Jharkhand High Court
Defendant/ vs Cemindia Company Ltd. (At Present Known ... on 28 February, 2020
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Appeal No. 11 of 2010
M/s Bharat Coking Coal Ltd (a subsidiary of Coal India Limited), a
company registered under the Companies Act, 1956, having its
registered office at Koyala Bhawan, Dhanbad, Jharkhand State and
carrying on its business at 6, Lyons Range, P.O. & P.S.- Hare Stree,
Dist.- Kolkata, Calcutta, West Bengal - 700001.
... ... Defendant/Appellant
-Versus-
Cemindia Company Ltd. (at present known as ITD Cementation
India Ltd. and earlier known as Kvaerner Cementation India Ltd., yet
earlier known as Trafalgar House Construction India Ltd. and still
earlier known as Cemindia Company Ltd.), a Company registered
under the Companies Act, 1956, having its registered office at APEE
JAY House, Dinshaw Vachha Road, Mumbai-400020, interalia
carrying on business from its Regional Office at Anar Chamber, 5,
Chowringhee Approach, Calcutta - 700072.
... ... Plaintiff/Respondent
---
CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Appellant : Mr. K.M. Natraj, A.S.G.
: Mr. Parijat Kishore, Advocate
: Mr. A. K. Mehta, Advocate
For the Respondent : Mr. Ajay Krishna Chatterjee, Sr. Adv.
: Mr. Rohitashya Roy, Advocate
: Mr. Vibhor Mayank, Advocate
50/28.02.2020
1. Heard Mr. K.M. Natraj, learned Senior Counsel and Additional Solicitor General of India appearing on behalf of the appellant alongwith Mr. Parijat Kishore and Mr. A.K. Mehta, Advocates.
2. Heard Mr. Ajay Krishna Chatterjee, learned Senior Counsel appearing on behalf of the respondent alongwith Mr. Rohitashya Roy and Mr. Vibhor Mayank, Advocates.
Factual background of the case
3. This appeal has been filed against the judgment dated 23.08.2010 (Decree sealed and signed on 04.09.2010) passed by the learned Subordinate Judge-I, Dhanbad in Title (Arbitration) Suit No. 76/2002, whereby the learned court below has been pleased to partly allow the 2 objection filed under Section 30 of the Arbitration Act, 1940 in respect to Issue No. 6 only and rejected the other objections to the award and thereby upholding the Award passed by the Sole Arbitrator and making the award a rule of the court after deleting an amount of Rs. 11,99,695.86 towards Sales Tax relating to Issue No 6.
4. Admittedly, the claimant neither filed any objection to the award, nor filed any cross appeal. Accordingly, the matter regarding Claim No.6 which has been deleted by the learned court below as well as the claims which have been rejected by the learned Arbitrator in the Award itself have attained finality.
5. The arbitration proceeding involved in this case arises out of an agreement entered into between the parties and there is no dispute that there is an arbitration clause in the agreement. On 14.05.1979, a Global Tender (in short NIT) for sinking, lining and outfitting work at Bhalgora New Pit of Bhalgora Colliery under the appellant-coal company was floated. The respondent of the present case (hereinafter referred to as the claimant) was found to be the L-1 bidder and accordingly, after negotiation, a letter of intent was issued to the claimant on 13/15.12.1981 which was duly accepted by the claimant and ultimately, a formal agreement was executed between the parties on 13.05.1981 for a value of Rs. 2,26,76,858.00. The formal agreement incorporated and embodied 10 documents as annexures thereunder including the NIT and the letter of intent.
6. It is submitted that by the learned counsel for the appellant coal company that as per the agreement, the work was to be completed within 25 months from the date of commencement i.e. from 02.10.1981 and accordingly, the work was to be completed on or before 02.11.1983. However, the work could not be completed and therefore, the Claimant applied for extension of time which was granted upto 02.05.1986 vide Letter dated 24.12.1985 with no extra liability on the appellant-coal company.
37. The learned counsel referred to the letter of extension dated 24.12.1985 (Annexure-1 to this memo of appeal) and submitted that it is an undisputed document and the terms and conditions of the agreement was subject to the letter of extension dated 24.12.1985. The learned counsel submitted that the work could not be completed even during the extended period and ultimately, another extension was granted vide letter dated 10.04.1987 and the time was extended till 31.12.1988 with no extra liability on the appellant-coal company. The learned counsel submitted that instead of completing the work, the Claimant terminated the agreement on 31.08.1988 and the appellant- coal company accepted the termination of contract on 26.10.1988 and thereafter, the Claimant also accepted the payment of all the bills without any objection.
8. The learned counsel submitted that dispute cropped up between the parties and on 01.02.1989, a retired Judge of Hon'ble Calcutta High Court was appointed as the Sole Arbitrator. After holding about 195 sittings, the learned Sole Arbitrator expired on 28.04.1998 without publishing the award. The learned counsel further submitted that thereafter, another retired Judge of Hon'ble Patna High Court was appointed as Sole Arbitrator vide order dated 02.09.1999 passed by the learned Subordinate Judge-I, Dhanbad.
9. It is submitted that the appellant filed certain documents in support of the counter claim before the learned Sole Arbitrator, but the said documents were rejected on 07.01.2002. The learned Sole Arbitrator passed the award on 13.04.2002 for an amount of Rs. 3,09,05,826.61 with interest @ 9% thereon with effect from 31.05.1989 till realization with cost of Rs. 1,00,000/- and with a further direction to return the bank guarantee. The learned counsel submitted that the counter claim was allowed only to the extent of Rs. 7,80,783/- and while preparing the net amount payable, the amount on account of counter claim was duly deducted by the learned Sole Arbitrator.
410. Upon receipt of a copy of the award, the appellant coal company filed objection on 27.06.2002 under Sections 15, 30 and 33 of the Arbitration Act, 1940 to which the respondent replied on 01.08.2002 and after completing the pleadings, the appellant also filed a written note of argument before the learned court below on 18.08.2010. The learned counsel submitted that the learned Subordinate Judge-I, Dhanbad partly allowed the objection with respect to Claim No.6 and accordingly, deleted the amount of Rs. 11,99,695.86 from the original award and made the remaining award a rule of the Court.
11. The learned counsel also submitted that the present appeal was admitted for final hearing and an interim order of stay of execution case was allowed subject to deposit of the entire decretal amount together with interest before this Court which was ultimately deposited before this court on 18.12.2019 amounting to a total of Rs. 11,07,81,786.94 only.
12. It would be useful to project the chart which has been submitted by the learned counsel for the parties regarding the nature of claim, the amount claimed, the amount awarded by the learned Sole Arbitrator and also result of challenge to the award before the learned court below.
