CR No.3508 of 2002 (O&M) 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH Civil Revision No.3508 of 2002 (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 is filed for setting aside the judgment and decree passed by the Courts below whereby objection petition filed under Section 30 and 33 of the Indian Arbitration Act, 1940 was dismissed and award passed by the Arbitrator was ordered to be made rule of Court. The case of the parties as noticed by the learned District Judge, as noticed in paras 2 to 21 of its order, reads as under:- CR No.3508 of 2002 (O&M) 2 “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 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 originally submitted different claims than the claims originally submitted before the Executive Engineer. Claimant submitted a claim of Rs.1,89,500/- before the Executive Engineer but at the time of presentation before the arbitrator he put forth claim of Rs.4,31,500/- and 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 CR No.3508 of 2002 (O&M) 3 and has also awarded double interest for which he was not entitled. Claim-wise objections are as under:- 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. 28,896/- was lying in the final bill of the agency but arbitrator has awarded Rs.33,369/- by allowing for additional quantity of cement concrete sleepers although department never admitted for additional quantity of cement concrete sleepers, rather had advocated that agency have been paid as per actual work done at the spot and award is based on no evidence and in that way arbitrator while ignoring all these facts has mis-conducted the proceedings and the award CLAIM NO.2:PAYMENT DUE AS INTEREST ON HELD UP AMOUNT OF FINAL BILL FROM 1.4.1989 TO DATE OF REALISATION:- 5. It is submitted that agency admitted that they completed the work on 26.9.1989 but arbitrator without applying his mind judiciously awarded interest on the balance amount of final bill from 1.4.1989 about 5 months 25 days in advance of completion of work with his own yard stick, so has gone beyond the terms and conditions of the contract agreement and more over arbitrator has given interest at the rate of 15% also. CLAIM NO.3: PAYMENT DUE AS COMPENSATION ON ACCOUNT OF REDUCED RATE OF PROGRESS, UNDER UTILIZATION IDLENESS FORCED ON US BY FAILURE CR No.3508 of 2002 (O&M) 4 OF THE DEPARTMENT TO PROVIDE REQUISITE INPUTS IN THE CONSTRUCTION STAGE. 6. It is submitted that arbitrator wrongly awarded Rs.50,000/- on account of idle labour, although in-fact there was no idle labour and it was for the contractor to use his resource to the best of his utility and the contractor was given the work of four reaches and if due to certain reasons, the work of one reach was not completed he could have utilised the labour in the adjoining work nor contractor ever reported that his labour is sitting idle. The contractor initially claimed Rs.34,500/- and only these claims were referred to the arbitrator, but the arbitrator wrongly awarded/granted Rs.50,000/- without applying his mind. CLAIM NO.4:PAYMENT DUE ON ACCOUNT OF ESCALATION AND PRICE ADJUSTMENT 7. It is submitted that the arbitrator has not applied his mind judiciously and not given due weighable to the clauses of the agreement which are back bone of the entire case because as per clause 41 of the agreement price adjustment was to be made for work done within the stipulated period or extension thereof not attributable to the contractor and department had given extension that escalation will be given for extended period and contractor was duly informed. The agency initially demanded Rs.14300/- before the Executive Engineer and Rs.11,000/- before the arbitrator but arbitrator wrongly awarded Rs.31,779/-. CR No.3508 of 2002 (O&M) 5 CLAIM NO.5:PAYMENT DUE FOR ITEMS OF WORK EXECUTED BUT NOT MEASURED ANDPAID FOR 8. It is submitted that amount of Rs.12,941/- was payable to the agency which remain unpaid on account of preparation of bill. INTEREST: 9. It is submitted that there was no clause in the contract agreement about the interest to be paid but arbitrator has gone beyond the terms of the agreement. COUNTER CLAIM NO.1: BY OBJECTOR/APPELLANT:RECOVERY OF 4018 NO.E.C.BAGS 10. It is submitted that agency did not show any proof regarding return of empty cement bags. The counter claim of Rs.6027/- put forth by the department was wrongly rejected. COUNTER CLAIM NO.3 10 NO.RCC PIPE 225 MM 11. It is submitted that 10 No. RCC pipe 225 mm dia was issued to the contractor vide indent No.21/8 dated 16.3.1988 and contractor had acknowledged its receipt and the receipt was shown to the arbitrator but arbitrator did not allow the counter claim of Rs.2800/- to which the department is entitled. COUNTER CLAIM NO.4 RECOVERY OF WATER CHARGES 11. It is submitted that arbitrator wrongly rejected the claim of the department on account of water-charges amounting to Rs.1485/- and this amount is liable to be awarded to the CR No.3508 of 2002 (O&M) 6 department. COUNTER CLAIM NO.5 LIP CUTTING DONE BY THE DEPARTMENT. 