CR No.3506 of 2002(O&M) 1
IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH
Civil Revision No.3506 of 2002 (O&M)
Date of Decision: September 04, 2009
State of Punjab ...........Petitioner
Versus
M/s Aar Kay Construction Co.Pull Bazar Ropar etc...........Respondents
Coram: Hon'ble Mrs.Justice Sabina
Present: Mr.J.S.Sandhu, Assistant Advocate General Punjab
for the petitioner.
Mr.Ashwani Talwar,Advocate for respondent No.1
--
Sabina, J. (oral)
This revision petition is filed for setting aside the judgment
and decree passed by the Courts below whereby objection petition filed
under Sections 30 and 33 of the Indian Arbitration Act, 1940 was dismissed
and award passed by the arbitrator was ordered to be made Rule of the
Court.
The case of the parties as noticed by the learned Additional
District Judge, as noticed in paras 2 to 17 of its order, reads as under:-
“2.The brief facts of the case are that petitioner/respondent No.1
filed application directing respondent No.2 to produce the award
and proceedings and also filed application for making the same as
rule of the Court submitting that respondent No.2 was appointed
as arbitrator by the Court and after entering into the reference and
after adjudicating the matter has given award on 5.5.1999 and
CR No.3506 of 2002(O&M) 2arbitrator has given reasoned award which does not suffer from
any illegality as arbitrator is the master of fact and law and his
inter-pretation is final and Civil Court cannot sit in appeal and
scope of interference is limited. That the arbitrator has given
ample opportunity to both the parties to produce their evidence
and thereafter made award.
3.The State-objector/appellant has filed objections, taking
preliminary objections that arbitrator has announced the award
without taking into consideration all the facts of the case and
without giving proper hearing to the arguments of the objector
and award is apparent as product of non-application of mind.
That claimant submitted different claims than the claims
originally submitted different claims than the claims originally
submitted before the Executive Engineer. Claimant submitted a
claim of Rs.2,41,850/- before the Executive Engineer but at the
time of presentation before the arbitrator he put forth claim of
Rs.7,59,350/- and during the course of proceedings gave escalated
details of these claims for adjudication to the arbitrator but the
arbitrator has not appreciated these facts and award is based on no
evidence and clear cut case of non-application of mind and also
has decided time barred claims for which he was not competent
and has also awarded double interest for which he was not
entitled. Claim-wise objections are as under:-
CLAIM NO.1 : PAYMENT DUE ON ACCOUNT OF FINAL
BILL REFUND OF SECURITY DEPOSITS AND RELEASE
OF AMOUNT OF LESSOR RATE PAID.
CR No.3506 of 2002(O&M) 3
4. It is submitted that Rs. 15,747.95/- was lying in the
final bill of the agency and agency submitted bill for
Rs.28000/- then revised to Rs.26,881.30 Ps but arbitrator
without going into the facts on records gave award amounting
to Rs.20,623.30 Ps with his own yard stick and award is based
on no evidence.
CLAIM NO.2: CLAIM ON ACCOUNT OF INTEREST
5. It is submitted that there is no clause inthe agreement to
pay interest on delayed payment and arbitrator not only
awarded this amount but also awarded interest on this
agreement and which is beyond the terms and conditions of the
contract agreement and against claim No.7 the arbitrator has
already given 15% compound interest and arbitrator gave
interest on double amount.
CLAIM NO.3: PAYMENT DUE FOR ESCALATION
6. That arbitrator has never applied his mind judiciously and
has not given due weightage to the clauses of the agreement
which is the back bone of the entire case because as per clause
No.41 of the contract agreement price adjustment will be made
only for the work done within the stipulated period but
contractor had applied for extension as he have not completed
the work within the stipulated period. The agency intially
demanded Rs.7250/- but arbitrator awarded Rs.31,887/- and
arbitrator could not award more than the claim submitted before
him and claim is without any evidence.
CLAIM NO.4: CLAIM FOR IDLE PERIOD
CR No.3506 of 2002(O&M) 4
7. That arbitrator has wrongly awarded Rs.75,000/- on account
of idle labour, although there is no idle labour and it was for
the contractor to use his source to best of his utility nor the
contractor ever reported that the labour is sitting idle.
CLAIM NO.5:CLAIM FOR SILT CLEARANCE
8. It is submitted that the facts reported by agency in this
respect were found to be incorrect and no work could have
been done without sanction and it is any body’s guess how the
agency has executed such huge quantity of earth work without
any proper sanction, and arbitrator has not applied mind and
awarded amount of Rs.70,000/- which is liable to be set aside.
COUNTER CLAIM NO.1:BY OBECTOR/APPELLANT
9. It is submitted that arbitrator had not taken on record any
document from the agency showing return of empty cement
bags, rather the department has shown indent duly signed but
arbitrator favoured the agency by rejecting the claim of the
respondent and amount of R.7125/- on this account is liable to
be recovered from the agency
COUNTER CLAIM NO.3: MAKING DOWELS ON BOTH
SIDES
10. That the agency has not constructed dowels as per
specification and arbitrator has admitted that they were not in
proper shape, meaning thereby they were not constructed
according to the requirement and amount of Rs.9450/- on this
account is liable to be awarded in favour of the objector.
COUNTER CLAIM NO.4 (LIQUIDATED CHARGED)
CR No.3506 of 2002(O&M) 5
11. That the agency admitted that they have completed work on
26.9.1989 and department has claimed I.D.charges from
19.2.1988 because agency failed to complete the work by due
date and counter claim amounting to Rs.6,23,925/- be awarded
along with interest from 1/98 onwards.
