Bangalore District Court
Union Of India vs M/S.Mohata Construction on 2 April, 2018
IN THE COURT OF XXII ADDL. CITY CIVIL & SESSIONS JUDGE
BENGALURU
NGALURU (C.C.H.No.7).
(C.C.H.No.7).
Dated This the 2nd Day of April, 2018.
Dated:
Present: Ms.VELA. D.K., B.A., LL.B.(Hons.)
XXII Addl. City Civil & Sessions Judge.
Bengaluru.
A. S. No. 1 7 4 / 2016
Applicant Union of India,
Rep.by Chief Engineer, (AF),
Military Engineer, No.2,
DC area MES Road,
Yeshwantpura Post,
Bengaluru-560022,
Mr.Jagdish Raj, DCWE (Contracts),
s/o.Shri Rasal Chand,
Aged about 52 years.
Vs.
Respondents 1. M/s.Mohata Construction
Company, A Partnership Firm
having its Registered Office at
No.25, Sadul Ganj,
Regional office at No.63,
N.Park Dugar,
Mount Poonamallee Road,
Ramavaram, Chennai-600089.
Represented by its General Power
of Attorney Holder
Sri.Sanddep Mohata,
S/o. Raman Lal Mohata,
Aged about 34 years,
R/o.Flat No.12084,
Prestige Wellington Park,
No.1 & 2 IAF Main Road,
Gangamma Circle, Jalahalli East,
Bengaluru-560030.
2 A.S.No.174/2016
2. Sri.Kukkaje Ramakrishna Bhat,
Retired District Judge,
Sole Arbitrator,
Arbitration Centre,
Hon'ble High Court of Karnataka,
(Domestic & International),
Bengaluru-560001.
JUDGMENT
The Plaintiff has filed the Application under Section 34 of the Arbitration and Conciliation Act.
2. The facts of the case is that the Tender was invited by the plaintiff for the construction of the living accommodation and mess with cook house and dining hall for 100 SNCO's at Belgaum. The petitioner is said to have accepted the tender for a sum of Rs.3,26,82,834-71ps. on 2-6-2009. The site was said to be handed over and the work to be commenced on 15-7-2009 which was said to be required to be completed within six months in respect of the First Phase by 14-1-2010 and within fourteen months in the Second Phase by 14-9-2010. The date of the completion of the work was said to be extended from time to time and the work was said to be completed on 25-6-2011. The completion certificate was issued and the final bill was said to be also paid. Still the respondent is said to have claimed amount for increase in minimum wages paid to the labourers and other claims. The claims made before 3 A.S.No.174/2016 the arbitrator were said to be pertaining to reimbursement of increase in wages of labourer vide Condition No.63 of the General Condition of Contract, provision of paneled shutters of 30mm think styles and 12 mm think pre-laminated particle board in lieu of 12 mm think pre-laminated particle board, increase in labour wages due to new law about the higher wages to be paid, failure of the respondent to make payment of increase in minimum wages paid to the labour from time to time with interest at 24% and Rs.2-lakhs for cost of arbitration.
On the basis of the claims and the counter, the claims 1, 2, 4 and 5 were said to be answered in the Affirmative and claim No.3 in the negative.
The main claim is said to be non-payment of the increase in the minimum wages and to have committed breach of contract causing financial loss to the claimant. Under clause 5.1 to 5.3, the stipulation pertains to minimum wages payable. However, the contractor is said to be required to pay highest of the wages for labour as fixed by the Government, whichever is higher. That wages referred in condition 58 is said to be deemed as the minimum wages payable and the contractor not to have whatsoever the claim if any on account of local factor of regulations, which is said to be required to 4 A.S.No.174/2016 pay in excess of the minimum charges during the execution of the work. Under Section 63 of the General Condition of the work, the claimant is said to have sought for reimbursement of the increase in the wages of the labour.
On examining the materials that were placed, being aggrieved by the Order of the arbitrator, the present suit is said to be filed on the following grounds:
(a) The actual position of the law applicable to the facts and circumstances of the case is said to be not appreciated and thereby it is on the face of record contrary to the established public policy of India.
