Case: M/S. Harish Chandra &amp; Company Vs. State Of U.P. Thr. Superintending Eng

4) The appellant herein is a civil contractor whereas the respondent is the State of U.P. represented through Superintending Engineer Irrigation Construction Circle, Yamuna Colony, Dehradun5) In the year 1979, the respondent (State) invited tender being Number 6/1979-80 for doing Earthwork in power channels on different routes of various distances and also construction of drainage crossing in Chhoti Lui falling in 6 stretches and divided in two sections called serial 4 and serial 6 in a scheme called - KHARA HYDEL SCHEME6) The appellant submitted their tender for serial 4 and serial 6. The respondent accepted the appellants tender. Accordingly, two agreements bearing nos. 5/SE/79-80 and 6/SE/79-80 were executed between the appellant and the respondent for execution of the work in question on 30.10.19797) So far as agreement No. 5/SE/79-80 is concerned, it was in relation to work of section bearing serial 4 whereas agreement No. 6/SE/79-80 was in relation to work of section bearing serial 6. The work, pursuant to these agreements, was to start from 01.12.1979 and had to be completed on or before 31.05.19828) Disputes of various nature arose between the parties in execution of both the agreements. The disputes were related to the completion of works, its nature, manner of its completion, non-payment and withholding of appellants bills, deduction of amount from the bills etc.. Since the disputes could not be settled amicably, the parties invoked the arbitration clause (1.47) contained in the agreements and approached the Civil Court for appointment of arbitrator and for making references to him for adjudication of the disputes which had arisen between them in relation to 2 agreements. The request was acceded to and accordingly some disputes were referred to the sole arbitrator9) So far as this appeal is concerned, it arises out of disputes, which relates to agreement No. 6/SE/79-80, i.e., (serial 6). So far as disputes relating to agreement No. 5/SE/79-80 i.e.(serial 4) and some disputes relating to agreement No. 6/SE/79-80 are concerned, they were also referred to the arbitrator for his decision. One reference, however, attained finality by the orders of this Court in State of U.P. vs. Harish Chandra & Co., (1999) 1 SCC 63 , whereas another reference is pending in this Court10) Consequent upon the reference made to the arbitrator insofar as the present appeal is concerned, the appellant (claimant) filed 6 claims (claim Nos. 12 to 17) before the sole arbitrator (Mr. Harish Chandra - retired Chief Engineer). The details of the 6 claims made by the appellant against the respondent (State) are as under: -12.Claim due on account of breaking of large pieces of hard rock in the filling done from 9.00 to 9.80 KM.Rs. 1,05,00,000.00 along with interest @ 24% per annum from 31.5.86 to the date the amount is actually paid13.Claims due as payment on account of non-payment after 30.9.85.Rs. 11,62,650.00 along with interest at 24% per annum from 1.6.86 to the date the amount is actually paid14.Payment due as claim on account of wrongful deduction of Security.Rs. 1,04,426.00 along with interest at 24% per annum from 1.5.85 to the date the amount is actually paid15.Payment due as claim on account of extra excavation.Rs. 5,51,250.00 along with interest @ 24% per annum from 1.6.86 to the date the amount actually paid16.Payment due as claim on account of dressing done on slopes of filled earth in Embankments from Km. 9.00 to KM. 9.80Rs. 4,59,200.00 along with interest @ 24% per annum from 1.6.86 to the date of amount actually paid11) The respondent (State) contested the aforementioned claims by filing their reply. The State also filed their counter claims against the appellant claiming damages. The appellant contested the counter claims by filing their reply. The parties adduced evidence and examined several witnesses in support of their respective claims12) On 27.11.1995, the arbitrator passed a reasoned award. Out of 6 claims, the arbitrator allowed appellants 3 claims, i.e., claim Nos. 12, 13 and 17 and rejected the claims Nos. 14, 15 and 16. The arbitrator also rejected the counter claims of the respondent (State) in toto. The details of the claims awarded and rejected are as under:Claim No.Amount demanded Rs.Amount Awarded Rs12.Rs. 1,05,00,000.00 24% interest from 31.5.86Rs. 44,98,995.0013.Rs. 11,62,650 with 24% interest upto 31.5.86Rs. 10,61,450/- with interest 18% from 1.6.86 to 27.11.9514.Rs. 1,04,426 with interest from 1.5.85Rejected15.Rs. 5,51,250/- with interest @ 24% from 1.6.86Rejected16.Rs. 4,59,200/- with interest @ 24% from 1.6.86Rejected13) The respondent, felt aggrieved, filed objections under Section 30 of the Act 1940 before the Civil Judge(S.D.), Dehradun against the award. The appellant contested the objections and prayed for passing a decree in term of the award. By order dated 30.05.1996, the civil Judge rejected the objections and passed a decree in term of the award along with simple interest payable at the rate of 18% p.a. on the awarded sum of Rs.55,60,445/- from the date of decree till payment of amount14) The respondent, felt aggrieved, filed appeal being O.A. No. 1097 of 2001 before the High Court. By impugned judgment dated 17.08.2007, the High Court allowed the appeal, set aside the order of the Trial Court and while allowing the objections filed by the State set aside the award. The High Court held that the arbitrator misconducted himself in passing the award inasmuch as he travelled beyond the terms of the agreement15) Felt aggrieved, the appellant (contractor/claimant) has filed this appeal by way of special leave against the judgment of the High Court

Reasoning:
41) In our considered view, it is clear from the facts of the case that the claims made by the appellant were essentially based on facts. They were accordingly probed on oral and documentary evidence adduced by the parties, which resulted in partial success of 3 claims in appellants favour and rejection of 3 claims. So far as the State is concerned, they did not pursue their counter claim consequent upon its rejection by the arbitrator42) We have not been able to notice any kind of perversity in the arbitrators reasoning and nor are we able to notice any kind of apparent error whether legal or otherwise in the award which may constitute a case of any legal misconduct on the part of the arbitrator empowering the Court to set aside the award by taking recourse to Section 30 of the Act. The reasoning and the conclusion arrived at by the arbitrator is one of the possible view which is capable of being taken by the arbitrator on the material brought on record and we find no legal ground to set it aside the samewe are unable to concur with the reasoning and the conclusion arrived at by the High Court