C.R. No. 5182 of 2003 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.R. No. 5182 of 2003 Date of Decision: 08.01.2010 The State of Punjab, through Executive Engineer, Khara Construction Division, SYL Canal Project, Chandigarh. ... Revision-Petitioner Versus M/s Kuljit Singh and Company, Kothi No. 27, Sector 5-A, Chandigarh. ...Respondent CORAM: HON'BLE MR. JUSTICE SHAM SUNDER Present: Mr. Abhishek Chautala, AAG, Punjab, for the revision-petitioner. Mr. P.S. Rana, Advocate, for the respondent. SHAM SUNDER, J. * * * * This revision-petition, is directed against the order, dated 16.10.01, rendered by the Court of Civil Judge (Senior Division), Chandigarh, vide which, it made the award, dated 12.03.99, as Rule of the Court, and, the order, dated 07.08.03, rendered by the Court of Additional District Judge, Chandigarh, vide which, it dismissed the appeal. 2. The facts, in brief, are that, the petitioner (now respondent), filed an application, under Sections 14, 17, and, 29 of the Arbitration Act, 1940, and the State of Punjab, respondent, filed an objection C.R. No. 5182 of 2003 2 petition, under Sections 30 and 33 of the Act, for setting aside the award dated 12.03.99. The award was made rule of the Court, by the then Sub Judge, Chandigarh, vide order dated 23.02.93, and the appeal, against the order, was dismissed, by the then Additional District Judge, Chandigarh, vide order dated 04.02.94. A Civil Revision, filed by the respondent (State of Punjab) (now revision-petitioner), was accepted, by this Court, vide order dated 26.09.94, and the award and the decree, were set aside. The petitioner (contractor firm), filed a Special Leave Petition, in the Apex Court, which was decided, vide order dated 02.01.95, wherein, it was held, that objections, raised by the State, against the interim award, could be considered, after the final award, was made. The petitioner (contractor firm), filed an application for removal of Sh. V.K. Kaura, Arbitrator, and appointment of some other Arbitrator, in his place, in the Court of the then Sub Judge 1st Class, Chandigarh. In the meanwhile, Sh. V.K. Kaura, retired from government service, on 30.04.94 , as a result whereof, the Court of the then Sub Judge 1st Class, Chandigarh, appointed Sh. Y.D. Uppal, Director, RSD (D) Organization, Chandigarh, as an Arbitrator, who entered upon the reference. It was stated that the award, dated 12.03.99, passed by the Arbitrator, was based on conjectures and surmises, and the same had been improperly procured by the petitioner (now respondent). It was further stated that the Arbitrator, misconducted during the course of arbitration proceedings, by passing the award, on no evidence, in favour of the petitioner. It was further stated that the Arbitrator, failed to give any findings, on the quantity of C.R. No. 5182 of 2003 3 earth work for the construction of passage, and allowed a wrong quantity, while deciding the claim. It was further stated that claims No. 2 and 3, had not been decided by the Arbitrator. It was further stated that the Arbitrator, simply held, that it would be appropriate, if the aforesaid claims, were dealt with, alongwith similar claims, pending before Sh. M.S. Mangat, Arbitrator. It was further stated that, with regard to claim No. 4, the Arbitrator, had wrongly held, that the quantity of wet sinking of wells, was increased by 48.79%. It was further stated that, so far as litigation charges, were concerned, the Arbitrator, awarded Rs. 20,000/-, as costs, to the petitioner (contractor firm), thereby, giving rise to the unnecessary litigation. It was further stated that the claim for interest, was never referred, to the Arbitrator, and, as such, the award, was required, to be set aside, in that respect. 3. Reply to the objections, was filed, wherein, it was stated, that the Arbitrator, did not commit any breach or neglect of duty, nor there was miscarriage of justice. It was further stated that the objections, did not give any specific instance, in this respect, and, as such, the allegation of misconduct, on the part of the Arbitrator, while passing the award, was absolutely vague. It was further stated that the Arbitrator, was none else, than a serving Officer of the objector and an experienced Engineer of repute. The remaining averments, in objection-petition, were denied, being wrong. 4. On the pleadings of the parties, the following issues were struck:- (i) Whether the award dated 12.03.99 passed C.R. No. 5182 of 2003 4 by Sh. Y.D. Uppal, Director, Dam Ranjit Sagar Dam (D) Organization, Chandigarh, as Arbitrator, is liable to be set aside on the grounds taken in the objection- petition by the respondent-objector? OPA (ii) Relief. 5. After hearing the Counsel for the parties, and, on going through the evidence, on record, the trial Court, allowed the application of the petitioner/respondent, and made the award, dated 12.03.99, as Rule of the Court. 6. Feeling aggrieved, an appeal, was preferred by the respondent/revision-petitioner, which was dismissed, by the Court of Additional District Judge, Chandigarh, vide order dated 07.08.03. 7. Still feeling dissatisfied, the instant revision-petition, has been filed, by the revision-petitioner. 8. I have heard the Counsel for the parties, and have gone through the record of the case, carefully. 