Civil Revision No.4259 of 2002 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Civil Revision No.4259 of 2002
Date of decision 22.5.2009.
Union of India
...... Petitioner.
versus
M/s Bawa Jasbir Singh
...... Respondent.
Present : Mr. S.K.Sharma, Advocate for the petitioner.
Mr. P.S.Rana Advocate for the respondent.
L.N.MITTAL,J.(Oral)
This is revision petition by Union of India having remained
unsuccessful in both the Courts below. Respondent-Contractor M/s Bawa
Jasbir Singh executed some work of the petitioner-Union of India. Disputes
arose between the parties. The said disputes were referred to Arbitrator.
The Arbitrator made his award dated 18.5.1993 awarding various amounts
to the Contractor against different claims made by the Contractor. The
Contractor filed application under Section 14(2) and Section 17 of the
Arbitration Act, 1940 ( in short – the Act) for directing the Arbitrator to file
the award and for making award as rule of the Court. The petitioner filed
objections under Section 30 of the Act against the award of the Arbitrator.
Civil Revision No.4259 of 2002 2
Learned Civil Judge (Junior Division), Chandigarh vide judgment dated
16.3.2001 dismissed the objections of the petitioner-herein and made the
award of the Arbitrator as rule of the Court. Appeal preferred by the
petitioner stands dismissed by learned Additional District Judge,
Chandigarh vide judgment dated 3.6.2002. Feeling still aggrieved, the
instant revision petition has been preferred by Union of India.
I have heard learned counsel for the parties and perused the
case file.
Learned counsel for the petitioner challenged the amounts
awarded by the Arbitrator under claim Nos.5,7 and 22 of the Contract.
Under claim No.5, the Arbitrator allowed Rs.7181.71ps. for increase in the
number of bricks used in the septic tank. This claim is alleged to be
factually incorrect because vide deviation order No.21 dated 31.8.2005, cost
of these bricks had been paid to the Contractor. This objection of the
petitioner cannot be entertained as it relates to disputed question of fact.
The finding of the Arbitrator cannot be set aside by Court on disputed
question of fact.
Under claim No.7, the Contractor raised claim of Rs.25,000/-
for increase in the price of bricks. The Contractor revised his claim to
Rs.53,980/-. The Arbitrator has awarded Rs.43,726.50ps. The petitioner
alleged that increase in price of bricks took place on 16.9.1983 and by then
6,18,000 bricks had already been utilized and thereafter only 2,90,000
bricks were purchased by the Contractor. However, award of the Arbitrator
is non speaking and, therefore, it cannot be discerned therefrom as to for
how many bricks claim of the Contractor has been allowed. Consequently,
Civil Revision No.4259 of 2002 3
this objection of the petitioner also cannot be accepted.
Under claim 22, the Contractor claimed Rs.1,87015/- on
account of increase in price of diesel and petrol. The Arbitrator allowed
Rs.86,884/- against this claim of the Contractor. The objection of the
petitioner is that diesel and petrol were not incorporated in the Contract but
still the claim has been allowed. However, this objection relates to factual
controversy, which cannot be gone into by the Court. The award of the
Arbitrator on this aspect cannot be set aside on this ground.
Last objection of the petitioner relates to claim No.10. The
Contractor claimed Rs.3,50,000/- as damages for delay in execution of the
work. The Contractor revised the claim to Rs.3,93,117/-. The Arbitrator
has allowed Rs.1,12,000/- to the Contractor against this claim. The
contention of the petitioner is that the Arbitrator has committed legal
misconduct in allowing this claim because clause 11(C) of the Contract
specifically provides that no claim in respect of compensation or otherwise,
howsoever arising, as a result of extension granted under conditions (A)
and (B) shall be admitted.
Learned counsel for the petitioner vehemently contended that in
view of specific clause 11(C) in the Contract, the Arbitrator could not have
allowed Rs.1,12,000/- as damages or compensation to the Contractor for
delay/extension in the execution of the work. It was also contended that the
Contractor was granted extension twice on his own request without any
financial implication and the Contractor accepted the same. Reliance in
support of this contention has been placed on a judgment of the Apex Court
in the case of Ramnath International Construction Pvt. Ltd. vs. Union of
Civil Revision No.4259 of 2002 4
India and Anr. AIR 2007 Supreme Court 509 and also on a judgment of this
Court in the case of M/s Chaudhary Construction Company v/s Union of
India and others Civil Revision No.2728 of 1995 decided on 21.5.2007
wherein certain other judgments namely Jaswant Singh vs. Union of India
and others (C.R.No.4064 of 2001, decided on 04.10.2002), Union of India
vs. M/s Harbhajan Singh reported as (2007-1) Punjab Law reporter 299,
Union of India vs. M/s Om Construction Company reported as 1997 (1)
RCR (Civil) 143 were also referred to. In all these judgments, same clause
11(C) of the Contract was interpreted and award of the Arbitrator
regarding grant of compensation on account of prolongation of the Contract
was set aside being in violation of the aforesaid clause and thereby the
Arbitrator was held to have committed legal misconduct in granting the said
claim of the Contractor.
