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2019 DIGILAW 543 (HP)

State of H. P. v. Ajay Kumar Sood

2019-05-02

SANDEEP SHARMA, SURYA KANT

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JUDGMENT : Sandeep Sharma, J. Being aggrieved and dissatisfied with judgment dated 1.5.2017, passed by the learned Single Judge in Arbitration Case No. 62 of 2015, whereby objections under Section 34 of the Arbitration and Conciliation Act (in short "the Act") having been filed by the appellants objectors (hereinafter referred to as the Objectors), laying therein challenge to award dated 29.4.2015, passed by the learned Arbitrator, came to be dismissed, objectors have approached this Court in the instant proceedings filed under Section 37 of the Act, praying therein to set-aside the aforesaid impugned judgment. 2. Precisely, the facts as emerge from the record are that objectors vide Executive Engineer, Jubbal Division, HPPWD, Jubbal letter No. 3245-51 dated 17.6.2002 awarded the work of C/o balance work on K.P.A. road km o/o to 17/0 (SH-C/O M/T work at RD 0/0 to 10/00, for Rs. 98,00,498/- with completion of time of one year. As per the statement of claims filed by the respondent-claimant (hereinafter referred to as "the claimant"), the work was completed by him on 30.6.2006 and during this period, extentsion was also granted to him till the date of completion without any compensation. Under clause 2.1 of the agreement, claimant submitted a bill for work done of Rs. 7,32,290/- dated 11.8.2008 and in addition thereto, the claim for price escalation under clause 10CC of the contract was also submitted vide letter dated 26.11.2007 for Rs. 9,08,310/- and for Rs. 1,04,871/- vide letter dated 27.11.2008. As per the claimant, bills, as referred herein above, were required to be paid within six months, but no payment was made, as a consequence of which, security deposited by it also continued to be withheld by the respondents. 3. Aggregate for the execution of work in question was though proposed to be procured locally, but subsequently, same was procured from Panchkula and as such, claimant had to incur extra carriage of Rs. 25,00,000/- payable by the objectors. Executive Engineer, Jubbal Division, HPPWD Jubbal District Shimla, H.P., recommended the case of the claimant vide letter dated 21.5.2004. However, fact remains that no such amount ever came to be paid to the claimant. As per the claimant, work in question was completed by it well within time granted by the objectors and time was extended without any levy of compensation since delay was on account of reasons not attributable to it. However, fact remains that no such amount ever came to be paid to the claimant. As per the claimant, work in question was completed by it well within time granted by the objectors and time was extended without any levy of compensation since delay was on account of reasons not attributable to it. As per the claimant, it had to keep and maintain the machinery, tool, plant and equipment during the extended period without any additional work and as such, incurred damage to the extent of Rs. 50,00,000/-, for machinery, which was rendered idle on site. Aforesaid fact was brought to the knowledge of the objectors vide letter dated 26.8.2003, but amount to the tune of Rs. 4,16,913/- was deducted from running account bills, which continued to be withheld unauthorisedly by the objectors in spite of request of the claimant. 4. Since dispute arose inter-se parties qua the aforesaid aspect of the matter, same came to be adjudicated subsequently by an arbitrator, who, vide impugned award dated 29.4.2015, allowed the claim Nos. 1 to 5 and 7 out of total 7 claims in favour of the claimant. 5. Feeling aggrieved with the passing of aforesaid award passed by the learned Arbitrator, objectors preferred objections under Section 34 of the Act before the learned Single Judge, who vide judgment dated 1.5.2017, dismissed the same and as such, in this backdrop, objectors have approached this Court in the instant proceedings. 6. Having heard learned counsel for the parties and perused material available on record vis-a-vis reasoning assigned by the learned Single Judge while upholding the award passed by the learned Arbitrator, this Court is not persuaded to agree with the contention raised by Mr. Adarsh Sharma, learned Additional Advocate General that learned Single Judge before passing impugned judgment failed to properly examine the material adduced on record by the respective parties, rather this Court finds that learned Single Judge while passing impugned judgment upholding the award passed by the Tribunal has carefully examined each and every aspect of the matter and as such, judgment under challenge does not call for any interference. 7. Since details with regard to claim set up by claimant have been already taken note of in earlier part of the judgment, it is not necessary to reproduce the same at this stage. 7. Since details with regard to claim set up by claimant have been already taken note of in earlier part of the judgment, it is not necessary to reproduce the same at this stage. Record reveals that objector No.2, Executive Engineer while refuting the claim set up by the claimant stated that work in question was awarded to the Contractor on 17.6.2002, whereas ban on mining by this Court was imposed on 21.2.2004 and as such, it ought to have completed the work as per date stipulated in the agreement i.e. 30.6.2003. While placing reliance upon communication dated 21.5.2004, objectors claimed before the learned Arbitrator that claimant was clearly apprised about the position that this delay in completion of work is not attributed to the department and as such, claims put forth by it are not maintainable/sustainable, rather he is liable to pay the department as per counter claims set-up by it. 8. Apart from the above, learned Additional Advocate General while referring to the record made a serious attempt to persuade this Court to agree with his contention that no reason came to be assigned by the Arbitrator while allowing claims set up by the respondent (claimant) and as such, impugned award deserves to be set-aside. To the contrary, Mr. J.S. Bhogal learned Senior Counsel, vehemently argued that award in question came to be passed by the learned Arbitrator on the basis of consent and admission made by the objectors themselves and as such, aforesaid argument having been made by the learned Additional Advocate General deserves outright rejection. While making this Court to peruse award passed by the learned Arbitrator as well as impugned judgment passed by the learned Single Judge, Mr. Bhogal, strenuously argued that sufficient reasons have been assigned by the Arbitrator while allowing claims and thereafter by learned single Judge while upholding the findings returned by the learned Arbitrator. 