IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Civil Revision 6782 of 2001 Date of decision: 28.8.2009 M/s King’s Builders Contractor …Petitioner Versus Union of India and ors …Respondents Present: Mr Adish Gupta, Advocate for the petitioner. Mr Kamal Sehgal, Advocate for Union of India. S.S. SARON, J. This revision petition has been filed by M/s King’s Builders Contractors against the order dated 25.5.2001 passed by the learned Additional District Judge, Chandigarh whereby the appeal of the respondents-Union of India against the order dated 22.2.1996 passed by the learned Sub Judge Ist Class, Chandigarh, has been accepted and the order of the learned Sub Judge Ist Class Chandigarh has been set aside. The petitioner – M/s King’s Builders Contractors entered into a contract agreement with respondents-1 and 2 for making provisions of certain accommodation including services at Ramgarh near Chandigarh. Differences arose between the parties to the contract and Mr RD Sharma (respondent-3) was appointed the sole arbitrator to adjudicate the matter. The arbitrator passed his award dated 21.2.1994 whereby 8 claims that were raised by the petitioner were considered and amount was awarded for 1 Civil Revision 6782 of 2001 claims-1,2, 4 and 5. The award was filed in the Court of Sub Judge Ist Class, Chandigarh in terms of Section 14(2) read with Section 17 of the Indian Arbitration Act 1940 (Act – for short) for making the said award rule of the Court. The respondent – Union of India filed objections for setting aside the award in question. It was alleged that the arbitrator had misconducted the proceedings and had exceeded his jurisdiction. Besides, the award had been passed with a biased mind. The learned Sub Judge Ist Class, Chandigarh vide order dated 22.2.1996 found no merit in the objections raised by the respondent-Union of India and dismissed the same. Accordingly, the award dated 21.2.1994 was made rule of the Court. Besides, interest @ 12% p.a. was awarded from the passing of the decree till realization of the entire awarded amount. The respondent-Union of India, aggrieved against the order of the learned Sub Judge Ist Class, Chandigarh, filed appeal, which has been accepted insofar as claim for award -1, 2 and 5 of the arbitration award dated 21.2.1994 is concerned. The petitioner, aggrieved against the same, has preferred the present petition. Learned counsel for the petitioner has contended that the award dated 21.2.1994 is a non-speaking award and, therefore, it was not open to the learned Additional District Judge, Chandigarh to set aside the same. Reliance is placed on the judgment of the Supreme Court in Karam Singh Lal v. Union of India SLP (Civil) 15850 of 2000 decided on 24.9.2001 wherein, in respect of a non-speaking award, it is submitted that it was held by the Supreme Court that the same was not liable to be set aside as there were no reasons available with the Court to ascertain as to what was the illegality in the award. 2 Civil Revision 6782 of 2001 In response, learned counsel for Union of India has submitted that the petitioner on his own had taken extension in time for completion of the work under Clause 11(A) and Clause 11(B) of the agreement between the parties. Therefore, in view of Clause 11(C), no claim in respect of compensation as a result of extensions granted, is admissible to it. Reliance is placed on the case of Ram Nath International Constructions (P) Ltd v. Union of India (2007)2 SC 453. I have given my thoughtful consideration to the contentions of the learned counsel for the parties and with their assistance, have gone through the record. It may be noticed that the award dated 21.2.1994 is a non- speaking award. The dispute relates to claims- 1, 2 and 5, which may be noticed as follows:- “Sr No. Brief description Findings Amount claims awarded (Rs) 1. Claim No.1 Payment due to lapses of the Partially 22,000.00 Deptt such as late handing sustained over the site. Amount of claim - Rs 25000/- Revised Amount - Rs 35580/- 2. Claim No.2 Losses due to non- Pataially 45,000.00 Availability of Schedule ‘B’ sustained Stores. Amount of claim - Rs 25000/- Revised Amount - Rs 193133/- 3. xxx xxx 4. xxx xxx 5. Claim No.5 3 Civil Revision 6782 of 2001 Losses due to disturbed Partially 3,000.00 Conditions. Sustained. Amount of claim - Rs 15000/- Revised Amount - Rs 16172.72 6 to 8. xxx xxx” A perusal of the above shows that claim-1 was due to lapse of the department i.e. the respondent, in late handing over the site for which an amount of Rs 25,000/- was claimed and a revised amount of Rs 35580/- was claimed. The arbitrator awarded Rs 22,000/-. Claim-2 relates to losses due to non-availability of Schedule-B Stores for which an amount of Rs 25,000/- was claimed and revised amount of Rs 1,93,133/- was claimed, for which an amount of Rs 45,000/- has been awarded. Claim-5 relates to losses due to disturbed conditions for which an amount of 15,000/- was