Punjab-Haryana High Court
Punjab State Through Executive ... vs Amar Nath Aggarwal Construction Pvt. ... on 18 July, 1997
Equivalent citations: (1998)120PLR266
JUDGMENT Amarjeet Chaudhary, J.
1. This appeal has been filed by the State of Punjab for setting aside the judgment of Sub Judge, Ist Class, Ropar, who on an application filed by M/s Amar Nath Aggarwal Construction Private Limited made the award as a Rule of the Court and dismissed the objection petition filed by the State of Punjab vide his judgment dated 27.4.1992.
2. The brief facts of the case are that the State of Punjab through Executive Engineer, Kharar Construction Division Mohali entered into a an agreement dated 21.5.1985 for the construction of SYL Canal from RD 716000 to 72000 KM with M/s Amar Nath Aggarwal Construction Private Limited (hereinafter to be referred to as the 'Contractor'). The agreement between the parties was executed regarding execution of work relating to the contract. There was a condition in the contract that in case any dispute arises between the parties, the matter was to be adjudicated by the Arbitrator. A dispute between the parties, namely the State of Punjab and the Contractor had arisen; Shri K.C. Verma, Chief Engineer (Civil) Haryana Design, P.S.E.B. was appointed as an arbitrator by the Chief Engineer, Constructions, S.Y.L. Chandigarh vide letter dated 27.7.1989. The Arbitrator announced his award on 26.7.1991 in favour of the Contractor to the tune of Rs. 20,20,410/- with interest at the rate of 15% per annum from the date of award till the date of the decree of the Court. Thereafter the Contractor moved an application for directing the Arbitrator to file the award and making it rule of the Court. The State of Punjab also moved an application dated 25.5.1991 under Sections 30 and 33 of the, Arbitration Act (hereinafter referred to as the 'Objection Petitioner') which was duly registered.
3. In the Objection petition, the State of Punjab had pleaded the award of the Arbitrator is based on conjectures and surmises and it had objected to the claim No. I, IX, XI, XIV, XV, XVII, XIX, XX and XXI. The Objections were resisted by the Contractor on various grounds.
4. The Court, on the pleadings of the parties, framed the following issues:-
1. Whether the award is liable to be set aside on the grounds mentioned in the objection petition? O.P.O.
2. Whether award is liable to be made rule of the Court? O.P.R.
3. Relief.
The court after taking into consideration the evidence of both the parties.
5. The award was assailed on the ground that the Arbitrator had made the award without applying his mind even to the terms and conditions of the agreement which were of vital importance being very foundations of rights and liabilities of parties.
Learned counsel for the appellant contended that the Arbitrator has gone beyond the agreement which resulted in a grave miscarriage of justice and misconduct. He argued that the Arbitrator has wrongly awarded Rs. 5,48,096/- for loss of turnover profit regarding claim No. 1. This amount has been awarded in baseless and imaginary manner. There is no clause in the agreement for payment of turnover/profit and as such the award is legally invalid. The only relief which could be legally available in such cases was to grant extension of time under clause 61 of the agreement which was duly granted as and when requested by the contractor. The Arbitrator had ignored the provisions of various clauses of agreement and acted beyond his jurisdiction. It has also been highlighted that the land in village Dharak Kalan and Bassain was acquired in August, 1985 and September 1985 and machinery advance and mobilisation advances were granted to the Contractor. The plea of the Contractor that he remained prepared for taking the job by 22.4.1986 is incorrect. As such the Contractor could not claim any turn-over profit without having mobilised his resources or investment in the job.
6. Learned counsel for the appellant also argued that the Arbitrator has wrongly awarded a sum of Rs. 3,50,374/- regarding claim No. IX. The same is against the terms and conditions of the agreement. The Arbitrator has just depended upon the language of item 12(i) of the Schedule of Rates but totally ignored the specific quantity that has been stipulated in the contract itself. Learned counsel has invited this Court's attention to the Schedule of rates.
7. Mr. Saron further contended that the Arbitrator had wrongly awarded a sum of Rs. 73,495/- regarding claims No. XI and XVII and the Court had wrongly rejected the objection filed by the State of Punjab. The amount has been awarded against the terms and conditions of the agreement and it is based on assumption and approximation.
8. While assailing the award on claim No. XII, learned counsel argued that a sum of Rs.l,0u,000/- has been wrongly awarded under this count. The Arbitrator has misconceived in the proceedings as he has taken drawing SYD 193 to be the base and ignored the drawing SYD 26 which was material document to be considered. Drawing SYD 193 only shows the thickness of lining for bed and side slopes. This drawing is silent about the thickness of filter material to be laid as the same is to be laid as per other drawing i.e. SYD-26.
9. While attacking the amount on claim No. XIV, learned counsel argued that the Arbitrator has wrongly awarded a sum of Rs. 73,795/- for which there was no evidence on the record and he has ignored the provisions of the contract agreement.
10. A sum of Rs. 2,88,990/- awarded on claim No. XV has been assailed on the ground that this amount has been awarded against the contract agreement.
