JUDGMENT
M.K. Sharma, J.
1. The respondent was awarded a contract for construction of 50,000 MTC godown alongwith electrical installations and internal roads by the petitioner. During the course of execution of the aforesaid work disputes arose between the parties. Subsequently, the respondent suspended and stopped work and accordingly the contract
with the respondent was terminated and the petitioner proceeded to issue a fresh tender for the incomplete work at the risk and cost of the respondent. The petitioner and the respondent requested the Managing Director of the petitioner to appoint an arbitrator in terms of clause 25 of the conditions of the contract and referred the claims of the parties to the said arbitrator. The appointing authority namely the Managing Director of the petitioner by his letter dated 15.10.1987 appointed Shri M.C.Johari as the arbitrator and the two claims of the petitioner and also about 7 claims out of total of 10 claims of the respondent were referred to the said arbitrator for decision. The claims No. 1,2.4,6 & 8 of the respondent were not referred to the arbitrator as the same were considered to be ‘excepted matters’ by the petitioner. The respondent, thereafter filed a petition in this court under Section 20 of the Arbitration Act. On the other hand Shri M.C.Johari, arbitrator entered upon the reference on 4.11.1987 and directed the parties to file their claims and counter claims statement. During the pendency of the hearing of the aforesaid reference the respondents by their letter dated 19.2.1988 informed the arbitrator that a petition under section 20 of the Arbitration Act has been filed in the High Court and the same is pending and requested to adjourn the hearing. The arbitrator, therefore, did not proceed with the arbitration. This court by order dated 20.2.1991 passed in Suit No. 1373-A/1985 disposed of the petition filed by the respondent and directed the Managing Director of the petitioner to appoint the arbitrator in terms of clause 25 of the agreement, referring the disputes as mentioned in the petition to an arbitrator to be appointed by the Appointing Authority. By letter dated 12.4.1991 the appointing authority appointed Shri B.K.Sharma, as the arbitrator and referred the claims of the respondent as specified by the High Court as also the counter claims of the petitioner pending before Shri M.C.Johari for adjudication and decision in terms of the arbitration clause. The arbitrator appointed by the appointing authority entered upon the reference and after going through the evidence adduced and after hearing the parties passed an award on 7.8.1993. The said award was filed in this court and an objection has been filed as against the said award by the respondent, which is registered as I.A.No.10187/1994.
2. I have heard the learned counsel appearing for the petitioner as also the learned counsel appearing for the respondent on the aforesaid objection as also on the issue as to whether the award should be made a rule of the court or not. In the light of the submissions advanced before me by the counsel appearing for the parties and the documents placed on record I propose to dispose of the objections as also the suit by this common judgment/order.
3. The first contention of the learned counsel appearing for the responded is that the award was made by the arbitrator in a hurry and there was violation of the principles of natural justice. It was submitted that the petitioner submitted his written submissions on 20.7.1993 and without waiting for the reply to be submitted by the respondent the arbitrator proceeded to pass his award on 27.8.1993. According to the counsel there was clear violation of the principles of natural justice. The aforesaid submission, in my considered opinion is misplaced. It is the case of both the parties
that the arbitrator heard both the parties and gave ample opportunities to place their respective cases and records. Written submissions were placed on record by the petitioner after conclusion of the hearing i.e. on 20.7.1993 and the award was passed on 7.8.1993. No reply is generally envisaged as against such written submissions. However, if so desired, the respondent could have placed on record his own written submissions immediately after conclusion of the hearing or in any case prior to the date of making the award, which was not done in the instant case. Therefore, since there was sufficient gap between the conclusion of hearing, and making of the award, during which period the respondent did not chose to file reply, if any, the aforesaid submission has no merit and is rejected.
4. It was also contended by the respondent that the arbitrator did not peruse the documents while making the award. A bare perusal of the award passed by the arbitrator would indicate that he had perused the documents on record and made reference to them in his award. He has also referred to various submissions made by Counsel appearing for the parties and, therefore, it cannot be said that there was any violation of the principles of natural justice in the present case. Said submissions is also without any force and is accordingly rejected.
