IN THE HIGH COURT OF SIKKIM Arbitration Appeal No. 8 o f 2000 State of Sikkim ... Appellant. Versus Sagarmull Agarwal ... Respondent Arbitration Appeal No.9 o f 20Q0 ... Appellant. Respondent Sagarmull Agarwal Versus State of Sikkim ' '■i. \ )k , Date c f Derision : iif' 2000. Coram : The Hon’ble Mr. Justice Ripusudan Dayal, Chief Justice. The Hon’ble Mr. Justice Anup Deb, Judge. Present : Mr. Udai P. Sharma, Senior Government Advocate for the State. Mr. A. Moulik, Advocate for Sagarmull Agaraal. JUDGMENT Daval C. J. Both these appeals arise from the judgment and decree o f the learned District Judge, East and North, dated 16'^ August, 1999 passed in Civil Misc. Case No. 7 o f 1993 (Arbitration) making the award o f the arbitrator rule o f the Court except for claim No. 1. 2. Sagarmull Agarwal entered into an agreement dated 12* July, 1982 with the State o f Sikkim through the Chief Conservator o f Forests, whereby the Government granted “ to the purchaser and his agents or employee liberty and permission to lift or transport 50,000 eft @ Rs.8.15 per eft i.e. Rs.4,07,500/- o f Silver Fir logs from in between Phuni and Yumthang to outside Sikkim through North Sikkim Highway at all times between the date o f issue o f the removal order er - 1 - 2000:SHC:1-DB to 31®* day o f March, 1983.” Case o f Sagarmull Agarwal is that he could not lift the articles, since he could not get permit to enter into the restricted area, and, as such, there was breach o f contract on the part o f the State. However, there is no dispute that Forest Department is not the competent authority to grant the requisite permit and the Forest Department wrote several letters to the concerned authorities by way o f assistance. The matter was referred to the arbitrator. Details o f the claims made before the arbitrator and the amounts awarded by the arbitrator are as under Claims o f Claim ant (Issue) SI. No. Claim No. B rief description o f claims Awarded Amount. (a) (b) (c) (d) 1. 1. 2. 5. 2(a) Claim for supply o f fresh silver fir logs o f 50,000 eft. or the present market rate. (Claim partially sustained) Awarded the present market rate o f 50,000 eft. o f Silver Fir Logs at Rs. 170.00 (Rupees one hundred and seventy)only per cubic feet. Idle charge o f Supervisors and other staff. Rs.3,50,000/- (Rupees Amount o f claim Rs.3,76.430.00 (claim three lakhs fifty thou- partially sustained) sand) only. 2(b) Charge o f trucks which had to be kept idle. Rs. 1,50,000 (Rupees Amount o f claim Rs.2,82,000.00 (claim one lakh fifty thou- partially sustained) sand) only. 3 Forfeiture o f money paid in advance to the Rs. 1,00,000 (Rupees truck owners. Amount o f claim one lakh) only. Rs. 1,00,000.00 (claim sustained) 4 Interest already paid to Financers/Bankers. Rs.3,00,000/- (Rupees Amount o f claim Rs.6,00,000/- (Claim three lakh) only. Partially sustained) Market difference Amount o f claim Rs.6,00, 000/- (Claim not sustained) Nil 2 - 2000:SHC:1-DB Loss and damages in business due to defama- Rs.5,00,000/- tion incurred in the case. Amount o f claim (Rupees five lakh) Rs. 10,00,000/-(Claim partially sustained). only. Past, present and future interest claim at 20% per annum (Claini partially sustained) Awarded interest at 18% per annum as follows . (i) Interest awarded at 18% per annum on awarded amount except claim claim N o.l from the Dec. 1986 upto the date o f reference. (ii) Interest awar­ ded at 18% per annum on awarded total amount and all claims from the date o f reference to date o f award. 9. 10. 9(a) Claim for breach o f contract. Amount o f claim Rs. 10,00,000/- (Claim partially sustained) Overhead expenses in tune. Amount o f Claim Rs.3,00,000/- (Claim not sustained) (iii) if payment is made within 40 days, no interest is awarded from the date o f award. I f the payment is delayed by more than 40 days, interest awarded on awarded all claims and total amount upto date o f decree from the date o f award at Rs. 18% per annum. (iv) At 18% per annum interest awarded on alt clajms and total amount from the date o f decree to the date o f payment. Rs.3,00,000/- (Rupees three lakh) only. N IL 3 - 2000:SHC:1-DB 11. 9(b) Cost o f reference. Amount o f claim Rs. Rs.25,000/-(Rupees 80,000/- (Claim partially sustained) twenty five thousand) only. 3. An.application was filed before the learned District Judge, East and North, Sikkim by Sagarmull Agarwal for making the award the rule o f the Court which was registered as Civil Misc.Case No.7 o f 1993. The learned District Judge set aside the award in respect o f claim N o .l giving rise to Arbitration Appeal N o.9/2000 by Sagarmull Agarwal. With respect to the rest o f the items awarded by the arbitrator, the award was confirmed giving rise to Arbitration Appeal No.8 o f 2000 filed by the State o f Sikkim. 4. Sri U. P. Sharma, learned Senior Government Advocate, appearing on behalf o f the State submits that the claim made by Sri Agarwal was on the ground o f the / alleged breach o f contract, since he could not lifi the articles, as he had failed to get ' i the necessary permit to enter into the restricted area, but there was no agreement m letween the parties that the C hief Conservator o f Forests shall arrange permit for him. He further submits that there could not be implied contract for arranging the permit also since the C hief Conservator o f Forest-cum-Secretary Forest, Government o f Sikkim was not the competent authority to grant the requisite certificate. Sri A. Moulik has, on the other hand, submitted that it was known to both the parties that unless permit was granted, the contract could not be executed. In reply, Sri Sharma submits that permit must have been granted by the competent authority, if Sri Agarwal had agreed to arrange local labour, but the could not secure the permit, since he wanted to bring the labour from outside. Under Article 299 o f the Constitution, agreement has to be in writing and since there was no , agreement to the effect that the State shall grant the necessary permit in spite o f the fact whether Sri Agarwal would bring labourers from outside or would employ -4 2000:SHC:1-DB local labour, there is no scope for reading in the -^^eement such an implied agreement. Since there was no agreement between the parties that the respondent would grant such a permit, there was no question o f breach o f contract. The learned trial Court did not enter into this aspect o f the matter and observed that he has no jurisdiction to investigate into the correctness o f the arbitrator’s decision. But the question as to whether claims made by the arbitrator fell within the scope o f the agreement does not concern merely the correctness o f the decision but touches the jurisdiction o f the arbitrator. The arbitrator cannot travel beyond the agreement and when the agreement does not contain a clause whereby it could be inferred that the State had agreed to provide the necessary permit, non-grant o f the permit by another department cannot be said to be breach o f agreement. As all the claims for which award was m ade by the arbitrator relate to the claims made on the alleged '' 0 \ breach o f contract, the whole award is liable to be set aside. /</ '' \ In the result, Arbitration Appeal No.9/2000 is dismissed and Arbitration Appeal iW , — ^ 'r, N o .8/2000 is allowed. In the circumstances, parties shall bear their ovm costs. 30/5/2000 •y i . • o~ } "2 e>. r. t 0 ^ ( R. Dayal) Chief Justice 30/5/2000. ;rr:? r;: /m i \ nrr^r'1 CCQU (5@UBV QttS'MSKIir^ C£ 5 - 2000:SHC:1-DB