On the other hand, learned counsel for the respondent-
Contractor contended that since the award is non speaking, the Court
cannot go into mental process of the Arbitrator in granting the disputed
claim of the Contractor. Reliance in support of this contention has been
placed on judgment of this Court in Union of India and another vs. Sabboo
Mal and Sons and another 2003(2) RCR (Civil) 431. Learned counsel for
the respondent also contended that scope for interference in the case of
non-speaking award is very limited. Reliance in support of this contention
has been placed on judgment of Hon’ ble Apex Court in the case of Karam
Singh Lal vs. Union of India and others 2002(1) Arb.LR 224 (SC) wherein
also similar clause 11 of the Contract was interpreted.
Learned counsel for the respondent also argued that scope for
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interference in exercise of revisional jurisdiction is very limited. Reliance
has been placed on a judgment of Hon’ble Supreme Court in Satna Stone &
Lime Co.Ltd.M.P. vs. Union of India & Another etc. 2008 (3) RCR (Civil)
226 wherein it was held that scope of the interference by Court in award
given by the Arbitrator is limited. Reliance has also been placed on the
judgment of Hon’ble Apex Court in Sutlej Construction Company Pvt.Ltd.
vs. State of Punjab 2001(3) RCR (Civil) 151 wherein it was observed that
Court in exercise of jurisdiction under Section 115 of the Code of Civil
Procedure cannot give its own interpretation to the terms and conditions of
the Contract but can correct only jurisdictional error committed by the
Arbitrator.
On the other hand, learned counsel for the petitioner cited
judgment of this Court in the case of M/s AKM Constructions & Engg.
Company vs. Commander Works Engineer 2007(1) RCR (Civil)86
wherein it was observed that even if it is non speaking award, if the claims
awarded by the Arbitrator are contrary to the terms of the Contract on the
face of the record, the Court is not precluded from interfering with such an
award. The contention that it is not open to the Court to attempt to probe
into the mental process of the Arbitrator where the award is non speaking
will not apply in such a case.
I have very carefully considered the rival contentions and
perused the judgments cited by the learned counsel for the parties.
Clause 11(C) of the Contract is very clear and categorical. It
provides that no compensation whatsoever shall be admissible to the
Contractor as a result of extension of time granted for execution of the
Civil Revision No.4259 of 2002 6
Contract. In view of the plain and unambiguous language of the clause,
the Arbitrator could not have granted amount of Rs.1,12,000/- to the
Contractor under this head. The Arbitrator by doing so has committed legal
misconduct and, therefore, award of the Arbitrator is prone to interference
by this Court. This conclusion is strengthened by latest judgment of the
Hon’ble Apex Court in the case of Ramnath International Construction Pvt.
Ltd. (supra) and other judgments referred to hereinabove.
No doubt, scope of interference by Court in the award of the
Arbitrator is very limited. There is also no doubt that scope of interference
in exercise of revisional jurisdiction is also limited. However, when there
is jurisdictional error by the Arbitrator or there is legal misconduct, Court
can always interfere with the award under Section 30 of the Act and even
this Court in exercise of revisional jurisdiction can interfere with the award
of the Arbitrator in such a situation. In the instant case, the Arbitrator
committed legal misconduct by awarding amount of Rs.1,12,000/-to the
Contractor under the aforesaid head, which could not have been awarded at
all in view of categorical provision in the Contract. Award of the said
amount being contrary to the express condition of the Contract contained in
clause 11(C) thereof, the Court not only has jurisdiction but also owes a
duty to interfere with the award of the Arbitrator to the extent of the said
amount.
In view of the aforesaid, the instant petition is allowed partly
and impugned judgments of both the Courts below are modified to the
extent that the respondent-Contractor shall not be entitled to the amount of
Rs.1,12,000/- awarded by the Arbitrator as damages/compensation for
Civil Revision No.4259 of 2002 7
extension of time in the execution of the Contract whereas judgments of the
Courts below in respect of the other amounts awarded by the Arbitrator
are upheld.
( L.N.MITTAL )
JUDGE
May 22, 2009
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