While assailing the amount of Rs. 2,05,276/- awarded under claim No. XIX, Mr. Saron has argued that the Arbitrator has wrongly awarded this amount. The departmental draglines were provided to the contractor to supplement their own resources for completion of work within time and this was done in response to their specific request. The hire charges for machinery deployed were to be recovered.
The award of Rs. 42,204/- regarding claim No. XX has been assailed on the ground that it is baseless regarding lining work. Detailed analysis of rates for increased thickness of lining were prepared and got approved from the competent authority as per procedure laid down in Schedule-II which is a part of contract agreement.
Mr. Saron has also argued that a sum of Rs. 3,38,180/- regarding claim No. XXI has been wrongly awarded as the same has been awarded against the terms and conditions, which were accepted by both the parties.
11. Mr. Saron has also argued that the soil test was also done. The Contractor should not have been paid the escalation charges. While giving award, the Arbitrator should not have adopted one formula and should have adopted the formulas given in the schedule and interest on extra items should not have been awarded as the same cannot be awarded under the Arbitration. Interest can be awarded by the Court.
12. In order to fortify his submission, Mr. Saron has relied upon the following rulings :-
1. Associated Engineering Company v. Government of A.P., J.T. 1991(3) S.C. 123;
2. Secretary Irrigation Department v. G.C. Roy, J.T. 1991(6) S.C. 349, A.I.R. 1992 S.C. 732;
3. Jugal Kishore v. Vijayendra, A.I.R. 1993 S.C. 864;
4. Chahal Engineering v. State of Punjab, A.I.R. 1993 S.C. 2541;
5. State of Punjab v. Mehanga Ram, 1989(1) R.S.J. 399.
13. The counsel for the respondent-Contractor, on the other hand, has argued that the award of the Arbitrator is well reasoned. He has given minute details regarding all the claims. The Arbitrator being master of facts and law and there being no error apparent on the face of the award, the. Civil Court should not normally interfere with the decision of the Arbitrator until and unless it can successfully be shown that the Arbitrator has mis-conducted himself. No such mis-conduct is proved in the instant case. It has further been argued that the Arbitrator's award having been confirmed by the Civil Court by making it a rule of Court, this Court in appeal should be slow to interfere with the decision making it a rule of the Court. In support of the argument, the counsel for the respondents has taken me through the findings recorded in the impugned judgment. He has also strongly relied upon the case law which has been so mentioned in the judgment under challenge before me.
14. I have given thoughtful consideration to the respective arguments of the counsel for the parties. The relevant case law on the subject has also been examined. After giving my deep consideration, I am of the view that there is no force in appeal and the same deserves to be dismissed.
15. Before dealing with the findings so recorded in the judgment under various heads, it is necessary to observe the basic principles regarding which there can hardly be any dispute. It has been held in several judicial pronouncements that in the case of a reasoned award, error of law should appear from the award itself or from any document or note incorporated in the award itself or appended thereto and that it is not permissible to travel beyond the award and consider such material which is not incorporated in or appended to the award. This proposition of law has been settled in Trustees of the Port of Madras v. Engineering Constructions Limited, A.I.R. 1995 S.C. 2423. It has further been held in this case that the High Court cannot reappraise the evidence/material before umpire and come to a different finding of fact.
16. The arguments advanced before me as well as the findings recorded in the impugned judgment, in my considered view deserve to be examined in the light of the decision of the Apex Court in Trustees of the Port's case (supra).
17. As has been done by the Court below, I also propose to decide the questions involved herein claim wise.
18. Claim No. 1 (Loss of Turnover/Profit) Under this head, the Arbitrator has awarded a total sum of Rs. 5,48,096/-. The relevant observations read as under :
"The commencement of the work admittedly is 22.4.1986 though the agreement was signed on 21.5.1985. The loss of turnover by the claimant has been claimed for 11 months @ 15% for the turnover of the contract amount which is Rs. 74,74,038/-.
Due to the farmers' agitation, the Contractor could not start work till 22.4.1986, though the agreement was signed on 21.5.1985. The revised claim is of Rs. 6,85,120/- against the original amount of Rs. 11,21,106/-.
It is a matter of established circumstances that the respondent could not hand over the land on which the claimant was to execute the work under the contract which the claimant contractor had, at the instance of respondent, mobilized labour, personnel and machinery and remained in state of preparedness as the directions were being issued from time to time by the respondent to commence the work. The claimant had mobilized all his resources and made investment for the job but due to actual non-commencement over a period of 11 months got no return on account of this work. As a result of this, he suffered loss of profit. In view of the this, the claimant deserves compensation for this loss. Considering all aspects, I, therefore, give award for loss of profit at the rate of 12% for the pro rata period of 11 months out of 18 months which comes to 12 x 11 x 7474038/100 x 18 = Rs. 5,48,096/-".
