Himachal Pradesh High Court
Date Of Decision: 13Th October 2023 vs Hiralal Dey on 13 October, 2023
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arbitration Case No. 42 of 2020 Date of Decision: 13th October 2023 .
The Executive Engineer, HPPWD Division Kasauli, District Solan, H.P. ....Objector Versus Mohan Singh Thakur of ....Non-Objector/Respondent Coram Hon'ble Mr Justice Rakesh Kainthla, Judge.
rt Whether approved for reporting? Yes For the Objector : Mr. R.P.Singh, Deputy Advocate General.
For the Non-objector/ : Mr. Tarunjeet Singh, Advocate. Respondent Rakesh Kainthla,Judge (Oral).
These objections have been filed against the award passed by the learned Arbitrator, dated 11.05.2020. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).
2. Briefly stated, the facts giving rise to the present objections are that the work of M/T on Lohanji Mari Ka Ghat Road in Km 0/0 to 13/200 (SH: Formation Deficiency in Km 0/0 to 5/0, ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:2:- retaining structure, cross-drainage, sub-base, WBM Gr-1, Base course Gr-II & GR-III, Premix Carpet, PCC Parapets, Drain and .
dumping site in km 0/0 to 13/200 under NABARD RIDF-XVIII), Agreement No. .67/2013-14 was awarded to the claimant, vide Award letter dated 14.08.2013, for an amount of ₹ 4,01,35,892/-
(Four Crore One Lac Thirty-Five Thousand Eight Hundred Ninety of Two Only). The time for completion was 12 (Twelve) months to be calculated from the fifteenth day after the issuance of the Award rt letter dated 14.08.2013. Thus, the date of completion of the awarded work was 28.08.2014. The claimant made all the arrangements for labour, machinery and other infrastructure required for the execution of the work. However, he faced problems of hindrance free-site for the timely completion of work and brought the problems to the notice of the departmental authorities, vide letter dated 28.08.2013. The materials i.e. cement, explosive, and bitumen were to be issued by the department, but the department failed to issue sufficient quantity of the materials to complete the work. The claimant brought this fact to the notice of the department vide a letter dated 04.02.2014.
He again wrote a letter dated 12.02.2014, explaining the difficulties faced by him due to the non-availability of the site and ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:3:- sufficient quantity of materials. However, no action was taken by the department. No payment was made to him for the work .
executed by him. He again wrote letters dated 18.03.2014, and 02.04.2014, regarding the problems being faced by him. The respondent did not take any action on the letters written by the claimant. The work could not be completed in time due to the of non-availability of the site and the materials. The claimant wrote a letter dated 15.07.2014, mentioning all these facts. The labour rt and machinery of the claimant were kept idle and he brought this fact to the notice of the department, vide letters dated 05.11.2014 and 13.11.2014. The claimant applied for an extension of time vide letter dated 06.01.2015, mentioning the reasons due to which the work could not be completed within time. He wrote a letter dated 05.05.2015, asking the department to provide a clear site.
However, no action was taken despite extending the time w.e.f.
01.07.2015 till 30.11.2015; however, the site was not made available. The claimant wrote a letter to the department to close the work on 1.10.2015, to avoid unnecessary litigation and the make payment for the work done by him. However, no action was taken on this letter. The work could not be completed within two years. The claimant again applied for an extension of time, which ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:4:- was granted but the site was not made available. Hence, claimant sought the arbitration.
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3. The Chief Engineer (South Zone), HPPWD-Shimla-2 appointed the Superintendent Engineer, 3rd Circle, HPPWD, Solan, H.P as Sole Arbitrator on 24.01.2017. The learned Arbitrator entered upon the reference on 16.02.2017 and thereafter the of claimant filed a claim petition before the learned Arbitrator.
4. The department filed a reply admitting that the work rt was awarded to the claimant. It was asserted that the work consisted of reciprocal promises as per which the claimant was to execute the work on the site made available by the department.
More than 85% hindrance-free site was made available to the claimant. The department discharged all the reciprocal promises, regarding the payment of the work executed by the claimant, and the issuance of the material as per the actual requirement. The contractor was to adhere to the timeline provided in the agreement; however, he failed to do so. The Department granted the first extension w.e.f. 08.08.2024 till 30.6.2015, the second extension w.e.f 10.07.2015 till 30.11.2015 and the third extension w.e.f 21.07.2016 till 31.07.2016. The claimant was in default and is ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:5:- not entitled to the claim amount. The variation/increase/decrease is covered under Clause 10cc of the agreement. The statement of .
the claim was denied on merits. The counterclaim was preferred by the department for the recovery of various amounts to the tune of ₹12,72,425/- plus interest.
