Delhi High Court
Kidar Nath Sharma vs Union Of India And Anr. on 18 January, 2002
Equivalent citations: 2002IIIAD(DELHI)601
JUDGMENT V.S. Aggarwal, J.
1. The petitioner, Kidar Nath Sharma, is a contractor. He has filed the present petition under Section 14 and 17 of the Arbitration Act praying for the award of the arbitration to be made a rule of the court and for a decree to be passed in terms of the award. In pursuance of the notices have been issued the respondent Union of India has filed the objections assailing the award on various grounds. The objections have been filed under Section 30 read with Section 33 of the Arbitration Act, 1940. Needless to state that the same are being contested.
2. On 5th March, 1998 on behalf of the Union of India it had been pointed that without prejudice to his rights and contentions an order for payment of amount and interest be passed and the Union of India be allowed to deposit the amount allowed by the arbitrator along with the interest with the registry of the court. On 19th March, 1999 on behalf of the objector/respondent it was stated that the amount has since been deposited. By the present order the objections referred to are proposed to be disposed. It was not in controversy that proceedings of the arbitrator could be red in evidence.
3. On behalf of the Union of India/objector it was asserted that the bill had been accepted in full and final settlement and payment of this fact has totally be ignored by the arbitrator. The attention of the court was drawn to the fact that if after full and final settlement within 30 days further claim is not laid the arbitrator could not award in terms of the agreement any further amount. The contractor had to list the disputed items. He did not raise the dispute and therefore it was argued that the objections as such on this short ground should succeed. At the outset it can well be mentioned that unless an objection is raised before the arbitrator or unless it is a part of the objections before the court, the court will not travel beyond the submissions already made and go into new pleas that are being offered. In the present case in controversy this plea had been raised before the arbitrator. It has not been noticed even by the arbitrator or in other words it can safely be stated that no such argument had been advanced before the arbitrator. Specifically such a plea in so many word in clear and unambiguous terms has not been agitated in the objections. Therefore, this new plea cannot be entertained and at the outset deserves to be rejected.
4. Before proceeding further the basic principle which is not in controversy as to under what circumstances an award can be set aside can be re-listed. It is a settled principle of law that the court ordinarily will not probe into the mental process of arbitrator. It will not sit as a court of appeal over the decision of the arbitrator. The parties agree to their arbitrator and they when the award is good on the face of it object to the decision in law or on facts. Arbitrator is the final judge of facts. The parties are bound by the arbitrator's finding and therefore will not seek a review of the facts of the same. The court is not to see into the adequacy of evidence but would only interfere if no other finding of fact is possible or in other words the award so made is totally erroneous.
5. On behalf of the objector it was pointed that the claimant had claimed an amount of Rs. 5487/-. The said claim was refuted asserting that recovery has been made since the claimant had used the departmental electricity. The arbitrator recorded that the action of the objector in recovering the electricity charges for the work of AC accommodation is not justified and awarded Rs.5487/- against the apart of the claim. it was urged that this amount has already been paid in the other award between the parties and the attention of the court was being drawn to the document C-35 and it was contended that the same has totally been ignored.
6. So far as the said contention is concerned indeed it has merit and cannot be brushed aside. This is for the reason that the earlier award clearly reveals that the same amount had been claimed and had been allowed. There cannot be a duplicate payment all over again for the amount and in face of this fact, it must be held that objections that amount of Rs.5487/- could not have been must prevail. To that extent the award requires a modification.
7. It was further argued that the arbitrator cannot travel beyond the agreement and the escalation charges that have been allowed could not have been so allowed to the applicant. Reliance by the learned counsel for the objector in this regard was placed on the decision of the Supreme Court in the case of State of Orissa v. Sudhakar Das (dead) by LRs. .
In the cited case the agreement did not contain any escalation clause. It was held that in the absence of any escalation clause, the arbitrator cannot assume any jurisdiction to award any amount towards escalation and to that extent the Supreme Court had modified the award.
8. Perusal of the award reveals that the applicant/contractor had claimed an amount of Rs.1,80,0000/- on account of escalation due to rise in the cost of man and material. The arbitrator had not granted any escalation amount but recorded that the claimant has already been awarded compensation under claim no.5 (which in fact should be claim no.4 and there is a typing mistake). In claim no.4 the applicant had set up a claim for Rs. 3,10,000/- as damages due to prolongation of work. The arbitrator had considered this fact and recorded that there were hindrances attributable to the objectors during the stipulated period of completion. The same have been taken note of as of fact and it was held that stipulated date of start and completion work 15th March, 1990 and 14th September, 1990. The work was completed only on 22nd May, 1992. The applicant had made their intention to claim the compensation clear vide the notice letter that had been placed on record. It was held that because of prolongation of work the applicant had suffered the losses and compensation as such had been allowed. These facts clearly show that what has been awarded is not escalation charges but compensation for certain defaults on the part of the objectors. A clear distinction in this regard between the two must be drawn. It is one thing to claim escalation charges and another to claim the compensation as such. Compensation necessarily would be for some breach on the part of the objector. In that view of the matter the decision of the Supreme Court in the case of State of Orissa v. Sudhakar Das (supra) has little application.
9. Reference with advantage can well be made to the decision of the Supreme Court in the case of Villayati Ram Mittal v. Union of India 1986 (1) ALR 328. This court concluded that the compensation is awarded for the loss suffered owing to breach of contract. The principal noted was that injured party should be put as nearly as possible in the same position so far as money can do by measure of damages. Keeping in view the said principle the objection in this regard necessarily must fail and cannot succeed.
10. It has further been asserted that no reasons have been recorded with respect to the claim 1B by the arbitrator and therefore since award had to be a reasoned one the objection in this regard must succeed. Even on that count the contention necessarily has to be stated to be rejected. Reasons necessarily does not mean or imply a prolonged judgment. Reasons can be brief and intelligible to permit the court or any other authority to look into as to why such a conclusion has been arrived at. perusal of the claim also reveals that the arbitrator ad noted the contention and was aware of the controversy. Therefore, it cannot be termed that it is an unreasonable award vis-a-vis claim 1B.
11. Objections have further been raised with respect to the claim no.4 alleging that the claim has been allowed in a hypothetical manner. Regarding claim no.6 it has been highlighted that the same has been passed in violation of the provisions of the Arbitration Act and regarding claim no.7 it has been contended that certain documentary evidence has been ignored. It has already been recorded above that the court will not sit as a court appeal to adjudicate on the controversies when a finding of fact has been arrived at and does not seem to be erroneous it will not require any interference. Therefore qua these controversies when the perusal of the award reveals that what is being arrived at and stated is not erroneous it requires no interference.
12. For these reasons the award of the arbitrator is modified and amount of Rs.5487/- is disallowed otherwise the rest of the award is made a rule of the court and decree in terms of the award is passed. If the amount has not been withdrawn the applicant may withdraw the same. In case the same has been withdrawn the applicant would refund the amount referred to above regarding which the award is modified within two months.