JUDGMENT
Baboo Lall Jain, J.
1. The petitioner, Union of India made an application to this Court on 8th March, 1994, under Section 30 and 33 of the Arbitration Act, 1940, inter alia, praying that this Court has no pecuniary jurisdiction to entertain, try and determine or to pass a judgment upon the award in the above Award Case No. 7 of 1994. It was; also prayed that the award be declared null and void and set aside and for other consequencial orders.
2. It has inter alia been stated in the petition that the Executive Engineer, Gangtok, Central Public Works Division, Gangtok, Sikkim, by letter dated 9.10.1986 accepted the tender submitted by the respondents which was for the site development work of construction of staff quarters for A.G. Sikkim at Syari Busti, Gangtok. The accepted contract price was of Rs. 17,04,652.50 paise. The date of commencement of work was 24.10.1986 and the work was stipulated to be completed by 23.8.1987.
3. The said contract agreement being No. 23/SE/86-87 contained an arbitration clause being Clause No. 25 which provided as hereunder :-
“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 or materials used on the work or as to any other question, claim, right matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions orders or these 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 abandounment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, Central Public Works Department, in charge of the work at the time of dispute or if there be no Chief Engineer the administrative head of the said Central Public Works Department at the time of such appointment. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he has to deal with the matter to which the contract relates and that in the course of his duties as Government Servant he had expressed views on all or any other of the matters in dispute or differences. The arbitrator to whom the matter is originally referred or vacating his office or being unable to act for any reason, such Chief Engineer or administrative head as aforesaid at the time of such transfer, vacation of office or inability to act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was felt by his predecessor. It is also a term of this contract that no person other than a person appointed by such Chief Engineer or administrative head of the C.P.W.D. as aforesaid would 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) or above, the arbitrator shall give reasons in the award.
Subject as aforesaid the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply in the arbitration proceeding under this clause.
It is also a term of the contract, that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute.
It is also a term of the contract that if the contractors do/does not make any demand for arbitration in respect of any claim (s) in writing within 90 days of receiving the intimation from the Government, that the bill is ready for payment, the contractor (s) will be deemed to have been waived and absolutely barred and the Govt. shall be discharged and released of all liabilities under the contract in respect of these claims.
The arbitrator(s) may from time to time with consent of the parties enlarge the time, for making and publishing the award”.
4. According to the petitioner disputes and differences arose between the parties and the respondent requested the Chief Engineer, Central Public Works Department, having its office at Calcutta, to appoint an arbitrator and to refer the disputes to the arbitration in terms of the arbitration agreement. The said Chief Engineer, Central Public Works Department, Calcutta, by his letter dated 5th December, 1990 appointed Sri V. Nainani, as the sole arbitrator. The said Sri V. Nainani vacated his office on 8th July, 1992. Thereafter, the said Chief Engineer, inter alia by his letters dated 20/24th August, 1992 appointed Sri T. K. Misra as the sole arbitrator to determine the disputes and differences between the parties.
5. The said sole arbitrator entered upon reference on 1.9.92. The parties filed their statement of facts and counter statement and counter claim before the learned arbitrator. By consent of the parties, the time to make the award was extended till 15th January, 1994. The said arbitrator made and published the award on 24-11-1993. Thereafter he issued a corringendum dated 20th December, 1993. The arbitrator issued another corringendum dated 23rd February, 1994.
6. The said award was filed in this Court, on 18th January, 1994 and a notice under Section 14(2) of the Arbitration Act, 1940 was issued and the same was served on the petitioner on 7th February, 1994.
7. The grounds of setting aside the award and for declaring the same null and void are set out in paragraph 11 of the petition.
8. In paragraph 12 of the petition, it is stated that this; Hon’ble Court has no pecuniary jurisdiction to entertain, try and determine and to pronounce the judgment upon the said purported award along with the corrigendum inasmuch as the said purported award is for less than Rs. 10 lakhs.
9. The said award dated 24th November, 1993 was for Rs. 7,43,744/with simple interest at the rate of Rs. 10 per cent per annum from 10th February, 1990 to the date of payment and/or the decree whichever is earlier. The arbitrator also awarded the costs to the extent of Rs. 4,000/- to the claimant. The arbitrator also awarded as per claimants claim vide page 14 of his statement of facts.