5. The parties filed the documents.
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6. The learned Arbitrator held that the extension was granted to the claimant three times, out of which two were at the rt instance of the claimant and one was unilateral. The extension was granted with the condition that no claim shall be paid for the period of extension. The matter was amicably settled between the parties, but this settlement was never implemented by the Executive Engineer. The work was held up due to land disputes at 10 places; therefore, it was not possible to carry out the balance work. The claimant established that a hindrance-free site was never made available to him and he is entitled to close the work.
The claimant was entitled to ₹38,41,468/- for extra work. The delay was attributable to the department as the work could not be executed due to hindrances and the objections of the local people.
The claimant was held entitled to ₹61,027/- on this account. The ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:6:- claimant had executed 95% of the work and the remaining work was within the deviation limit, therefore, he was not entitled to .
any payment on account of loss and profit due to unexecuted work. He failed to establish the claim for the loss of productivity by any evidence. No claim was payable for mental harassment.
The claimant was entitled to a refund of ₹6,08, 263/-. Simple of interest @8% per annum from the date of release of performance security and post pendent lite interest @ 18% were awarded. An rt amount of ₹2,02,500/- was awarded in favour of the department regarding the recovery of the material consumed by the contractor. The cost of the arbitration was fixed at₹ 2,00,000/-.
7. Feeling aggrieved and dissatisfied with the Award passed by the learned Arbitrator, The Executive Engineer, has filed the present objection petition, asserting that the award is against the public policy of India. The learned Arbitrator has travelled beyond the scope of the Contract. The award is unreasonable. The learned Arbitrator has failed to follow the procedure as prescribed in Arbitrator & Conciliation Act, 1996. The learned Arbitrator misconstrued and misinterpreted the contract.
The claim of price escalation was beyond the scope of the ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:7:- jurisdiction of the learned Arbitrator. It was not specified as to how ₹61,027/-, was calculated. No interest is payable on the .
security amount as the security amount was never claimed by the claimant. The learned Arbitrator gave undue, unreasonable and unwarranted benefits to the Contractor. Therefore, it was prayed that this petition be allowed and the award passed by the learned of Arbitrator be set aside.
8. The objection petition was opposed by filing a reply, making rt preliminary submissions, regarding lack of maintainability, the petition being bad for non-joinder of State of H.P., the objection petition having not been verified as per Rules of the Court, and the petitioner being estopped from maintaining the present objection petition. The contents of the objection petition were denied on merits. It was asserted that the delay in the execution of the work was attributable to the department. The claimant was unable to complete the work within the stipulated time due to the default of the department. The learned Arbitral Tribunal went through the documents and the contentions raised before him. The award is justified. The learned Arbitrator had acted as per the contract and the Arbitration & Conciliation Act.
::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:8:-The procedure was finalized by the parties and the department never raised any objection. Adequate opportunities were provided .
to both the parties. The justification was provided for awarding the various amounts, therefore, it was prayed that the present petition be dismissed.
9. I have heard Mr. R.P.Singh, learned Deputy Advocate of General for the objector/department and Mr. Tarunjeet Singh Bhogal, learned counsel for the respondent/non-objector.
10. rt Mr. R.P.Singh, learned Deputy Advocate General has taken a technical objection that the Award was to be passed within one year from the date of entering into the arbitration; however, there was a delay of 5 days in passing the award. The Award is a nullity. He further submitted that the Award is against the public policy of India as the learned Arbitrator had adjudicated upon the excepted matter. Therefore, he prayed that the Award be set aside.
11. Mr. Tarunjeet Singh Bhogal, learned Counsel for the non-objector/claimant has raised two technical objections that the petition is bad in the absence of the State of H.P. and the objection petition is not verified by the Executive Engineer, by whom it was purported to be filed before this Court. He supported ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:9:- the Award on merits and submitted that the jurisdiction of this Court to interfere with the Award on merits is quite limited. The .
objection petition does not lie within the scope of the interference laid down in various judgments; therefore, he prayed that the present objection petition be dismissed.
12. I have given considerable thought to the rival of submissions at the bar and have gone through the records carefully.
13. rt The present petition has been filed by the Executive Engineer, HPPWD, Division Kasauli, District Solan, H.P., who was arrayed as a party before the learned Arbitrator. The claimant himself had not arrayed the State of H.P. as a party before the learned Arbitrator and the objection could not have been filed by the State being a third party. Hence, the objection that the present objection petition is bad for non-joinder of the State, is not acceptable.
14. The Executive Engineer, was arrayed as a party before the learned Arbitrator; however, the objection petition has been signed by the Superintending Engineer, 3 rd Circle, HPPWD, Solan, H.P. An affidavit has also been filed in support of the petition by ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:10:- the Superintending Engineer, 3rd Circle Solan, H.P. It was submitted that the objection petition is not properly signed.
