{"id":34365,"date":"2008-09-19T00:00:00","date_gmt":"2008-09-18T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-ors-vs-ms-jagdish-prasad-ram-avtar-p-on-19-september-2008"},"modified":"2015-08-29T21:17:48","modified_gmt":"2015-08-29T15:47:48","slug":"union-of-india-ors-vs-ms-jagdish-prasad-ram-avtar-p-on-19-september-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-ors-vs-ms-jagdish-prasad-ram-avtar-p-on-19-september-2008","title":{"rendered":"Union Of India & Ors vs M\/S Jagdish Prasad Ram Avtar P … on 19 September, 2008"},"content":{"rendered":"
Rajasthan High Court – Jodhpur<\/div>\n
Union Of India & Ors vs M\/S Jagdish Prasad Ram Avtar P … on 19 September, 2008<\/div>\n
                                      1\n\n                                             S.B. Civil Misc. Appeal No.1431\/2005\n         Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n\n\n             S.B. Civil Misc. Appeal No.1431\/2005\n                     Union of India & Ors.\n                                    Vs.\n     M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n\nDate : 19.9.2008\n\n                HON'BLE MR. PRAKASH TATIA, J.\n<\/pre>\n
Mr.Arvind Samdariya, for the appellants.
\nMs.Rekha Borana, for the respondent.\n<\/p>\n
                            – – – – –\n<\/p>\n
     Heard learned counsel for the parties.\n<\/p>\n
     This appeal is against the order dated 8.4.2004
\npassed by the Court of District Judge, Sri Ganganagar
\nin   Civil   Misc.    Case     No.122\/1996 by           which       the    court
\nbelow rejected the objections of the appellants filed
\nunder   Section       30     read     with      Section        33     of     the
\nArbitration Act, 1940 (for short ‘the Act of 1940’).\n<\/p>\n
     The contract in question is No.CEBTZ-13\/1983-84.
\nIt had arbitration clause and when dispute was raised
\nafter rescinding of the contract by the appellant Union
\nof India on 17.11.1987, the appellant itself initially
\nappointed Mr.AV Gopalakrishna, then Shri BM Gupta was
\n                                      2<\/span><\/p>\n
                                            S.B. Civil Misc. Appeal No.1431\/2005
\n        Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
appointed   and     lastly,       he     too     was        substituted      by
\nArbitrator Shri Vidhya Bhushan by letter of reference
\ndated 14.2.1995. The Arbitrator passed the award on
\n4.3.1996. The Arbitrator considered the claims of the
\ncontractor as well as of appellant Union of India. The
\nclaims of contractor referred in para no.9 of the award
\nhave been dealt with by the arbitrator whereas in para
\nno.10 of the award, the learned Arbitrator dealt with
\nthe claim of appellant Union of India. The award is not
\na reasoned award. However, the learned Arbitrator has
\nnot accepted the total claims of any of the parties but
\ngave different amounts to the parties from the amounts
\nclaimed by them. Some of the claims of both the parties
\nhave been rejected. For ready reference, the table of
\nclaim and amount awarded by the Arbitrator are quoted
\nhere under :-\n<\/p>\n
“Claims and award for the contractor                   :-<\/p>\n
\nS.No. Brief description of                  claimed              award\n      claims                                amount               amount\n<\/pre>\n
1.   Balance price of work done 1,76,766.40 48,560.00
\n     collective amount of
\n     Deviation Orders sanctioned
\n     from time to time during
\n     execution of work.\n<\/p>\n
     (Claim partly sustained).\n<\/p>\n
2.   Cost of material lying at 1,88,289.27 19,410.58
\n     site at the time of
\n     termination of the contract.\n<\/p>\n
                                      3<\/span><\/p>\n
                                            S.B. Civil Misc. Appeal No.1431\/2005
\n        Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
     (Claim partly sustained).\n<\/p>\n
3.   Difference of cost of                     15,379.65 NIL
\n     overweight steel 6mm and
\n     8mm as finalised by the
\n     Board.\n<\/p>\n
     (Claim not sustained).\n<\/p>\n
4.   Cumulative amount of 5 Nos 3,82,086.76 1,71,770.43
