Bombay High Court
Prabhubhai Jadhavji Rathod vs The Union Of India Thru. Secty. & 3 Ors on 11 October, 2018
Author: A. S. Chandurkar
Bench: A. S. Chandurkar
J-AA-3-08 1/7
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
ARBITRATION APPEAL NO.3 OF 2008
Prabhubhai s/o Jadhavji Rathod
aged major, Occ. Contractor,
r/o Kusum Smriti, 19, Dharampeth Extension,
Shankar Nagar, Nagpur carrying business
Civil Engineering Contracts in the name and
style of P.J. Rathod as Proprietor ... Appellant.
-vs-
1. The Union of India,
Through the Secretary,
Government of India,
Ministry of Railway,
New Delhi
2. The General Manager,
S. E. Railway, Garden Reach,
Calcutta, West Bengal
3. The Divisional Railway Manager
(Engineering), South Eastern Railway,
Nagpur
4. R. Vaidyanathan, Dy. CSTE (Construction),
S. E. Railway, Nagpur ... Respondents.
Shri S. Khedkar, Advocate for appellant.
Shri N. P. Lambat, Advocate for respondents.
CORAM : A. S. CHANDURKAR, J.
Date on which submissions were heard : 11/09/2018 Date on which Judgment is pronounced : 11/10/2018 This appeal under Section 37 of the Arbitration and Conciliation ::: Uploaded on - 11/10/2018 ::: Downloaded on - 12/10/2018 01:57:30 ::: J-AA-3-08 2/7 Act, 1996 (for short, the said Act) has been preferred by the Contractor as he is aggrieved by the dismissal of the application that was filed by him under Section 34 of the said Act for challenging the award passed by the Arbitrator.
2. The facts in brief are that on 01/09/1988 the Contractor was awarded a contract by the respondents herein with regard to Replacement of 8 number of Existing Points and Crossings by New Points and Crossings at Tharsa and Chacher Railway Stations in Nagpur Division. The said work was to be completed within a period of two months. Out of the 8 Points that were to be completed the Contractor completed the work of 5 Points and thereafter sought closure of the contract on 28/03/1990. By communication dated 13/06/1990 the respondents closed the contract without any liability for closure on either side. Thereafter the Contractor sought payment of his dues and ultimately by invoking provisions of Section 11 of the said Act the appointment of an Arbitrator was sought. The Arbitrator passed an award on 08/03/2001 and awarded a total amount of Rs.37,201/- to the Contractor. Being aggrieved the Contractor challenged the said award before the Court under Section 34 of the said Act. By the impugned order said proceedings have been dismissed.
3. Shri S. Khedkar, learned counsel for the appellant submitted that in the light of the letter dated 12/01/1990 the contractor was entitled to ::: Uploaded on - 11/10/2018 ::: Downloaded on - 12/10/2018 01:57:30 ::: J-AA-3-08 3/7 receive the value of the non-scheduled work executed by him. However, neither the Arbitrator nor the Court granted that amount despite the fact that such work had been duly carried out. It was submitted that the block register and site order book that was directed to be produced by the Arbitrator was not produced by the respondents and hence an adverse inference was liable to be drawn. Referring to various clauses of the General Conditions of Contract (for short, GCC) on the basis of which the work was carried out and especially Clauses 26 and 62(x) it was submitted that the Contractor was entitled to receive the amount for the said work carried out. Placing reliance on the decisions in General Manager, Northern Railway and anr. vs. Sarvesh Chopra (2002) 4 SCC 45 and K. N. Sathyapalan (Dead) By LRs vs. State of Kerala and anr. (2007) 13 SCC 43, it was submitted that there was no reason whatsoever to deny grant of aforesaid amount to the Contractor. He also referred to the judgments in Arbitration Petition No.86/1978 (Union of India vs. M/s Mehta and Chavan) decided at the Principal Seat on 05/12/1979 and First Appeal No.178 of 1998 dated 08/05/2015 (Central Mine Planning & Design Institute Ltd vs. M/s Anupam Rai) and submitted that in absence of the Contractor being responsible for the delay, he was entitled to be so compensated. It was thus submitted that the claim as made under the Claim Statement was liable to be granted.