The argument of Mr. S.S. Saron that there being no clause in the agreement for payment of any amount on account of loss of turnover/profit, in my considered view, has got absolutely no force. Simply because there is clause 61 providing for extension of time in completing the contract and simply because of existence of escalation under clause 40, it cannot be held on a point of law that the Contractor is not entitled to loss of turn-over/profit in the light of the facts regarding which there is no dispute. It could not be disputed that the agreement granting contract to the respondent was executed on 21.5.1985 whereas the land was not made available for execution of the work on site till April, 1986. For all this period, the Contract or could not utilise the amount, labour and other material. The Contractor as has been found in the impugned judgment had mobilised labour personnel, machinery and remained in the state of preparedness at the instance of the Government. The present was a case of time-bound contract and time limit for completion as stipulated in the agreement was 19 months only. The site having been handed over after a period of 11 months, it could be well understood that the Contractor had to remain in a state of preparedness and could not apparently invest the amount for execution of the contract anywhere else and, therefore, there is nothing wrong with the finding of the Arbitrator. The respondent-Contractor is, thus, entitled to compensation which has been given on the basis of a formula as has been incorporated in paragraph 14 of the impugned judgment. Clause 61 in my considered view relates to extension of time and not regarding loss of profit. Such a situation which has come into being on account of non-delivery of possession of the land for executing the contract was not visualized in clause 61 of the Agreement. Similarly, Clause 40 which pertains to price adjustment with the decrease and increase of the rate of labour and material etc. will not cover the present situation. There is nothing wrong with the finding of the Subordinate Judge that Clause 39 is also not relevant as the same relates to extra items only. The reliance placed by the Court below upon the Supreme Court judgment in A.T. Brij Paul Singh and Brothers v. State of Gujarat, A.I.R. 1984 S.C. 1703, in my considered view, is correct. It has been held in the aforesaid judgment that if a breach is committed by the party entrusting the contract, the Contractor is entitled to claim damages for loss of profits which he is expected to earn.
19. Claim No. IX (Damage due to high sub-soil water level).
Under this head, the Arbitrator has allowed Rs. 2,96,081/- to the claimant along with interest of Rs. 54,293/-. The relevant observations reads as under :-
"The respondent has averred that the excavation below sub-soil water level is only payable. But from the language of the item as detailed above, this work is to be paid for the complete de-watering from beginning to the end of the excavation. The claim is, therefore, valid and hence allowed for the unpaid quantity of 51,314 at the rate of quoted rate of Rs. 5.77 per cum. The claim of Rs. 2,96,081/- is awarded. Since the work was executed in the beginning of the work, the claim for interest since 1986 could stand but since the claimant has made the claim with effect from 6/88, the same is awarded @ 15% which rate is charged by the respondent from the claimant, on advances etc. till the date of reference which is 20.9.1989. The interest awarded comes to 15 x 296081 x 14.67/100 x 12 = Rs. 54,293/-. Thus, the total amount of award for this item comes to Rs. 2,96,081/- + 54,293/- = Rs. 3,50,374/-.
In order to appreciate the question whether the Arbitrator has gone beyond jurisdiction in allowing the compensation as indicated above, it is necessary to have a look at item No. 12 of the Scheme of Rates of the agreement which pertains to dewatering due to high sub-soil water level. Item No. 12 reads as under :-
"That complete de-watering for carrying out excavation from the beginning to end of the excavation and start of lining with contractor's own pumps and other equipments for full period of excavation till start of 8 lining laying out of pumping operation will be subject to approval of Engineer in Chief."
Item No. 12 as has been reproduced above does not indicate that dewatering will be done from Sub-soil Water Level to end of excavation. Rather the wording indicates that it will be from the beginning to the end. The interpretation, therefore, put by the Arbitrator on the face of it apparently is correct. The Hon'ble Supreme Court in the case of Hind Builders v. Union of India, A.I.R. 1990 S.C. 1940, has held that the Arbitrator are experienced Engineers and, therefore, if two views are possible, the view arrived at by him must prevail. In the instant case, the Arbitrator himself was Chief Engineer and, therefore, the Civil Court or this Court would not ordinarily sit on judgment over his views as a Court of Appeal particularly when even the Executive Engineer in his explanatory memo of extra/other item has admitted the existence of high sub-soil water level upon all the approximate quantity as was admitted in the objection petition itself as excavation was for 2,20,000cum. The payment has been made for l,47,000cum and, therefore, the Arbitrator has rightly allowed the claim under this head. The Arbitrator was not precluded from giving interest for this. The judgment of the Hon'ble Supreme Court in Executive Engineer, Irrigation v. Apna Data, A.I.R. 1988 S.C. 1520, can be quoted with advantage.
20. Claim No. XI and XVII (Steep rise in prices of many items and aggregate).
The Arbitrator having dealt with both these claims jointly, I also propose to deal with the same jointly. The Arbitrator while disallowing the claim of the Contractor under Claim No. XI has allowed a sum of Rs. 73,495/- under Claim No. XVII by making the following observations :
"Claim No. 11 and 17 being interconnected, I am taking up both of them together here itself. The claimant has stated that the agreement was executed in May, 1985 and had they carried out the work in time, they would not have paid the labour and material at the rates which have subsequently risen about 20% but the escalation covers 2 to 3%. On this count, the claimant has raised the claim to Rs. 11.21 lacs.
