JUDGMENT
Vikramajit Sen, J.
1. The question that has been raised is whether it was possible for the learned Arbitrator to base his Award on three principles – (a) incorporation (b) implied theory and (c) unjust enrichment and constructive trust. The Award has been challenged on the grounds that it is contrary to the decisions of the Hon’ble Supreme Court in Rajasthan State Mines and Minerals Ltd. v. Eastern Engineering Enterprises and Anr., , Associated Engineering Co. v. Govt. of A.P, , Sikkim Suba Associates v. State of Sikkim, JT 2001 (5) 186, New India Civil Erectors v. ONGC, , V.G. George v. India Rane Earths Ltd., , Steel Authority of India v. J.C. Budhi Raja, , Continental Construction v. State of M.P., Oil and Natural Gas Corporation Ltd. v. SAW Pipes Ltd., . It is contended that the learned Arbitrator has erroneously introduced principles of equity and constructive trust in the Award. The settled position, as has been reiterated in the decisions above mentioned, is that the learned Arbitrator, being a creature of the Contract itself, cannot transgress its frontiers.
2. It is equally well settled that the functions of a Court which is seized with Objections to an Award is not in the nature of an Appellate Body. The present dispute has to be decided in the context of the Arbitration Act, 1940 where the scope of the judicial inquiry has empirically proved to be very broad. This has sought to be narrowed down in the Arbitration and Conciliation Act by restricting it inter alia to a transgression of public policy. Even under the old regime, however, as mentioned above, the Court was not to substitute its understanding with that of the learned Arbitrator. The Hon’ble Supreme Court has even gone to the extent of stating that since the learned Arbitrator is the master of facts, errors on facts ought not to be lightly interfered with by the Court.
3. Two score years have passed since the decision of Union of India v. Rallia Ram, , the following observations of the Apex Court in this case have not been varied.
”An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decided a dispute submitted to him is ordinarily not liable to be challenge on the ground that it is erronous. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary Courts. The Court is also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those referred. The Court has also power to remit the award when it has left some matters referred undetermined, or when the award is indefinite or where the objection to the legality of the award is apparent on the face of the award. The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or willful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. But it is now firmly established that an award is bad on the ground of error of law on the face of it, when in the award itself or in a document actually incorporated in it, there is found some legal proposition which is the basis of the award and which is erroneous”.
4. Acknowledging that the Arbitrator is the final judge of facts, the Apex Court in State of Orissa and Anr. v. Kalinga Construction Co. (P) Ltd., held that the High Court erred in considering the matter as a court of appeal and in re-evaluating the evidence and that it further erred in recording a finding in reversal of the conclusions of the arbitrator. In Hindustan Iron Co. v. K. Shashikant and Co., the Court held that the award of the Arbitrator ought not to be set side for the reason that, in the opinion of the Court, the Arbitrator reached wrong conclusions or failed to appreciate the facts. That this was a well settled proposition of law was reiterated in the decision of the Apex Court in Coimbatore District Podu Thozillar Sangam v. Balasubramania Foundary and Ors, where it has been opined that it is only an error of law and not a mistake of fact committed by the arbitrator which is justifiable in the application/objection before the Court. If there is no legal proposition either in the award or in any document annexed with the award which is erroneous and the alleged mistakes or alleged errors, are only mistakes of fact and if the award is made fairly, after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement, the award is not amenable to corrections of the Court. Similar views were again expressed in Indian Oil Corporation Ltd. v. Indian Carbon Ltd., (1988) SCC 36; Jawahar Lal Wadhwa and Anr. v. Haripada Chakroberty, ; Puri Construction Pvt. Ltd. v. Union of India, ; M/s. Sudarsan Trading Co. v. Government of Kerala and Anr., (1989) 2 SCC 30; Food Corporation of India v. oginderpal Mohinderpal and Anr., where even a plausible view taken by the Arbitrator was held not to be open to Court interference. In Municipal Corporation of Delhi v. M/s. Jagan Nath Ashok Kumar and Anr., the Court held that if the reasons appear per se to be not unreasonable and irrational the Court ought not to reappreciate the evidence. In Hind Builders v. Union of India, the Court cautioned that where two views were possible it could not be predicated that there was an error apparent on the face of the award. In Bijendra Nath Srivastava v. Mayank Srivastava and Ors., the view was expressed that the reasonableness of reasons given by the arbitrator were not open to challenge and that the proper approach would be for the Court to support the award. Similarly, in Hindustan Construction Co. Ltd. v. Governor of Orissa and Ors., it was repeated that the Court cannot reappreciate the material on the record. In Trustees of the Port of Madras v. Engineering Constructions Corporation Ltd., the decision of a Division Bench of the High Court of Madras, which reversed the Award on a question of fact and not a question of law, was set aside by the Supreme Court. After considering its previous decisions, the Apex Court in B.V. Radha Krishna v. Sponge Iron India Ltd., again held that the Court could not substitute its own view in place of that of the Arbitrator. In Army Welfare Housing Organisation v. Gautam Construction and Fisheries Ltd. the Court declined to vary an award for the reason that without re-appreciating evidence it would not be possible to fault the quantum awarded towards anticipated expenses.