12. The petitioner/respondent No.1 has contested the
objection petition taking preliminary objections that the
arbitrator has given his award after giving full opportunity to
both the parties and taking into consideration the whole case
and evidence and even otherwise arbitrator being technical man
of the department is fully conversant with the procedural
technicalities and personally visited the site on 5.4.1999 before
giving the award and opportunity was given to both the parties
and it is settled law that arbitrator is master of fact and law and
best judge of the quality and quantity of evidence and his
interpretation is final and Civil Court cannot sit in appeal. It is
submitted that award can be interfered only if the arbitrator has
mis-conducted with himself or with the proceedings and Civil
Court cannot re-appraise and re-appreciate the evidence. That
reasonableness of the reasons given by the arbitrator cannot be
gone into by the Civil Court and even if there are two possible
interpretations of the same clauses, the interpretation given by
the arbitrator is final. It is submitted that arbitrator has given
the reasoned and detailed award and Civil Court cannot re-
appraise as the award is reasoned award and allegations have
been dealt with by the arbitrator and there is no change in the
CR No.3506 of 2002(O&M) 6claim submitted by the claimant/petitioner. It is further
submitted that the arbitrator has given the award on the basis of
record given by both the parties and it is reasoned one and it is
not necessary to give detailed history of the whole case and
even brief note of reason is sufficient and it cannot be
interfered by the Civil Court and the allegations are only for the
sake of raising the objections otherwise there is no proof in the
same and award has been given on the basis of evidence
produced by the parties and respondent failed to substantiate
their claim an now the decision is final. Claim-wise reply is
submitted as under:-
CLAIM NO.1:-
13. With regard to claim No.1, it is submitted that arbitrator
has awarded the claim on the basis of evidence led by both the
parties and after giving proper opportunity and interpretation
given by the arbitrator is final. It is further submitted that
change in the amount of claim is due to clerical mistake which
is in accordance with the rate as given by the appellant/objector
and award does not suffer from any mis-conduct or illegality.
CLAIM NO.2:
14. It is submitted that the arbitrator has rightly awarded the
interest for which arbitrator has power and now there is no bar
for the arbitrator to award interest and interpretation of the
arbitrator is final.
CLAIM NO.3:
15. It is submitted that interpretation of the agreement by the
CR No.3506 of 2002(O&M) 7arbitrator is final and same cannot be interfered by the civil
court, even if there are two possible interpretations and civil
court cannot see whether interpretation is right or wrong and
Court can interfere only if arbitrator has mis-conduct the
proceedings.
CLAIM NO.4:-
16. It is submitted that arbitrator is a technical man and is
known to the practice and procedure of the work and has
awarded the amount being conversant with the system and
arbitrator has rightly awarded the amount, so there is no mis-
conduct.
CLAIM NO.5:-
17. It is submitted that arbitrator has taken into
consideration the whole evidence and award is final and there is
no mis-conduct on the part of the arbitrator and evidence
cannot be appreciated by the Civil Court and there is no mis-
conduct. With regard to the objection of interest, it is
submitted that arbitrator has full power to award interest. With
regard to objection of counter-claim, it is submitted that
arbitrator has given award in accordance with the evidence on
the basis of personal verification and has rightly dismissed the
counter-claims and prayed that the objections be dismissed and
prayed that the award be made as rule of Court in toto.
On the pleadings of the parties, the following issues were
framed:-
“1. Whether award is liable to be made rule of the
CR No.3506 of 2002(O&M) 8Court?OPA
2. Whether award is illegal and is liable to be
set aside?OPR/O
3. Relief.”
After hearing the learned counsel for the parties, I am of the
opinion that no ground for interference by this Court is made out.
Learned counsel for the State has submitted that the
Arbitrator had misconducted by awarding amount beyond the scope of the
agreement and hence, the award could not be sustained. Learned counsel
for the State has further submitted that so far as claims No.3, 4 and 6 are
concerned, the Arbitrator had awarded the amount qua the said claim
beyond the scope of the agreement.
It is a settled proposition of law that the Civil Court cannot
sit as a Court of appeal with regard to the award submitted by the Arbitrator.
However, in case, the Arbitrator has misconducted then the Court can
interfere and set aside the award. In the present case, work was allotted to
the respondent. Payment of the execution of the work was not made to the
respondent and consequently the matter came up before the Arbitrator.
The Arbitrator, while dealing with claim No.3 has observed
that the department had paid a lesser amount than the amount claimed by the
respondent on account of escalation. The extensions which were sought by
the respondent were not attributable to the respondent. After going through
the record, the Arbitrator opined that the contractor was entitled to
escalation price on the work done by him.
Similarly, while dealing with claim No.4, the Arbitrator
found that the labour had remained idle on account of stoppage of work and
CR No.3506 of 2002(O&M) 9
the work could only be started after the sanction of competent authority
received. In these circumstances, the Contractor was liable tobe
compensated.
So far as claim No. 6 is concerned, the Arbitrator found
that the respondent had done concrete lining on canal after disilting canal
bed. In this regard, the respondent was liable to be compensated.
However, there is nothing on record to suggest that the
Arbitrator had misconducted. The Arbitrator, after appreciating the
evidence led by the parties, has decided the matter. The award was made
rule of the Court vide judgment and decree dated 16.8.2000 by the Civil
Judge(Senior Division) Rupnagar and the appeal filed by the State against
the said judgment and decree was dismissed vide judgment and decree dated
11.2.2002. Learned counsel for the respondent has submitted that the
payment in terms of the award has since been made and,thus, the award
stood satisfied. Hence, no ground for interference is made out.
Dismissed
( Sabina )
Judge
September 04, 2009
arya