Research › Search › Judgment

Himachal Pradesh High Court · body

2024 DIGILAW 190 (HP)

State of H. P. v. Tarun Mahindru

2024-03-20

JYOTSNA REWAL DUA, M.S.RAMACHANDRA RAO

body2024
JUDGMENT : M.S. Ramachandra Rao, CJ. This appeal is filed by the State of Himachal Pradesh challenging the judgment dt. 11th November, 2019 in Arbitration Case No.103 of 2015 of the learned Single Judge of this Court. 2. Notice was issued to the respondent and the said notice has also been served on the respondent, but, there is no representation on behalf of the respondent. 3. After hearing the submissions of the learned Additional Advocate General, the matter is being disposed of by this judgment. 4. Work of construction of Degree College Darang at Narla, Tehsil Padhar, District Mandi was awarded to the respondent through office letter dt. 20th November, 2008 by appellant no.2 for Rs.1,88,80,682/-. The time allowed for completion of work was 18 months which was to be reckoned from the 15th day of the award letter/letter of intent dt. 1st November, 2008. Thus, the work was to be completed on or before 14.05.2010. It is alleged by the appellants that the respondent contractor could not complete the work within the stipulated time period; that the time extension was given by the Superintending Engineer, Joginder Nagar Circle on 05.08.2011, and only thereafter the work was completed and handed over to the Education Department. It is stated that gross payment amounting to Rs.2,46,97,492/- had been paid to the respondent up to 11th running bill in addition to escalation bill amounting to Rs.6,48,648/- which was also paid to the respondent. 5. The respondent, however, moved an application on 09.04.2012 raising 9 disputes and requested for appointment of an Arbitrator invoking Clause 25 of the agreement between the parties. 6. The High Court appointed Sh. J.S. Bhogal, Senior Advocate, as sole Arbitrator through order dt. 4th July, 2013 and he entered into a reference on 07.08.2013. Claims statement and reply had been filed before the Arbitrator and the Arbitrator passed the an award on 13.04.2015 as under: “As per Arbitrator Award dt. 13.04.2015 Claim Details Amount awarded A Final bill Rs.1,00,000/- B Prolongation Overheads Rs.3,90,725/- C&E Labour Cess Rs.2,54,460/- D Price escalation Rs.9,94,953/- F Watch and Ward charges Rs.27,000/- G Interest 12% p.a. from 1.2.2012 on awards against claims ‘A’ and ‘D’ till date of award. The award shall also carry interest under Section 31(7)(b) of the Act after the date of award H Costs Rs.75,000/- 7. The award shall also carry interest under Section 31(7)(b) of the Act after the date of award H Costs Rs.75,000/- 7. Questioning the same, the appellants herein had filed application under Section 34 of the Arbitration and Conciliation Act, 1996 in Arbitration Case No.103 of 2015. 8. Learned Single Judge disposed of the said case on 11.09.2019 by granting the following reliefs: “Details of award in Arbitration case dated 11.09.2019 Claim Details Amount awarded A Final bill Not allowed Claim Details Amount awarded A Final bill Not allowed B Prolongation Overheads Rs.3,90,725/- C&E Labour Cess Not allowed D Price escalation Rs.9,94,953/- F Watch and Ward charges Rs.27,000/- G Interest 12% p.a. from 1.2.2012 on awards against claims ‘A’ and ‘D’ till date of award. The award shall also carry interest under Section 31(7)(b) of the Act after the date of award H Costs Rs.75,000/- 9. To the extent the judgment of the learned Single Judge went against the appellants, the appellants have moved this appeal. 10. This Bench posed a question to the learned Additional Advocate General as to how learned Single Judge could have modified the award passed by the Arbitrator in the light of the judgments of the Supreme Court in National Highways Authority of India vs. M. Hakeem and another , (2021) 9 SCC 1 and National Highways Authority of India vs. P. Nagaraju and others., Manu/SC/08/0/2022. 11. In M. Hakeem after considering the scope of power conferred on the Court under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award, the Supreme Court held that the power of the Court under Section 34 to set aside the award would not include the power to modify such an award. The Supreme Court observed in M. Hakeem at para-48 as under:- “48. Quite obviously if one were to include the power to modify an award in Section 34, one would be crossing the Lakshman Rekha and doing what, according to the justice of a case, ought to be done. In interpreting a statutory provision, a Judge must put himself in the shoes of Parliament and then ask whether Parliament intended this result. Parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996. In interpreting a statutory provision, a Judge must put himself in the shoes of Parliament and then ask whether Parliament intended this result. Parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996. It is only for Parliament to amend the aforesaid provision in the light of the experience of the courts in the working of the Arbitration Act, 1996, and bring it in line with other legislations the world over.” 12. This has been reiterated in P. Nagrajan (2 supra). 13. In this view of the matter, we set aside the judgment dt. 11th November, 2019 in Arbitration Case No.103 of 2015 passed by the learned Single Judge and remit the matter back to learned Single Judge for consideration in accordance with principles laid down in above two decisions. Arbitration Case No.103 of 2015 is restored to the file of the Court. Learned Single Judge is requested to take up the matter and then decided it, in accordance with law within three months. 14. It is made clear that learned Single Judge can go into all findings on all claims and issues while hearing the matter afresh. 15. Accordingly, the appeal stands disposed of alongwith pending miscellaneous application(s), if any.