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4. Shri N. P. Lambat, learned counsel for the respondents supported the impugned adjudication. He submitted that the communication dated 12/01/1990 was rightly not considered by the Arbitrator as well as by the Court as the same appeared doubtful. He submitted that there was no reference to such extra work being carried out by the Contractor in other communications. The supplementary agreement was also not placed on record to indicate execution of any additional work. Referring to Clauses- 39 and 43 of the GCC it was submitted that the amounts refused by the Arbitrator were in accordance with the terms of the contract itself. He also referred to Query No.3 that was put to the respondent in the meeting that was held on 01/02/2001 and submitted that the said claim was rightly refused by the respondents. It was thus submitted that as the Arbitrator as well as the Court had considered the entire material on record and had partly allowed the claim, no interference was called for.
5. I have heard the learned counsel for the parties at length and I have also perused records of the case. The present appeal arises under Section 37 of the said Act and unless it is demonstrated that the findings recorded by the Courts are perverse or not based on any material on record or ignoring the material available on record, the scope to interfere would be limited. Before the Arbitrator the Contractor made 8 claims. For the amount of Overheads an amount of Rs.20000/- was claimed but Rs.2500/- ::: Uploaded on - 11/10/2018 ::: Downloaded on - 12/10/2018 01:57:30 ::: J-AA-3-08 5/7 came to be awarded. The claim with regard to recruiting labour and labour camp facility, idling of staff and labour, value of work pertaining to non- scheduled items and loss of business profit came to refused. Refund of security deposit was directed and interest though claimed at the rate of 18% per annum was granted at the rate of 12% per annum. Cost of arbitration of Rs.20,000/- came to be granted. As noted above the Court in proceedings under Section 34 of the said Act affirmed the award as passed and dismissed the said application.
6. The principal claim is with regard to work being undertaken for non-scheduled items being Claim No.4 and for that purpose the claimant had relied upon photo copy of the letter dated 12/01/1990. As per that letter the Contractor claims to have carried out work which was not specifically mentioned in the contract. The Arbitrator refused to grant any amount towards that claim on the ground that there was no authenticate record indicating approval from any Competent Authority for execution of that work. The Court while considering said claim has found that in the communication dated 06/06/1989 though there was mention of some non- scheduled work, there are no particulars given. The amount claimed towards that extra work was more than the value of the contract work. That amount was not claimed in the letter dated 20/09/1990. It is in this backdrop that reference has been made to Clause-43(1) of the GCC. The ::: Uploaded on - 11/10/2018 ::: Downloaded on - 12/10/2018 01:57:30 ::: J-AA-3-08 6/7 same requires a monthly statement of the work carried out to be submitted and there is no document in this regard placed on record by the contractor indicating such work being carried out. Similarly, Clause 39(1) requires any item of work not included in the Schedule to be carried out on the instructions of the Engineer, Maintenance. In absence of any approval to the extra work said to be carried out by the Contractor, that claim has been refused. As noted above, the Arbitrator as well as the Court did not find it expedient to rely upon the communication dated 12/01/1990. Cogent reasons have been given for excluding that claim. Moreover, there is absence of any joint measurement being carried out and placed on record. Reference in that regard has been made to Clause-45 of the GCC requiring such joint measurement. It is found that in the light of reasons given by the Arbitrator as well as by the Court under Section 34 of the said Act after considering the entire material on record, the finding in that regard cannot be said to be perverse. Except the communication dated 12/01/1990 there is no other document to substantiate the claim with regard to execution of non-scheduled work.
7. The legal proposition as laid down in General Manager, Northern Railway and anr., K. N. Sathyapalan (Dead) By LRs. and M/s Mehta and Chavan (supra) cannot be disputed. However, the ratio laid ::: Uploaded on - 11/10/2018 ::: Downloaded on - 12/10/2018 01:57:30 ::: J-AA-3-08 7/7 down therein could be applied if it was clearly demonstrated that the Contractor had carried out the non-scheduled work as sought to be urged. In absence of any other material on record and the fact that the site order book was stated to be a joint record of the representative of the Railways and the Contractor, its non-production would not warrant drawing of an adverse inference. As it has been found that there is no sufficient material to indicate such non-scheduled work having been executed, the claim of the Contractor has been rightly not granted to that extent. Even accepting that delay was caused at the respondents' end, that by itself would not enable the contractor to claim the value of the work said to be executed by him with regard to the non-scheduled items in the absence of any material in that regard.
8. In that view of the matter, I do not find any case made out under Section 37 of the said Act to take a different view from the view as taken by the Court under Section 34 of the said Act. Consequently, the appeal stands dismissed with no order as to costs.
JUDGE Asmita ::: Uploaded on - 11/10/2018 ::: Downloaded on - 12/10/2018 01:57:30 :::