5. The learned counsel appearing for the respondent also submitted that the award passed by the arbitrator as against claims No.1,3,4 & 7 are required to be set aside as there was an error apparent on the face of the record and the arbitrator misconducted himself in making the award in respect of the aforesaid claims. It was submitted that the aforesaid claims being claims No.1,3,4 & 7 relate to the release of amount in respect of the final bill, part rates, extra rates and the balance secured advance. It was submitted that although an order was passed by the court to record joint measurements which was filed as Ex.R-6 showing a sum of Rs.2,50,000/- being payable to the respondent yet the arbitrator ignored the’ joint measurement recorded as per directions of this court and awarded no amount in favour of the respondent.
6. I have carefully considered the aforesaid submissions in the light of the award passed by the arbitrator in respect of the aforesaid claims and also the records. The arbitrator has categorically recorded that during the course of voluminous correspondence exchanged between the respondent and the petitioner no mention has been made of the extra item’ relating to cutting of Jungles. The arbitrator while coming to the aforesaid conclusion has also recorded that there were a number of godowns in existence at the site and regular cleaning was done in order to guard against breeding of insects etc. He found the aforesaid contention of the petitioner as having force and substance and rejected the claim. The arbitrator also found the claim with regard to part rates for selected earth, for Chemical emulsion, tubular trusses and stone aggregates had little substance. The aforesaid conclusion has been arrived at by the arbitrator after perusal of the records and on appreciation thereof. This court cannot sit as an appellate court over the findings recorded by the arbitrator and re-appreciate the conclusions and the findings of fact arrived at by the Arbitrator. After considering the records of the case I am satisfied that no
error apparent on the face of the record has been committed by the arbitrator and therefore, the award in respect of claims No.1,3,4 & 7 are upheld and the objection stands rejected.
7. Claim No.2 relates to refund of security deposit amounting to Rs.1,62,000/-. I find that while giving his award in respect of counter claim No.1 the arbitrator has awarded adjustment of the aforesaid security deposit from the amount payable to the petitioner. Thus, in fact the arbitrator has awarded refund of the security deposit amount to Rs.1,62,000/- which was directed to be adjusted towards counter claim. No objection therefore, could be filed when the security deposit was directed to be paid by way of adjustment. The objection, thus has no merit.
8. Claim No.5 relates to withholding of Rs.30,000/- from various bills which were later on revised downwards to Rs.20,924/-. The said withholding of the amount was towards payment of electricity charges for 11 months. In my considered opinion the claim of an amount of Rs.20,000/- towards electricity charges for 11 months cannot be said to be on the higher side as has been held by the arbitrator and therefore, the award passed by the arbitrator in respect of this claim also stands upheld.
9. The next objection of the respondent is in respect of the award passed against claim No.8. It was submitted by the learned counsel appearing for the respondent that the arbitrator did not look into the relevant documents which indicate that the respondent paid the said amount and therefore, was entitled to reimbursement of the said amount. The arbitrator, while disallowing the said claim has held that in order to get the benefit under Clause 10(c) the respondent has to fulfill certain conditions and is required to submit some information and documentary proof to the Manager (Engineering), who would determine the quantum of enhancement in the rates. On consideration and appreciation of the documentary evidence on record the arbitrator found that the Engineer-in-charge had been emphasising upon fulfillment of the aforesaid condition and submission of the information and documentary proof repeatedly whereas for the reasons best known to the respondent they did not furnish the said information and documentary proof nor did they fulfill all the conditions prior to the rescission of the contract and therefore, they were not entitled to claim the same. The aforesaid conclusion is arrived at on appreciation of the documentary evidence on record and in my considered opinion, it is a finding of fact which should not be and cannot be disturbed in a proceeding of the present nature. The said objection is also rejected and the award is upheld.
10. The objection has also been filed by the respondent as against the award of the arbitrator for claims No.9 & 10. The arbitrator, on consideration of the documentary evidence on record found that the rescission of the contract by the petitioner was legal and therefore, no damages nor loss nor any amount was payable towards loss of profit. Since the arbitrator found as a matter of fact that the rescission of the contract was not invalid, the same is a finding of fact and no error apparent on the face of the record could be pointed out by the respondent and therefore, the award passed as against the aforesaid claim is also upheld.