Breakup of Award relating to allowing and rejection of claims and Counter Claims and the outcome as per the impugned judgement Issue no./ NATURE OF CLAIM AMT AMT Impugned claim no. CLAIMED AWARDED judgement (RS) (RS) 1 Delay Charges 1,07,22,686.56 48,54,258.40 No interference
(i) Non-availability of winder 43,48,034.56 43,48,034.56
(ii)Breakdown of winder 4,82,055.84 4,82,055.84
(iii) Interruption of Power 30,22,988.16 Nill
(iv) Want of Decision 28,69,608.00 24,168.00 2 Water-make 33,56,063.45 33,56,063.45 No interference 3 Handling of water 28,25,169.71 2,77,837.43 No interference 4 Escalation Charges 1,74,82,363.56 1,74,82,363.56 No interference 5 Work executed by Claimants 4,30,790.04 4,30,790.04 No interference 6 Re-imbursement on account of sales-tax 11,99,695.86 11,99,695.86 Deleted by assessed Court 7 Components of winder engine 8,316.00 8,316.00 No interference 8 Return of Bank guarantee and reimburse Bank Guarantee No interference directed to be bank charges paid returned within 5 3 months of publication of the Award, in default, pay Bank Guarantee charges.
9 Damages for preventing from executing 27,41,697.00 Nil balance of work 10 Interest of Delay in Payment of Bills 40,87,284.87 No interference 11 Compensation for delay in removal of 7,62,000.00 Nil plant and equipment from site after termination of contract Issues Counter-claims under various heads 3,86,64,608.94 7,80,783.00 No interference relating to including Recovery of Balance Advance counter (Recovery of claim. made to Claimant (7,80,783.00) Balance advance to Claimant) Total 3,16,96,609.61 Deleted claim no. 6 Less Counter-claim allowed (-) 7,80,783.00 No interference Net Amount Payable till 31.05.1989 3,09,05,826.61 Costs 1,00,000/-
Interest awarded by the Arbitrator - 9% per annum on 3,09,05,826.61 from the date of reference to arbitration i.e. 31.05.1989 till realization.
13. The relevant clause of the agreement which has been relied upon by the parties during the course of hearing are as follows: -
Clause 2 of the Agreement dated 13.05.1981 The following documents shall be deemed to form and be read and construed as part of this Agreement viz: -
Documents Annexures a. Schedule of quantities and finally agreed Annexure I rates for sinking, lining & outfitting of Bhalgora new pit.
b. Finally agreed variations in other clauses
Annexure-II
c. Contractor's letter of acceptance No.
CMPDI-BS/81 dated 10.2.1981 Annexure-III
d. Contractor's letter No. 3034-CMPDI-
80 dated 5.5.1980 Annexure-IV
e. Contractor's letter No. 5797A-CICL-
Min-80 dated 7.3.1980 Annexure-V
f. Contractor's tender No. 5797-CICL-
Min-79 dated 25.10.1979 Annexure-VI
g. Company's letter of intent No.
6
D(CP&P)/F1(30)/80/2038 dated 13/15- Annexure-VII
12-1980
h. Company's letter No. Annexure-VIII
ECL/DIR(CP&P)/Global Tender/80-62
dated 25.4.1980
i. Company's letter of CMPDI/Shaft
Design/Tender/80/1038 dated 16.1.1980 Annexure-IX
j. Company's tender documents issued to
the Contractor on 3.7.1979 against tender Annexure-X
notice No. CMPDI/Shaft Sinking/2
Annexure-II to the agreement dated 13.05.1981 contains the finally agreed variations in various clauses of the contract. Clause 2, 6, 7 and 9 of Annexure-II to the Agreement
2. Interruptions and delays:
"2.1 Interruptions or delays to work due to causes mentioned in sub-clause 2.2 below shall entitle the Contractor to payment for the full time lost at the rate of Rs.
912/- per hour per shaft. It is an essential condition of contractor that delay charges for delay or interruption in supply of services shall be paid notwithstanding any other conditions in the contract.
2.2 The causes referred to in sub-section 2.1 are defined as inadequate supply or non-supply of materials, services, power, water, drawings to be supplied by the Company's representative as stipulated in the Contract delay in provision of licences, quota certificates, etcetera, work by the Employer or other agencies or by instruction of the Engineer for temporary suspension of work.
"6. Winder:
6.1 Bharat westfallia winder of 475 KW suitable for sinking up to 350 m depth shall be provided by the company.
Foundation casting for the winder shall be done by the cemindia and installation and maintenance shall be done by the company. "
"7. Escalation on day work and delay schedule:
7.1. Escalation on labour and material component of day works shall not be charged. Escalation shall be applicable 7 only on plant and equipment charges component of day work.
7.2. Escalation on delay schedule shall be applicable as per contractor's offer."
"9. Variations in other clauses:
9.1. For all other clauses, as per terms and conditions contained in the documents being Annexure I to X, the order of precedence shall be that the stipulations contained in a letter/document of a later date shall have precedence over the letter/document of an earlier date."
Letter of the claimant dated 05.05.1980, Annexure-IV to the Agreement dated 13.05.1981 wherein it has been stated as under:
"We accept your stipulation that you will not reimburse the extra expenditure as a result of escalation in prices of cement and steel, which will be used for temporary work.
Our clause 15 of Appendix-V of our original tender dated 25th of Oct. 1979 shall remain unaltered."
Clause-3 of the Schedule of day works rate "Escalation clause as laid down in the contract shall apply to all dayworks and delay charges."
Clause- 15 of Appendix-V
15. Price escalation: -
15.1 Labour "The Contractor's tender is based on wages including Dearness Allowance and other benefits presently payable under the Agreement effective from January 1, 1979, and the labour component has been taken as 40% of the full value of work including the lumpsums. If, during the currency of the contract, there is an increase in the wage structure of the minimum rated workmen of the Contractor as a result of any statute rules, notifications, award, settlement or agreement including any increase that may be required under the Contract Labour (Regulation and Abolition) Act, 1970 or from the existing Coal Mines Wages Board Award, the Contractor shall be compensated on the following basis:
V = 0.40 x R x W - Wo Wo 8 Whereby V = Increase payable to the Contractor for any month.
R= Gross Value of work done during the month under review.
Wo = Total remuneration of the minimum rated workmen on October 15, 1979, under the Agreement effective January 1, 1979 comprising basis wage, dearness allowance, fixed or variable and all other allowances. W = Total remuneration of the minimum rated workmen of the Contractor for the month under review computed as above, taking into account reduction in working hours, if any, but excluding normal increment in the time-scale.
15.2 Materials:
Escalation of materials will be calculated and paid in accordance with the following formula:
V = 0.30 x R x I - Io Io Where V = Payment to be made on escalation of materials. R = Gross Value of work done for the month under consideration.
Io = Wholesale Price Index for all Commodities as published in Reserve Bank of India Bulletin for January 1979 (Base 1970-71 : 100).
I = Wholesale Price Index for all Commodities as published in the same Journal as above for the month under consideration.