5. The Claimant has entered into a Contract with the Respondent for the performance of a portion of the Contract awarded by National Hydroelectric Power Corporation (NHPC) to Hindustan Steelworks Construction Ltd. (HSCL) broadly for the excavation of earth which portion had been sub-contracted by HSCL to the Respondent. Rates had been agreed to for this Work which was Rs. 14/- + 10 per cent per cubic meter. In other words, if the Respondent had performed the Contract, and had not sub-contracted it still urther in favor of the Claimant these rates would have inured to in favor of the Respondent.
6. As I see it there can be no premium in these rates. They are directly linked to the expenses which are likely to be incurred in the performance of the contractual obligations. Payments are made for work done and expenses incurred therein.
7. On a reading of the impugned Award it is inescapable that the learned Arbitrator has discussed the principles of incorporation, unjust enrichment and equity and has, as is apparent, infused these principles into the Award. A detailed consideration of the Award would reveal that these principles have only assisted the learned Arbitrator in actually construing the terms of the Agreement. Where the language adopted and employed in an Agreement is precise and explicit, controversies do not arise. The disputes, or imagined disputes, usually would not find their way to a Court of Law. It is my appreciation of the Award that basically the learned Arbitrator has done nothing more than consider the terms of the engagement between the parties. Where the sundry clauses do not immediately bring out the exact Agreement between the parties, by a dialectic which encompasses concepts such as undue engagement, trust, act, equity, he has by adopting a percutaneous approach gone under the surface of the contract in order to understand what the parties had contracted to perform.
8. As I see it if the Respondent is entitled to rate of Rs. 33.49/- etc. that was surely not by way of a windfall, but was for compensation for work actually done. In the detailed and reasoned Award the learned Arbitrator has come to the conclusion that the terms of Agreement subsisting between the Respondent and HSCL had been incorporated into the Contract between the Claimant and the Respondent. They were back-to-back contracts. As I read the Award it is palpably clear that if this was not so, and the revised rates were not in the nature of rates payable for Work done, the entire transaction would have been vitiated inter alia on the anvil of unjust enrichment. It is not disputed that an escalation in the rates of Rs. 14/- + 10 per cent was under consideration when the subject agreement had been entered into.
9. Having heard the arguments from learned counsel for the parties for almost two hours, I cannot agree with learned counsel for the Respondent that the learned Arbitrator has gone beyond the Contract. He has merely interpreted it, and filled in flesh to what he considered unexpressed or badly worded covenants between the parties. No grounds to interfere in the Award are made out.
10. The only question that remains is that of Interest. The learned Arbitrator has awarded it at the rate of fifteen per cent from 1.1.1994 till the passing of the Decree or payment whichever is earlier. No payment has been made till date. I am of the vie w that awarding interest at the rate of fifteen per cent per annum, in the present market situation, may be excessive. Accordingly, if the decreetal amount is paid within thirty days from today no interest will be payable from the date of the passing of he Decree. However, if this is not so done, interest shall be payable from the date of the Decree at the rate of twelve per cent per annum on the decreetal amount.
11. I find no error of law apparent on the face of the Award. There is no reason to remit or to modify the Award. There is also no ground for reconsidering or setting aside the Award. I accordingly pronounce judgment according to the Award. In these circumstances, the Objections are dismissed and the Award is made Rule of the Court.
12. Decree-sheet be drawn up accordingly.