9. The Counsel for the revision-petitioner, submitted that proper opportunity, was not afforded, to the revision-petitioner, by the Arbitrator, as the account books and income tax record of the contractor, on the basis of the application, moved by the revision- petitioner, were not summoned. He further submitted that, virtually, no evidence, was produced, by the contractor, before the Arbitrator, in respect of claim No. 1. He further submitted that the Arbitrator, thus, passed the award, on conjectures and surmises. He further submitted that the Arbitrator, failed to appreciate the terms and conditions of the arbitration agreement. He further submitted that different criteria, was C.R. No. 5182 of 2003 5 adopted, by the Arbitrator, while awarding the amount, under various items. He further submitted that the interest, awarded by the Arbitrator, was un-reasonable. He further submitted that the award, was, thus, liable to be set aside, but the Courts below, were wrong, in making the same, as Rule of the Court. He further submitted that the orders of the Courts below, being illegal, were liable to be set aside. 10. On the other hand, the Counsel for the respondent, submitted that, full opportunity, was afforded, to the revision- petitioner, by the Arbitrator, during the course of proceedings, to lead evidence. He further submitted that the revision-petitioner, was not condemned un-heard, by the Arbitrator. He further submitted that, this Court, cannot reappreciate and reappraise the evidence, led before the Arbitrator. He further submitted that, it was for the Arbitrator, to interpret the terms and conditions of the arbitration agreement. He further submitted that the award, was passed, on the basis of evidence, produced by the parties, and, it, therefore, could not be said to be a case of no evidence. He further submitted that the interest @ 15 per cent per annum, awarded by the Arbitrator, upto the date of passing the award, and future interest @ 12 per cent per annum, awarded by the Courts below, could not be said to be unreasonable. He further submitted that the orders of the Courts below, being legal and valid, were liable to be upheld. 11. After giving my thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, in my considered opinion, the revision-petition, is liable to be dismissed, with some C.R. No. 5182 of 2003 6 modification of the rate of interest, for the reasons to be recorded, hereinafter. It is settled principle of law, that the Civil Court, cannot sit in appeal, over the findings of the Arbitrator. This Court, cannot reappreciate and reappraise the evidence, led before the Arbitrator. The Court, can only determine, as to whether, the Arbitrator, misconducted, or not. Full opportunity, was afforded, to the parties, to present their claim, before the Arbitrator. The claimant, filed his claim, and the respondent, also filed a counter-claim. The documents, were presented, by the parties. The Arbitrator, fully considered the same, in a proper manner, and, ultimately, passed the award. It, therefore, could not be said that, no proper opportunity, was afforded, to the revision- petitioner, to lead evidence, before the Arbitrator, and it was condemned unheard. The Award is, thus, not based on conjectures and surmises. The submission of the Counsel for the revision-petitioner, in this regard, being without merit, must fail, and the same stands rejected. 12. Coming to the second submission of the Counsel for the revision-petitioner, to the effect, that the Arbitrator, did not interpret the clauses of the arbitration agreement, in a proper manner, it may be stated here that it was for the Arbitrator, to interpret the terms and conditions/clauses of the arbitration agreement. In Sutlej Construction Company Pvt. Ltd., 2001(3), RCR (Civil), 151 (SC), a case, decided by a three Judge Bench of the Apex Court, it was held, that the Civil Court, can interfere with the award of the Arbitrator only, to correct a jurisdictional error. In the absence of jurisdictional error, the Court, C.R. No. 5182 of 2003 7 exceeds in interfering, in the findings of fact, recorded by the Arbitrator or the Appellate Court, giving its own interpretation to the terms and conditions of the contract, in exercise of its jurisdiction, under Section 115 of the Code of Civil Procedure. This Court, in its revisional jurisdiction, therefore, cannot go into the question, regarding the proper or improper interpretation of the terms and conditions of the arbitration agreement. There is no jurisdictional error, committed by the Arbitrator, in passing the award. The Courts below, on scrutiny of evidence, were right, in coming to the conclusion, that proper interpretation of the terms and conditions/clauses of the arbitration agreement was made. In this view of the matter, the submission of the Counsel for the revision-petitioner, being without merit, must fail, and the same stands rejected. 13. Coming to the third objection, it may be stated here that, no doubt, the Arbitrator, awarded interest @ 15 per cent per annum. The Court of Civil Judge (Senior Division), Chandigarh, reduced the future interest to 12 per cent per annum. In my opinion, the future interest, awarded by the Courts below @ 12 per cent per annum, can be said to be unreasonable. The orders of the Courts below, are modified, in the manner, that the respondent, shall be entitled to interest @ 12 per cent per annum, from the date of reference to the date of making award, as Rule of the Court, and @ 6 per cent per annum, on the principal amount thereafter, until the realization of the amount due. The pre- reference interest, if any, shall remain unaltered. The submission of the Counsel for the revision-petitioner, to this extent, being correct, is C.R. No. 5182 of 2003 8 accepted. 14. For the reasons recorded above, the revision-petition, is dismissed with the modification, that the respondent, shall be entitled to interest @ 12 per cent per annum, from the date of reference to the date of making award, as Rule of the Court, and @ 6 per cent per annum, on the principal amount, thereafter, until the realization of the amount due. 08.01.2010 (SHAM SUNDER) Amodh JUDGE