\n     claims respecting the
\n     instant contract.\n<\/p>\n
     (Claim partly sustained).\n<\/p>\n
5.   Unconsumed materials vide                  4,810.51        NIL
\n     CRV No.57\/EV\/79\/BRD dt.\n<\/p>\n
     23.3.88.\n<\/p>\n
     (Claim not sustained).\n<\/p>\n
6.   Unconsumed stores and tools               72,782.60 16,896.60
\n     and plants which remained
\n     at site at the time of
\n     termination of contract.\n<\/p>\n
     (Claim partly sustained).\n<\/p>\n
7.   Release of security                       60,000.00 To be rel-\n<\/p>\n
     deposit furnished in the                            eased\n     shape of bank guarantee.                            within one\n     (Claim sustained).                                  month of\n                                                         the award.\n8.   Retention money furnished              1,50,000.00 To be rel-\n     in the shape of bank                               eased\n     guarantee.                                         within one\n     (Claim sustained).                                 month of\n                                                        the award.\n9.   Loss of profit on the                     62,879.38        NIL\n     unexecuted portion of\n     work @ 10%.\n     (Claim not sustained).\n10. Past interest on the                   5,48,047.35 12% PASI\n    Principal sum of                                   from\n    Rs.8,69,916.43 @ 18%                               28.5.88 to\n    per annum from 01.3.87                             31.8.90 on\n    to 31.8.90.                                        awarded\n    (Claim partly sustained).                          amount of\n                                                       claim 1 to\n                                                       6.<\/span>\n                                      4<\/span>\n\n<\/pre>\n
                                            S.B. Civil Misc. Appeal No.1431\/2005
\n        Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
11. Interest pendentelite                      18%            12% PASI
\n    from 23.9.91.                                             from
\n    (Claim partly sustained).                                 23.9.91 to
\n                                                              the date of
\n                                                              award on
\n                                                              awarded
\n                                                              amount of
\n                                                              claims 1
\n                                                              to 6.\n<\/p>\n
12. Cost of arbitration                       20,000.00         NIL
\n    (Claim not sustained).\n<\/p>\n
Claims and award for the Union of India :-<\/p>\n
\nS.No. Brief description of                  claimed              award\n      claims                                amount               amount\n1.   Addl expenditure incurred             7,12,809.68 5,40,057.47\n     by the claimant for\n     completion of incomplete\n     works through risk & cost\n     of respondent.\n     (Claim partly sustained).\n2.   Technical Examination of                  25,407.41 23,687.29\n     work.\n     (Claim partly sustained).\n3.   Claim on account of                    7,14,665.22 NIL\n     compensation.\n     (Claim not sustained).\n4.   Claim on account of over             15,65,837.56 Not adju-\n     issued stores.                                    dicated.\n     (Claim not referred by\n     Appointing Authority).\n5.   Cost of reference.                        10,000.00        NIL\n     (Claim not sustained).\"\n\n<\/pre>\n
     In this appeal, the appellant has challenged the
\norder dated 8.4.2004 by which their objections against
\n                                           5<\/span><\/p>\n
                                               S.B. Civil Misc. Appeal No.1431\/2005
\n           Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
the     award    were       rejected.         The        learned    court        below