Material Escalation will be on a monthly basis. 15.3 Plant and equipment imported/indigenous The Contractor's tender is based on imported/indigenous plant prices prevailing on October 15, 1979, delivered at site.
In arriving at the plant cost, the Contractor has considered depreciation as per standard life expectancy of the plant. The proportionate increase in depreciation due to the increased cost of plant delivered at site shall be reimbursed to the Contractor.
15.4 The Contractor's tender is based on freight and transport charges to site, insurance, customs and excise duties, sales tax, royalties and Port charges as prevailing on 9 October 15, 1979. Any increase in these charges shall be reimbursed by the employer to the Contractor.
15.5 Escalation Clause shall apply to Lumpsums and shall also apply during the extended Contract Period."
14. Both the parties have referred to the letter of extension of the agreement dated 24.12.1985 issued by the appellant coal company whose content is as follows: -
"With reference to your above letters, it is to inform you that the progress of your work is unsatisfactory, and the project is getting delayed as per schedule date of completion. This has resulted in a huge loss to the company. However, you are further granted extension of work upto 2nd May, 1986 to complete the pending work, subject to the relevant terms and conditions of the contract in this behalf.
You are advised to complete the project within the above time schedule without any extra liability and loses being incurred directly or indirectly to our company on account of such delay on your part."
15. Arguments of the Appellant/ M/s Bharat Coking Coal Limited (hereinafter referred to as the appellant-coal company) are as follows: -
a. The learned counsel for the appellant-coal company submitted that the learned court below while considering the challenge to the award has not considered that the award itself was fit to be set aside on accounts of the grounds which were raised by the appellant-coal company and fell within the scope of interference under the provisions of the aforesaid Arbitration Act, 1940. The learned counsel also submitted that the appellant-coal company had challenged the award as allowed by the learned Sole Arbitrator in connection with each and every head and challenge continues, but considering the amounts involved in connection with each head, the bone of contention is the escalation charges (Claim No.4). The learned counsel has submitted that so far as the return of bank guarantee and reimbursement of bank charges are concerned, there is no much financial implication and accordingly, the same need not be considered.10
b. The learned counsel submitted that before referring to the illegalities or scope of interference in the present award, it would be necessary to place the law laid down by the Hon'ble Supreme Court by way of various judgments on the point of scope of interference in an award passed under the provisions of Arbitration Act, 1940.
c. The learned counsel referred to the judgment passed by Hon'ble Supreme Court reported in (2003) 7 SCC 396 (State of U.P. vs. Allied Constructions) and specifically referred to Para-4 thereof to submit that there is no dispute that an award passed by an Arbitrator can be set aside, only if one of the terms specified under Sections 30 and 33 of the Arbitration Act, 1940 is attracted. The learned counsel also submitted that it has been held that the Arbitrator is within his jurisdiction to interpret the various clauses of contract, but such interpretation can still be interfered with, if the award itself is perverse or is based on wrong proposition of law and an error apparent on the face of record, would not imply closer scrutiny of the merits of the documents and the materials on record. It has also been held that once it is found that the view of the Arbitrator is plausible one, the court will refrain itself from interfering.
d. The learned counsel submitted that in the present case, the learned Sole Arbitrator while awarding the claim in connection with escalation has travelled beyond the contract and has ignored the various clauses of the contract. The learned counsel further submitted that the essential conditions of the contract having been ignored, the award calls for interference. The learned counsel thereafter referred to the judgment passed by Hon'ble Supreme Court reported in (2001) 4 SCC 86 (Bharat Coking Coal Limited Vs. L.K. Ahuja & Co.) and referred to Para- 13 thereof to submit that in a case where the escalation is permissible on certain items and not permissible on others, as in 11 the instant case, it was the duty of the learned Arbitrator to ensure that the portion of escalation which is claimed on items which is not permissible, were not granted. The learned counsel submitted that the learned Arbitrator while allowing the claim of escalation as Claim No. 4 has totally ignored this fact and has allowed the entire Claim No. 4. The learned counsel further submitted that there are certain clauses in the agreement which restricted the claim regarding escalation only on certain items.
He submitted that the aforesaid submission is without prejudice to the argument of the appellant that the letter of extension clearly indicated that there would be no financial liability arising out of extension and it is the specific case of the appellant-coal company that the letter of extension is to be read with the contract and award of escalation, under any head whatsoever, was totally excluded from the contract between the parties for the extended period. The learned counsel also relied upon the judgment passed by the Hon'ble Supreme Court reported in (1999) 9 SCC 283 (Rajasthan State Mines & Minerals Ltd. vs. Eastern Engineering Enterprises And Another) and referred to Para Nos. 1, 3, 6, 13, 20, 22, 23, 26, 30, 34, 40, 44 and 45. He extensively placed this judgment to submit that Para-44 of the aforesaid judgment has clearly laid down the scope of interference in arbitration award passed under the provisions of Arbitration Act, 1940. He submitted that if the Arbitrator has passed the Award in total disregard to the terms and conditions, the same would amount to a jurisdictional error and the Arbitrator could not have travelled beyond the terms and conditions of the contract between the parties. The learned counsel further submitted that the present award is required to be tested in light of the aforesaid proposition of law which has been summarized and culled out by the Hon'ble Supreme Court 12 in the case of Rajasthan State Mines & Minerals Ltd. vs. Eastern Engineering Enterprises and Another (Supra).
e. On the principles regarding interpretation of contract, the learned counsel for the appellant-coal company referred to the judgment of Hon'ble Supreme Court reported in (2009) 7 SCC 636 (M.K. Abraham and Company vs. State of Kerala and Another). He referred to Para-21 thereof to submit that if there are several communications/attachments etc. to the main contract prepared at different point of time, unless a contrary intention is apparent, the latter in point of time would normally prevail over the earlier in point of time. The learned counsel submitted that even if the claim in connection with escalation charges is accepted to be within the original contract, the subsequent letter of extension which was bilateral act of the parties, being at a subsequent point of time, would prevail over such clauses regarding escalation. He also submitted that the extension of time, though contemplated under the contract, but it was subject to the condition which was put by the appellant-coal company at the time of grant of extension. The appellant-coal company had put a specific condition that there would be no extra liability arising out of extension of contract and therefore any claim on account of escalation, even if permissible under the contract, would get eclipsed pursuant to the letter of extension with the aforesaid condition. The learned counsel also submitted that the Claimant had acted upon the letter of extension without any demur or protest and accordingly, the principles of estoppel would also apply which has been totally ignored by the learned Arbitrator. He submitted that the principle of law of estoppel is well-recognized and the learned Arbitrator having ignored it, the award calls for interference under Section 30 of the Arbitration Act, 1940 being an error apparent on the face of record. The learned counsel also submitted that the award 13 passed by the learned Arbitrator itself indicates that the Claimant did not complete the work in spite of second extension and therefore, they are estopped from claiming escalation as per their own conduct.