Since, in the escalation formula, the general price rise is taken into account, the claim cannot sustain for all the times. On SYL Project, the work generally involved excavation, filter and concreting. Excavation only involves labour which is accounted for in the escalation formula.
However, it is logical that the rates of sand and coarse aggregates had suddenly shot up in view of the fact that the quantities of these materials were required in lacs of cubic meters and the existing resources in the area could not meet with the requirements of the Project. As a result of this phenomenon, the prices of aggregates had suddenly shot up abnormally. This fact is admitted by the Chief Engineer Construction SYL Project in a meeting presided by the Chief Secretary to Government Punjab held on 9.6.1987 in which Chief Engineer/SYL Designs was present.
In view of the above, the claim No. 11 which is of general nature does not sustain and is, thus rejected.
However, in case of claim No. 17, I allow additional rates as follows :-
i) Coarse aggregate for lining Rs. 25 per cum.
ii) Sand for lining Rs. 10 per cum.
iii) Filter material for drainage
behind lining Rs. 15 per cum.
As per the last running bill prepared and paid by the respondent, the quantities of concrete and drainage behind linning are as under :-
Concrete Bed (150 mm) thick 3791.76 Sqm. 568 cum.
Side Slope (75 mm) 5380.865 Sqm. 941 cum
Sleepers 200 mm. x 100 mm. - 3340.02 66.0 cum
1575 cum
Aggregate 1417.5 Cum
Sand 15750 x 0.45 - 709.25 Cum.
i) Drainage behind lining in bed = 3760. 32 = 564 cum.
(159 mt. thickness).
ii) Drainage behind lining in side slopes
(30 cm./thickness) = 5425.68 Sqm. = 1627cum.
2191 cum."
But the same is restricted to 2066 cum as claimed by the claimant.
Thus, I give the award as follows :-
Coarse aggregate = 1417 x 25 = Rs. 35,425
Sand = 708x10 = Rs. 7,080
Drainage behind lining = 2066 x 15 = Rs. 30,990
Rs. 73,495
From the award of the Arbitrator regarding Claim Nos. XI and XVII, it has been seen that an amount of Rs. 73,495/- only has been awarded that too under Claim No. XVII and not under Claim No. XI. It is further apparent that the Arbitrator has restricted the claim to 2066 Cum. Valid reasoning can be seen in the finding so recorded by the Arbitrator and in view thereof, there is no force in the argument of Mr. Saron that the impugned award is against the terms and conditions of the agreement and that the award is based on assumption and approximation. Reference to clause 40 of the Contract/Agreement is wholly irrelevant because this clause pertains to price adjustment and escalation. The same does not prohibit the acceptance of rates as have been given by the Arbitrator. Rather according to Clause 40, the amount paid to the Contractor for the work done by him can be adjusted for the increase and decrease of the rates of labour and materials excepting such material which has been supplied by the Government as per Annexure 2 and, therefore, there is nothing wrong in the finding recorded by the Court below particularly when the Arbitrator has not only considered the formula under Clause 40 but he has also considered various other circumstances. It could not be disputed as has been observed above that the work was allotted to the Contractor as per the agreement signed on 21.5.1985 and that the possession of the site was handed over to him after a great delay for executing the work and that the work was delayed in view of the failure on the part of the Government. In the meanwhile, there was a steep rise in the cost of the material. The Arbitrator would have been better advised as has been sought to be contended by the counsel for the State not to make any reference of the meeting dated 9.6.1987 but the perusal of the entire award would make it clear that the conclusions arrived therein are not based upon the meeting note alone. Above all, the Arbitrator was not bound in law to give any reasoning for the award of sum of Rs. 73,495/- in view of the Clause 63 of the agreement.
21. Claim No. XII (Drainage behind lining in slopes and Godas) Under this head, the Arbitrator has allowed the claim of Rs. 1,00,000/- by discussing as under :-
"The claimant has claimed that as per item No. 9 of the Schedule of Rate of Contract agreement, they had to execute drainage behind lining for 150 mm. thickness whereas the respondent has got the same executed for 300 mm and per the quoted rate for 150 mm.
In drawing No. SYD 26 of the respondent for lining and drainage behind lining, thickness of lining for bed has been shown as 150 mm. against 100 mm. in drawing No. SYD-193 of the respondent and that for side slope as 175 mm. against 125 mm as No. SYD - 193. The drainage behind shown in drawing SYD 26 is 150 mm. in bed and 300 mm. in side slopes. The respondent has admittedly made the payment of drainage material in the bed for 150 mm. at the quoted rates given in item No. 8 of the Schedule of Rates. In drawing No. SYD-193, in which originally thickness of lining was shown conforming to the language of Item No. 3 and 4 of the Schedule of Rates quoted by the claimant, the thickness of drainage behind lining material was shown of the same thickness throughout i.e. for bed as well as the slopes. As such it is conducted that the thickness of the drainage material behind lining on the slopes and Gadas has been changed to twice of the original i.e. to 300 mm. from 150 mm. The only relevant drawing for the purpose of rates could be SYD-193 as it has the same specification as given in the Schedule of Rates.