\nconsidered each of the ground raised by the appellant
\nin detail and thereafter, rejected the contention of
\nthe appellant.\n<\/p>\n
      According to learned counsel for the appellant, in
\nview of the condition in clauses no.11 and 54, the
\nissue    which     could      have       been       decided      only     by     Chief
\nEngineer could not have been referred to the Arbitrator
\nand in the present case, the Arbitrator has adjusted
\nthat amount which has referred in Col.1 of the claim of
\nthe contractor. It will be worthwhile to mention here
\nthat the contractor claimed Rs.1,76,766.40 on account
\nof    balance    price       of   work        done       which     is    collective
\namount of deviation orders sanctioned from time to time
\nduring     execution         of   work.         Against          this    claim      of
\nRs.1,76,766.40,             the          Arbitrator              awarded          only
\nRs.48,560.00.         The    said     plea          of    the      appellant      was
\nrejected by the trial court on the ground that no such
\nobjection       was    raised       by        the    appellant          before    the
\narbitrator and, therefore, once they have submitted to
\nthe jurisdiction of the arbitrator and got adjudication
\nof claim, they cannot claim objection under Section 30
\nof the Act of 1940.\n<\/p>\n
                                           6<\/span><\/p>\n
                                               S.B. Civil Misc. Appeal No.1431\/2005
\n           Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
       Learned counsel for the appellant submitted that
\nit is a challenge to the jurisdiction of arbitrator,
\ntherefore, the objection could have been raised under
\nSection 30. Learned counsel for the appellant relied
\nupon     the    judgment        of        the      Hon’ble         Supreme          Court
\ndelivered       in      the     case          of      Prabartak           Commercial
\nCorporation          Ltd.      vs.        The         Chief        Administrator,
\nDandakaranya Project & Anr.<\/a> reported in AIR 1991 SC 957
\nwherein it has been held that where the matter is to be
\ndecided by the Chief Engineer under the terms of the
\ncontract,       that       matter     cannot          be   referred            to     the
\nArbitrator. The matter which can be referred to the
\nArbitrator and can be decided by the arbitrator and the
\nclaim    can    be     decided       by       other    mode,        there       may    be
\nseparate       provisions in         the        contract. If             any    of    the
\nparty had any objection regarding the jurisdiction of
\nthe Arbitrator in deciding the matter then that should
\nhave been raised on earliest occasion or at least with
\nthe     reply       before    the    arbitrator.              It    is     a    matter
\nrelating       to    the     contract         of    1983-84        and     where      the
\ndispute arose on 17.11.1987 and the award was passed in
\nthe year 1996 and, therefore, the arguments about the
\njurisdiction of the arbitrator has been raised after a
\nlong delay of 5 years from the time of appointment of
\narbitrator.         Therefore,       if       the     civil        court       has    not
\n                                        7<\/span><\/p>\n
                                             S.B. Civil Misc. Appeal No.1431\/2005
\n         Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
accepted that objection, this Court is not inclined to
\naccept the objection against the jurisdiction of the
\narbitrator.    It    is    not     a       case   of   inherent      lack     of
\njurisdiction of the arbitrator.\n<\/p>\n
      Learned counsel for the appellant submitted that
\nthe   contractor       claimed         Rs.1,88,289.87         as     cost     of
\nmaterial lying at the site at the termination of the
\ncontractor against which Rs.19,410.58 has been awarded
\nto the contractor by the Arbitrator but while doing so,
\nthe arbitrator has not given bifurcation and has not
\nshown the head under which the amount has been awarded.