f. With the aforesaid background, the learned counsel referred to the clauses of the agreement entered into between the parties and submitted that the agreement was entered into on 13.05.1981 and the relevant clause would be Clause Nos. 7 and 9 of Annexure-II to the agreement.
g. The learned counsel submitted that by virtue of aforesaid Clause-9, the letter of extension which was given on 24th December, 1985 would have precedence over all other communications and by virtue of said letter, the Claimant was not entitled to claim escalation for the extended period. He submitted that escalation for the original period of contract is not the subject matter of dispute between the parties. He also submitted that aforesaid Clause-9 has been totally ignored by the learned Arbitrator and the learned Arbitrator has committed error apparent on the face of record.
h. The learned counsel further referred to Appendix-V of the agreement which is a part of tender and contains the conditions of contract and he referred to Clause-15.5 thereof. i. The learned counsel submitted that the said clause would have no application to the facts and circumstances of this case in view of the subsequent letter of extension dated 24th December, 1985 read with aforesaid Clause-9 of Annexure-II to the agreement dated 13.05.1981. The learned counsel submitted that the learned Arbitrator has referred to aforesaid Clause-15.5 while awarding claim for escalation to the Claimant for the extended period and has ex-facie committed error in interpretation of the contract, when seen in light of the aforesaid judgment which has been relied upon by the appellant-coal company on the point of 14 interpretation of the agreement. The learned counsel while summarizing his argument submitted that the learned Arbitrator has not only ignored the relevant clauses of the agreement between the parties, but has also committed error apparent on the face of record while applying the law of the land with respect to interpretation of agreement between the parties. He submitted that the learned Arbitrator could not have ignored the terms mentioned in the letter of extension while awarding claim of escalation to the Claimant.
j. The learned counsel for the appellant while referring to Claim No.1 submitted that the said claim could not have been allowed by the learned Arbitrator to the full, in as much as, the delay period has been wrongly calculated without discounting the earlier period during which the Derrick Crane was working till 18.06.1983. The learned counsel submitted that since it was not mandatory on the part of the appellant-coal company to maintain the winder, therefore, any amount under such head could not have been awarded.
k. The learned counsel while referring to Claim No.2 submitted that the specific case of the appellant before the learned Arbitrator was that the claimant was to do the work of pre- cementing in shaft and as per the contract, if the pre-cementing is done, then, only potential water-make is to be measured using Darcy's Law. He submitted that as the pre-cementing was not done and therefore, this claim could not have been allowed. He submitted that the learned Arbitrator has misinterpreted the contract while awarding this amount.
l. The learned counsel while referring to the Claim No.3 as awarded by the learned Arbitrator submitted that claim No.3 was totally dependent upon claim No.1 and as the claim No.1 was wrongly decided and therefore, there was no occasion to allow the Claim No.3.
15m. So far as the Claim No.5 is concerned, the learned counsel submitted that as the work itself was not completed by the claimant, which is an admitted fact and therefore no amount could have been awarded under claim No.5 and the learned Arbitrator has erred in law in awarding any amount under claim No.5.
n. The learned counsel also submitted that Claim No.10 was also wrongly allowed in view of the fact that no interest could have been awarded to the claimant, when the claimant did not complete the work and admittedly, a portion of the counter claim was also allowed. Further it is submitted that a number of extensions were given to the claimant, although there was delay and latches on the part of the claimant.
16. Submissions of the respondent-Claimant i. The learned counsel appearing on behalf of the Claimant submitted that so far as the law regarding scope of interference in the arbitration award is concerned, the same is not in dispute and he also relied upon the judgments which have been relied upon by the learned counsel appearing on behalf of the appellant. He submitted that the judgments relied upon by the appellant do not apply to the facts and circumstances of the present case.
ii. The learned counsel submitted that in the present case, it cannot be disputed that the interpretation of contract between the parties was within the domain of the learned Arbitrator. He submitted that while dealing with the claim of escalation, the learned Arbitrator has fully interpreted the terms and conditions of the contract between the parties and has also taken into consideration, the letter of extension dated 24th December, 1985 and accordingly, the interpretation which was given by the learned Arbitrator is the correct interpretation of the contract and without prejudice to this submission, it cannot be disputed that it 16 was one of the plausible interpretation of contract between the parties. He submitted that in both the circumstances i.e. correct interpretation of contract and plausible interpretation of contract, there is no scope for interference in the arbitral award as these two situations do not fall within ground for challenged under Arbitration Act, 1940 calling for any interference. iii. The learned counsel while referring to the agreement submitted that as per Clause-2, there were certain documents which were deemed to form part of the agreement and those have been enumerated in Clause-2 of the agreement itself which are Annexures-I to X of the Agreement. He referred to Clause-9 of Annexure-II to the agreement to submit that Clause-9.1 clearly indicates that the documents referred are Annexures-I to X. He submitted that apparently the various documents referred to as Annexures-I to X to the Agreement dated 13.05.1981 are of different dates. Therefore, it has been clearly stipulated in the contract that the order of precedence shall be that the stipulation contained in letters/documents of a later date shall have precedence over the letters/documents of an earlier date. He submitted that clause-9 is to be restricted and confined to the various documents mentioned in clause-2 of the agreement and it cannot be interpreted to mean all other communications which were exchanged between the parties post entering into the agreement. He submitted that if such an interpretation, as being argued by the learned counsel for the appellant is given, then there will be no finality to terms and conditions of the contract between the parties and every exchange of document would lead to a change of terms and conditions of the contract. iv. The learned counsel while referring to Clause-7 of the Annexure- II to the agreement submitted that from perusal of Clause-7, it is clear that there is no negative covenant, so far as the escalation is concerned. What is barred is escalation on some of the items. He 17 submitted that the learned Arbitrator neither dealt with the issue as to under which item the escalation was claimed, nor it was ever the case of the appellant-coal company that the claim of escalation on any of the head was barred under the contract. He further submitted that no such ground has been taken by the appellant-coal company even before the learned court below to set aside the award indicating that any of the portion of claim on account of escalation was barred under the contract. He submitted that under the Arbitration Act, 1940, the learned Arbitrator was within his right to pass a non-speaking order so far as item-wise escalation is concerned. He submitted that the award does not speak as to under which specific head/item the escalation was claimed. The learned counsel submitted that the argument of the learned counsel for the appellant-coal company in connection with impermissible heads of escalation is beyond the records of the case as the parties did not join issue on such point and the learned Arbitrator has clearly held that it was never averred by the appellant-coal company that the claim of escalation was not available for any item under the contract. He submitted that the entire thrust of argument of the appellant-coal company was that the claim on account of escalation was not payable because of the rider mentioned in the letter of extension dated 24.12.1985.