The quantities of drainage behind lining as per last running bill is 5425 sqm. for side slope while the revised claim is for Rs. 3760.32 Sqm. for bed and 1000 Sqm. for Godas for an amount of Rs. one lac. This claim is in consistent with the factual position and the original claim. Even though the due amount of award comes to 5426.68 x 25 = Rs. 1,35,642/- yet since the claimed amount is Rs. one lac. the award is restricted to this amount."
The argument of Mr. S.S. Saron while refuting the claim No. XII as has been reproduced above to the effect that the Arbitrator has misconducted in the proceedings as he has taken Drawing SYD 193 to be the base and ignored Drawing SYD 26 in my considered view does not cut any ice. There is force in the argument of the counsel for the Contractor that the extra work was got executed by the State from the Contractor as thickness was changed from 150 mm. to 300 mm. A perusal of the award shows application of mind by the Arbitrator. He has given thorough consideration to the two drawings and relevant items of schedule rates besides the quantity from the last running bill. After reaching at the conclusion he recorded the figure at Rs. 1,35,642/- but the same has been restricted to the actual amount claimed i.e. Rs. 1,00,000/-. On the facts of the case under this head it is difficult for the civil court to hold that the Arbitrator has misconducted himself. This Court would be disinclined to reverse the finding of fact arrived at by the Arbitrator and confirmed by the Court below :-
22. Claim No. XIV (Weep Holes in Side Slopes) The claim under this lead as had been awarded by the Arbitrator is Rs. 73,795/- although the original claim made by the Contractor was for a sum of Rs. 2,40,000/-. The award reads as under :-
"The claimant has stated that they were made to execute this extf a item but nothing has been paid so far.
The claim is for an amount of Rs. 2,40,000/-. The respondent in its Written Statement has admitted this work as an extra item but has stated that payment could be made after approval of the rates from the competent authority.
The respondent has filed analysis of the rates and explanatory memo. The items involved are excavation, provision of filter material, E.C.X. pipes and labour for installation. In the analysis of the respondent, number of weep holes in the bed is 102 and on side slope 1490. The Contractor has installed the weep holes except HIC pipe in an area of 5380.86 Sqm. in a total area of 10956 Sqm. in the slope portion only. The rate of earth work is Rs. 23/- per cum as per item No. 1 of the Schedule of Rates and the rate of filter material has been allowed Rs. 85/- per cum under Claim No. 21 dealt with in detail in its turn.
As per analysis of the respondent, quantity of earth work with filter in the weep holes is 0.486 cum for each hole.
Thus, the cost of doing excavation of providing and laying filter comes to 23 + 85 x 0.486 = Rs. 101.09 per weep hole. The number of weep holes done comes to 5380/10956 x 1490 = 731 Say 730.
Thus the total amount of award in this case comes to Rs. 730 x 101.09 = Rs. 73,795/-."
The argument of Mr. Saron regarding this item is that the Arbitrator has wrongly awarded the aforementioned amount without any evidence on the record and that the provisions of the Contract/Agreement have been ignored. Further argument is that the Chief Engineer was to approve the rate and that the Arbitrator could not allow the amount. The arguments, in my considered view, absolutely, have got no force. In the light of Clause 63 of the Agreement, the Arbitrator was required to state reasons only in the case of award amount being Rupees one lac. and above. Despite this the Arbitrator has given valid reasons. Executive Engineer prepared analysis and the explanatory note and in view thereof, a very rational view has been taken by the Arbitrator. While there is no quarrel regarding the fact that the Chief Engineer was to approve the list which was not finalised but the Arbitrator could certainly while conducting arbitration proceedings act on the basis of the material placed before him by the parties and adjudicate upon the dispute referred to him. It was well within his jurisdiction to settle the claim and if the above view is possible, the same cannot be reversed simply because two views are possible. There is no error of law in arriving at the conclusion which needs correction by the Civil Court or by this Court while exercising appellate jurisdiction. Reliance placed upon H.P. Hotels etc. v. U.P. State Electricity Board, A.I.R. 1989 S.C. 268, by the Court below, in my view, on this point is correct.
23. Claim No. XV (Loss due to sloughing) Under this head, the Arbitrator has awarded a sum of Rs. 2,88,990/- on account of enhanced rates for the removal of sloughing material from the side slopes which fell into the bed of canal by making the following observations:-
"The claimant has demanded enhanced rate on account of work done for removal of sloughed material from the side slopes which fall into the bed of the Canal, as the respondent has paid at the rate of Rs. 23/- per cum treating as an ordinary earthwork in excavation as per item 1 of the Schedule of rates.
The respondent has admitted the removal of sloughed portion but has not treated it as an extra item. In fact, removal of sloughed earth which becomes slush is difficult to handle and the bucket of the dragline cannot be filled as it gets filled with ordinary earth and then the output is much less and more time consuming, as is the experience on similar projects. Furthermore, the rate of Rs. 23/" per cum is the average rate for earthwork from WSL down to the bottom of the canal for heavy quantities. In case of removal of the sloughed material, it is only to tattern from the bed of canal and too generally in the slush form.
