date when the statutory appeal was decided. In the instant case, there was no provision with regard to any statutory appeal.
Had there been any statute giving right of appeal to the respondent and if the respondent had filed such a statutory appeal, the period of limitation would have commenced from the date when the statutory appeal was decided. In the instant case, there was no provision with regard to any statutory appeal. The respondent kept on making representations one after another and all the representations had been rejected. Submission of the respondent to the effect that the period of limitation would commence from the date on which his last representation was rejected cannot be accepted. If accepted, it would be nothing but travesty of the law of limitation. One can go on making representations for 25 years and in that event one cannot say that the period of limitation would commence when the last representation was decided. On this legal issue, we feel that the courts below committed an error by considering the date of rejection of the last representation as the date on which the cause of action had arisen. This could not have been done." 13. Learned counsel for the appellants has also placed reliance on the judgment rendered by this Hon'ble Court in Union of India Vs. M/s. Madan Mohan Jain and Sons and Anr. (S.B. Civil Misc. Appeal No.2780/2016 decided on 17.01.2019), relevant portion of which reads as under: "11. In the backdrop of facts and circumstances of the instant case and the ratio decidendi of the above-cited judgments, if the grounds set out by the appellant for rescinding arbitral award are objectively examined, then it would ipso facto reveal that appellant has taken shelter of a ground castigating Arbitrator to travel beyond the scope of the reference submitted to arbitration. Besides that, it is also challenged on the anvil of Fundamental Policy of India and contrary to the materials available on record. A ground is also set out in the application that findings of the sole arbitrator are perverse and patently illegal. Therefore, while concurring with the submission of learned counsel for the respondent-contractor that scope of judicial review under Section 34 of the Act is not akin to appellate jurisdiction and is very limited one, I may hasten to add that at least it is expected of the learned Court below to record its finding negating the grounds set out by the appellant. 12.
12. I am aghast that the learned Court below, after narrating the factual aspects and discussing the legal precedents, rejected all the grounds in an absolutely cursory manner. If the impugned order is subjected to legal scrutiny, then it is clearly apparent that the learned Court below while nixing the application of the appellant has not even whispered that how and in what manner grounds raised by the appellant are not tenable. The entire finding in this regard finds mention in Para 10 which in my view cannot satisfy the test of finding as being bereft of any reason and simply depicts the conclusion of the learned Court below. This sort of situation, in my view, has rendered impugned order vulnerable." 14. On the other hand, learned counsel for the respondent submitted that the limitation of 1979 to 1994 would not be a bar to laying the claim, because there was continuous correspondence going on between the parties, and until a finality would have reached in relation to the dispute in question, the limitation would always remain alive. 15. Learned counsel for the respondent also submitted that the quantum was justified and the additional affidavit brought on record cannot be taken into consideration by this Court, at this belated stage. 16. Learned counsel for the respondent further submitted that the aforequoted order dated 07.02.2005 passed by this Hon'ble Court, was an interim order, and thus, cannot be said to be a final culmination of the dispute in question. 17. Learned counsel for the respondent also submitted that the language of aforementioned order dated 07.02.2005 indicates that counsel for the appellant had given up the cause of limitation, at the threshold, when the order was being passed. 18. Learned counsel for the respondent has relied upon the precedent law laid down by the Hon'ble Supreme Court in Puri Construction Pvt. Ltd. Vs. Union of India, (1989) AIR SC 777 ; Bhagawati Oxygen Ltd. Vs. Hindustan Copper Ltd., (2005) 6 SCC 462 ; Shree Ram Mills Ltd. Vs. Utility Premises (P) Ltd., (2007) 4 SCC 599 ; Rashtriya Ispat Nigam Ltd. Vs. M/s. Prathyusha Resources and Infra Private Ltd. and Anr.,2016 2 CJ(Civ)(SC) 399 ; State of Maharashtra Vs. M/s. Hindustan Construction Company Ltd.,2010 1 WLC(SC)Civ 646 ; Ravindra Kumar Gupta and Co. Vs. Union of India, (2010) 1 SCC 409 and; G.Ramachandra Reddy and Co. Vs.
Utility Premises (P) Ltd., (2007) 4 SCC 599 ; Rashtriya Ispat Nigam Ltd. Vs. M/s. Prathyusha Resources and Infra Private Ltd. and Anr.,2016 2 CJ(Civ)(SC) 399 ; State of Maharashtra Vs. M/s. Hindustan Construction Company Ltd.,2010 1 WLC(SC)Civ 646 ; Ravindra Kumar Gupta and Co. Vs. Union of India, (2010) 1 SCC 409 and; G.Ramachandra Reddy and Co. Vs. Union of India and Anr., (2009) 6 SCC 414 . 19. After hearing learned counsel for the parties as well as perusing the record of the case alongwith the precedent laws cited at the Bar, this Court is of the opinion that the schedule of the rates prescribed for completion the work in question is on record alongwith the additional affidavit. 20. This Court finds that the schedule speaks of the supply of soling stone for pitching and apron of weighing not less than 40 Kgs. each after blasting at quarry site and had a rate of Rs.8/- per cubic meter. However, as per learned counsel for the appellant, the G-Schedule rate for the above item of work was Rs.12 per cubic meter in the work order. 21. This Court observes that the final bill of the contractor had been paid by the same rate i.e. @ Rs.12 per cubic meter and no deductions have been made. 22. On perusing the record, this Court finds that the learned Arbitrator has taken the rate of Rs.15 per cubic meter, which was neither existing on record and does not having any substantiation. 23. This Court also takes note of the fact that the learned Arbitrator passed the claim without going through the final bill, recorded rates and the measurement books, and passed the claim as under:- Quantity of work for said item 99,117.71 cum Wrong rate assumed to pay beyond G-schedule rate 15.0 per cum Payment said to be made by Department at wrong rate 8.00 per cum Wrong difference in rate for this item 15-8=7.00 cum Wrong claim passed 99,117.71 x 7 = 724946 (i.e. 4.5% TP above Wrong interest on the above amount (A) @ 18% for 7 years paid 724946 x 18/100 x 7 year =913432 Total wrong claim passed (A+B) 16,38,378/- 24.
This Court is thus of the opinion that the submission made on behalf of the appellants that the claim not being raised from 1978 to 1994 only on the ground that the claim was not rejected, cannot be accepted. 25. The precedent laws of Union of India Vs. M/s. Madan Mohan Jain and Sons and Anr. (supra) and State of Tripura and Ors. Vs. Arabinda Chakraborty and Ors. (supra), as cited by learned counsel for the appellants, are directly applicable in the present case. 26. Thus, this Court finds that the claim should have been dismissed on the ground of limitation itself, as no satisfactory reason has been provided therefor. 27. In light of the aforesaid observations, the present appeal is allowed and the impugned judgment and decree and the award are quashed and set aside. All pending applications stand disposed of. Record of the learned court below be sent back forthwith.