v. The learned counsel further submitted that so far as the terms and conditions contained in Appendix-V is concerned, Clause 15 of the same deals with price escalation and there are various components i.e. price escalation on account of labour, material, plant and equipments imported/indigenous. He submitted that Clause 15.5 of Appendix-V clearly indicates that escalation clause shall be lump sum and shall also apply during the extended period of contract. He submitted that the extension of the contract period was within contemplation of the parties and 18 the agreement categorically incorporated that escalation clause will apply even during the extended period of contract. Therefore, the learned Arbitrator, by interpreting the contract, has rightly referred to Clause-15.5 of Appendix-V to the contract. He further submitted that there is no conflict between the various clauses which are mentioned in the agreement and the aforesaid Clause-15 as contained in Appendix-V and upon true interpretation of the agreement, the learned Arbitrator has awarded the escalation. He also referred to various rates of the work and referred to Clause-3 which specifically provides that escalation clauses as laid down in the contract shall apply to all day works and delay charges. He submitted that this clause in the rate has also been considered by the learned Arbitrator while granting escalation charges under claim No.4.
vi. The learned counsel further referred to the letter of extension dated 24.12.1985 to submit that while granting extension till 2nd May, 1986, it was clearly made subject to the relevant terms and conditions of the contract in this behalf. He submitted that there is no exclusion mentioned in the said letter regarding any of the terms and conditions of the contract, rather it reminds the Claimant that the terms and conditions of the contract would be binding on the parties. He further submitted that there is a subsequent paragraph in the said letter of extension dated 24.12.1985 which indicates that the project is to be completed within the time schedule without any extra liability and losses being incurred directly or indirectly to the appellant-coal company on account of such delay on the part of the Claimant. The learned counsel submitted that the term without any "extra liability" is absolutely ambiguous and therefore, the learned Arbitrator has expressed it in the award by stating that the learned Arbitrator does not understand what the appellant-coal company meant by saying "extra liability".
19vii. The learned counsel submitted that the point regarding escalation has been dealt with in two paragraphs by the learned Arbitrator in Paragraph Nos. 32 and 33. He submitted that the learned Arbitrator after interpreting the contract between the parties has specifically recorded a finding in Para-32 that after applying the rule of construction embodied in the finally agreed variation, it has to be held that the appellant-coal company was liable to pay escalation charges as per the rate mentioned in letter except with regard to steel and cement used for temporary work. After having interpreted the contract in Para-32, the learned Arbitrator also considered the impact of the letter of extension dated 24.12.1985 which clearly indicated that the extension was being granted subject to the relevant terms of the contract in this behalf. The learned counsel submitted that as the terms of the contract clearly contemplated award of escalation as aforesaid and therefore, there was no occasion to read the letter dated 24.12.1985 to exclude any of the terms of the contract between the parties. The learned counsel submitted that the learned Arbitrator has interpreted the letter of extension and it has not been argued by the learned counsel for the appellant-coal company that extra liability would include the escalation. The learned counsel submitted that the consideration of the letter of extension is reflected in Para-33 of the award and accordingly, the learned Arbitrator was within his right to interpret the contract as well as the letter of extension dated 24.12.1985. It is submitted that the view which has been taken by the learned Arbitrator was the correct view and certainly one of the plausible views. Without prejudice to the argument that the interpretation given by the learned Arbitrator was the correct interpretation, the learned counsel for the Claimant submitted that even if this Court finds that the interpretation as given by the learned 20 Arbitrator was one of the plausible views, the same is enough to reject the present appeal of the appellant-coal company. viii. The learned counsel submitted that it has been clearly held by the learned Arbitrator that the bills are not disputed by the appellant-coal company and it has been nowhere averred that the same are not in consonance with the contract. ix. The learned counsel submitted that so far as Claim No.1 regarding claim of delay charges is concerned, the same was under four heads i.e. non-availability of winder, break-down of winder, interruption of power and want of decision. So far as the non-availability of winder and break-down of winder are concerned, the claim has been allowed in full and the claim relating to interruption of power has been fully rejected. Further, the claim in connection with want of decision has been allowed only to the extent of a meagre amount of Rs. 24,168/- out of a claim of Rs.28,69,608/-.
x. The learned counsel submitted that while deciding Claim No. 1, the learned Arbitrator, upon interpretation of the contract has held that the appellant-coal company was responsible for installation and maintenance of the winder. The appellant-coal company was to provide winder operators and the claimant was to pay wages. The claim was calculated @ Rs. 912/- per hour being the rate as per Clause-2 of Annexure-II. The learned counsel also submitted that the learned Arbitrator has also recorded that the winder break-down claim is based on the joint records showing the period of break-down signed by both the parties. The learned counsel submitted that this claim was allowed after due consideration of the evidences on record and interpretation of the contract which was within the domain of the learned Arbitrator. Accordingly, the same does not fall within the scope of interference in the award under Section 30 of the Arbitration Act, 1940.
21xi. With regards to Claim No.-2, the learned counsel submitted that the same was also allowed on the basis of joint measurement made and signed by both the parties and was as per the terms of the contract and it is not the case of the appellant-coal company that the rate claim was excessive or the same was not as per the terms of the contract. Accordingly, Claim No. 2 as decided by the learned arbitrator does not call of interference. xii. So far as Claim No.-3 is concerned, the learned counsel for the respondent submitted that the learned Arbitrator has interpreted the contract and has clearly held that the agreement itself provided for separate payment for dewatering and the same was only allowed in part after due consideration of the materials available on record. There is no scope for re-appreciation of evidence and accordingly, the challenge to this claim is also fit to be rejected.
xiii. In response to the argument of the appellant in connection with the Claim No.5, the learned counsel for the respondent submitted that the same was also as per jointly agreed measurement and the bill was certified by the Engineer-in- charge of the appellant-coal company. He submitted that the claim was allowed based on appreciation of documentary evidences on record which does not call for any interference. xiv. The learned counsel submitted that so far as the claim in connection with Claim No.10 is concerned, the same has been rightly allowed by the learned Arbitrator by a well-reasoned order and upon true interpretation of the agreement between the parties. He submitted that as per clause of the agreement, payment of interest after expiry of forty days has been provided in the contract and the learned Arbitrator has found that the certified bills prepared after joint measurement books were not paid and such findings are pure finding of facts based on documentary evidence and construction of terms of contract 22 which does not call for any interference under the provisions of Arbitration Act, 1940.
xv. The learned counsel for the claimant further submitted that so far as the counter claim is concerned, the same was partly allowed and the appellant-coal company itself did not produce the evidences before the learned Arbitrator within the stipulated time period. The learned counsel while referring to the findings of the learned Arbitrator in connection with counter claim submitted that even from perusal of the judgment passed by the learned court below, it appears that no serious arguments were advanced in connection with the counter claim.
Findings of this Court
17. The factual background of the case has already been mentioned in Paras- 3 to 14 above which are admitted facts on record and need not be repeated.