The rate of Rs. 23/- per cum having been given by the respondent is unreasonable and does not commensurate with the inputs. In my opinion that rate payable should be Rs. 70/- per cum, and, therefore, I award a sum of Rs. (70-23) x 6148.74 = Rs. 2,88,990/-."
The basic argument of the counsel for the State against the aforementioned claim is that it is against the contract/agreement. It has been found by the Court below that the dispute regarding removal of slough and extra work is covered under item No. 1 Schedule I of the contract/agreement. The Arbitrator has given reasons for holding that extra input was required for this work. De-watering could not be equated with sloughing and on this point also, I am inclined to agree with the finding recorded by the Court below. The award in this respect as well as the finding recorded in the impugned judgment is well reasoned in which no interference is called for.
24. Claim No. XIX (Hire rates of Drag Lines).
The Arbitrator under this Head has allowed a refund of Rs. 2,05,276/-. This conclusion has been arrived at as under :-
"The claimant has stated that the respondent has deducted a sum of Rs. 16.32 laes. as departmental charges for the reaches RD 71200 M to 71600 and 71600 M to 72000 M. On scrutiny of the record, it is observed that total numbers of hours booked is 2655 for both the above mentioned reaches combined together. No separate booking of hours has been done for these two reaches executed by the claimant while reach RD 71600 M to 72000 M. only is under this arbitration. However, recoveries of drag line hire charges have been made against this work as follows :-
Bill No. Amount deducted
i) 13 dt. 20.2.88 of earth work Rs. 64,361.00
ii) 17 dt. 25.6.88 of earth work Rs. 1,77,774.64
iii) 1 dt. 28.3.88 of lining Rs. 75,000.00
iv) 4 dated 22.6.88 of lining Rs. 2,46,724.51
===============
Rs. 5,63,860.15
The rate of hire charges in the first B.T. Bill for drainage No. J/3029 was Rs. 391.04 per hour which was later on increased without any reason and also in the subsequent bills, departmental charges @ Rs. 27-1/2% and interest @ 12% of the capital cost of the machines were also added.
The original rate of Rs. 391.04 per hour cannot subsequently be increased as this was the promised rate in the first instance and this rate being worked out to naya paise was obviously thoughtfully worked out. The respondent is estopped from changing the rate on the principle of promissory estoppel. Apart from this while working out the rate, all aspects are included out of which the rate of interest on capital amount is a major factor. As such the interest cannot be charged over and above the rate. As such, I award that the chargeable rate shall remain Rs. 391.04 per hour which is the maximum of all the charges for hiring of machinery at the first instance on capital cost.
The machinery has been given to the contractor claimant for use on the departmental work and not for any outside work. The contractor cannot expect additional charges from the claimant for its own work. As such, I order that the department charges at the rate of 27-1/2% cannot be levied.
From the scrutiny of the record, it is observed that the number of hours booked is 2655 for both the reaches as detailed above. The total amount received as hire charges for this work is Rs. 563860.15 against a total of Rs. 16.32 lac. for both the reaches, namely, RD 71200 M to 71600 M and RD 71600 M to 72000 M, while the total number of hours booked to this work comes to 2655 x 563860/1632000 = 91 The chargeable amount in respect of this work as machinery hire charges would come to 917 x 391.04 = Rs. 3,58,584/- while the amount deducted from the bills of this work is Rs. 5,63,860/-. So the amount to be refunded comes to Rs. 563860 - 358584 = Rs. 2,05,276/-. I hereby award this amount under this claim."
The argument of counsel for the State that the Department provided Drag Lines to the Contractor to supplement his own resources for completion of work within time on his request and that the hire charges for the machinery so deployed were to be recovered, in my considered view, deserves to be rejected. I have carefully gone through the finding recorded by the court below on this point and am in complete agreement with the same. Rather this Court is not in a position to add a line to the finding so recorded in the impugned judgment which deserves to be endorsed straightaway. The Court below has taken all pains to record the following finding which, in my considered view, is unexceptional.
"After considering the arguments pressed into service on behalf of the parties, I feel myself inclined to accept the submission of the learned counsel for the claimant. The Arbitrator has assigned good reasons. No separate booking hours was done for two reaches executed by the claimant. The Arbitrator arrived at the finding regarding the booking of the hours for both the reaches to 2655. Thus, it cannot be said that he wrongly counted the hours booked. The rate of high charge in the first B.T. Bill for drag lines was for 391-04 per hour. It was later on increased. The Arbitrator has found that in the subsequent bills, departmental charges @ Rs. 27-1/2% and interest @ 12-1/2% of capital cost were added. The views expressed by the Arbitrator that the departmental machinery was used for the departmental work and as such no departmental charges could be levied, is quite plausible. The contractor was only agent for the respondent. Accordingly, the Arbitrator assigned the reason that the department cannot accept additional charges for its own work. Apart from this, the Arbitrator considered all the aspects and found that while working out the rate for drag lines all aspects were included out of which the rate of capital amount is major factor. He has gone to the extent of assessing the work done in this reach and based his conclusions on record adduced by the parties during the proceedings. Hence the award regarding this claim appears to be well based. It is difficult to agree with the objection that he ignored instructions, pleadings and evidence and committed neglect of duty which resulted in miscarriage of justice. The interpretations of the Arbitrator are final, particularly when the matter was referred to him for adjudication and no specific rate was originally fixed as envisaged in clause 43. The original rate charged was 391-04 per hour. Had the rate been more than the original rate, then rate initially fixed would be more than Rs. 391-04. Accordingly, there is no merit in 'the objection on this count. It is rejected."
