JUDGMENT
Vijender Jain, J.
CM No. 9759/2005 (for condensation of delay)
Counsel for the respondent says that he does not wish to file any reply and the delay may be condoned.
For the reasons stated in the application for delay, the same is allowed.
Delay is condoned.
FAO (OS) 212-18/2005
1. The appellants in this appeal are aggrieved by an order of the learned Single Judge of this Court dated 9.3.2005 by which the objection of the respondent against the arbitral award in relation to claim on account of escalation have been accepted and the appellants claim for escalation awarded by the Arbitrator at 70% has been reduced to 11%.
2. We have gone through the impugned order of the learned Single Judge, award given by the Arbitrator and other related material placed before us.
3. In paragraph 46 of the arbitral award, the learned Arbitrator has observed as under:
46.Coming to now merits of this claim, the claimant had quoted 59% over and above DSR 1985. DSR-1989 had come into operation at the time the work was being executed. DSR-1993 is not applicable as the same came into operation after the completion of the work. It is not disputed that the rates increased by 70% from DSR-1985 to DSR 1989. The work of value of Rs. 3,19,056/- based on contractual rates of 59% above DSR 1985 was done during the extended period of the contract. The claimant has estimated his losses on the basis of DSR 1989 and DSR-1993 rates. In my view the claimant is entitled to get only 70% increase on the value of work executed in the extended period of the contract. The amount comes to Rs. 2,23,339.
4. Aggrieved by the award of the Arbitrator on the aforesaid aspect, the respondent filed objections which have been accepted by the learned Single Judge vide impugned order. While accepting the objection of the respondent in regard to the above, the learned Single Judge held as under:
The learned arbitrator, on the reasoning of the award would be required to recompense the contractor for an increase by 11% beyond 17.4.1991 up to 13.7.1991 for the value of work done if the quoted rates by the contractor had to be adopted as the basis for the reason that contract quoted rate had already availed benefit of 59% increase in rates vis-a-vis DSR 1985.
Two conclusions would, therefore, be possible. The first would be that if the award has to be read as is suggested by learned Counsel for the contractor, award would be a perverse award for the reason there would be a contradiction in the reasoning and finding of the learned arbitrator. The second conclusion would be that the learned arbitrator committed an error apparent on the face of the award by awarding 70% increase in the value of the work executed between 17.4.1991 to 13.7.1991 for the reason the learned arbitrator has recorded that the quoted rate in the year 1990 was 59% above DSR 1985.
Objection filed by DDA is accordingly accepted.
5. Learned counsel for the appellants argued that the learned Single Judge while allowing the objection of the respondent has committed a manifest error by re-appreciating the reasonings given by the learned Arbitrator as if the Court was sitting in appeal over the judgment of the Arbitrator. It was submitted that the Court cannot go into the merit of the award unless there is an error apparent on the face of the record or the award is against public policy. Learned counsel has placed reliance on the finding of the Arbitrator to the effect that the Arbitrator had found that there was increase of rates by 70% from DSR-1985 to DSR 1989. It was further contended that the above finding was given by the Arbitrator on the specific claim made by the appellants before him for an award of 70% above the quoted rate, that is, DSR-1985 plus 59% plus 70% being the escalation in rates during the course of execution of the work. Learned counsel for the appellants drew our attention to page 11 of the paper book of this appeal to show that the appellants had pleaded before the Arbitrator that the value of the work done beyond second RA bill paid on 24.4.1991 i.e. beyond stipulated date of 15.3.1991 was Rs. 3,19,056/- or say Rs. 3,20,000/-. However, the difference of rates between DSR 1985 and DSR 1989 plus increase as on 31.3.1991 comes to 180% above DSR 1985. Though the appellants had claimed escalation at 180% above DSR 1985 but the learned Arbitrator had awarded escalation only at the rate of 70% above DSR 1985.
6. In our view, there was no error apparent on the face of the award and to us it appears that the learned Single Judge has incorporated his own reasoning into the award by reducing the escalation from 70% awarded by the Arbitrator to 11% and the same is beyond the scope and purview of Section 34(2) of the Arbitration and Conciliation Act, 1996. In doing so, the learned Single Judge acted as if he was exercising the appellate jurisdiction over the decision of the Arbitrator contained in the arbitral award. This is not permissible in law.
7. In Delhi Development Authority v. Bhagat Construction Co. (P) Ltd and Anr. 2004 (3) Arb. LR 548, a Division Bench of this Court had held as under:
It is also well settled that for the opinion taken and the decision rendered by the Arbitrator, this Court will not substitute its own view, even if this Court comes to a different conclusion, until and unless the decision of the Arbitrator is manifestly perverse or has been arrived at on the basis of wrong application of law.
8. In our view, the ratio of law laid down by this Court in the aforementioned case squarely applies to the facts of this case. Though in the facts of the case two views, that is, one taken by the Arbitrator and the other taken by the learned Single Judge could be possible, but it was not open to the learned Single Judge to substitute his own view in place of the decision taken by the Arbitrator on a particular point. Such a course adopted by the learned Single Judge is contrary to the well-settled law and the same cannot be sustained.
9. In view of the above, the impugned order of the learned Single Judge is hereby set aside.
10. The appeal is allowed. No order as to costs.