ORDER
Dr. B.P. Saraf, J.
1. This appeal is directed against the judgment and order of the learned single Judge dated 15th December, 1994 by which the learned Judge dismissed the arbitration petition of the appellant and made the award rule of the Court and ordered decree in terms thereof
2. The facts of this case, briefly stated, are as follows :
“Pursuant to the tender enquiry made by the appellants, Central Warehousing Corporation, the respondents, M/s. M. S. Khurana, submitted a tender for construction of 50,000 NTC Godown Base Depot along with ancillary buildings like office blocks, chowkidar quarters, canteen blocks etc., water supply, electrical and sanitary installation and internal road at Central Warehouse, Khandawa. The tender of the respondents was accepted by the appellants and the contract agreement was executed on 15th November, 1978. The tender was for an amount of Rs. 1,19,93,726.02. According to the agreement, the work was to be completed before 23rd August, 1979. Due to various reasons, the work could be completed by the respondents only on 15th December, 1981. However, according to the appellants, the work was completed on 5th July, 1982. Thereafter disputes arose between the parties. Claims and counter-claims were made by the appellants and the respondents for completion of the work beyond the stipulated date. The disputes between the parties were thereafter referred to the arbitrator under Clause 25 of the General Conditions of the Contract. The arbitrator considered the rival claims of the parties and by the impugned award, awarded a sum of Rs. 8,54,064.48 with interest at the rate of 11% per annum thereon from 6th July, 1982 till payment in favour of the respondents. The appellants, Central Warehousing Corporation, challenged the above award by filing arbitration Petition, which was numbered as Arbitration Petition No. 3 of 1991. Though in the above arbitration petition, prayer was made for setting aside the award the real grievance of the appellants was only in regard to the award insofar as it pertains to Claims Nos. 5 and 7. So far as Claim No. 7 is concerned, the contention of the appellant was that it was beyond the scope of the Arbitration clause, being Clause No. 25 of the agreement, read with Clause 10C thereof. So far as Claim No. 5, which represented the amount deducted by the appellants from the bills of the respondents for alleged failure to return the empty cement bags is concerned, the same was challenged on the ground that the decision of the arbitrator in that regard was not based on material on record. The learned single Judge considered the submissions of the appellants and rejected the arbitration petition of the appellants. The learned single Judge held that Claim No. 7 was within the scope and ambit of the arbitration clause and the arbitrator had jurisdiction to decide the same. So far as the claim under item No. 5 is concerned, the learned single Judge held that the arbitrator having recorded his finding after considering all the materials on record, it was not open to the court to go into the reasonableness of the reasons given by the arbitrator. Aggrieved by the above order of the learned single Judge, the Central Warehousing Corporation has preferred this appeal.
3. We have heard the learned Counsel for the appellants and perused the claims of the respondents in the light of the agreement. Claim No. 7 pertains to compensation of Rs. 6,01,176.75 under Clause 10C of the agreement. The case of the respondents is that this claim was for increase in the cost of labour and material to which the respondents were entitled under Clause 10C of the agreement. Clause 10C stipulates that if during the progress of the work, there is any increase in cost of labour and materials as a direct result of any fresh law or statutory rule or order and such increase exceeds 10% of the price/wages at the time of the tender and if the contractor has incurred such expenditures, he would be entitled to be compensated for it, provided the delay in such execution was not attributable to the contractor. The contract remained in force till the date of completion of the work and the respondents claimed that they were entitled to compensation of Rs. 6,01,176.75 under Clause 10C of the contract. The learned arbitrator considered the claim of the respondents for increase in the cost of labour and materials and awarded a sum of Rs. 6,01,176.75 on that count. The appellants seek to challenge this part of the award on the ground that in view of Clause 10C of the agreement, the dispute in regard to claims falling under Clause 10C could not be referred to arbitration under Clause 25 of the agreement and hence the arbitrator acted without jurisdiction in adjudicating that claim. We have carefully considered the above contention, Clause 10C of the agreement provides for payment of additional amount of the contractor in the event of increase in price of any material incorporated in the works or wages of labour, etc. The said clause, so far as it is relevant, reads as under :
“It during the progress of the work, the price of any material incorporated in the works (not being a material supplied from the Engineer-in-Charge’s Stores in accordance with Clause 10 thereof) and/or wages of labour increase as a direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any changes in sales tax) and such increase exceeds ten per cent of the price and/or wages prevailing at the time of receipt of the tender for the work, and the contractor thereupon necessarily and property pays in respect of that materials (incorporated in the works) such increased price and/or in respect of labour engaged on the execution of the work such increased wages, then the amount of the contract shall accordingly be varied provided always, that any increase so payable is not, in the opinion of the Chief Engineer/ Superintending Engineer (whose decision shall be final and binding) attributable to delay in the execution of the contract within the control of the contractor.