25. Claim No. XX (Rales of lining work).
The arbitrator under this head has only awarded a sum of Rs. 42,204/- in favour of the contractor by making the following observations :-
"The claimant has stated in his claim that in item No. 3 of Schedule of Rates, the thickness of lining in bed was 100 mm. and 125 mm. under item No. 4 of Schedule of Rates whereas during actual execution, it was increased to 150 mm. in bed and 175 mm. in slope. It has further been stated that the claim was not correctly paid for on the basis of pro rata increase in thickness.
In the written statement, the respondent has admitted that he has made payment of increased thickness of lining as per approval accorded by the competent authority in accordance with clause 39.
On perusal of drawing No. SYD 193, it is learnt that the thickness of lining was 100 mm. for the bed and 125 mm. for the side slope. This drawing is part of tender documents and the contract agreement. From this drawing it is observed that the line indicating drainage behind lining is continuous of uniform thickness showing thereby that the drainage behind lining from bed as well as from slope was the same as per tender documents. On study of item Nos. 3 and 4 of the Schedule of quantities of the tender documents which ultimately become part of the contract agreement, the thickness of concrete lining is 100 mm. in bed and 125 mm. in slope for which the claimant had quoted his rates. The rates specified in the schedule of rates are for Sqm with specified thickness. The quantity thus varies with the thickness. All the inputs will proportionately increase. The payment to be made by the respondent should have thus been made on the pro rata basis of the thickness which has not been done. I, therefore, award the rate of 150 mm lining in bed against 100 mm originally proved at 45.00 x 150/100 = Rs. 67.50 per Sqm. Against this, rate paid is Rs. 62.00 per Sqm. for a quantity of 3791-76 Sqm. Thus, the balance amount of Rs. (67.50 -- 62.00) x 3791.76 = Rs. 20,854/- is awarded for the lining of the bed, as against this the claim is of Rs. 20,681/-. As such, the amount of award is restricted to Rs. 20,681/- only.
Similarly, for the side slope, I award the rate of 175/125 x 50 = Rs. 70 per Sqm. against which payment of Rs. 68/- per Sqm. for the quantity of 5380.86 Sqm. has already been made by the respondent. The award for the claim comes to Rs. 70-61 x 5380.86 = Rs. 21,523/- but the claim is for Rs. 21,702/-. The award is restricted to Rs. 21,523/-. So, the total award for thickness comes to Rs. 20681 x 21523 = Rs. 42,204".
The award of Rs. 42,244/- under claim No. XX has been assailed primarily on the ground that detailed analysis of the rates for increased thickness of lining were prepared by the Department and were got approved from the competent authority and, therefore, the Arbitrator has misconducted in awarding the aforesaid amount. On the other hand, the counsel for the claimant has argued that the payment could be made on pro-rata basis of thickness and the Arbitrator was well within his jurisdiction to award the aforesaid amount. The argument of counsel for the State, in my considered view, has got absolutely no force. The award being less than Rupees one lac. the Arbitrator was under no legal obligation to record reasons. Still a perusal of the award as has been reproduced above goes to show that valid reasoning is forthcoming in support of the grant of the amount in question. Additional work was done and on that basis payment on pro-rata basis of thickness has been allowed.
26. Claim No. XXI (Extra item of filter material).
The award of the Arbitrator under this Count is to the tune of Rs. 3,38,180/-. The arbitrator allowed the rate of Rs. 185/- per cum as against Rs. 133.85/- per cum as was submitted by the State by recording the following obscivation:-
"The claimant has asked for rate of Rs. 220/- per cum for providing river borne material for filling the sloughed portion of the canal as against paid rate of Rs. 130/- per cum for a quantity of 6148.74 cum.
It is admitted by both the parties to the dispute that this is an extra item. The only dispute is in respect of the rate. The respondent has filed approval rate of analysis by the department for Rs. 13,385/- per cum. As against this the claimant has filed the analysis of rate for Rs. 206.80 per cum but claimed Rs. 200/- per cum.
The photocopy of the analysis of rate submitted by the Executive Engineer alongwith the self explanatory note has been filed by the claimant in which initially the recommended rate was Rs. 211.91 per cum which was later on amended to Rs. 167.02 per cum by deleting/reducing some of the items.