12. It is submitted that the balance work of M/s V.K. Construction company was allotted to the petitioner but earlier department has decided to do departmentally and item of lip cutting was done and record shown to the arbitrator but arbitrator did not give due attention and department is entitled for Rs.1288/-. COUNTER CLAIM NO.6.3 SLABS DOK 13. Though three No slabs were D.okeyed on account of poor quality of work done by the agency but were relaid and D.Okeyed slabs are again a point of rejection of the work done and in that way, the arbitrator has misconducted the proceedings. COUNTER CLAIM NO.7 EARTH WORK FOR PREPARATION OF DOWELS. 14. Though arbitrator visited the site on 5.4.1999 but not said that he himself see dowel at the site, although the purpose to visit was to appraise of the actual position and objector department has shown all relevant record, so counter claim of Rs.40,520/- be awarded in favour of the department. COUNTER CLAIM NO.8: (LIQUDIATED CHARGES); 15. It is submitted that agency himself admitted having completed the work on 26.9.1989 but department claimed L.D. charges from 21.3.1988 because the agency failed to complete CR No.3508 of 2002 (O&M) 7 the work till 21.3.1988, so department is entitled to Rs.1,96,420/-. 16. 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 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 an 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 CR No.3508 of 2002 (O&M) 8 no 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 respondent failed to substantiate their claim and now the decision is final. Claim-wise reply is submitted as under:- CLAIM NO.1:- 17. 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 interpretation 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. CLAIM NO.2: 18. 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: 19. It is submitted that the arbtirator has considered the aspect raised by the appellant and awarded Rs.50,000/- although petitioner/respondent No.1 has claimed Rs.1,34,250/- and in that way the interpretation given by the arbitrator is final and CR No.3508 of 2002 (O&M) 9 arbitrator has given verdict after giving due opportunity to both the parties and going through the evidence led by both the parties and arbitrator is best judge of the quality and quantity of the affairs. CLAIM NO.4:- 20. It is submitted that interpretation of the agreement by the arbitrator is final and same cannot be interfered by the civil court, even if there are two possible interpretations and civil court cannot see whether interpretation given by the arbitrator is right or wrong and jurisdiction of the Civil Court to interfere in the award is very limited. CLAIM NO.5:- 21. It is submitted that now it is well settled law that arbitrator is well within his power to award interest with regard to the objections of counter-claim, all these points in support of the counter-claim have been seriously contested submitting that arbitrator has given award after considering the evidence and has rightly declined the counter claim 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 CR No.3508 of 2002 (O&M) 10 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, 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. Similarly, while dealing with claim No.4, the Arbitrator has observed that the department had paid a lesser amount than the amount claimed by the respondent on account of escalation. The extension which were sought by the respondent were not attributable to the respondent. After going through the record, the Arbitrator opined that the contractor was entitled to escalation price on the work done by him. However, there is nothing on record to suggest that the CR No.3508 of 2002 (O&M) 11 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 . Hence, no ground for interference is made out. Dismissed ( Sabina ) Judge September 04, 2009 arya