11. As regards the counter claims of the petitioner the first counter claim relating to risk and cost amount of Rs.11,57,575/- was allowed by the arbitrator whereas the second counter claim amounting to Rs.9,53,318/- levied as compensation for delay was disallowed by the arbitrator. Objection has been filed as against the award allowing counter claim to the tune of Rs. 11,57,575/-. Counsel appearing for the respondent strenuously argued that the aforesaid counter claim was not referred to the arbitrator by this court while disposing of section 20 petition filed by the respondent on 20.2.1991. It was submitted that since the aforesaid dispute was not referred to the arbitrator by the court the arbitrator could not have considered the aforesaid counter claim which was not within his ambit and therefore, the arbitrator exceeded his jurisdiction in giving the award. In support of his contention the learned counsel for the respondent relied upon the decision of the Supreme Court in Orissa Mining Corporation Ltd. v. Prannath Vishwanath Rawlley, of this court in Natwarlal Shamaldas & Company v. MMTC, .
As delineated above, the aforesaid two counter claims which were considered and decided by the arbitrator in the present case alongwith several other disputes as raised by the respondent and subject matter of the present reference were referred by the appointing authority namely the Managing Director of the petitioner to the sole arbitration of Shri M.C Johari, by letter dated 15.7.1987. Shri M.C.Johari entered upon the reference and was in the process of hearing the said reference when the petition under Section 20 of the Arbitration Act was filed by the respondent in this court. By order dated 20.2.1991 this court directed that all the 12 disputes as raised in the petition by the respondent be referred to the sole arbitrator to be appointed by the appointing authority. In pursuance of the said direction the appointing authority referred all the claims of the respondent to Shri B.K.Sharma alongwith the two counter claims which were already referred by the appointing authority to Shri M.CJohari for adjudication. Since the two counter claims as raised by the petitioner were already referred to the arbitrator it cannot be said that the said two disputes were not pending for arbitration. Some of the disputes which were also referred by the High Court to the arbitrator already stood referred to the arbitrator alongwith the said counter claims. The said disputes alongwith the counter claims which were part of the reference earlier made on 15.7.1987 were clubbed together and referred to the sole arbitration of Shri B.K.Sharma. In my considered opinion, the facts of the decision cited by the counsel for the respondent and the present case are distinguishable. In the said cases the claims which were not referred to the arbitrator by the court were held to be not arbitrable. In Orissa Mining ease (supra), it was held that when an agreement is filed in court and an order of reference is made under section 20(4) then the claim as a result of the order of reference is limited to a particular relief and that the arbitrator cannot enlarge the scope of the reference and entertain fresh claims without a further order of reference from the court. The same is however, not the case in the present case as in the present case the disputes relating to counter claims of the petitioner were already before the Arbitrator and therefore, not fresh claims and were
pending for decision before the arbitrator before application under Section 20 was filed, and therefore, arbitrable and the same having been brought and clubbed together and decided in the same proceedings cannot be held to be beyond the jurisdiction of the arbitrator. The said counter claims of the petitioner and some claims of the respondent were referred to an arbitrator for adjudication and the decision and pending for decision when a separate order was passed by the High Court for referring some more disputes to the arbitrator. All the disputes were clubbed together and were referred to one arbitrator for the sake of convenience and decision in one proceeding. The arbitrator in deciding the said counter claims did not exceed his jurisdiction and therefore, no interference is called for with the award on that count.
12. The arbitrator, after considering the evidence on record found that the aforesaid claim is justified. The aforesaid finding was arrived at after consideration of the evidence on record on appreciation of which it was found that the respondent themselves could execute the work in respect of 18% only within 11 months and the rescission of the contract was found to be valid. It was also held that the petitioner was entitled to get the balance work executed under clause 3 of the contract agreement on the risk and cost of the respondent. The aforesaid claim was also found to be justified. No error apparent on the face of the record could be pointed by the respondent and therefore, no interference is called for with regard to the aforesaid award. The objection stands rejected.
13. In the result the award passed by the arbitrator is made a Rule of the Court. Decree in terms of the award is passed. Decree sheet be drawn up in terms of the award. The petitioner shall also be entitled to interest @ 12% per annum on the amount from the date of the award till realisation, in terms of the provisions of Section 29 of the Arbitration Act.