HIGH COURT OF JAMMU AND KASHMIR AT JAMMU. AA No. 62 OF 2001 Mohd. Din Petitioners Chief Engineer, PWD & anr. Respondent !Mr. O.P.Thakur, Advocate ^Ms. Neeru Goswami, Dy.A.G Mr. Justice J.P.Singh Date: 15.03.2011 :J U D G M E N T :
Disputes arising out of the Contract allotted to Mohd. Din,
by the Jammu and Kashmir State Government, in respect of,
Improvement and Development of formation widening Batote-
Kishtwar _HIP by way of earth work and walling including
construction of breast walls, parapets and V shape drain in Km
14/980-46/350 Khelani zigs, were referred to the sole Arbitration
of the Chief Engineer, PWD (R&B), Jammu, in terms of the
Contract Agreement between the parties.
Aggrieved by the conduct of the Arbitrator, Mohd. Din
approached this Court by his Arbitration Application No.34/98
seeking the removal of the Arbitrator and appointment of another
Arbitrator in his place.
His plea was allowed by the Court, And vide order dated
16.08.2000, Sh. A.N.Saraf, Retired District and Sessions Judge
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was appointed Arbitrator to adjudicate upon the disputes between
the parties.
Sh. Saraf entered upon the Reference, who on finding that
the Chief Engineer and other functionaries of the State
Government were not cooperating with the arbitration
proceedings, proceeded to adjudicate the disputes referred to
him, setting the State ex-parte.
After the State was set ex-parte, Mohd. Din-Contractor,
lodged additional Claim seeking its adjudication as well by the
Arbitrator.
The learned Arbitrator allowed the Claims and the
additional Claim vide his Award of November 23, 2001.
The Award having been filed in the Court, notices were
issued to the parties to file Objections, if any, thereto.
Responding to the notice issued on the Arbitrators Award,
the State-respondents sought setting aside of the Award on
various grounds.
The Memo of Objections filed by the State in this regard
has been registered as CMP No.57/2004.
Taking the pleadings of the parties on the Staterespondents
challenge to the Award in consideration, the parties
were put to issues, which read thus:
1) Whether the Arbitrator has mis-conducted
himself or the proceedings?
OP Objector.
2) Whether Award is otherwise invalid?
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OP Objector.
3) Relief.
The evidence on the issues was led by the parties by
Affidavits.
Learned counsel appearing for the State-respondents
questioned the Award on three grounds, viz.
1. The Award was nullity in law and liable to be set aside
for having been made and published, after the time
prescribed for the purpose under the Jammu & Kashmir
Arbitration Act, 2002.
2. In case the Award was held to have been filed within the
time allowed by the Court, it was, even otherwise, liable
to be set aside, in that, the additional Claim allowed by
the Arbitrator, without allowing opportunity of hearing to
the State therein, amounted to Arbitrators misconduct
rendering the Award invalid as a whole for violation of
the principles of Natural Justice.
3. The interest allowed on the Award being excessive and
unconscionable, the Award needed modification.
I have considered the submissions of the learned counsel
for the parties and perused the records.
The perusal of the records of the Arbitrator indicates that
vide this Courts order of September 24, 2001 on CMP No.
66/2001, the Arbitrator was allowed last extension of four months
to make and publish the Award, condoning the intervening delay.
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The Arbitrator, thus, having made and published the Award
on 23.11.2001 was within the time allowed by the Court and there
is, therefore, no merit in the first submission of the learned State
counsel, which is, accordingly, rejected.
In so far as the second submission of the learned State
counsel is concerned, I find sufficient force therein, for, after
having set the State-respondents ex-parte, the learned Arbitrator
had the jurisdiction to deal with only Claims, which stood referred
to him and on no other fresh claim, unless he had heard the State
on fresh Claim.
It was admitted by the parties that the additional Claim was
lodged after the respondents were set ex-parte and no notice
was issued by the Arbitrator to the State-respondents for their
Response thereto.
In these circumstances, the Arbitrator had, therefore, acted
beyond his jurisdiction in making the Award on the Contractors
additional Claim. The error committed by him in making the
Award on the additional Claim, without following the principles of
Natural Justice is, thus, apparent on the face of records.
The additional Claim of Rs. 1,50,000/- along with interest
thereon, as allowed by the Arbitrator, cannot thus be sustained.
As the Claims allowed by the Arbitrator are clearly
separable, so only that portion of the Award which allows the
additional Claim, would required setting aside as Arbitrators
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misconduct in respect of other Claims, as alleged, has not been
proved, and that is why not agitated, and rightly so at the time of
hearing of the case.
The plea of the learned State counsel that whole of the
Award was liable to be set aside because of the Arbitrators
misconduct in allowing the additional claim of Rs. 1,50,000/-, is,
however, not found tenable, in that, looking to the nature of the
misconduct for violation of the principles of Natural Justice in
allowing the additional Claim, it is only that claim which would
becomes unsustainable and not rest of the Award of the
Arbitrator, which is not found suffering from any misconduct.
In so far as the third submission of the learned State
counsel is concerned, suffice would it be to say that the Arbitrator
had the jurisdiction to award interest and the finding recorded by
him allowing 12% interest on the amount awarded, may not be
open to challenge in these proceedings, which are not in the
nature of Appeal against the findings and Award of the Arbitrator,
and additionally because the rate of interest awarded by the
Arbitrator, looked from any angle, does not appears
unconscionable as argued by the learned State Counsel.
CMP No.57/2004 of the State-respondents, therefore,
needs to be allowed to the extent indicated herein above.
Accordingly, the Award dated 23.11.2001 made by
Sh. Amar Nath Saraf, Retired District & Sessions Judge, is set
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aside to the extent it allows Claim No.4 of Rs.1,50,000/- in favour
of Mohd. Din-claimant. The interest allowed on this amount too
would stand set aside.
Rest of the Award for an amount of Rs.4,00,000/- alongwith
interest @12% per annum, therefore, sustains for making it a
Rule of the Court.
The Award made by the Arbitrator for an amount of
Rs.4,00,000/- alongwith interest @ 12% per annum is, therefore,
made a Rule of the Court.
Registrar to draw Decree accordingly.
A.A. No.62/2001 and CMP No.57/2004 are disposed of
accordingly.
(J. P. Singh)
Judge
JAMMU
15.03.2011
Pawan Chopra