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15. Order 6 Rule 14 of CPC, provides that every pleading has to be signed by the party and his pleader, if any, provided that where a party pleading is, by reason of absence or for other good cause unable to sign the pleading, it may be signed by any person of duly authorized by him to sign the same or to sue or defend on his behalf. Therefore, it is apparent that as per Order 6 Rule 14 of CPC rt the party has to sign the pleadings and it is only in case of availability of good cause that some other person authorised by the party may sign on its behalf.
16. Similarly, Order 6 Rule 15 of CPC, provides that every pleading shall be verified at the foot by the party or by one of the parties pleading or by some other person proved to the satisfaction of the Court to be acquainted with the facts of the case. Order 6 Rule 15(4) of CPC also provides that a person verifying the pleading shall also furnish an affidavit in support of his pleadings. Thus, an obligation has been cast upon the party not only to sign but also to verify the pleading and support it by an affidavit.
::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:11:-17. In the present case, the Executive Engineer, HPPWD, Division Kasauli, District Solan, H.P., who was a party before the .
learned Arbitrator never authorized Superintending Engineer, 3rdCircle, HPPWD, Solan, H.P. to sign the pleadings on his behalf.
It is submitted by Mr. R.P.Singh, learned Deputy Advocate General, that the State Government has issued a Notification, as of per which the Superintending Engineer is competent to sign the pleading filed before the High Court. It is difficult to see how a rt Notification issued by the State Government will apply to a proceeding in which the State Government is not a party. The State Government can nominate the persons, who will sign the pleadings on his behalf as per Order of 28 of CPC, but cannot regulate the signing of the pleading where it is not a party.
Admittedly, the State Government is not a party in the present proceedings; therefore, the Notification issued by the State Government, authorizing a particular person to sign the pleading, will not apply in the present case.
18. The effect of violation of provisions of Order 6 Rules 14 and 15 of CPC has been considered by the various Courts from time to time. It was laid down by the Delhi High Court in Susanne ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:12:- Lenatz v. International Hotels Ltd., 2005 SCC OnLine Del 1269, that the defect in the verification or signing is merely an irregularity .
and will not be fatal. It was observed:
" This position is well settled and a reference may be made to some decisions on this line. The decisions being:
1. Mohinimohun Das v. Bungsi Buddan Saha Das, (1890) ILR 17 Cal 580 (PC) of
2. M.C.S. Rajan & Co. v. National Nail Industries AIR 1976 Madras 151.
3. Dahyabhai Girdhardas v. Bobaji Dahyaji Kotwal AIR 1953 4. rtBombay 28.
Rajesh Wadhwa v. Dr (Mrs) Sushma Govil AIR 1989 Delhi 144.
5. Nadella Satyanarayana v. Yamanoori Venkata Subbiah AIR 1957 Andhra Pradesh 172.
In view of the settled legal position that the defect of non-signing of the plaint is a mere irregularity and not an illegality, the suit cannot be dismissed on this ground."
19. Gauhati High Court also held similarly in Kailash vs Hiralal Dey, AIR 1994 Gau 12, that a mere defect in the signing and verification is not sufficient to set aside the judgment and decree as it is only a procedural defect and does not affect the merits of the case. It was observed:
"14. Section 99 is very clear that no decree shall be reversed or substantially varied on the ground of non-joinder of parties ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:13:- or causes of action or any error, defect or irregularity in any proceeding not affecting the merit of the case or jurisdiction of the court. Although according to Mr. Khetri, this section does not include signing and verification of the plaint, I am of .
the opinion that the expression "any error, defect or irregularity in any proceeding in the suit" will also include signing and verification of the plaint as laid down in rules 14 & 15 of order 6 CPC. In this connection,the attention of this court has been drawn by Mr. Sarma to a decision of the Punjab & Haryana High Court in Smt. Mitkhtiar Kaur v. Smt. Ghulab Kaur, AIR 1977 Punjab & Haryana 257. In that case, the plaint and the verification were not signed by the plaintiff, but by his of lawyer. But the plaintiff in the witness box supported all the averments made in the plaint. The court observed that the counsel for the plaintiff was presumed to be acquainted with the facts of the case. So the verification of the plaint made by rt him can be accepted. Moreover, it is a defect which may only amount to an irregularity and can be ignored for rejecting the plaint. It was also held that the legal position is that want of verification has not the effect of making the plaint void and it merely amounts to an irregularity. Regarding the signing of the pleadings, although the High Court recorded that decisions are not uniform, the prominent view is that irregularity in the signature of a plaint is a mere defect of procedure and does not affect the jurisdiction of the Court.
