F.A.O..No.319 of 2008. -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O..No.319 of 2008. Decided on....27.05.2009. State of Punjab. ..Appellant VERSUS Mudh Bhillowal and another ..Respondents CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN PRESENT Mr.N.S.Pawar, Advocate for the appellant. Mr.Akshay Bhan, Advocate for respondent No.1. RAKESH KUMAR JAIN, J. Challenge in this appeal is to the order dated 21.08.2007 passed by the learned District Judge, Hoshiarpur, vide which the objections filed by the appellant under Section F.A.O..No.319 of 2008. -2- 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') have been dismissed. Shorn of unnecessary details, briefly stated, the facts, of the case are that Mudh Bhillowal, Pucca Cooperative L & C Society, Amritsar, (respondent no.1), entered into an agreement No.12 of 1986-87 with the State of Punjab, through the Executive Engineer, Roads and Bridges Division, PWD (B&R), (appellant) for the construction of Guide Bundh at Sri Hargobindpur bridge over Beas from RD 700 to 1710 Upstream. Clause 25 of the agreement provides for the arbitration in case of a dispute between the parties to be referred to the Superintending Engineer, Central Works Circle, Jallandhar. A dispute between the parties arose on the stand having been taken by the appellant that respondent no.1 has failed to execute the work as per the specifications and terms of the agreement. In view of the aforesaid dispute, the matter was referred to Sh.K.K.Vashishat, the then Superintending Engineer, Central Works Circle, Jallandhar, for arbitration which was ultimately decided by his F.A.O..No.319 of 2008. -3- successor Sh.J.P.Chander, vide his Award dated 21.11.2001. Aggrieved against the Award of the Arbitrator, the appellant filed a petition under Section 34 of the Act, before the District Judge, Hoshiarpur. There were four claims set up by the appellant before the Arbitrator which are briefly described as under:- Sr.No. Brief Description of claim Amount Sr.No Brief Description of claim Amount Claim No.1: - Compensation on account of action under Clause II of the contract agreement Rs.6,50,000/- Claim No.II: - Amount recoverable on account of minus bill. Rs.17,12,683/- Claim No.III Amount recoverable on account of risk and cost after taking the action under Clause-3 of the agreement. Rs.1,70,39,000/- (revised) Rs.229.12 lacs Claim No.IV: - Interest @ 18 per cent per annum may be awarded in favour of the State of Punjab from the date from which those units are due to the State bill date of realization. The learned District Judge after taking into consideration the entire evidence on record, observed as under: - 'As regards claim No.1, the Arbitrator observed that the hearing of the case was closed with the consent of F.A.O..No.319 of 2008. -4- both the parties and further observed that the claim is not arbitral and has given sound reasoning for the same. As regards Claim No.2, the arbitrator observed that the damage caused by unprecedented floods do not fall within the meaning of imperfections, but are to be regarded as reconstruction. The society was bound to rectify the defects but not the reconstruction and that was the reason that claim No.2 was rejected. So far as claim No.3 is concerned, the arbitrator observed that notice under clause 3 of the contract agreement after a period of almost nine years has been found illegal and unjustified and also contention of representative of the society that the figure of Rs.1,70,39,000/- now raised to Rs.2,29,12,000/- is hypothetical, is quite convincing and appealing and that was the reason that claim No.3 was also rejected. Regarding claim No.4, the arbitrator in its wisdom after taking the totality of circumstances into consideration, observed that claimant is not entitled to any amount by way of interest. From the award, it is evident that proper opportunity was afforded to both the parties and arguments were heard with the consent of the parties. F.A.O..No.319 of 2008. -5- Documents as per the wish of both the parties were allowed to be taken into consideration in conducting arbitration proceedings. No infirmity or illegality in following the procedure had occurred. He has given sound reasoning for passing the impugned Award. No extraneous circumstance has been attributed to the Arbitrator. On the fact of it, the arbitrator had not conducted any breach and neglect of duty and responsibility. There is nothing on the file if he acted contrary to the principles of equity and good conscience or acted beyond jurisdiction. Except oral allegations, there is nothing to prove if the Arbitrator acted in a callous manner. This Court is not to re-appraise the evidence or to examine the controversy as decided by the Arbitrator unless it is shown that the reasons given by the arbitrator are totally judicially perverse or based on wrong proposition of law. It is well settled that even where two views are possible and view taken by the Arbitrator is a plausible one, the Court will refrain itself from interfere. In these circumstances, I do not find any justification to interfere in a legal and valid Award passed by F.A.O..No.319 of 2008. -6- the Arbitrator. I also do not find any error or illegality in the same. As such, both the points are decided against the appellant and in favour of the respondent.' 