Full Judgment Text
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PETITIONER:
M/S STEEMAN LTD
Vs.
RESPONDENT:
THE STATE OF HIMACHAL PRADESH AND OTHERS
DATE OF JUDGMENT: 06/03/1997
BENCH:
A.S. ANAND, K. VENKATASWAMI
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
Venkataswami, J.
On a close and careful scrutiny of the facts we find
that the dispute in these matters lies in a very by
referring to matters which have no real relevance to the
actual disputes in these matters.
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.
As Arbitrator orginally 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.
While the arbitration proceedings were going on the
respondents again rescinded the contract finally on
7.6.1972.
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.
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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.
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.
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.
When we asked the learned Senior Counsel appearing for
the petitioner whether anything survives in the special
leaves petition not only in view of the issues raised before
the Arbitrator for adjudication but also having regard to
the arbitrator appointed by this Court passing the award,
the learned counsel frankly submitted that the special leave
petition has become infructuous. Accordingly, we dismiss the
same as having become infructuous. Accordingly, we dismiss
the same as having become infructuous.
Award has been filed in this Court. Petitioner has
filed objections to the award.
Challenging the award as such, the learned counsel
raised four points.
The first point raised is that the arbitrator should
have answered the question of law raised before the
predecessor arbitrator and the failure to do so vitiates the
award.
Secondly, the arbitrator has made a non-speaking award
and, therefore, it is not possible to find out whether he
has applied his mind to that part of the claim amounting to
rupees two lakhs eighteen thousand which represented the
good sized after rescinding the contract.
Thirdly, the arbitrator has no given reasonable
opportunity of meeting the case of the respondents and also
in establishing the petitioner’s case. In support of this
contention he placed reliance on Suresh Ragho Desai and
Another vs. Smt. Vijaya Vinayak Ghag (1988) 4 SCC 591) and
Rajpur Development Authority & Others vs. M/s Chokhamal
Contractors & Others (1989) 2 SCC 721).
And the last point is that the interest awarded was at
too low a rate as the claim was for 18% and the award was at
6%.
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
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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.
Regarding the second point, the facts are like this.
The petitioner company’s demand in the original claim under
clauses I & II read as follows :-
(in round figure
of 1000 rupees)
1. The work done by the company
upto 16.9.1972 when it was forcibly
dispossessed, approximately
..... 12,00,000/-
Less value received from H.P. PWD,
in the shape of cash or material
.... 3,00,000/-
------------------
9,00,000/-
Plus for property of the company
illegally & forcibly taken over
on 16.9.72 by the Department
(+) 4,18,000/-
Less value of material handed
over to the company
(-) 2,00/000/-
---------------------
11,18,000/-
Total mount on account of work done
and property forcibly taken over
plus interest @ 18% p.a. from 16-9-
72 to 15-9-84, i.e. for 12 years
(+) 24,15,000/-
The total sum to which the company
is entitled as on 15-9-84 under
this head
32,33,000/-
II. Damages on account criminal
breach of Trust, fabricating
false evidence, mischief, forgery,
cheating, with intent to cause in
just loss and injury to the
petitioner. The company claims a
illegally deprived of
11,18,000/-
The above claims were modified before the present
Arbitrator which read as follows:-
Claims preferred by the
Petitioner:-
I (a) Claim on works done by the
Company upto
Rs. 11,18,000/-
(b) Interest on the amount under
I(a) @ 18% per annum for a period
of 12 years.
Rs. 24,15,000/-
II. Claim made by the company
under reasons whatsoever as per
clause of the agreement
Rs. 11,18,000/-
[Other clauses omitted as not
relevant]
The Arbitrator has passed the award on the basis of the
amended claim as follows :-
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------------------------------------------------------------
S.No. Claims preferred by Amount Awarded amount
the petitioner claimed (Rs.)
------------------------------------------------------------
I.(a) Claim on work done 11,18,000/- I award Rupees
by the company upto Forty Two
16.9.72. thousand Nine
hundred Forty
Nine and Sixty
three paisa
only
(Rs.42,949.63)
(b) Interest on the 24,15,000/- I award simple
amount under I(a) interest of
six per cent
for 12 years
upto this date
amounting to
Rupees Thirty
Thousand Nine
Hundred Twenty
Three and
Seventy three
paisa only.
(Rs.30,923.73)
II. Claims made by the 11,18,000/- I award Rupees
company on damages Twenty Three
this is amended Hundred twenty
claim from the Five lying in
earlier item for deposit with
reasons whatsoever Respondent.
as per clause of the Further I
agreement), and award Rupees
amount is the same Fifty Thousand
on inventory
of stores etc.
totalling
Seventy Three
Thousand Two
hundred twenty
Five only).
(23,225+50,000
=73,22.00).
------------------------------------------------------------
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.
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
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parties to put forward their respective claims. At the last
sitting dated 5.4.85. the Arbitrator observed as follows :-
"As far as oral hearing is
concerned, it is closed but in case
any clarifications are needed by
the court after receipt of final
reply from both the parties within
the dates stipulated above. The
parties may be summoned at short
notice to seek such clarifications
needed by the court.
Pursuant to the above, it appears the Arbitrator sent
letters to both parties seeking certain clarifications.
Taking advantage of that, learned counsel for the petitioner
argued that the arbitrator has not given reasonable time to
the petitioner to clarify the doubts. The learned counsel
also invited our attention to a post-script found at the
concluding part of the proceeding dated 30.5.85. The post-
script reads as follows :-
"That during course of hearing,
petitioner requested of and
interval to see the documents and
give clarifications. Accordingly.
The court adjourned for half an
hour during the course of the
proceedings.
According to the learned counsel, the time given by
Arbitrator was totally inadequate toe clarify the doubt and
therefore, there was no reasonable opportunity. As pointed
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.
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.
In the result the Interlocutory Application 1/90 in
Transfer Petition (Civil) No. 233/80 as well as Special
leave petition (Civil) No. 15978/86 stand dismissed. However
there will be no order as to costs.