IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arb. Appeal No.2 of 2006 Decided on : May 26, 2009 Amrik Chand Sood …Appellant. Versus Executive Engineer …Respondent. Coram The Hon’ble Mr. Justice R.B. Misra, Judge. The Hon’ble Mr. Justice Surjit Singh, Judge. Whether approved for reporting?1 For the Appellant : Mr. Ramakant Sharma, Advocate. For the Respondent : Mr. P.K. Sharma, Additional Advocate General, Mr. P.M. Negi, Deputy Advocate General, and Mr. R.P. Singh, Assistant Advocate General. Per Surjit Singh, J (Oral) This appeal, under Section 37 of the Arbitration and Conciliation Act, 1996, is directed against the order, dated 5th April, 2006, of learned Single Judge, whereby objections, under Section 34 of the Arbitration and Conciliation Act, 1996, preferred against the award, dated 21st December, 2004, of learned Arbitrator, have been dismissed. 2. Stated in a nutshell, facts relevant for the disposal of the appeal are as follows. Petitioner was awarded work of supplying and stacking at site graded broken/crushed stone aggregate and sand by the respondent, i.e. Executive Engineer, National Highway Division, H.P.P.W.D, Jogindernagar. The supply was to be made between 11th March, 1993 and 11th June, Whether reporters of the local papers may be allowed to see the judgment? …2… 1993. The petitioner allegedly did not even commence the work, prior to the date by which it was to be completed. He started the work sometime in the month of September. Consequently, the contract was rescinded and penalty was imposed by the Chief Engineer, under Clause-2 of the Agreement. On account of the rescission of the Contract, security amount was forfeited, as per clause-3 of the Contract. Petitioner was paid for the material supplied by him. 3. Petitioner felt aggrieved by the rescission of his contract and consequential order of recovery of compensation from him and forfeiture of security amount. Also, he was not satisfied with the amount of money paid to him for the material supplied by him. According to him, value of the material supplied by him was much more than the money paid to him on that account. He raised the following claims: 1. Value of work done = Rs.1,94,500/- 2. Loss of profit = Rs. 30,956/- 3. Damage for prolongation of work = Rs.7,75,000/- 4. Forfeiture of security deposit = Rs. 17,631/- 5. Penalty = Rs. 40,087/- 6. Interest = @ 24 per cent 7. Arbitration Charges = Rs. 20,000/- Matter was referred to the Arbitrator, in terms of Clause-25 of the Contract. Arbitrator, after scrutinizing the record and the evidence adduced before him, dismissed the claim of the petitioner, on all the aforesaid counts. 4. Petitioner filed objections, under Section 34 of the Arbitration and Conciliation Act, 1996. Objections have been dismissed by the learned Single Judge. Hence, this appeal. …3… 5. We have heard the learned counsel representing the appellant, as also the learned Deputy Advocate General. 6. Learned counsel for the appellant submits that as per award of the Arbitrator, there were stacked some boulders at the site, but the value of those boulders has not been paid to the appellant. For two reasons, we do not find any merit in the submission. First, the Arbitrator has observed in the award that those boulders had been carried away by one Narinder Thakur, to whom the petitioner owed certain amount of money. Also, there is one letter on record by which the petitioner authorized said Narinder Thakur to take away the boulders, towards the discharge of his debt, which he owed to said Narinder Thakur. Secondly, what was agreed to be supplied to the respondent, by the petitioner, was not the boulders but crushed stones aggregate. 7. Learned Arbitrator rejected the claim for refund of security money and also the money deducted, on account of penalty/compensation, holding that such items were not arbitrable, under the Agreement. Learned Single Judge has also observed that the two items are not arbitrable. 8. We have been taken through the Arbitration Agreement. Penalty was imposed, under Clause-2 of the Agreement and security had been forfeited, on account of rescission of the contract, under Clause-3 of the Agreement. Both these clauses are beyond the scope of Arbitration clause, contained in Clause-25, as held by a Division Bench of this Court in FAO No.142 of 1985, decided on 13th November, 1996. A …4… photocopy of the said judgment has been shown to us. The same is ordered to be taken on record. In view of the abovestated position, we see no merit in the present appeal. The same is, therefore, dismissed. ( R.B. Misra ), J. May 26, 2009(sd) ( Surjit Singh ), J.