Provide however, no reimbursement shall be made if the increase is not more than 10% of the said prices/wages, and if so, the reimbursement, shall be made only of the excessive 10% and provided further that any such increase shall not be payable it such increase has become operative after the contract or extended date of completion of the work in question.
**** **** **** **** It is clear from a reading of the above clause that the contractor is entitled to get additional amount in respect of increase in the price of materials or labour taking place during the progress of the work. The only exception is a case where in the opinion of the Chief Engineer/Superintending Engineer it is attributable to delay in execution of the contract within the control of the contractor and the decision of the Chief Engineer/Superintending Engineer in regard to this aspect of the matter is final and binding. 4. Clause 25 of the agreement which provides for settlement of disputes by arbitration, so far it is relevant, reads an follows :
“Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship of materials used on the work or as to any other question, claim, right matter of thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or those conditions or otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Managing Director. Central Warehousing Corporation, at the time of dispute, or if there be no Managing Director, Central Warehousing Corporation the administrative head of the said Central Warehousing Corporation at the time of such appointment. There will be no objection to any such appointment that the arbitrator so appointed is a Corporation employee, that he had to deal with the matters to which the contract relates and that in the course of his duties as Corporation employee he had expressed views on all or any of the matters in dispute or difference. The arbitration to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Managing Director or administrative head as aforesaid at the time of such transfer, vacating office or inability to act shall appoint another person to act as arbitrator in accordance with the terms to the contract. Such person shall be entitled proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by such Managing Director or administrative head of the Central Warehousing Corporation as aforesaid should act as arbitrator and if for any reason, that is not possible. the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000 (Rupees fifty thousand) and above, the arbitrator shall give reasons for the award.
Subject as aforesaid the provision of the Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being inforce shall apply to the arbitration proceeding under this clause.”
The above clause is couched in widest possible language. It provides, inter alia, for settlement of all questions and disputes as to any claim, right, matter or thing whatsoever, in any way arising out of or relating to the contract or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof by arbitration. All such disputes are to be referred to the sole arbitrator appointed by the Managing Director of the appellant at the time of the dispute or it there is not Managing Director, the administrative head of the appellants at the time of such appointment. It is obvious from the language of Clause 25 that it is couched in widest possible language. As held by the Supreme Court in Renusagar Power Co. Ltd. v. General Electric Co. , expressions such as “arising out of” or “in collection with” or “in relation to” or “in consequence of” or “concerning” or “relating to” the contract are of the widest amplitude and content and include even questions as to the existence, validity and effect (scope) of the arbitration. agreement. In the instant case, Clause 25 is couched in widest possible terms and all dispute under the agreement in regard to any claim of the party would fall within the scope and ambit thereof unless it is specifically excluded from the purview thereof According to the appellants, Clause 10C contains such an exclusion. This submission is based on the power given to the Chief Engineer/Superintending Engineer to decide whether the increase was attributable to delay in execution of the contract within the control of the contractor. We have carefully considered the contention of the learned counsel for the appellants. We, however, find it extremely difficult to agree with the submission of the learned counsel that Clause 10C of the agreement confers power on the Chief Engineer/Superintending Engineer to decide the claim under that clause and, therefore, the same cannot be referred to arbitrator under Clause 25 of the agreement. In our opinion, Clause 10C of the agreement does not provide for decision on any claim in regard to increase in prices of materials or labour from the Chief Engineer/ Superintending Engineer. He has been only empowered to decide whether the increase was attributable to delay in execution of the contract within the contract of the contractor and the decision of the Chief’ Engineer in this regard has been made final. In the instant case, admittedly, the Chief Engineer to the Superintending Engineer has not held that the increase claimed by the respondents was attributable to delay in execution of the contract within the control of the contractor. The arbitrator, in that view of the matter, was fully justified in considering the claim of the respondents under Clause 10C for increase in the amount payable as a result of increase in the price of materials and labour as provided in Clause 10C of the agreement. We do not find any infirmity in this action of the arbitrator. In our view, the arbitrator has not only acted within his jurisdiction but properly exercised his jurisdiction and the learned single Judge has lightly confirmed the same.
