Case: Steeman Ltd Vs. State Of Himahcal Pradesh

2. Brief facts leading to the filing of these two matters are the following :The work of construction of Sitla Bridge over river Ravi at Champa was awarded after negotiation to the applicant/petitioner (M/s Steeman Ltd) on 31.2.1969. We are not giving details as they are not necessary. As there was some dispute between the parties regarding the progress of the works and payments for the same. The petitioner Company submitted disputes/differences for adjudication by and arbitrator as per clause 29 of the agreement. While so, the Executive Engineer, Champa division imposed penalty of Rs. 63,000/- in addition to rescinding the contract on imposing penalty, the petitioner Company successfully appealed to the Government of Himachal Pradesh. Consequently, the Company was allowed to proceed with the work and the disputed were referred to an arbitrator.3. As Arbitrator originally appointed was not acceptable to the petitioner Company one, Mr. R.K. Sarkar was appointed as arbitrator by mutual consent of parties. The said arbitrator entered upon the reference.4. While the arbitration proceedings were going on the respondents again rescinded the contract finally on 7.6.1972.5. On 7.10.1972. The petitioner Company submitted additional claims before the arbitrator consequent upon the rescinding of the contract finally. The petitioner Company also raised a question of law before the arbitrator. namely, whether the respondent was competent to rescind the contract on the ground of slow progress when the matter in dispute was subjudice before the arbitrator during the pendency of the case. The arbitrator referred that question for opinion of the Himachal Pradesh High Court under Section 13(b) of the Indian Arbitration Act. While that was pending, it appears that in the place of Mr. R.K. Sarkar one Mr.O.B. Sablok was appointed as arbitrator. The petitioner challenged the substitution of the arbitrator before the High Court. The High Court while setting aside the removal of Mr. R.K. Sarkar and the appointment of Mr. O.B. Sablok as arbitrator. Since no orders were passed by the High Court for proceeding further with the arbitration matter the petitioner company moved this court by filing Transfer Petition No, 233 of 1980 for transfer of the cases to some other High Court. This court disposed of the Transfer Petition on 12.3.1984 by appointing on Mr. G.N. Ramaswamiah. Chief Engineer (IPH) H.P. P.W.D with the mutual consent of the parties with a direction to the said arbitrator to enter upon the reference and directing both the parties to appear before him on 3.9.1984.6. The said arbitrator duly entered upon the office. held as many as 10 sitting/hearings and drew minutes of every meeting in detail. Based that an award has been passed 14.6.1985.7. The High Court (before which the question of law above mentioned, was referred to by Mr. R.K. Sarkar, the previous Arbitrator) disposed of the matter on 3.7.1986 stating that since the successor Arbitrator had made the award, there was no need to answer the question. On that view. The High Court dismissed the reference matter. Aggrieved by that the above special leave petition has been filed.

Reasoning: 14. So far as the first point is concerned. we do not think that the said question arises out of the present arbitration proceedings inasmuch as this Court appointed the present arbitrator to go into the disputes between the parties and the parties were directed to place before the arbitrator their respective disputes. As a matter of fact by consent of both the parties, the arbitrator framed issues for adjudication and it does not appear from the issues that the question of law not being raised was one of the issues, further the so called question of law loses its relevance, after the appointment of the new arbitrator by this Court, as indeed no act of rescinding the contract took place after this court appointed the Arbitrator. Therefore, there is no substance in the first point.The Arbitrator was in out opinion quite justified in not awarding any amount under a separate head for the property of the Company forcibly taken possession in he light of the amended claims presented before him. There is thus no substance in the argument that the claim as originally put forward regarding company property allegedly taken possession of by respondent illegally and forcibly, was not separately considered by the Arbitrator. Answer is obvious viz. no. such separate claim was made by the petitioner in the amended claim. Hence we have no hesitation to reject the second point also.19. So far as the third point is concerned, namely that the petitioner was not given reasonable opportunity to substantiate the case, we do not think that we can accept that contention after perusing the detailed minutes of the Arbitrator drawn at the sittings which extended to 10 in number. As a matter of fact, we find that the Arbitrator had called upon the petitioner Company time and again to furnish document to support the claims. But. The petitioner has only partly complied with the directions of the Arbitrator. The Arbitrator had given full and reasonable opportunity to both parties to put forward their respectivepointed out earlier, after going through the minutes of the Arbitrator drawn during in the argument. Further neither of the counsel was in a position to explain as to who made the post-script and when was it entered in the proceedings of the Arbitrator. The decisions cited by the learned counsel for the petitioner in support of his argument that want or reasonable opportunity would vitiate the award by not come to his aid as we are satisfied on the facts of the case from the record including the minutes drawn meticulously, that the Arbitrator had given full and reasonable opportunity to both parties. Accordingly we find no force in this point as well.22. As regards the last point concerning the interest, we are informed that there is no clause in the agreement regarding interest. Before the arbitrator both parties appear to have agreed on the rate of interest at 18%. However, the Arbitrator i the facts and circumstances of the case awarded interest at 6%. The agreement between the parties does not mean that the Arbitrator was bogged down to that rate irrespective of other facts and circumstances of the case on hand. We have no good reason to think that the Arbitrator has awarded interest at 6% as against 18% claim without taking into account the relevant facts and circumstances of the case. Further the jurisdiction of the Court to interfere with the award is confined to matters enumerated in Section 30 of the Arbitrator Act. We do not think that the last point resided before us would fall within the ambit of Section 30 to interfere with the award.