C.R.No.3509 of 2004 (O&M) 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH Civil Revision No.3509 of 2004 (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 filed is 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 the Rule of Court. The case of the parties as noticed by the learned District Judge, as noticed in paras 2 to 18 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 C.R.No.3509 of 2004 (O&M) 2 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 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.7,77,237/- before the Executive Engineer but forwarded te claim of Rs.3,64,876/- and later on 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:- C.R.No.3509 of 2004 (O&M) 3 CLAIM NO.1 : PAYMENT DUE ON ACCOUNT OF FINAL BILL REFUND OF SECURITY DEPOSITS AND RELEASE OF AMOUNT OF LESSOR RATE PAID. 4. It is submitted that Rs. 11,419/- was lying in the final bill of the agency and in the first instance the agency claimed a sum of Rs.30,000/- and on 11.8.1998 to Rs.24,480/- which shows that claims are not based on facts and figure. That arbitrator has allowed additional quantity of cement concrete sleeper, although department never admitted for additional quantity of cement concrete sleeper, rather have advocated that agency has been paid as per actual work done but arbitrator ignoring all claims has mis-conducted the proceedings and gave award. CLAIM NO.2: CLAIM ON ACCOUNT OF INTEREST That there is no clause in the contract agreement to pay interest but arbitrator gave 15% compound interest after claim No.6 of the award which is clearly mis-conduct. 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 initially demanded Rs.18,515/- but arbitrator awarded Rs.36,900/- and C.R.No.3509 of 2004 (O&M) 4 arbitrator could not award more than the claim submitted before him and claim is without any evidence CLAIM NO.4:CLAIM FOR IDLE PERIOD 7. That arbitrator has wrongly awarded Rs.1,00,000/- 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 although the agency written two leters in this respect but there being no silt in the bed of the Canal, the agency was not issued any work order or any sanction to execute work and arbitrator has given award of Rs.1,25,000/- without proper application of mind. COUNTER CLAIM NO.1:RECOVERY OF 2179 EMPTY CEMENT BAGS 9. All record pertaining to this claim was shown to the arbitrator but agency did not show even a single proof of return of empty cement bags and counter-claim was rejected wrongly and department is entitled to counter-claim of Rs.3269/-. COUNTER CLAIM NO.3 MAKING DOWELS ON BOTH SIDES 10. That arbitrator visited the site on 5.4.1999 and found that only sign of dowel are found meaning thereby, they have not constructed as per the design, so department has right to recover Rs.15,120/- which deserves to be awarded. COUNTER CLAIM NO.4 (FILLING OF EXPENSION C.R.No.3509 of 2004 (O&M) 5 JOINTS.) 11. That the arbitrator visited the site and even found that seeling compound is visible but has not appreciated the plea taken by the department that the joints are not filled as per PWD specification, so counter claim be allowed against the agency. COUNTER CLAIM NO.5 (LIQUIDATED CHARGES) 12. That there being a gap of one year, 9 months 14 days from the due date and admitted date of completion the department has right to recover the liquidated charges from agency amounting to Rs.10,80,280/- upto 12/97 and interst on it. 13. 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 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 C.R.No.3509 of 2004 (O&M) 6 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 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 respondents failed to substantiate their claim and now the decision is final. Claim-wise reply is submitted as under:- CLAIM NO.1:- 14. 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 interoperation 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. C.R.No.3509 of 2004 (O&M) 7 CLAIM NO.2: 15. 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: 16. It is submitted that interpretation of the agreement by the arbitrator is final and cannot be interfered by the Civil Court, even if there are two possible interpretations and Court cannot see whether the interpretation is right or wrong and Court can interfere only if arbitrator has mis-conduct the proceedings. CLAIM NO.4:- 17. 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:- 18. 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 C.R.No.3509 of 2004 (O&M) 8 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 the 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 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 and 4 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 C.R.No.3509 of 2004 (O&M) 9 respondent on account of escalation. The extension which were sought by the respondent were not attributable to the respondents. 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 the work could only be started after the sanction of competent authority received. In these circumstances, the Contractor 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. No ground for interference is made out. Dismissed. ( Sabina ) Judge September 04, 2009 arya