18. Both the parties have referred to certain clauses of the contract entered into between the parties and have also referred to the letter of extension dated 24th December, 1985 which is an admitted document on record and has been annexed as Annexure-1 to the memo of appeal. The appellant-coal company has relied upon Clauses- 7 and 9 of Annexure-II to the agreement dated 13.05.1981 and has also relied upon Clause-15.5 of Appendix-V of the agreement dated 13.05.1981 which is a part of the tender.
19. So far as the Claimant is concerned, he has relied upon Clause-2 of agreement dated 13.05.1981; Clauses- 6, 7 and 9 of Annexure-II to the agreement dated 13.05.1981 and has also relied upon Clauses- 14 and 15 of Appendix-V which contain Conditions of Contract as per Tender. The learned counsel for the Claimant has also relied upon Clause-3 of the Schedule of day works rate. The aforesaid clauses which have been relied upon by the appellant-coal company and the Claimant have already been quoted above.
2320. It is not in dispute that the work was to be concluded within a period of 25 months from the date of commencement of the agreement and the period expired on 02.11.1983. It is also not in dispute that the work could not be completed within the stipulated timeframe and the Claimant had applied for extension and the extension was granted up to 02.05.1986 vide letter dated 24.12.1985 which is contained at Annexure-1 to the memo of appeal. It is further not in dispute that subsequently another extension was sought for and was granted till 31.12.1988 vide letter of extension dated 10.04.1987 and it is claimed that the said extension was also on similar terms as that of extension letter dated 24.12.1985. However, ultimately, the claimant terminated the agreement without completing the work on 31.08.1988 which was accepted by the appellant-coal company on 26.10.1988. The second letter of extension dated 10.04.1987 has not been referred to by any of the parties and it has been simply mentioned that it is not in dispute that there was a second extension till 31.12.1988 on similar terms as that of the extension letter dated 24.12.1985. Since arguments have been advanced on behalf of the parties on the interpretation of Annexure-1 to the memo of appeal i.e. letter of extension dated 24.12.1985, the contents of the same has already been quoted above.
21. Considering the submissions advanced on behalf of the parties and upon going through the award, it appears that the parties had joined issue before the learned Arbitrator on the point of interpretation of the terms and conditions of the agreement and also the letter of extension dated 24.12.1985.
22. The learned arbitrator interpreted some of the terms of the contract in the beginning of the award itself and found as follows: -
"Thus, it would appear that the contract between the parties was a written one with definite terms and conditions which were binding on the parties. The rule of interpretation of the terms contained in these documents are also laid down in Clause 9 of Annexure II. It provides that the order of precedence of the terms and conditions as mentioned in these documents shall be that the 24 stipulations contained in letters/documents of later date shall have precedence over the letters/documents of an earlier date.
4. From the aforesaid documents, it may be inferred that the Respondents were obliged to provide free and uninterrupted supply of power and, on failure to provide the same, the Claimants were to be compensated at the rate of Rs. 912/- per hour by Clause 2 of Annexure II of the contract at page 15. Clause 6 read with clause 2 of Annexure II (Pages 15-16) provided that the Respondents would supply and maintain winder and in case of delay in supply of the winder or its break- down, the Claimants were to be compensated at the rate of Rs. 912/- per hour.
Clause 7 of Annexure-II and Clause 15 of Appendix V provided the formulae according to which escalation charges were to be paid to the Claimants. It was clearly laid down that escalation charges would have to be paid even up to the extended period of the contract and as also on delayed Schedule."
23. The learned Arbitrator also observed that there are other terms of the contract to which reference would be made at the relevant stage. This court finds that the learned arbitrator has referred to the relevant clauses of the agreement as well as letter of extension dated 24.12.1985 at relevance placed of the award while dealing with the claims of the claimant.
24. The focus of the argument advanced on behalf of the appellant- coal company is in connection with Claim No.4 i.e. escalation charges which has been allowed to the tune of Rs. 1,74,82,363.56 and the learned court below has refused to interfere with the said awarded amount. Therefore, the dispute in connection with Claim No.-4 is taken up first.
Claim No. 4 - escalation
25. Apart from the aforesaid interpretation of the terms of the contract as quoted above, the learned Arbitrator while considering the Claim No.-4 has recorded his findings in Para-32 and 33 of the Award. Upon perusal of Para-32 of the award, it appears that the 25 learned Arbitrator while considering the claim has taken into consideration the terms of the contract and found as follows: -
(a) There is a specific formula contained in the contract on the basis of base date and possible increase in the price/cost etc.
(b) In letter dated 25.10.1979, the claimants had asserted that escalation clause is a must and that it shall apply to lump sum and it shall also apply during the extended period of contract.
(c) A formula for charging escalation is laid down in paragraph-15.
(d) In paragraph-3 that it has been laid that escalation clauses as laid down in the contract shall apply to all due works and delay charges.
(e) The claimant accepted the amendment of the appellant-
coal company that the escalation charges for cement and steel used in temporary work shall not be paid to them.
26. The learned Arbitrator after appreciating the provisions of contract held that applying the rules of constructions embodied in the finally agreed variations (Annexure-II to the contract ), it has to be held that the respondents were liable to pay escalation charges as per the rates mentioned in their letter except with regard to steel and cement used in temporary work.
27. This Court finds that the learned Arbitrator had interpreted the contract between the parties to come to a conclusion that the Appellant -coal company was liable to pay escalation charges as per the rate except with regard to steel and cement used in temporary work.
28. The learned Arbitrator in Para-33 of the award has further dealt with the letter of extension dated 24.12.1985 as a specific plea was raised by the appellant-coal company before the learned Arbitrator that they cannot be called upon to pay escalation charges during the 26 extended period of contract in view of their letter granting extension, in which, it was clearly laid down that the extension was granted without any "extra liability". The learned Arbitrator while interpreting the aforesaid letter of extension dated 24.12.1985, has also considered that it was clearly mentioned by the appellant coal company in the letter dated 24.12.1985 that extension was subject to relevant terms of the contract in this behalf and the learned Arbitrator thereafter referred to clause 15.5 of contractors' tender which specifically laid down that escalation clause shall apply to lump sum and shall also apply during the extended period. The learned Arbitrator also took into consideration the letter of the claimant dated 05.05.1980, Annexure-IV to the agreement dated 13.05.1981 and held that this letter of the claimant will have precedence over earlier letter of the appellant coal company in view of the rule laid down for constructions of the contract as per the contract itself. The learned Arbitrator also found that it was not clear to the Arbitrator as to what the appellant- coal company meant by saying "extra liability" in the letter of extension dated 24.12.1985. The learned Arbitrator also took into consideration that the bills submitted by the claimant were not disputed and it was nowhere averred that the bills are not in consonance with the contract. Thereafter, the learned Arbitrator allowed the escalation charges to the extent of Rs. 1,74,82,363.56 as claimed by the claimant.