claimed and revised amount of Rs 16,172.72 was claimed and an amount of Rs 3,000/- has been awarded by the arbitrator. The said award is, as already noticed, a non-speaking award. In Karam Singh Lal’s case (supra), the Supreme Court held that in the said case the award made by the arbitrator was not a speaking award. The arbitrator had after setting out the preliminary information in regard to reference stated that he had heard and examined the matter and made the final award and no reasons were set out for the same. It was observed by the Supreme Court that in respect of a non-speaking award, scope of interference is very limited. The Court in dealing with the application to set aside such an award, is not to consider whether the view of the arbitrator on the reference is justified or not. The arbitrator’s adjudication is generally considered binding between the parties, for he is a tribunal selected by them and the power of the Court to set aside 4 Civil Revision 6782 of 2001 the award is restricted to cases set out in Section 30 of the Arbitration Act. It is further observed that it is not open to the Court to speculate where no reasons are given by the arbitrator as to what prompted him in reaching his conclusion. On the assumption that the arbitrator must have arrived at his conclusion by certain process of reasoning, the Court cannot proceed to determine whether the conclusion is right or not. It is not open to the Court to attempt to probe into mental process by which the arbitrator reaches his conclusion where it is not disclosed by the terms of the award. The ratio of the said judgment, therefore, would show that the Court is not to re- open the award of an arbitrator and assume as to what weighed in the mind of the arbitrator in reaching his conclusion which must be by certain process of reasons. In the said case also, Clause 11(C), which, it is stated, is the standard form of agreement relating to defence matters, had been considered. It was held that the High Court and the Additional District Judge did not appreciate the matter in the proper perspective and interfered with the award which was made rule of the Court. However, in the present case, it may be noticed that this Court is not required to go into the reasoning on the basis of which the arbitrator may or may not have reached its conclusions. It is to be seen whether in terms of the Clauses 11(A), 11(B) and 11(C) of the standard contract, the petitioner is at all entitled to raise a claim of payment for late handing over the site and non-availability of Schedule-B Stores. Clauses 11(A), 11(B) and 11(C) were considered by the Supreme Court in Ram Nath International Constructions (P) Ltd (supra). These Clauses read as under:- 5 Civil Revision 6782 of 2001 “11. Time, delay and extension.—(A) Time is of the essence of the contract and is specified in the contract documents or in each individual works order. As soon as possible, after contract is let or any substantial work order is placed and before work under it is begun, the GE and the contractor shall agree upon the time and progress chart. The chart shall be prepared in direct relation to the time stated in the contract documents or the works order for completion of the individual items thereof and/or the contract or works order as a whole. It shall include the forecast of the dates for commencement and completion of the various trades, processes or sections of the work, and shall be amended as may be required by agreement between the GE and the contractor within the limitation of time imposed in the contract documents or works order. If the work be delayed: (i) by force majeure, or (ii) by reason of abnormally bad weather, or (iii) by reason of serious loss or damage by fire, or (iv) by reason of civil commotion, local combination of workmen, strike or lockout, affecting any of the tradesmen employed on the work, or (v) by reason of delay on part of nominated sub-contractors, or nominated suppliers which the contractor has, in the opinion of GE, taken all practicable steps to avoid, or reduce, or 6 Civil Revision 6782 of 2001 (vi) by reason of delay on the part of contractors or tradesmen engaged by the Government in executing work not forming part of the contract, or * * * (viii) by reason of any other cause, which in the absolute discretion of the accepting officer is beyond the contractor’s control; then in any such case the officer hereinafter mentioned may make fair and reasonable extension in the completion dates of individual items or groups of items of works for which separate periods of completion are mentioned in the contract documents or works order, as applicable. * * * (B) If the works be delayed: (a) by reason of non-availability of government stores in Schedule B or (b) by reason of non-availability or breakdown of government tools and plant listed in Schedule C; then, in any such event, notwithstanding the provisions hereinbefore