On scrutiny of the analysis of rate filed by the respondent for Rs. 133.85 per cum, it is observed that some of the necessary items have not been included which were rightly included by the Engineer-in-Charge in the first instance. No reason whatsoever has been given for deleting the necessary items. The deletion, in my opinion, is arbitrary, without any basis and hence is uncalled for.
After going through the details of all the analysis of rates and material on record as well as pleadings of both the parties, I am of considered opinion that the payable rate is Rs. 185/- per cum. Against this, a rate of Rs. 130/- per cum already stands paid. Thus, I award a sum of Rs. 185-130 x 6148.74 = 338180".
The argument of Mr. Saron that the awarded amount is against the terms and conditions as accepted by both the parties has got absolutely no force. The Contractor could be paid escalation charges. It has been found by the Court below in the impugned judgment that there was no dispute that Engineer-in-charge submitted analysis of rates initially recommending the rate at Rs. 211.91 p. per cum and that the same was amended later on to Rs. 167.02 per cum by deleting/reducing some of the items. It has further been rightly found that all these rates i.e. Rs. 211.91, 167.02 and 133.85 were before the Arbitrator and further that analysis of rate for Rs. 206.80 per cum as submitted by the claimant was also before the Arbitrator and he ultimately arrived at the conclusion that the award should be given in the amount of Rs. 185/- per cum. After considering the entire material, no fault can be found by the civil court. In any case, the Arbitrator being the master of law and fact, neither the Civil Court nor the first Appellate Court would normally interfere in such like matters. The award of interest can be well justified in view of the law laid down in Housing Board Haryana v. National Construction Company, (1991-2)100 P.L.R. 183 and Secretary, Irrigation Department v. G.C. Roy, A.I.R. 1992 S.C. 732.
For the foregoing reasons which have been so recorded, I am unable to find any fault with the judgment of the Court below making the award of the Arbitrator rule of the Court.
27. However, before parting with the judgment, it is necessary to have a brief look at the case law cited by Mr. S.S. Saron.
In Associated Engineering Co's Case (supra) while dealing with the Labour escalation, the Hon'ble Supreme Court observed that the Arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract and that his sole function was to arbitrate in terms of the contract and further that he had no powers apart from what the parties have given him under the contract. It was further held that if the Arbitrator travels outside the bounds of the contract, he acts without jurisdiction. However, it was observed by the Apex Court that if the Arbitrator has remained inside the parameters of the contract and has construed the provisions of the contract, his award could not be interfered with unless and until he has given reasons disclosing the error apparent on the face of the award. There cannot be any dispute with the principles as have been laid down in the aforesaid case. The same are not applicable to the facts of the instant case as no error apparent on the face of the award is forthcoming. It has not been shown to me as to how and in what manner the Arbitrator has gone outside the parameters of the contract. In my considered view, the Arbitrator in the present case has construed the provisions of the contract and, therefore, the award cannot be interfered with.
28. The law laid down in G.C. Roy's case (supra) rather goes against the State than in its favour. It has been held by the Apex court in the aforementioned judgment that the award is not liable to be set aside merely due to absence of reasons therein. It has further been held that in case the agreement between the parties does not prohibit the grant of interest, the Arbitrator has got the power to grant interest. The power to grant interest will be presumed to be implied term of the agreement. The Apex Court went to the extent of observing that over the years English and Indian Courts have acted on the assumption that where the agreement does not prohibit a party to the reference from making a claim for interest, the Arbitrator would have the power to award interest pendente lite.
29. Similar are the observations Jugal Kishore's case (supra).
30. Mis Chahal Engineering's case (supra) lays down principles regarding the setting aside of the award on the ground of error apparent on the face of the record. It has been held that misconduct of the Arbitrator referred to in Section 30(a) and the expression is 'otherwise invalid' under Section 30(c) would include an error apparent on the face of the record. In the instant case, there being no error apparent on the face of the record, the award is not liable to be set aside on the ground that the same 'is otherwise invalid'.
31. Mehanga Ram's case (supra) cited by the learned counsel has got absolutely no relevance as the same pertains to interpretation of policy decision which was taken to regularise the services of work charge employees.
32. No decided case quoted by Mr. S.S. Saron can be applied with advantage for setting aside either the award of the Arbitrator or the decision of the Court below making the same as Rule of the Court. On the other hand, it has been held in several judicial pronouncements including the ones which have been cited by the Court below that the award of the Arbitrator should not be set aside unless and until there are errors apparent either on the face of the record or in the documents attached thereto. The Arbitrator being a technical person (in the present case, he being a Chief Engineer himself), his conclusions should not be lightly interfered with. The Arbitrator is master of law and facts and if he has given proper reasoning in support of his conclusions based upon facts, the Civil Court cannot sit in judgment over the award as the Appellate Court. In my considered view, neither any error of law is discernible in the award nor there is any error on the facts. The award being perfectly valid and the same having been made the Rule of the Court, no interference in appeal by this court is called for.
Finding no merit in the appeal, the same is hereby dismissed with no order as to costs.