29. This Court finds that the learned Arbitrator has read clause-9 of Annexure-II to the agreement with clause-2 of the agreement wherein altogether ten (I to X) Annexures have been mentioned and clause-9 of Annexure-II also specifically deals with Annexure-I to X to the Agreement. The learned Arbitrator has also considered and interpreted clause 15.5 and also the effect of the terms and language used in letter of extension and interpreted the same while arriving at a finding on the Claim no. 4.
2730. Upon perusal of the entire award, this Court finds that the break-up of the claim of the escalation charges is not available and it was never the case of the present appellant coal company before the learned Arbitrator that the escalation charges included escalation with regard to the excepted category of escalation i.e. escalation in relation to steel and cement used in temporary work. Even, during the course of argument before this court, the claim and its reply was placed, but no such break-up was found to indicate that the claim of escalation included escalation in relation to steel and cement used in temporary work. Accordingly, it cannot be said that the claim/award on account of escalation also included the excepted category i.e. steel and cement used in temporary work.
31. This Court is of the considered view that the learned Arbitrator was within his right to interpret the contract and the view taken by the learned Arbitrator was certainly a plausible interpretation of the contract between the parties. The learned counsel for the appellant has not been able to point out any terms of the contract so as to completely exclude claim of escalation charges and the learned arbitrator had found that the negative covenant with regards to escalation charges was confined only with regard to steel and cement used in temporary work. This Court is also of the considered view that the learned Arbitrator has not travelled beyond the contract while interpreting the contract and awarding escalation charges and allowing claim no. 4 calling for any interference by court under the Arbitration Act, 1940.
32. This Court finds that the interpretation given by the learned Arbitrator is certainly a plausible view and such interpretation is neither perverse, nor ignores any material terms of the contract and accordingly, it neither indicates any misconduct on the part of the learned arbitrator, nor reflects any error apparent on the face of the record. This Court also finds that the learned Arbitrator was within his right to interpret the contract in the manner he has done and 28 court cannot sit in appeal against the interpretation given by the learned Arbitrator and certainly a possible interpretation which was given by the learned Arbitrator. This Court further finds that no material clause of the agreement has been ignored by the learned Arbitrator while interpreting the agreement at the time of considering the claim of escalation and the award in relation to escalation is a well-reasoned award. This court is of the considered view that the learned Arbitrator has neither ignored, nor illegally mis-interpreted the contract between the parties and accordingly, the judgement relied upon by the appellant reported in (1999) 9 SCC 283 (Rajasthan State Mines & Minerals Ltd. vs. Eastern Engineering Enterprises And Another) does not help the appellant in any manner whatsoever. In the said judgement passed by the Hon'ble Supreme Court in spite of certain admitted specific stipulations in the contract that there would be no escalation in rates except in case of diesel, the learned Arbitrator ignored such stipulation and awarded certain amount which was beyond the fundamental terms of the agreement between the parties. In the facts of the case, the Hon'ble Supreme Court also observed that there was no question of interpretation of clauses of the contract rather they were so unambiguous that they did not require any interpretation and the Arbitrator having ignored such clear and unambiguous clause of contract was held to have travelled beyond his jurisdiction. It was also held that such deliberate departure from the contract amounts not only to manifest disregard of the authority or misconduct of his part, but it may tantamount to mala fide action.
33. In the present case, this Court finds that no such case is made out regarding ignoring any clear and unambiguous clause in the contract, rather the learned Arbitrator was conscious enough to interpret the provisions of the contract and also the terms and conditions of the letter of extension dated 24.12.1985 while passing the award with regards to escalation.
2934. So far as the judgment which has been relied upon by the learned counsel for the appellant passed by the Hon'ble Supreme Court reported in (2009) 7 SCC 636 (M. K. Abraham and Co. vs. State of Kerala and Another) with regard to the interpretation of contract and the manner, in which, the apparent irreconcilable inconsistencies are to be ironed out is concerned, the same does not apply to the facts and circumstances of this case. This Court finds that in the agreement between the parties read with the letter of extension, there is no inconsistency amongst the terms of agreement and the letter of extension and a plausible view has been taken, and a finding by way of interpretation of the contract between the parties has been arrived at by the learned arbitrator that on the one hand, the letter of extension was itself not clear in relation to "extra liability" and on the other hand it clearly reiterated the binding nature of terms and conditions of the agreement between the parties.
35. Even the judgment which has been reported in (2001) 4 SCC 86 (Bharat Coking Coal Limited Vs. L. K. Ahuja & Co.) does not help the appellant in any manner under the facts and circumstances of this case. It has been submitted by the learned counsel for the appellant that in the case before the Hon'ble Supreme Court, the escalation was not available in connection with all the component and the learned Arbitrator had lost sight of the importance of certain clauses of the agreement and it was not possible to find out, in what manner, the learned Arbitrator had given the lump sum escalation. This Court finds that the aforesaid judgment does not apply to the facts and circumstances of this case in view of the fact that it was never the case of the appellant before the learned Arbitrator that any of the amount which was claimed by way of escalation was falling within the excepted category of escalation, rather it appears that the quantum of escalation was not disputed and the only contention was that the claimant was not entitled to escalation in view of the conditions laid down in the letter of extension. It has also been pointed out by the 30 learned counsel appearing on behalf of the claimant that no such ground has been taken and it is not open to the appellant to raise such point for the first time in the present appeal. This Court has also gone through the grounds of setting aside the award which was filed before the learned Court below and this Court finds that neither such specific ground was taken by the appellant before the learned court below for setting-aside the award, nor the same is reflected from the award passed by the learned Arbitrator.
36. So far as the argument of the appellant that the claimant did not complete the work in spite of grant of extension till the year 1988 is concerned, this Court finds that in connection with termination of contract, the appellant had filed its counter claim which was allowed only to a small extent and merely because the work was not completed by the claimant , the same has no bearing in this appeal.
37. The specific case of the present appellant before the learned court below with regards to Claim No. 4 was that in view of the letter dated 24.12.1985, wherein the respondent granted extension to the claimant with no extra liability, the escalation charges allowed by the learned arbitrator was not justified and comes within the meaning of legal misconduct. The learned court below found that this argument of the present appellant has been considered by the learned arbitrator in the award and it has been mentioned that the respondent in its letter dated 24.12.1985 itself stated that extension was being granted subject to the relevant terms and conditions of the contract in this behalf. It was found that under clause 15.5 of the contractor's tender specifically lays down that escalation clause was applied on lumpsum and shall also be applied during the extended period. It was also mentioned in the award that the bill submitted by the claimant was not disputed and it was nowhere averred that they are not in consonance with the contract. Considering these aspects of the matters, the learned arbitrator has allowed the escalation charges.
