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2024 DIGILAW 103 (KAR)

Executive Engineer v. Theju Construction Co.

2024-02-02

H.P.SANDESH

body2024
JUDGMENT H.P. Sandesh, J. Heard the learned counsel for the appellant and though the respondent represented through the counsel, the counsel did not choose to appear before this Court. This Court made it clear in the previous occasion that if the respondent's counsel does appear in the next date of hearing, the matter will be heard in his absence. Hence, this Court heard the counsel appearing for the appellant in the absence of the respondent's counsel. 2. The main contention of the appellant's counsel that the Trial Court erroneously reversed the arbitration award in A.S.No.26/2007 filed by the respondent. The counsel also brought to notice of this Court paragraph Nos.20 and 21 of the order. In paragraph No.20 an observation is made that on perusal of the award it doesn't not disclose that, any of such applications of the plaintiff have been considered by the Arbitrator while passing the award. It has been urged by the plaintiff in Annexure -'E' viz., letter of the plaintiff to the Executive Engineer defendant No.3 and having sent copy of the same to the then Arbitrator stating that copies of some of the pages of the measurement books supplied by the Executive Engineer are not related to the work in question and measurement book numbers are even not forthcoming on the copies and also sought for complete measurement books duly certified, the said aspect has not been considered by the Arbitrator, it has to be stated that, the plaintiff has not been properly afforded opportunity and as such, the claim of the plaintiff/claimant has been affected by the said award of the Arbitrator which can be termed that, the said aspect having not been considered by the Arbitrator, it is seriously affected the case of the plaintiff. The counsel also brought to notice of this Court observation made in paragraph No.21 having considered all the aspects, when the jurisdiction of the Arbitrator itself is questioned and the very opportunity being not heard is evidence the same and as a result of same, the Arbitrator having not followed section 24 of the Arbitration and Conciliation Act, 1996, the award of the Arbitrator is liable to be set-aside. Therefore, the said materials available before the Court and in the light of the contentions of the parties and also in the light of the said rulings relied by the Advocate for the plaintiff, the circumstances involving in this case, demand for setting aside the award in question. Hence, the Trial Court exercised the power under Section 34(2) of the Arbitration and Conciliation Act, 1996 to set aside the award. 3. The counsel appearing for the appellant would vehemently contend that scope of Section 34 is very limited and also observation made by the Trial Court while setting aside the award is erraneous and inspite of sufficient opportunities is given and the same is noted in the award itself and also the counsel brought to notice of this Court the respondent was absent almost all the days i.e., out of 12 days, 6 times he was absent. Even Arbitrator while proceeding the matter also given an opportunity to submit any written submission by fixing the date and no such written submission is also made and having considered the opportunity proceeded to pass the award. The counsel would submits that the observation made by the Trial Court that there was no any jurisdiction and the same is erraneous. The counsel brought to notice of this Court clause 25 of the agreement between the plaintiff and respondent wherein it is clearly mentioned that if any dispute between the parties, the matter shall be referred to the sole Arbitrator who appointed by the Chief Engineer, Civil Wing, New Delhi in charge of the work at the time of dispute or there will be no Chief Engineer, the Administrative head of the said department at the time of the appointment. It will be no objection to such appointment that the Arbitrator so appointed is a government servant that he had to deal with the matters to which the Contracts relates and that in the force of his duties as government servant he had expressed. An express views on all or any of the matters in dispute or difference. It will be no objection to such appointment that the Arbitrator so appointed is a government servant that he had to deal with the matters to which the Contracts relates and that in the force of his duties as government servant he had expressed. An express views on all or any of the matters in dispute or difference. The Arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Chief Engineer, CPWD, Administrative held as aforesaid at the time of such transfer, vacation of office or inability to act shall appoint another person to act as Arbitrator in accordance with the terms of the contract. The counsel referring this clause would vehemently contend that when there is no dispute with regard to the referring Arbitration dispute and the very observation made by the Trial Court that without jurisdiction an order has been passed is erraneous. 4. Having heard the appellant's counsel and also on perusal of the award passed by the Arbitrator and dispute is with regard to the construction of residential accommodation for etiological Centre, Bengaluru and the very claimant himself as approached the Arbitrator and the respondent i.e., appellant herein also participated in the said arbitration proceedings. The counsel also brought to notice of this Court the claimant was absent in the beginning i.e., on 19.09.2000 and thereafter he was continuously present on four occasions i.e., on 17.10.2000, 07.12.2000, 12.04.2001, 11.07.2002 and also effective hearing was made on 11.07.2002. Both the parties were present along with their advocate and specifically mentioned that effective hearing was taken place. The counsel also brought to notice of this Court continuously again four times he was absent on 21.08.2006, 20.09.2006, 23.10.2006 and 08.11.2006, however he was represented through his counsel on 13.12.2006 and effective hearing was