IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arb. Case No.21 of 2009 Date of decision : October 22, 2010 State of H.P. and another …Petitioners. Versus Surender Pal …Respondent. Coram The Hon’ble Mr. Justice Surjit Singh, Judge. Whether approved for reporting?1 For the Petitioners : Mr. Ramesh Thakur, Assistant Advocate General. For the Respondent : None. Surjit Singh, J (Oral) Nobody appears for the respondent. 2. I have heard the learned Assistant Advocate General, appearing for the objection-petitioners. 3. Respondent Surender Pal, who is a Government Contractor, was awarded work of laying sewerage lines in Mandi town, by the objection-petitioners, sometime in the year 1993. A written agreement was executed between the parties, which contained an arbitration clause. Arbitration clause provided for adjudication of any dispute, arising between the parties, by an Arbitrator. 4. A dispute arose between the parties. Respondent made claim, in respect of eleven items, while the objection-petitioners made claim, in respect of four items. All the claims were referred to Arbitrator, namely Whether reporters of the local papers may be allowed to see the judgment? …2… Arbitrator-cum-Superintending Engineer (Design), Dharamshala. Arbitrator gave his award on 1st November, 2008. As per this award, a sum of `3,35,116/-, with interest at the rate of 10%, which was corrected vide corrigendum dated 10th November, 2008, was awarded in favour of the respondent and against the objection-petitioners. 5. Objection-petitioners have challenged the award, on the ground that the same is against Public Policy of India. Petition was filed, under Section 34 of the Arbitration and Conciliation Act, for setting aside the award. Objection-petitioners have challenged the award of a sum of `1,14,123/-, on account of refund of hire charges of compressor, in favour of the respondent and rejection of their claim for compensation under clause (2) of the agreement. 6. It is submitted by the learned Assistant Advocate General that when the respondent had claimed only a sum of `84,220/-, on account of refund of hire charges of air compressor, Arbitrator was not competent nor did he have the jurisdiction to award a sum of `1,14,123/- on that count. He says that the Arbitrator exceeded his jurisdiction and, thus, the award given by the Arbitrator, in respect of the aforesaid claim of hire charges of air compressor, is liable to be set aside or atleast modified. …3… 7. Submission made by the learned Assistant Advocate General is supported by a judgment of the Apex Court in J.C. Budhraja versus Chairman, Orissa Mining Corporation Ltd. and another, (2008) 2 SCC 444. In that case, contractor had claimed a sum of `95,96,616/- (excluding interest), but the Arbitrator awarded a sum of `1,02,66,901.36 (excluding interest). Hon’ble Apex Court held that the Arbitrator had exceeded his jurisdiction, which amounted to legal misconduct and the award, to the extent of `6,70,285/-, which was in excess of the claimed amount, held to be invalid. 8. In view of the abovestated position, it is held that the award of Arbitrator, in respect of claim for refund of hire charges for air compressor, is invalid to the extent of `29,903/-. 9. As regards the rejection of claim of the Objection-petitioners, for compensation under clause (2), Arbitrator has held that the objection-petitioners had waived the claim on this count. Reason given by the Arbitrator is that in reply dated 28th August, 1999 submitted to the Arbitrator, Executive Engineer had stated that no penalty had been imposed upon the contractor. The claim was not on account of penalty but on account of compensation under clause (2) and a sum of `16,097/- had specifically been claimed on this count. Consequently, it is held that rejection of claim for compensation, under clause …4… (2), was contrary to the material on record. Thus, the objection-petitioners are held to be entitled to a sum of `16,097/-, on account of compensation, under clause (2). 10. As a result of the above discussion, objection- petition is allowed and amount of award is reduced from `3,35,116/- minus (`29,903/- + `16,097/- = `46,000/-) to `2,89,116/-. Petition stands disposed of. October 22, 2010(sd) ( Surjit Singh ), J