FAO No.3177 of 2008 - 1 – IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** FAO No.3177 of 2008 DATE OF DECISION: 04.05.2009 **** Executive Engineer, Construction Division No.1, PWD (B&R), Bathinda. . . . . Appellant VS. Harmail Singh, Govt. Contractor and another. . . . . Respondent **** CORAM : HON’BLE MR.JUSTICE RAKESH KUMAR JAIN **** Present: Mr.N.S. Pawar, Addl. A.G. Punjab for the appellant. Mr.S.S. Binder, Advocate with Mr.J.S. Sidhu, Advocate for respondent No.1. **** RAKESH KUMAR JAIN J. This common order shall dispose of 17 First Appeals against Order bearing Nos.3177 to 3193 of 2008 as identical questions of law and facts are involved in these appeals, which have arisen out of the order passed by learned Court below vide which objections filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (in short ‘the Act’) have been dismissed. However, the facts are being extracted from FAO No.3177 of 2008 titled as “Executive Engineer, Construction Division No.1, PWD (B&R), Bathinda Vs. Harmail Singh, Govt. Contractor and another”. FAO No.3177 of 2008 - 2 – The brief facts of the case are that a dispute between the parties was adjudicated by the Arbitrator-cum-Superintending Engineer, B&R, Bathinda vide his award dated 21.7.1995. It was made rule of the Court. The Contractor filed appeal before the District Judge, Bathinda in which the award of the Arbitrator was set aside and the matter was remanded back to him for fresh adjudication. The appeal filed by the department against the order of the District Judge, Bathinda before this Court was dismissed. The dispute was then referred to Sh.D.P.S. Virk, Arbitrator-cum- Superintending Engineer who passed the present arbitral award on 19.12.2006. The said award was challenged by the appellant under Section 34 of the Act, inter alia, on two grounds, namely, that the Arbitrator did not possess the requisite qualification of Superintending Engineer (in short ‘S.E.’), therefore, he could not be called S.E. or acting as S.E. because as per rules the post of S.E. is occupied after Departmental Promotion Committee (in short ‘DPC’) make recommendation of their nominee i.e. approved S.E. by DPC on the basis of his service track record of achieving 12 points whereas the Arbitrator in these cases was never approved by DPC. The second ground on which objections were filed was that the Arbitrator had awarded interest at the higher rate without any jurisdiction. The learned Court below discussed and decided, both the points taken up by the appellant, separately against them. In respect of the competence of the Arbitrator, it was observed that according to Clause 25-A of the Arbitration agreement (Ex.D-3), in case of a dispute, the matter was to be referred for arbitration to Superintending Engineer-in-Charge of Circle Public Works Department, Building and Roads Branch or acting as such at the time of reference. It was found that Sh.D.P.S. Virk, though was an FAO No.3177 of 2008 - 3 – Executive Engineer, was given an additional charge of S.E., PWD (B&R), Circle, Bathinda and he was acting as such. Therefore, he exercised the powers of S.E. When Anil Gupta, Executive Engineer PW1 was cross-examined, he admitted that Sh. D.P.S. Virk was holding additional charge of S.E., PWD (B&R) w.e.f. 22.5.2006 by the order of Govt. of Punjab. He thereafter, admitted that later on, vide a letter dated 30.10.2007, the Govt. gave powers to the S.Es holding additional charge to decide arbitration cases. Thus, it was found that in terms of Clause 25-A of the agreement (Ex.D-3), the Arbitrator Mr.D.P.S. Virk was acting as S.E. and was competent to act as an Arbitrator. On the second point of interest, the learned Court below rejected the plea of the appellant on the ground that in the absence of clause of interest, the Arbitrator can allow the same and relied upon a decision of the Apex Court in the case of “Secretary, Irrigation Department Govt. of Orrisa and others Vs. G.C. Roy” AIR 1992 Supreme Court 732. It was also found that Sh. Anil Gupta, Executive Engineer, admitted in cross-examination that as per bill (Ex.D4), interest @ 10% per annum was recommended by him for payment in the award passed by Sh.T.S. Bali and the payment of said bill (Ex.D4) has already been made. Thus, it was held that the award of 15% interest cannot be called a higher rate of interest. Consequently the learned Court below dismissed the objections. Mr.N.S. Pawar, Addl. A.G. Punjab appearing on behalf the appellant has practically raised the same issues of competence of the Arbitrator and also with regard to award of the interest. Mr.S.S. Bhinder, learned counsel appearing on behalf of respondent No.1 has referred to Clause 25-A of the agreement (Ex.D-3) and contended that if the Mr.Virk was acting as the FAO No.3177 of 2008 - 4 – Superintending Engineer, then he was competent to act as an Arbitrator. In respect of the interest, it is contended that in view of Section 31 of the Act, the Arbitrator can award interest even upto 18%. I have heard the learned counsel for the parties and have given my thoughtful consideration to their rival contentions. Before adverting to the first question in respect of the competence of the Arbitrator it would be relevant to refer to Clause 25-A of the agreement (Ex.D-3). Clause 25-A reads as under: - “Clause 25 a, Arbitration etc: - If any question; difference or objection whatsoever shall arise in any way connected with or arising out of this instrument or the meaning or operation of any part thereof or the rights duties or liabilities of either party, then save in so far as the decision of any such matter is hereinbefore provided for and has been so decided, every such matter including whether its decision has been otherwise provided for and/or whether it has been finally decided accordingly, or whether the contract should be terminated or has been rightly terminated and as regards the rights and obligations of the parties as the result of such terminated shall be referred for arbitration to the Superintending Engineer-in- charge of Circle Public Works Department Buildings and Roads Branch or acting as such at the time of reference within 180 days or in 6 (six) months from the payment of the final bill to the contractor or from the date registered notice is sent to the contractor to the effect that his final bill is ready for payment and his decision shall be final and binding and where the matter involves a claim for or the payment or recovery or deduction of money, only the amount, if any awarded in such FAO No.3177 of 2008 - 5 – arbitration shall be recoverable in respect of the matter so referred.” It is clearly provided in the aforesaid Clause of the agreement (Ex.D-3) that the dispute arising between the parties shall be referred for Arbitration to the Superintending Engineer-in- Charge, Circle Public Works Department Building and Roads Branch or acting as such at the time of reference. Then the question arises whether Sh. D.P.S. Virk who acted as an Arbitrator was the Superintending Engineer-in-Charge, Circle Public Works Department Building and Roads Branch or was acting as such. In this regard, the evidence available on record has been thoroughly discussed by the learned Court below in which it has been held that Sh. D.P.S. Virk (Arbitrator) was given the Additional Charge of S.E, PWD, (B&R) Branch, Bathinda and was acting as such. Once, the finding of fact has been recorded by the learned Court below which has not been disputed by the appellant, I do not find any substance in the argument raised with regard to the competence of the Arbitrator. In so far the interest part is concerned, the finding recorded by the learned Court below is not required to be interfered with, because even in cross-examination Anil Gupta, Executive Engineer has admitted that 10% interest per annum was recommended by him for payment in the award passed by T.S. Bali and the said amount of interest was paid. Thus, award of 15% interest particularly in view of Section 31 of the Act cannot be called higher rate of interest. No other point has been raised in these appeals filed by the counsel for the appellant. FAO No.3177 of 2008 - 6 – In view of the above, I do not find any error in the order of the learned Court below and as such the present appeals are hereby dismissed without any order as to costs. (RAKESH KUMAR JAIN) May 04, 2009 JUDGE vivek