JUDGMENT
V.S. Aggarwal, J.
1. This is a petition filed by M/s Kochhar Construction Works (hereinafter described as the applicant) under Section 14 and 17 of the Arbitration Act, 1940 seeking the award to be made a rule of the court and for a decree in terms of the award to be passed with pendente lite and future interest at 8% P.A. on the amount till the payment is made.
2. The relevant facts are that petitioner had been awarded the work of construction of 1024 MIG Houses (New Pattern) at Mayur Vihar (Trilokpuri) Pocket V including internal development S.H. C/o 256, MIG House. Disputes and differences had arisen between the petitioner and objector (Delhi Development Authority) with regard to execution of the work. The Engineer Member of Delhi Development Authority was pleased to appoint Shri S.C. Kaushal, respondent No. 2 as the sole arbitrator. The arbitrator had given the award and hence it is claimed that award should be made a rule of the court and for a decree to be passed in terms of the same.
3. Notice had been issued and in pursuance thereto Delhi Development Authority/objector and applicant have filed objections to be considered hereinafter. The same have been contested.
4. The short question as is apparent from the resume of facts given above is as to whether the award is liable to be made a rule of the court or in terms of the objections so filed the same is to be set aside.
5. On behalf of the objector it had been urged that the award is liable to be set aside on the ground that no reason have been recorded by the arbitrator and once no reasons have been recorded the award is liable to be set aside.
6. So far as this particular contention is concerned, at the outset it deserves rejection at the threshold. It deserves a mention which is often repeated that the arbitrator is not required to record reasons in the form of a judgment. Whenever the agreement provides that reasons have to be recorded they have to be intelligible so as to know that the arbitrator has applied the mind. If reasons have been properly drafted and incorporated in the award it is to be appreciated but otherwise the court can always find as to whether reasons have been recorded or the award is without recording any reasons.
7. Reverting back to the award in question perusal of the same clearly show that each of the claim has been gone into and brief reasons have been recorded. It cannot therefore be stated that the arbitrator has not applied the mind or has not recorded the required reasons. The contention as such therefore must fail.
8. It had been urged that findings of the arbitrator with respect to claim No. 1 and 2 are erroneous. There are no reasons or basis for making the award of Rs. 68,790.75 with respect to claim No. 1 and 2 and the arbitrator therefore must be taken to have misconducted himself. In the reply filed the applicant had pointed that the arbitrator had awarded the amount under these claims which the Delhi Development Authority itself had released for payment to the applicant in its final bill.
9. Perusal of the award in this regard reveals that the applicant had claimed Rs. 90,000/- on account of the amount withheld as part rates in respect of items in the schedule of quantities in the agreement and claim No. 2 pertained to Rs. 3405.92 on account of substituted items of brick work in cement mortor in the ratio of 1:6 at correct rates. The arbitrator found that the applicants had revised the details of the claim to Rs. 79,572.07. The respondents have submitted the 31st and final bill and released the part rates of the item as claimed by the applicants. Therefore, it was held that the claim of the applicants was justified for release of full rates. The reasons given therefore require little interference and by no stretch of imagination it can be termed that the award in that count is erroneous.
10. It has further been urged that the arbitrator with respect to claim No. 3 has awarded an amount which is contrary to Clause 7 and 8 of the agreement. Under the said clauses of the agreement, the petitioner had to submit the bills to the Engineer in Chief for payment and since he has failed to do so, therefore, the payment would not be released to them. The award of the arbitrator indicates that claim no. pertained to Rs. 13,007.36 for refund of the amount deducted as rebate for monthly payments. He had also recorded that the respondent/objector in their letter of award of tender dt. 26th April, 1982 accepted the offer of the applicants for availing the rebate of 0.1% of estimated cost. The objectors had submitted the details of the rebate available for monthly payments in Ex. R 11 (before the arbitrator) and therefore claim of the applicants was partly justified. A refund as such was allowed. Perusal of the said controversy clearly show that the arbitrator has applied the mind.
11. It hardly needs re-statement of the position in law that he is ordinarily the final court of fact. The court will not re-appraise the evidence as if it was a court of appeal. Once the facts have been appreciated and it is not shown that no other finding could be arrived at, there is no ground to interfere. The said contention must fail.
12. Reverting to claim No. 6, once again it is alleged that the arbitrator had not considered that the applicant had claimed extra amount for providing of lugs and but hinges in T-iron frames. Providing of lugs and but hinges in T-iron frames were included in agreement No. 6.1 and no extra amount was payable. Similarly objection is raised with respect to claim No. 12 containing that the arbitrator had awarded Rs. 74,313.85 on account of establishment charges incurred after the stipulated dates of completion. Under the said claim the petitioner had alleged that there was breaches on the part of the objector for which the work was prolonged and as a result of breach of contract on the part of the petitioner damages had been claimed. The said finding that there was breach on the part of the objector is being so assailed.
13. As noted above both these findings so recorded by the arbitrator with respect to claim No. 6 and 12 are findings of fact. The arbitrator had noted so far as claim No. 12 is concerned, that the claimant had reduced the claim and that there was prolongation of contract period due to default on the part of the objector. Once it was so the arbitrator was justified in awarding the amount as such.
14. The main argument, however, raised on behalf of the objector/Delhi Development Authority was with respect to claim No. 10. Learned counsel for the objector vehemently urged that the arbitrator had awarded compensation and damages for prolongation of the work on account of increase in price of the material and labour and made an award for Rs. 6,13,961.79. The arbitrator had ignored the conditions of agreement between the parties. The grievance of the applicant was that part of the site was not made available as high tension wires were passing through the site and there was stoppage in the supply of cement due to shortage and there were certain delays in giving decisions and drawings. It is asserted that condition No. 1 of the contract has been ignored and as per the same, the applicant was not entitled to claim any extra compensation.