made. Thereafter again twice he was absent on 22.01.2007 and 09.02.2007. Having perused the award also, it is noted that respondent was represented by the Executive Engineer on 09.02.2007 but no effective hearing took place, however the Arbitrator taking into note of enough opportunities are being heard had given to both the parties, it was decided by him to give the award on the basis of records available. Having perused the award also, it is noted that respondent was represented by the Executive Engineer on 09.02.2007 but no effective hearing took place, however the Arbitrator taking into note of enough opportunities are being heard had given to both the parties, it was decided by him to give the award on the basis of records available. However, as a last chance, both the parties are directed to give any written submission particularly on the counter claim No.8 referred by the Chief Engineer on 22.01.2007, so as to reach the Arbitrator by 28.02.2007. No such written submission has been received by 28.02.2007 inspite of date was given to submit written submission. Based on the material, the Arbitrator proceeded to consider the claim made by the claimant as well as the counter claim made by the respondent. An order was passed in determining the liability on the part of the claimant to the tune of Rs.10,87,166/- with interest at the rate of 12%. 5. Being aggrieved by the said award, the same has been questioned in A.S.No.26/2007. The Trial Court having considered the material available on record and as the counsel appearing for the appellant rightly pointed out which is discussed in detail from paragraph Nos.18, taken note of Arbitrator has not given sufficient opportunity to the plaintiff. An observation is made that Arbitrator has conducted proceedings sometimes in the absence of the plaintiff, the same is contrary to the material available on record and in the order sheet, it is very clearly mentioned with regard to his absence. Even effective hearing was made when the respective counsel was present and even opportunity was given to the respondent to file his written submission also. The decision is also taken based on the documents which have been submitted. Inspite of opportunity is given to submit the written submission also fixing the date as 28.02.2007, no such written submission was filed before the Arbitrator and also no extension of time is also sought and the same is observed in the award. The decision is also taken based on the documents which have been submitted. Inspite of opportunity is given to submit the written submission also fixing the date as 28.02.2007, no such written submission was filed before the Arbitrator and also no extension of time is also sought and the same is observed in the award. The observation made in the paragraph No.19 that in respect of Annexure 'B' to 'G' as urged by the plaintiff, having not considered by the Arbitrator, it has to be said that the Arbitrator has failed to comply with certain provisions under Section 24 of Arbitration and Conciliation Act, 1996, Section 24(b) of Arbitration and Conciliation Act, 1996 and all statements and documents or other information or applications submitted to the Arbitration Tribunal by one party is mandatorily required to be communicated to other party, not only by such act of the Arbitrator as alleged by the plaintiff, can be said at this stage that, it has caused prejudice to the right of the plaintiff for having not given opportunity to the plaintiff as contended. 6. Having made the said observation and failed to take note of the award and details are given in the award itself with regard to the opportunity is given. This Court has also observed that inspite of an opportunity is given to submit their written submission also, no such submission is made. The Trial Court also having considered the material on record in paragraph Nos.20 and 22 also made an observation that the Arbitrator has not considered the material on record and also in paragraph No.21 made an observation that when the jurisdiction of the Arbitrator itself is questioned and the very opportunity being not heard is evident. Hence, the very approach of the Court to setting aside the award is also an erraneous approach by the respondent. The counsel appearing for the appellant also brought to notice of this Court clause 25 of the written contract between both the parties and there is a clause for arbitration. Apart from that the very respondent himself has approached the Arbitrator and Arbitrator has been appointed. Hence, the very conclusion that no jurisdiction and jurisdiction of the Arbitrator itself is questioned is nothing but an erraneous observation made by the Trial Court. Apart from that the very respondent himself has approached the Arbitrator and Arbitrator has been appointed. Hence, the very conclusion that no jurisdiction and jurisdiction of the Arbitrator itself is questioned is nothing but an erraneous observation made by the Trial Court. The Trial Court fails to take note of the details which have been given in the Arbitration award itself with regard to an opportunity is accorded to the respondent and without looking into the details, an order has been passed that an opportunity was not given. Hence, the very approach of the Trial Court is erraneous and also the Trial Court proceeded to consider the case on hand as the original civil suit. The very scope of the Section 34 of Arbitration and Conciliation Act, 1996 is very limited and only in case of limited circumstances the same can be set aside as the grounds set out in Section 34 of Arbitration and Conciliation Act, 1996, the Court can interfere and set-aside the award and fails to take note of limited powers under Section 34 of Arbitration and Conciliation Act, 1996. The very approach made by the Trial Court is erraneous and hence it requires interference. 7. In view of the discussions made above, I pass the following: ORDER i) The Miscellaneous First Appeal is allowed. ii) The impugned order passed by the Trial Court in A.S.No.26/2007 dated 17.02.2011 is hereby set-aside and the award passed by the Arbitrator is restored.