Case: State of Punjab Vs. Amar Nath Aggarwal Const. and Others

These appeals arise out of a common order made in appeals filed against two Awards which were made decrees of the Civil Court after rejecting the objections raised by the appellant under Sections 30 and 33 of the Arbitration Act against respective Awards. The Chief Engineer was appointed as an Arbitrator to go into the dispute raised by the respondents in respect of two contracts to construct Sutlej Yamuna Link Canal (Irrigation), Punjab. The arbitration clause therein provided that if the office of the Arbitrator becomes vacant for any reason, another sole Arbitrator will be appointed. The Arbitrator, who was the Chief Engineer, was compulsorily retired from service on 28.5.1990 and he made an Award on 9.6.1990, thus it is contended that the Arbitrator had no jurisdiction to pass the Award in question. From the material on record it is clear that the Arbitrator commenced the proceedings on 28.7.1989 and concluded the same by passing the Award on 9.6.1990. In between these two dates several proceedings were held by him, evidence recorded and the appellant also participated in those proceedings on 4.6.1990. By an order made on 5.9.1990 the Chief Engineer was reinstated by setting aside the order of compulsory retirement. The contention urged on behalf of the appellant, relying upon the decision of this Court in Khardah Company Ltd. vs. Raymon & Co. (India) Pvt. Ltd., is that when the Arbitrator lacks jurisdiction, mere participation in the proceedings will not confer any jurisdiction upon the Arbitrator and, therefore, in the present case also even though the appellant may have participated in the proceedings held by the Arbitrator on the date when he was not holding the office, the Arbitrator could not be deemed to be continuing in service. We do not think the contention put forth on behalf of the appellant is tenable. What is held by this Court in Khardah Company Ltd. vs. Raymon & Co. (India) Pvt. Ltd. (supra), is that in the event the agreement for arbitration does not exist, then it will not be open to the Arbitrator to enter into arbitration and any action taken by him will be without jurisdiction. The defect will not be cured in such an event, even by the participation of the parties in the proceedings. In the present case when the proceedings for arbitration commenced, the Arbitrator did have jurisdiction and when he continued the proceedings whether he would act or not, may be a question of legality of proceedings and not one of lack of jurisdiction. In that view of the matter when the Arbitrators services were reinstated and he continued in service, it must be deemed that there is no hiatus in the proceedings. In that view of the matter we find no substance in the first contention urged on behalf of the appellant.The next contention urged is one on the claim made by the respondent regarding jungle clearance by way of extra work. It is contended that in regard to such extra work a claim could be made only in the event the contractor had submitted a return to the office of the Executive Engineer on or before 10th day of each month with regard to any additional work done or will have to be done and details of the work claiming extra work which also contains value of such work. In the present case this clause is sought to be held against the claim made by the contractor and it is urged that the Award made by the Arbitrator suffers from an error apparent on the face of the Award inasmuch as the Arbitrator travels far beyond the terms of the agreement itself. The contention is not justified because the appellant itself had made certain payments in regard to the jungle clearance at certain rates. The question was, in such an event if really the work had been done was there any material for the authorities concerned to find out the extent of the work done. But no claim was disallowed on the ground that such claim had not been made in terms of the Clause 39. The Arbitrator has gone into this question in detail and has found that there was correspondence between the appellant and the respondents in this connection and there is material to show that such work is really done and as to what quantum of Award should be granted is a matter which must be left to the Arbitrators discretion. In that view of the matter we do not think there is any substance in this contention either. So far as the third contention is concerned, it is urged that stripping of the earth was required to be used for filling placement in the random zone. It was acknowledged that the earth becoming available on account of stripping of earth was of no use at all. This finding of fact has been recorded by the Arbitrator and we do not think there is any justification for the appellant to make any complaint. Even though the Arbitrator may have taken note of the decision taken by the Chief Engineer in December, 1987 but that would only afford a basis and guide to him to arrive at a proper conclusion and it is not the foundation for the reasoning adopted by him.It was next contended that for lip cutting he had done extra filling of one metre for which the quantity of earth work involved was to the tune of 11, 310 cum. It was contended that it was done on the ground that the tendered rate in item No. 6 relating to lining of the canal was inclusive of lip cutting and therefore it was not permissible to the Arbitrator to have awarded extra payment. This aspect has been considered in detail by the Arbitrator and no ground as such is pointed out to us which can be characterised as one to constitute an error apparent on the face of the Award to set aside the Award. In that view of the matter we think the Award made by the Arbitrator does not suffer from any infirmity as could be urged under Sections 30 and 33 of the Arbitration Act. As regards the question of interest is concerned, it is covered by the judgment of a Constitution Bench in case of Executive Engineer, Dhenkanal Minor Irrigation Division etc. vs. N. C. Budharaj (dead) by LRs etc. 2001 SC 19768 = 2001 SC 19768 (SC)), and in that view of the matter no further consideration is required on that aspect in these appeals.

Decision reasoning: 0[ds]From the material on record it is clear that the Arbitrator commenced the proceedings on 28.7.1989 and concluded the same by passing the Award on 9.6.1990. In between these two dates several proceedings were held by him, evidence recorded and the appellant also participated in those proceedings on 4.6.1990. By an order made on 5.9.1990 the Chief Engineer was reinstated by setting aside the order of compulsory retirementWe do not think the contention put forth on behalf of the appellant is tenableIn that view of the matter we find no substance in the first contention urged on behalf of the appellant.The next contention urged is one on the claim made by the respondent regarding jungle clearance by way of extra work. It is contended that in regard to such extra work a claim could be made only in the event the contractor had submitted a return to the office of the Executive Engineer on or before 10th day of each month with regard to any additional work done or will have to be done and details of the work claiming extra work which also contains value of such work. In the present case this clause is sought to be held against the claim made by the contractor and it is urged that the Award made by the Arbitrator suffers from an error apparent on the face of the Award inasmuch as the Arbitrator travels far beyond the terms of the agreement itself. The contention is not justified because the appellant itself had made certain payments in regard to the jungle clearance at certain rates. The question was, in such an event if really the work had been done was there any material for the authorities concerned to find out the extent of the work done. But no claim was disallowed on the ground that such claim had not been made in terms of the Clause 39. The Arbitrator has gone into this question in detail and has found that there was correspondence between the appellant and the respondents in this connection and there is material to show that such work is really done and as to what quantum of Award should be granted is a matter which must be left to the Arbitrators discretion. In that view of the matter we do not think there is any substance in this contention eitherIt was contended that it was done on the ground that the tendered rate in item No. 6 relating to lining of the canal was inclusive of lip cutting and therefore it was not permissible to the Arbitrator to have awarded extra payment. This aspect has been considered in detail by the Arbitrator and no ground as such is pointed out to us which can be characterised as one to constitute an error apparent on the face of the Award to set aside the AwardIn that view of the matter we think the Award made by the Arbitrator does not suffer from any infirmity as could be urged under Sections 30 and 33 of the Arbitration Act. As regards the question of interest is concerned, it is covered by the judgment of a Constitution Bench in case of Executive Engineer, Dhenkanal Minor Irrigation Division etc. vs. N. C. Budharaj (dead) by LRs etc. 2001 SC 19768 = 2001 SC 19768 (SC)), and in that view of the matter no further consideration is required on that aspect in these appeals.