15. In support of the said argument reliance strongly was placed by the learned counsel for the objector on the two decisions of the Supreme Court, firstly in the case of Steel Authority of India Ltd. v. J C Budharaja, Government & Mining Contractor 1993 (3) Arb. LR 335 (SC) and in the later decision in the case of Rajasthan State Mines and Minerals Ltd. v. Eastern Engineering Enterprises and Anr. 1993 (3) Arb. LR 350 (SC).
16. In the case of Steel Authority of India (supra) the Supreme Court held that if the award is against the terms of the contract then it would be beyond the jurisdiction of the arbitrator and if the arbitrator has acted without jurisdiction the award is liable to be set aside and it would be taken to be a misconduct for purposes of Section 30 and 33 of the Arbitration Act, 1940.
17. Similarly in the case of Rajasthan State Mines and Minerals (supra) the same principle had been reiterated and in paragraph 22 the principle of law had been decided as under:-
“It is settled law that the Arbitrator is the creature of the contract between the parties and hence if he ignores the specific terms of the contract, it he ignores the specific terms of the contract, it would be a question of jurisdictional error which could be corrected by the court for that limited purpose agreement is required to be considered. For deciding whether the Arbitrator has exceeded his jurisdiction reference to the terms of the contract is a must. It is true that arbitration Clause 74 is very widely worded, therefore, the dispute was required to be referred to the Arbitrator. Hence, the award passed by the Arbitrator cannot be said to be without jurisdiction but, at the same time, it is apparent that he has exceeded his jurisdiction by ignoring the specific stipulations in the agreement which prohibits entertaining of the claims made by the Arbitrator….”
18. These principles of the law which were pressed into service on behalf of the objector are not disputed. There is no controversy that if the arbitrator has travelled beyond the terms of the contract the award can be set aside because in that event it would be an award, made without his jurisdiction which would be misconduct for purposes of Section 30 and 33 of the Arbitration Act, 1940.
19. What is the position in the present case. Condition No. 1 of the agreement between the parties reads:-
“The contractor must get acquainted with the proposed site for the works and study specifications and conditions carefully before tendering. The work shall be executed as per programme approved by the Engineer-in-Charge. If part of site is not available for any reason or there is some unavoidable delay in supply of materials stipulated by the department, the programme of construction shall be modified accordingly and the contractor shall have no claim for any extras or compensation on this account….”
20. On behalf of the objector it was urged that it had been agreed that if the part of the site is not made available for any reason or there is some unavoidable delay in supply of the material, the programme of construction shall be modified accordingly and no extra compensation can be claimed by the objector. The arbitrator has considered the said fact and the relevant part of the award in this regard is:
“….The tender document clearly specifies that the site is available and the drawings, designs, specifications of work, and, a schedule of quantities and rate of the various descriptions of work and any other documents required in connection with can be seen or purchased from the respondent(s) but the site was not available, since high tension line was passing over the site of few blocks to be constructed and foundation drawings was not available, even then the claimant(s) have shown good progress and have achieved 45.2% of progress in terms of work done in half the stipulated time; as against 37.5% required in terms of Agreement. The claimant(s), thereafter, could not achieve the required progress due to sudden stoppage in supply of cement (Ext. C-34), due to shortage. The decisions were not given for change of specification of flooring and RCC staircases railing and, also, for colour scheme apart from non-supply of panel door shutters. There was shortage of fund due to which payments were made in the Installments. Thus, there was breach of contract on the part of the respondent(s) on this account, and, the time was not of the essence of the contract any more. Respondent(s) have also granted extension of time with levy of compensation (Ext. C-35) and have also justified extra time of 137 days. Therefore no fault on the part of claimant(s) have been shown for prolongation of work. Moreover, no evidence has been placed on record attributing slow progress on the part of the claimant(s) nor the grant of extension of time under Clause-5 of the Agreement. The cause of prolongation of work is due to omission and negligence on the part of the Respondent(s). The claimant(s) have claimed the rise of rates on the basis of market rates @ 150% after the stipulate date for completion of work as over (Ext. C-27) …..”
21. As is apparent from what has been stated above no compensation was to be made available if part of the site is not made available. While interpreting the contract between the parties they have to be adhered strictly and words used have to be given their true grammatical meaning. Deviation from above can only be made if the words are not clear or in any case are ambiguous.
22. In the present case in hand it is the objections itself filed by Delhi Development Authority that part of the site was not available on time because high tension wires were passing through the same. Even in the reply it is indicated that part of the site was not made available for a considerable time. In other words, it is common case that part of the site was made available not immediately but subsequently. Condition No. 1 referred to above would only come into play if part of the site was not available at all. Herein once there was delay in making available a part of the site then condition No. 1 will not apply and in that view of the matter this particular plea so much though of has little role to play and necessarily must be rejected. The arbitrator thereafter had proceeded to assess the compensation holding that there was breach of contract in this regard. In that case for the reasons recorded it cannot be termed that the said finding is without any basis. The objection in this regard must also fail.
23. During the course of submissions in support of objections filed by the petitioner against the award it was pointed that there has been a mistake in the calculation with respect to claim No. 6(a), 10 and 17. Indeed if there is any such mistake the parties would be at liberty to move the arbitrator afresh for rectification of the said mistake. But that effect there was little dispute at the bar.
24. For the reasons recorded the award is made rule of the court and decree in terms of the award is passed. The applicant would be entitled to interest at the rate of 12% P.A. from the date of the passing of this order till the final payment is made. However, with respect to the claims regarding which it is stated that there is a mistake in calculation, the applicant would be at liberty to approach the arbitrator for rectification.