contained, the accepting officer may in his discretion, grant such extension of time as may appear reasonable to him and the same shall be communicated to the contractor by the GE in writing. The decision so communicated shall be final and binding and the contractor shall be bound to complete the works within such extended time. 7 Civil Revision 6782 of 2001 (C) No claim in respect of compensation or otherwise, howsoever arising, as a result of extensions granted under Conditions (A) and (B) above shall be admitted.” A reading of the above Clauses show that Clause 11(A) provides that time is the essence of the contract and is specified in the contract documents or in each individual works order. Clause 11(B) provides that if the works be delayed by reason of non-availability of government stores in Schedule - B or by reason of non-availability or breakdown of govt tools and plant listed in Schedule-C, then in such an eventuality notwithstanding the provisions contained, the accepting officer may in his discretion, grant such extension of time as may appear reasonable to him. Clause 11(C) envisages that no claim in respect of compensation or otherwise howsoever arising, as a result of extensions granted under Conditions (A) and (B) above shall be admitted. The case of the respondent-Union of India is that extension having been granted, the claim for compensation under Conditions – A and B of Clause 11 is not admissible. It is not in dispute that the extension has been granted for the execution of the work by the respondent-Union of India. It was observed by the Supreme Court in Ram Nath International Constructions (P) Ltd (supra) that Clause (C) provides that where extension has been granted by reason of delay indicated under Clause 11(A) which was beyond the control of the contractor or on account of delay on the part of the employer specified in Clause (B), the contractor is not entitled to make any claim either for compensation or otherwise arising in whatever manner as a result of such an extension. In para 18 of the judgment, it was observed as follows:- 8 Civil Revision 6782 of 2001 In spite of having held that both were responsible for the delay and having noticed the arguments based on clause 11 (C) of the General Conditions of Contract, the arbitrator proceeded to award damages on the ground of delay on the reasoning that the contractor is entitled to compensation, unless the employer establishes that the contractor has consented to accept the extension of time alone in satisfaction of his claim for delay. As rightly held by the High Court, which decision we have affirmed while considering Question (i), clause 11(C) of the General Conditions of Contract is a clear bar to any claim for compensation for delays, in respect of which extensions have been sought and obtained. Clause 11(C) amounts to a specific consent by the contractor to accept extension of time alone in satisfaction of his claims for delay and not claim any compensation. In view of the clear bar against award of damages on account of delay, the arbitrator clearly exceeded his jurisdiction, in awarding damages, ignoring clause 11(C).” Therefore, it may be noticed that in Ram Nath International Constructions (P) Ltd (supra), the Supreme Court considered the circumstances as to whether the contractor was at all entitled to any compensation whereas in Karam Singh Lal’s case (supra), the Supreme Court noticed that in the absence of reasons of the arbitrator, the claim that was raised in terms of Clause 11(C) was not liable to be interfered with as there was no reasoning as to on what basis the arbitrator had reached his conclusions. In the present case, the reasons for reaching the conclusions are not relevant, it is the very awarding of the compensation for the lapses 9 Civil Revision 6782 of 2001 on account of late handing over the site on account of non-availability of Schedule-B Stores, which is to be considered. Therefore, in view of the provisions of Clause 11(C), the claim being not sustainable, there is no infirmity in the order of the learned Additional District Judge in negating the claim of the petitioner for claims – 1 and 2. Insofar as claim-5 is concerned for which an amount of Rs 3,000/- has been awarded due to disturbed conditions, the same would be covered by Clause 11(A)(iv) which provides that if the work is delayed by reason of civil commotion, local combination of workmen, strike or lock out, affecting any of the tradesmen employed on the work. Therefore, the delay on account of civil disturbances would not be maintainable in view of Clause 11(A)(iv) of the standard form of agreement. Insofar as claim-5 is concerned, there is no infirmity also in the order of the learned Additional District Judge. Consequently, in the light of the discussion made above, there is no merit in this petition and the same is accordingly dismissed. 28.8.2009. ( S.S.SARON ) ASR JUDGE 10 Civil Revision 6782 of 2001 11