\nThe said argument is legally not sustainable in view of
\nthe fact that by this, the appellant is seeking reason
\nfor the award and it is settled law that the arbitrator
\ncan pass the award without assigning any reasons. From
\nthe claim of the contractor and the award given by the
\narbitrator and looking to the difference in amount, it
\nappears that the arbitrator has applied its mind and
\nagainst the claim of Rs.1,88,289.27, the contractor has
\nbeen awarded Rs.19,410.58 only. The same is position
\nfor the claim no.6 and for this reason also, whether it
\ncould have been referred to the arbitrator, there was
\nno objection before the arbitrator by the appellant.\n<\/p>\n
                                           8<\/span><\/p>\n
                                               S.B. Civil Misc. Appeal No.1431\/2005
\n           Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
       Another        objection     of        the     appellant        is   about
\nrelease of security amount. It is submitted that the
\nsecurity amount could be released only when no dues
\ncertificate is issued by the petitioner. This plea is
\navailable only when it is an amicable settlement. Once
\nthe    issue     is    resolved      by       the    arbitrator,       then    the
\nquestion     of    no    dues     certificate             from   the   appellant
\ncould not be a hurdle in way of the appellant for
\nreleasing        the     security.            No    dues     certificate        is
\nsettlement between the parties and end of claims so far
\nas the award is concerned. With the passing of the
\naward,     nothing       remains      which         can     be   disputed      and
\nobjected by either of the parties. Therefore, the no
\ndues    certificate        looses      its         significance.       Otherwise
\nalso, the Union of India can issue such certificate and
\nmake payment of security but as held above, there is no
\nnecessity for obtaining the no dues certificate by the
\nrespondent        from   the     appellant           in    the   situation      as
\nreferred above.\n<\/p>\n
       Learned counsel for the appellant submitted that
\nthe arbitrator has awarded past interest though at the
\nrate of 12% instead of 18% as claimed by the contractor
\nwhich could not have been granted. For that, I do not
\n                                            9<\/span><\/p>\n
                                                  S.B. Civil Misc. Appeal No.1431\/2005
\n              Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
find any force in said submission of learned counsel
\nfor the appellant looking to the facts of the case.
\nLearned counsel for the appellant also submitted that
\nthe rate of interest is required to be reduced in view
\nof the judgment of Hon’ble Supreme Court in the case of
\nRajasthan State Road Transport Corpn. vs. Indag Rubber
\nLtd.<\/a> reported in AIR 2006 SCW 4564.\n<\/p>\n
       I considered the submissions of learned counsel
\nfor the parties and perused the facts of the cases
\nreferred to above particularly the case of Indag Rubber
\nLtd. (supra).\n<\/p>\n
       The dispute was of the year 1987 and the award of
\ninterest was at the rate of 12% per annum which was
\nreduced to 6% on the ground that the rate of interest
\nis excessive. In a commercial transaction, the rate of
\ninterest can be granted as per the commercial rate of
\ninterest. Before the Civil Court, there was no material
\nthat     in     the     year     1987,         the   rate    of     interest       in
\ncommercial transaction in the year 1988 and onwards was
\nmuch    less       than     12%.     Therefore,         this      Court     is    not
\ninclined to interfere in the said award of interest by
\nthe arbitrator to the contractor.\n<\/p>\n
       In view of the above reasons, I do not find any
\nreason        to    interfere        in     the      impugned       order      while
\n                                               10<\/span><\/p>\n
                                                      S.B. Civil Misc. Appeal No.1431\/2005
\n                  Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr.\n<\/p>\n
          exercising the appellate jurisdiction.\n<\/p>\n
               Consequently, this appeal, having no merits, is
\n          hereby dismissed.\n<\/p>\n
                                                            (PRAKASH TATIA), J.\n<\/p>\n
S.Phophaliya\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Rajasthan High Court – Jodhpur Union Of India & Ors vs M\/S Jagdish Prasad Ram Avtar P … on 19 September, 2008 1 S.B. Civil Misc. Appeal No.1431\/2005 Union of India & Ors. Vs. M\/s. Jagdish Prasad Ram Avatar Pvt. Ltd. & Anr. S.B. Civil Misc. Appeal No.1431\/2005 Union of India & Ors. Vs. M\/s. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,19],"tags":[],"class_list":["post-34365","post","type-post","status-publish","format-standard","hentry","category-high-court","category-rajasthan-high-court-jodhpur"],"yoast_head":"\nUnion Of India & Ors vs M\/S Jagdish Prasad Ram Avtar P ... on 19 September, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/union-of-india-ors-vs-ms-jagdish-prasad-ram-avtar-p-on-19-september-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Union Of India & Ors vs M\/S Jagdish Prasad Ram Avtar P ... on 19 September, 2008 - 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