'As regards claim no.1, the Arbitrator observed that the hearing of the case was closed with the consent of both the parties and further observed that the claim is not arbitral and has given sound reasoning for the same. As regards Claim No.2 the arbitrator observed that the same was caused by unprecedented floods do not fall within the meaning of imperfections, but are to be regarded as reconstruction. The society was bound to rectify the defects but not the reconstruction and that was the reason that claim no.2 was rejected. So far as claim No.3 is concerned, the arbitrator observed that notice under clause 3 of the contract agreement after a period of almost nine years has been found illegal and unjustified and also contention of representative of the society that the figure of Rs.1,70,39,000/- now raised to Rs.2,29,12,000/- is hypothetical, is quite convincing and appealing and appealing and that was the reason that claim no.3 was also rejected. Regarding claim No.4, the arbitration in its wisdom after taking the totality of F.A.O..No.319 of 2008. -7- circumstances into consideration observed that claimant is not entitled to any amount by way of interest.' From the Award, it is evident that proper opportunity was afforded to both the parties. Documents as per the wish of both the parties were allowed to be taken into consideration in conducting arbitration proceedings. No infirmity or illegality in following the procedure had occurred. He has given sound reasoning for passing the impugned Award. No extraneous circumstance has been attributed to the Arbitrator. On the face of it, the arbitrator had not conducted any breach and neglect of duty and responsibility. There is nothing on the file it he acted contrary to the principles of equity and good conscience or acted beyond reference or without jurisdiction. Except oral allegations, there is nothing to prove if the Arbitrator acted in a callous manner. This court is not to re-appraise the evidence or to examine the controversy as decided by the Arbitrator unless it is shown that the reasons given by the arbitrator are judicially perverse or based on wrong proposition of law. It is well settled F.A.O..No.319 of 2008. -8- that even where two views are possible and view taken by the arbitrator is a plausible one, the court will refrain itself from interfere. In these circumstances, I do not find any arbitrator. I also not find any error or illegality in the same. AS such, both the points are decided against the appellant and in favour of the respondent. Still aggrieved, the present appeal has been filed by the State of Punjab. Sh.N.S.Pawar, learned Additional Advocate General, Punjab, has contended in respect of claim no.1 that opportunity of hearing was not granted by the Arbitrator and therefore, he has misconducted himself. As against this, Mr.Akshay Bhan, counsel for the respondent has submitted that the Arbitrator has granted equal opportunity to both the parties and had closed the hearing of the case with consent of both the parties. In this respect, he has referred to the findings of F.A.O..No.319 of 2008. -9- the Arbitrator, which is reproduced as under: - 'During proceedings held on 12.02.2001, the claimant Executive Engineer pleaded that the arbitration proceedings of the entire claim application be not held up the decision be taken separately on the application filed by the Society separately under Clause No.2 for waiving of the compensation was heard separately, giving proper and equal opportunity to both the parties, to produce documents and to lead evidence. The case of hearing was closed with consent of both the parties. After hearing the case under Clause 2 final action has been taken vide S.E. C/W,Circle, Jallandhar, letter No.2284-85 dated 13.06.2001 which is binding and final as per the clause No.2 of the contract agreement. The claim is not, therefore, arbitrable. However, as per the final and binding orders of the Superintending Engineer as per letter No.2284-85 dated 13.06.2001, the society will deposit Rs.6500/- (Rupees Six Thousand Five Hundred Only) with the claimant Executive Engineer.' 'During proceedings held on 12.02.2001, the claimant Executive Engineer pleaded that the arbitration proceedings of the entire claim F.A.O..No.319 of 2008. -10- application be not held up the decision be taken separately on the application filed by the Society separately under Clause No.2 as per the judgment of Hon'ble the Supreme Court. The case filed by the Society seeking for hearing under clause No.2 for waiving of the compensation was heard separately, giving proper and equal opportunity to both the parties, to produce documents and to lead evidence. The case of hearing was closed with consent of both the parties. After hearing the case under Clause 2 final action has been taken vide S.E. C/W, Circle, Jallandhar, letter No.2284-85 dated 13.06.2001 which is binding and final as per the clause No.2 of the contract agreement. The claim is not, therefore, arbitrable. However, as per the final and binding orders of the Superintending Engineer as per letter No.2284-85 dated 13.06.2001, the society will deposit Rs.6500/- (Rupees Six Thousand Five Hundred Only) with the claimant Executive Engineer.' After hearing the learned counsel for parties, I do not find any merit in the submissions made by the learned counsel for the State because it has been categorically observed by the Arbitrator that equal opportunity has F.A.O..No.319 of 2008. -11- been given to both the parties to produce the documents and lead their evidence and the case was closed with the consent of both the parties. The Arbitrator has also held that the claim set up by the appellant in Head no.1 is not even arbitrable. The learned counsel for the appellant could not point out any other error in the Award despite the fact that it is well settled that where two views are possible and the view taken by the Arbitrator is a plausible one, the Court shall refrain itself from interference. No other contention has been raised by the counsel for the appellant. Thus, in the totality of the circumstances, I do no find any merit in the present appeal and the same is hereby dismissed in limine. No costs. (RAKESH KUMAR JAIN) JUDGE May 27, 2009. rkarora