3138. The learned court below while deciding the objection to the arbitral award has considered the scope of interference in arbitration award and has referred to various judicial pronouncements by Hon'ble Supreme Court and held that while considering the challenge to an award the court will neither sit in appeal over the award, nor reappreciate the evidence and that there could be two grounds of challenge, i.e. legal misconduct on the part of the arbitrator and an error apparent on the face of the award. After pronouncing on the scope of interference, the learned court below has considered the award issue wise. The claim with regard to escalation has been dealt with as Issue No. 4. The learned court below rightly found that the reasons assigned by the learned arbitrator is based on the terms and conditions agreed between the parties and there was no scope for re-examination by the court. In view of the aforesaid findings of this Court, there is no reason to interfere with the impugned judgement of the learned court below on the point of award of escalation to the claimant.
39. This Court further has also to keep in mind that the present matter arises out of an arbitration award and the scope of interference itself is very limited, it is not open to this Court to re- interpret the agreement between the parties and come to a different conclusion once the contract has been interpreted by the learned Arbitrator and no material clause of the contract has been ignored and he has come to a definite finding, which is certainly one of the possible interpretation of the contract between the parties.
40. As a cumulative effect of the aforesaid findings, the contention of the learned counsel appearing on behalf of the appellant that the learned Arbitrator has travelled beyond the terms and conditions of the agreement/the condition of extension as contained in letter dated 24.12.1985, is hereby rejected. This Court is of the considered view that the award passed by the learned Arbitrator on the point of escalation did not call for any interference by the learned court below 32 and accordingly, the learned court below has rightly refused to interfere with the award in connection with escalation and has upheld the award on this point.
Claim No. 1 - delay charges - (Partly allowed by the learned Arbitrator)
41. The specific case of the present appellant with regard to Claim No. 1 is that the delay period was wrongly calculated and it should have been calculated from 19.06.1983 to 28.08.1983 instead of from the period from December, 1982 to 27.09.1983. This court finds that the period of breakdown of winder was considered by the learned arbitrator by considering the materials on record which included documents which were signed by both the parties and the contract between the parties. The learned court below rightly refused to interfere with the award on the point considering the limited scope of interference in arbitration award. Even before this Court, the learned counsel for the appellant has not been able to point out any such ground calling for interference in the award with regard to Claim No.
1. Accordingly, the impugned judgment on this point also does not call for any interference.
Claim No. 2 - water make - (allowed by the learned Arbitrator)
42. So far as Claim No. 2 is concerned, the challenge to the award was mainly on the point that only potential water make i.e. estimated amount of ingress of water into shaft was to be measured using Darcy's Law and that the learned arbitrator had wrongly allowed this claim on the basis of actual water make. The learned court below while considering this portion of the award has rightly found that the learned arbitrator has categorically taken note of the terms of contract that for determination of water make Darcy's Law will be applied and if it has not been done then the ingress of water make in shaft will be determined by determining the actual water make. The learned Arbitrator also considered the fact that joint measurement was done by both the parties for determining the actual water make.
33Considering the aforesaid circumstances, the claim has been allowed by the learned Arbitrator as per the contract between the parties. This Court finds that the learned court below has rightly refused to interfere with award relating to Claim No. 2. The learned arbitrator has passed a well-reasoned order which did not call for any interference as there is no scope for reappreciation of evidence and reinterpretation of the contract between the parties. Accordingly, the impugned judgment on this point also does not call for any interference.
Claim No. 3 - Handling of water - Partly allowed by the learned Arbitrator
43. So far as the Claim No. 3 is concerned, the learned court below rightly refused to interfere with the same as the award passed by the learned arbitrator on the point is itself based on interpretation of contract and appreciation of documents on record and there is no scope for reappreciation of evidence/materials placed before the learned arbitrator under the facts and circumstances of this case. Accordingly, the impugned judgment on this point does not call for any interference.
Claim No. 5 - Balance payment on account of work executed - partly allowed by the learned Arbitrator
44. So far as Claim No. 5 is concerned, the learned court below rightly found that the learned arbitrator had allowed the said claim on account of work executed by the claimant which was not disputed by the appellant even before the learned arbitrator. However, the learned arbitrator partly allowed the claim by allowing only the bill amount and held no interest was payable as the claimant had refused to accept the payment. Accordingly, the impugned judgment with regards to Claim No.5 does not call for any interference. Claim no. 10- claim of interest on delayed payments of bills (partly allowed by the learned Arbitrator) 34
45. So far as claim no. 10 is concerned, it relates to claim of interest on delayed payments of bills. The learned arbitrator considered the clause 4.2 of Annexure-II of the contract and allowed the said claim at the agreed rate of interest till the date of filing of the claim on 31.05.1989 and thereafter @ 9% per annum till payment by the appellant-coal company and interest till 31.05.1989 was quantified as 40,87,284.87. The learned arbitrator also observed that on claim no. 5, no interest would be payable as already discussed above. This Court finds that the award in connection with claim no.10 is a well- reasoned award based on terms and conditions of the contract and bills on the basis of jointly prepared measurement books and accordingly, the learned court below has rightly refused to interfere with the award relating to claim no. 10. Accordingly, the impugned judgement does not call for any interference by this Court on the point of claim no.10.
Counter claims (partly allowed by the learned Arbitrator)
46. So far as counter claim is concerned, the same has been dealt with by the learned arbitrator under issue Nos. 12, 13, 14 and 15 and the learned arbitrator allowed the counter claim only to the extent of Rs. 7,80,783.00 by way of recovery of the balance advance made to the claimant as the factum of advance was not denied by the claimant. The learned Arbitrator observed that the counter claim made by the appellant-coal company under other heads are not supported by evidence and the learned arbitrator found that the appellant-coal company did not produce any reliable evidence to prove the loss or damage, although the arbitration proceedings continued for 12 years and subsequently certain documents were filed only on 07.10.2001 which the learned arbitrator had rejected. This Court finds that the learned arbitrator had allowed the counter claim only to a small extent by a well-reasoned order. This court also finds that the learned court below has rightly rejected the challenge to the findings of the learned arbitrator on the point of counter claim. Accordingly, the 35 impugned judgement does not call for any interference by this Court on the point of counter claim also.
47. As a cumulative effect of the aforesaid findings, this arbitration appeal is hereby dismissed.
48. At this stage, the learned counsel for the claimant submitted that since the appeal is being dismissed, the amount which has been deposited before the learned Registrar General of this Court by virtue of interim order may be directed to be released in favour of the claimant. He also submitted that the liberty was already granted to the claimant to take the said money subject to bank guarantee during the pendency of this appeal, but since the matter was fixed for final disposal, there was no occasion to furnish bank guarantee and to take that money.
49. Considering the fact that the appeal has been dismissed, Office is directed to prepare an appellate decree in the present case and upon preparation of appellate decree, the learned Registrar General of this Court is directed to release the amount deposited by the appellant-coal company in favor of the decree holder.
50. Interim order, if any, stands vacated.
51. Pending interlocutory applications, if any, are also dismissed as not pressed.
52. Let a copy of this order be communicated to the learned Court below through 'FAX/e-mail'.
53. Let the lower court records be immediately sent back to the court concerned.
Mukul (Anubha Rawat Choudhary, J.)