10. On 14th December, 1993 the arbitrator signed a corrigendum by which he made certain corrections under Section 13 (B) of the Arbitration Act, on the ground of error arising due to accidental slip. By virtue of the said corrigendum dated 15th December, 1993, the amount of award was raised to Rs. 7,59,834 with interest as awarded.
11. On 13-2-1994, another corrigendum was signed and issued by the arbitrator in supersession of the earlier corrigendum. By the said second corrigedum, the arbitrator in exercise of his power under Section 13 (B) of the Arbitration Act, corrected the said award dated 24-11-1993 on the ground of error arising due to arithmetical mistake/ommission etc. following the corrigendum issued on 20th December, 1993. By virtue of the second corrigendum the amount of award was reduced to Rs. 6,75,716/- along with simple interest as awarded. The second corrigendum was directed by the arbitrator to form part of the award published on 24-11-1993 in supersession of the corrigendum issued on 20th December, 1993.
12. The various points that have been raised on behalf of Union of India are dealt with as hereunder.
13. It has been submitted that the said Award with corrigendum contained many errors on the face of the Award. However, no particulars of such errors on the face of the award have been given in the said petition. No such error of law apparent on the face of the Award has been pointed out to me, and I am not satisfied that there is any error apparent on the face of the award.
14. The next submission is that the Arbitrator misconducted himself in conducting the proceedings. Here again no particulars are given as to when and how the Arbitrator misconducted himself in conducting the, proceedings.
15. The next point is that the arbitrator misconducted himself in the proceedings by making and publishing the Award in favour of the respondent for a sum of Rs. 6,75,716/- without giving proper reasons for each of the items thereof. The Award shows that the Arbitrator has given some sort of reasons for his Award. Furthermore, even if the reasons given are not sufficient, the same cannot be a ground for setting aside the Award.
16. The next point raised is that the Arbitrator misconducted himself in law in awarding interest on Award, overlooking the fact that under the terms of the agreement no interest whatsoever is payable. From the Award it appears that the interest awarded is from the date of reference until the date of payment and/or the decree whichever is earlier. I am of the view that so far as the Awarding of the interest pendente lite is concerned, the Arbitrator has a discretion to award such interest under the law. Furthermore no provision of the agreement which provides for non payment of interest has been pointed out to me. The contract has not been annexed to the petition. In my opinion, so far as the payment of interest pendents lite form the date of the reference upto the date of payment is concerned, the Arbirator has an absolute discretion in the matter and it cannot be said that there is any error in law or misconduct on his part.
17. The next question for consideration is that the Arbitrator misconducted himself in law and the proceedings by calculating the amonut of claim without considering the affidavits tendered by the petitioner and without any application of mind and the reason given by the Arbitrator as to the items concerned are erroneous, bad in law. The entire arbitration proceedings were held before the Arbitrator and the arguments were also made before the Arbitrator. The Arbitrator in his Award has stated that he has made the award after perusal of the pleadings and the documents filed and after hearing the parties and considering the arguments advanced by the parties and after site inspection. I am unable to believe that the Arbitrator did not consider the pleading and/or evidence and/or documents and/or arguments tendered by or on behalf of the parties or that there is any misconduct on his part.
18. The next question is that the Award of the Arbitrator is beyond the scope of the reference. No particulars have been given as to what was the scope of the reference and in what respect the Arbitrator has gone beyond the scope of the reference. It is difficult for this court to accept such vague allegations. It has also been alleged that the Arbitrator ignored the limits prescribed in the contract. No particular of such provisions of contract and/ or the manner in which the same has been ignored are given and I am unable to accept the same.
19. The next point is with regard to the interest. I have alrealy stated that so far the awarding of interest pendents lite is concerned, the Arbitrator has an absolute discretion in respect of the same. If a man is deprived of the money which he has entitled to on the date of the reference, the Arbitrator is entitled to take notice of that and is entitled to award interest for the period of delay in payment of the amount which he ultimately finds to be due and payable by the parties.
20. The next question is that the Arbitrator misconducted himself by awarding costs of arbitration to the extent as awarded. In my opinion the Arbitrator is entitled to award costs of the arbitration. No provision of any contract has been placed before me which provides against the awarding of costs by the Arbitrator.