9. Having closely examined impugned award as well as judgment passed by the learned single Judge, this Court has no hesitation to conclude that contentions raised by the learned Additional Advocate General deserve outright rejection being fallacious because cogent and sufficient reasons have been assigned by the learned Arbitrator while passing the impugned award, more particularly, while allowing claim No. 2, i.e. price escalation of Rs. 10,13,181/- and claim No. 5 i.e. extra carriage of aggregate from Panchkula i.e. Rs. 10,13,181/- and claim No. 5 i.e. extra carriage of aggregate from Panchkula i.e. Rs. 25 lac, and as such, by no stretch of imagination, it can be said that award passed by the Arbitrator is either not a reasoned one or same has been passed without application of mind. 10. Apart from above, this Court finds that learned Single Judge while answering the aforesaid arguments raised on behalf of the department with regard to non-assigning of reasons and non-application of mind by the Arbitrator while passing award in question, has not only taken note of reasons assigned by the Arbitrator, rather after having perused record vis--vis reasoning assigned by the learned Arbitrator has also given his own findings qua correctness of reasoning assigned by the learned Arbitrator and as such, impugned judgment, which is based upon proper appreciation of material available on record, cannot be interfered with. 11. By now it is well settled that the scope of interference by Court is very limited while considering the objections filed under Section 34 of the Act. The award passed by the learned Arbitrator can be interfered with in case of fraud or bias or violation of principles of natural justice. Interference, if any, on the ground of patent illegality is only permissible, if same goes to the root of the case. Violation should be so unfair and unreasonable so as to shock the conscious of the court. Reliance is placed on Hindustan Tea Company v. M/s K. Sashikant & Company and Anr., AIR 1987 SC 81 , M/s Sudarsan Trading Company v. The Government of Kerala and Anr, (1989) AIR SC 890, McDermott International Inc. v. Burn Standard Company Limited and Ors., (2006) 11 SCC 181 , P.R. Shah, Shares and Stock Broker (P) Ltd., v. M/s. B.H.H. Securities (P) Ltd., and others, (2012) 1 SCC 594 , Swan Gold Mining Ltd. v. Hindustan Copper Ltd. in Civil Appeal No. 9048 of 2014, decided on 22.9.2014, Sutlej Construction v. Union Territory of Chandigarh, (2018) 1 SCC 718 . 12. 12. Moreover, there cannot be any dispute as has been repeatedly held by the Hon'ble Supreme Court as well as this Court that court while deciding objection, if any, filed by the aggrieved party under Section 34 of the Act against the award passed by an Arbitrator, does not sit in appeal over the findings returned by the learned Arbitrator and there cannot be any reappraisal of evidence on the basis of which, learned Arbitrator has passed the award. Otherwise also, in terms of Section 34 of the Act, objections, if any, raised by the aggrieved party can be considered by the court if the award is in any manner against the public policy, which certainly has to be liberally interpreted in view of the facts of the case. 13. Contention raised by the learned Additional Advocate General representing the objectors that impugned award is non-speaking and unreasoned is wholly mis-placed and deserves to be rejected because it is quite apparent from the perusal of award that Arbitrator has dealt with each and every aspect of the matter meticulously while passing impugned award. Hon'ble Apex Court in Markfed Vanaspati & Allied Industries v. Union of India, (2007) 7 SCC 679 has ruled that arbitration is a mechanism or method of resolution of dispute that unlike courts takes place in private, pursuant to agreement between the parties. In the aforesaid judgment, Hon'ble Supreme Court having taken note of its earlier judgment rendered in M/s Sudarsan Trading Co. v. Government of Kerala & Anr., (1989) 2 SCC 38 in para 29, has observed that the court in a non-speaking award cannot probe into the reasoning of the award. The Court further observed that only in a speaking award the court may look into the reasoning of the award, and it is not open to the court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator as to what impelled him to arrive at his conclusion. The reasonableness of the arbitrator's reasons cannot be challenged. The arbitrator's appraisement of the evidence is never a matter for the court to entertain. 14. In the case at hand, record also reveals that both the parties had agreed during 6th hearing held on 10.3.2014 that the amount under claim No.2, which was due and payable to claimant was Rs. The reasonableness of the arbitrator's reasons cannot be challenged. The arbitrator's appraisement of the evidence is never a matter for the court to entertain. 14. In the case at hand, record also reveals that both the parties had agreed during 6th hearing held on 10.3.2014 that the amount under claim No.2, which was due and payable to claimant was Rs. 9,74,612/- and the same had been sent to Superintending Engineer, Rohru, for approval and compensation levied under clause 2 of the award had already been waived off by the Superintending Engineer and as such, learned Single Judge rightly concluded that once the objectors themselves admitted the claim of the claimant (respondent) under the aforesaid head to be Rs. 9,74,612/-, then they cannot be permitted to resile from the said admission. 15. Consequently, in view of the detailed discussion made herein above, we find no reason to interfere with the well reasoned judgment passed by the learned Single Judge and as such, appeal is dismissed accordingly being devoid of any merits.