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) 2 arbitrator 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) 6 claim 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) 7 arbitrator 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) 8 Court?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