21. The next question is that the Award is unreasonable and perverse and the Arbitrator misconducted himself in the proceedings by making and publishing the Award. I do not find that such a vague allegation has any foundation or that in the facts and circumstances of the case it cannot be said that the Award is otherwise bad in law or should be set aside.
22. In the instant case the Arbitrator issued two corrigendum after making and publishing the Award. Section 13(1) of the Arbitration Act provides that the Arbitrator shall, unless different intention is express, in the agreement, have power to correct in Award any clerical mistake or error arising from any accidental slip or omission. The said two corrigendums as mentioned hereinabove were issued by the Arbitrator to correct the clerical mistake or error arising from accidental slip or omission and I do not think that there was any wrong on the part of the Arbitrator in doing so. In my opinion the said two corrigendums which have been filed by the Arbitrator in this Court should be treated as part of the Award and it is ordered accordingly. It is to be noted that by the last corrigendum issued on 23.2. 1994 the amount of the Award was reduced from Rs. 7,46,744/- as originally awarded to Rs. 6,75,716/-.
23. The next point taken is that this Court has no pecuniary jurisdiction to entertain, try and determine the application and to pronounce judgment upon the said purported Award which is for less than Rs. 10 lakhs. Accordingly to the petitioner this Hon’ble Court has jurisdiction to entertain, try and determine cases in which the value is above Rs. 10 lakhs only. The total Awarded amount along with interest as comes to Rs. 9,46,000/- as per the submissions made on behalf of the Union of India. It is to be noted that the rate of interest allowed by the Arbitrator to the claim for interest was 10 per cent per annum from 10.2.1990. In the statement of claim, the claim made by the respondent Award Holder with regard to interest was at the rate of 18 percent per annum and if claim is to be taken as the criterion for determination of jurisdiction, then and in that event the claim will be much more than Rs. 10 lakhs. Furthermore, the Arbitrator has awarded refund of security deposit of Rs. 1 lakhs. If the said sum is also to be added, then the total amount of award itself will be more than Rs. 10 lakhs.
24. Section 31(1) of the Arbitration Act, provides as follows :-
“31 Jurisdiction :- (1) subject to the provisions of this Act an award may be filed in any Court having jurisdiction in the matter to which the reference relates.”
25. From the above provision it will appear that what is relevant for the purpose of governing pecuniary jurisdiction of the Count is the subject matter of the Claim. Supposing a man makes a claim which is valued at more than Rs. 10,00,000/- then and in that event the Court having jurisdiction in respect of a claim of Rs. 11, 00,000/- and above will fee the Court having jurisdiction in the matter. It hardly matters that after the matter is heard and decided, by the Arbitrator the award is for an amount less than Rs. 10,0000/- or even if the claim is dismissed, the Court which will have jurisdiction in respect of the subject matter of the claim will be the Court having jurisdiction in the matter to do deal with the said award and/or to dismiss the same.
26. The next point urged before me was that this Court has no territorial jurisdiction in the matter. The submissions on behalf of the Union of India was that the Court which has the territorial jurisdiction is the Court at! Gangtok in Sikkkn. It was submitted that the final agreement was signed at Sikkim as between the parties and the work was executed at Sikkim. It was also submitted that no part of the cause of action arose within the jurisdiction of this Court. The Union of India did not place before me the contract between the parties. It has been submitted on behalf of the respondent that the negotiations with regard to the said contract were held at Calcutta at the office of the Chief Engineer and/or the Superintendent Engineer. The Engineer-in-Charge at Sikkim was working under the Chief Engineer at Calcutta. My attention was drawn to various provisions of the contract from the records filed by the Arbitrator. There are various provisions in the said contract which were to be performed in Calcutta. For example Clause 10C provides that if during the progress of the works, the price of any material incorporated in the works and/or wages of labour increases as a direct results of coming into force of any fresh law or a statutory rule or order and such increase is 10 percent of the price and/or wages prevailing at the time of receipt of the tender for the work and the contractor thereupon necessarily and properly pays in respect of that material, such increased price and/or payment in respect of labour engaged on the execution of the work and such increased wages, then the amount of contract shall accordingly be valid provided always that any increase so payable is not in the opinion of the Superintending Engineer (whose decision is final and binding) attributable to the delay in the execution of the contract within the control of the contract. The