5. So far as the Claim No. 5 of the respondents for a sum of Rs. 80,000/-, which was deducted by the appellants from the bills of the respondents on the ground of failure of the respondents on the ground of failure of the respondents to return the gunny bag supplied by the appellants, is concerned, we find that the arbitrator, on consideration of the facts and circumstances of the case held that the deduction of Rs. 80,000/- by the appellants from the bills of the respondents was not justified and accordingly, awarded the said amount in favour of the respondents. This part of the award was challenged by the appellants on the ground that the arbitrator failed to appreciate the facts of the case in proper perspective and thereby arrived at an erroneous conclusion. It was also contended that the reasons given by the arbitrator were not sufficient to justify the acceptance of the above claim. The learned single Judge repelled the above contention of the appellants on the ground that it was not open to the Court to go into the reasonableness of the reasons given by the arbitrator. The learned single Judge also observed that in the instant case, reasons having been given by the arbitrator which were based on the material on record, it was not open to him to sit in appeal over the award of the arbitrator. The appellants are aggrieved by the above order of the learned single Judge. According to the counsel for the appellants, the conclusion of the arbitrator in regard to Claim No. 5 is not based on materials and no proper reasons have been given by the arbitrator in support of the award of the claim under this head, and on that court itself, the award of Rs. 80,000/- under Claim No. 5, should be set aside.
6. We have carefully considered the above submissions of the learned counsel for the appellant. We, however, do not find any merit in the same. The scope and ambit of challenge to an award under Section 30 of the Arbitration Act, is no more res integra. It is well-settled by a catena of decisions of the Supreme Court that the award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate the facts. Under the law, the arbitrator is made the final arbitrator of the dispute between the parties. He is the also judge of the quality as well as quantity of the evidence. The award is not open to challenge on the ground that the arbitrator has reached a wrong conclusion or has failed to appreciate facts. It is not open to the Court to take upon itself the task of being a judge of the evidence before the arbitrator. Even, if the Court finds that on the same evidence, it might have arrived at different conclusion than the one arrived at by the arbitrator, it cannot set aside the award of the arbitrator on that ground. The Court, while examining the objections to an award, cannot examine the correctness of the claims on merits. An award would not be invalid even if it can be demonstrated by a process of inference and arguments that the arbitrator committed a mistake in arriving at a particular conclusion. Nor the reasonableness of the reasons given by the arbitrator can be challenged before the court. Bearing in mind the above principles, we do not find any infirmity in the judgment of the learned Judge repelling the challenge of the appellant to the award of Rs. 80,000/- against
claim No. 5.
7. In view of the above, we do not find any merit in this appeal and the same is, therefore, dismissed. In the facts and circumstances of the case, we make no order as to costs.
Certified copy expedited.
8. Appeal dismissed.