15. I am in respectful agreement with the above law laid down by the Punjab & Haryana High Court. In my view, we have come to a stage in our jurisprudence where we should not be tied down with procedural technicalities. But we should try to do substantial justice to the parties. In the case in hand, it would be unfair and unjust to reject the plaint merely on the ground that the plaint was not properly signed and/or verified as the plaintiff himself came to the witness box and made out the case in the plaint.
16. It may also be added here that Mr Sarma has placed reliance on two decisions, namely, Dahyabhai v. Bobaji Dahyaji Kotwal, A.I.R. 1953 Bombay 28 and Bhikaji Keshao Joshi v. Brijalal Nandlal Biyani, AIR 1955 SC 610. In Dahyabhai (supra) Hon'ble Chief Justice Changla of Bombay High Court (as his Lordship then was) held that if a plaint is ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:14:- not signed by a properly authorised person, prayer can be allowed for signing a plaint by the plaintiff even after limitation. In Bhikaji Keshao (supra), the Apex court while considering Section 83(1) of the Representation of the People .
Act, 1951 vis-a-vis Order 6 Rule 15 C.P.C. held that even if there was the absence of date in the verification of the election petition, it would be a good ground for dismissing the application and normally the petitioner should be allowed to remove the lacuna by adding a supplementary verification. Though these two decisions are not directly on the point, I am only referring to these two decisions to show that provisions of Order 6 Rule 15 C.P.C. are not mandatory, but directory in of nature. I, therefore, hold that order 6 rule 15 C.P.C. is not mandatory and any defeat can be cured at any stage."
20. Therefore, the defects in signing and verification are rt not fatal and the objection petition cannot be dismissed on the ground that the same is not signed and verified by the appropriate person.
21. Mr. R.P.Singh, learned Deputy Advocate, General submitted that in the present case learned Arbitrator has entered into a reference on 06.05.2019, as per para 2 of the Award, whereas, he has passed the Award on 11.05.2020, beyond the period of one year. Section29A of the Arbitration and Conciliation Act, as it existed on the relevant date provides the time limit for the arbitral award. It reads as under:
"(1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference.::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:15:-
Explanation.--For the purpose of this subsection, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their .
appointment.
xxxxxx (4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-
section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:
of Xxxxx"
22. It is apparent from the bare perusal of the provision rt that the mandate of the Arbitrator stands terminated if the award is not made within 12 months from the date, he enters upon the reference.
23. It was laid down by Allahabad High Court in Hari @ Hari Lal & others vs Union of India & others, in Civil Writ Petition No. 7734 of 2020 decided on 06.03.2020, that the learned Arbitrator has to make the award within 12 months from the date enters upon the reference after which his mandate terminates and he has no jurisdiction to pronounce the award. A similar view was taken by the Calcutta High Court in Rohan Builders (India) (P) Ltd. v. Berger Paints India Ltd., 2023 SCC OnLine Cal 2645, wherein it was observed:
::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:16:-23. Section 29-A changed all that and brought in not only strict timelimits for the making of the award but also the concept of termination of the mandate if the award is not made within the prescribed statutory timelines.
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31. The sub-text would therefore be that the mandate of the arbitral tribunal to make the award within 12 months after completion of pleadings [under section 29-A(1)] or within the extended time of 6 months [under section 29-A(3)] would stand terminated once the timelines are exhausted and the mandate would not remain in suspension till filing of the of application for extension of the mandate under section 29- A(4).
24. This is also apparent from the bare language of Section rt 29A of the Arbitration and Conciliation Act, which provides that if an award is not made within the period specified or the extended period, the mandate of the learned Arbitrator shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the same.
25. Thus, it is not a question of not having an opportunity to seek an extension but compliance with the provision of law.
Once the mandate terminates, it is not permissible to extend the same on equitable consideration.
26. In the present case, the learned Arbitrator held the last hearing on 10 January 2020 and closed the same.He pronounced the award on 11.05.2020. There was no participation of the parties ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:17:- after 10.01.2020. Since the award was not passed within one year of entering into the reference, the same is a nullity.
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27. Therefore, the objection raised by Mr R.P.Singh, learned Deputy Advocate General, has to be upheld that the Award was passed by the learned Arbitrator after his mandate had terminated and he has no jurisdiction to pronounce the award.
of Thus, the objections are liable to be accepted on this short ground alone.
Final order:
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28. In view of the above, the objection petition is allowed and the Award dated 11.05.2020, passed by the learned Arbitrator is ordered to be set aside. However, this order will not prevent any of the parties from seeking an extension of time as per law if permissible.
Pending miscellaneous applications, if any, also stand disposed of.
(Rakesh Kainthla) Judge 13th October,2023 (Ravinder) ::: Downloaded on - 20/10/2023 20:33:32 :::CIS -:18:- .
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