said Superintending Engineer, has his office at Calcutta, Central Circles III, CPWD, Calcutta. There are other provisions also which provide for decision either by Chief Engineer at Calcutta or the Superintending Engineer at Calcutta in respect of the performance of the contract. There are other provisions also in the contract which provide for the control and/or supervision and/or performance of the duties by the Chief Engineer and/or the Superintending Engineer both having their offices at Calcutta. Furthermore, in case of dispute the reference is to be made to an Arbitrator to be appointed by the Chief Engineer and/or the person efficiating in his position. Such request for arbitration has to be made in terms of the contract to the Chief Engineer at Calcutta and the appointment of the Arbitrator has also to be made by the Chief Engineer, Calcutta, In fact, the Chief Engineer did make appointment of Arbitrator from time to time from Calcutta. The Arbitrators were appointed from time to time by the said Chief Engineer from Calcutta. This was a provision of the Contract and the respondent had to request the Chief Engineer to appoint an Arbitrator in case of dispute in terms of the contract. This is also a part of provision of the contract. As a matter of fact, even the Arbitrators who were Arbitrators appointed from time to time by such Chief Engineer held arbitration proceedings mainly at Calcutta. The Engineer-in-Charge who signed the contract was working in a zone which was headed by the Chief Engineer and he was a Sub-ordinate Officer under the Chief Engineer. The respondent has submitted that the said Engineer- in-Charge had no powers to accept a contract and/or officer involving an amount as was involved in this contract which was about Rs. 17,00,000/- without the approval there of by Chief Engineer. According to the respondent, No. 1 the negotiations were held at the Chief Engineer’s office at Calcutta and the acceptance of the offer was made and/or approved by the said Chief Engineer at whose instance the said Engineer in charge at Sikkim communicated the acceptance to the respondent and signed the contract. Be that as it may, the department which entered into the contract with the respondent No. 1 was the department under the said Chief Engineer working at Calcutta. The said office of the department was at Calcutta.
27. If that is so then I fail to understand as to why the Court at Calcutta will not have the jurisdiction. First of all, the Head Office of the Department which entered into the contract was at Calcutta within the jurisdiction of this Court and secondly a part of the contract was to be performed by the Chief Engineer and/or Superintending Engineer both having their offices at Calcutta.
28. Reliance was placed on the judgment (FB) in support of the proposition that a suit can be filed at the Head Quarters of the Northern Railway at Delhi even though the contract was entered into by the Supdt. of Railways at Lucknow. In the instant case, the zonal office was headed by the Chief Engineer and it also had a Superintendent Engineer both having their offices at Calcutta. The office at Sikkim and directly under the control and supervision of the said Calcutta office. The said Chief Engineer or the said Superintending Engineer had certain contractual duties to perform in terms of the contract.
29. In that view of the matter, I am of the view that a part of the contract was to be performed at Calcutta and the head office of the department being at Calcutta, this Court has territorial jurisdiction in view of the said judgment and the Code of Civil Procedure. Furthermore, the Calcutta Office being the Head Office having a Chief Engineer of the zone under whom the Engineer-in-Charge was working, it can rightly be said that the place of business of the contracting party was at Calcutta where the Head Office was situated.
30. It was sought to be urged on behalf of the respondent that the application of the Union of India is (barred by limitation. It appears from the facts which have been placed before me that the service of the notice under Section 14(2) was served on 7th of February, 1994. The application of the Union of India in the above matter was noted as made on 8th of March, 1994, i.e. within a period of 30 days as allowed by law and in that view of the matter I am of the opinion that the instant application was not barred by limitation and was made within the time as allowed by law.
31. In view of what has been discussed above, I am of the view that this Court both pecuniary as well as territorial jurisdiction to try and determine and to pass judgment-Upon-Award in the above Award Case No. 7 of 1994. I am also of the view that no grounds have been made out for setting aside the said Award made by Mr. D. K. Misra an Officer of the Union of India working in the Ministry of Urban Development, Calcutta. It is also observed that the two corrigendums issued by the said arbitrator being the corrigendum dated 28th of December, 1993 and also the corrigendum dated 23rd of February, 1994 are both to be treated as part to the Original Award dated 24th of November, 1993.
32. The application made on behalf of the Union of India is hereby dismissed with costs.