(b) Under Condition 63, the reimbursement of the increase in the labour wages beyond 10% ought to be done with reference to the wages prevailing at the time of acceptance of the tender. Undisputedly, the schedule of the minimum fair wages published by the Government on the last due date of the receipt of the tender is said to be part of the contract. But both parties are said to have specifically agreed in condition No.63 that the reimbursement for increase in labour charges to be done with reference to the wages prevailing at the time of acceptance and not at the time of receipt of the tender. In fact, the 5 A.S.No.174/2016 contract is said to have been received on 28-4-2009 and accepted on 2-6-2009. The increase in the labour wages in excess of 10% has to be counted with reference to the labour wages prevailing on 2-6-2009 and not 28-4-2009. This increase ought to be done only when the contractor necessarily and properly to have paid such increase in respect of the wages to the labourer. The contractor is said to have not maintained proper books of account and other documents in order to show the amount of any increase.
During the execution of the work, the minimum wages were said to be increased by the Central Government from 1-10-2009, 1-4-2010, 1-10-2010 and 1-4-2011, but the claimants are said to have not submitted any calculation details supported with account book for labour payment, labour wages register, labour attendance register, in terms of condition No.63.
(c) On scrutiny of the documents, there were said to be lot of discrepancies in documents that were said to be intimated to the claimant from time to time through correspondence, namely, the Engineer-in-Charge not to have signed the Register of the Wages for the period from 18-6-2009 to 13-2-2010, signatures of labour to be mismatching in the labour wages and also at certain places the 6 A.S.No.174/2016 labour to have signed, whereas in some other places to have affixed the thumb impression.
The provisions of the classification of the cities in the Central Government Notification is said to be given the list of places of Area A and Area B and these are said to include within the distance of 15 kilometer from the Municipal Corporation. Belgaum is said to be specified neither in Class A nor in Class B and it is said to have been defined in Class C in the Central Government Notification dated:20-5-2009. The work site is said to be at a distance of 15 kilometer from the periphery of Belgaum and the work site-Sambra to have been defined as Class C in the notification and not as Class B. This is said to have been wrongly interpreted as Class B. The labour charges is said to be considered prevailing at the point of acceptance of the tender in terms of the Condition No.63 and the Sambra was said to be considered as C City in terms of the explanation of the Ministry of Labour and Employment, Government Notification dated:20-5-2009.
The amount of increase in labour wages is said to be Rs.5,61,766-00ps. But it is said to have been wrongly awarded huge amount of Rs.19,72,453- 62ps, ignoring the agreed Contract Condition No.63. The claimant, i.e., 1st respondent is said to have claimed Rs.2,04,162-78ps, under the head of 7 A.S.No.174/2016 additional amount for cupboards, but is said to have been awarded sum of Rs.2,75,000/- without any basis.
(d) The contract provisions regarding the cupboard shutters were said to be ignored in reference to the Particular Specification clause 12.11.1 that is said to provide that the timber to be second class hard wood. It is said to be meant for wooden rails and styles shown in Typical Drawings of 75x30. There is said to be variation in the provision in Particular Specification clause 12.11.12 and Typical Drawings, which is said to indicate 12 mm think commercial face particle boards, whereas, Particular Specification clause 12.11.2 is said to indicate 12 mm thick pre-laminated particle board with commercial face inside and laminated face outside. Therefore this Particular Specification (PS) clause is said to supersede with Typical Drawings (TD), 12 mm think pre-laminated particle board to be used in lieu of 12 mm think commercial face particle board. The claimant is said to have not provided anything extra than the contract provisions. The contractor is said to have provided shutter with second class hard wooden styles and rails 12 mm think pre-laminated particle board as per Particular Specification. The petitioner is said to be not liable to pay cost of the proceedings as awarded, because the Register of Wages is said to have lot of 8 A.S.No.174/2016 discrepancies and he himself is said to be responsible for this arbitration proceedings. Further that interest cannot be awarded for pre-reference period of pendentelite. Therefore has sought to set aside the award passed by the arbitrator dated:
24-8-2016 in A.C.No.94/2015.
3. In the objections, by the respondents contended to be partnership firm carrying on the business of Engineers and Contractors, registered with Registrar of Firms. Under condition No.58, it was said to be agreed by the claimant that the Schedule Minimum Fair Wages published by the Government of India with specified minimum rates of wages for various categories of workmen as applicable on the last due date of the receipt of the tender, i.e., 29-4-2009 to form part of the tender. If during the progress of the work, there was increase in the wages of the labour on account of fresh laws or statutory rule, that increase is said to exceed 10% of the wages prevailing at the time of acceptance of the tender for work and contractor thereupon necessarily and properly to pay such increased wages then the amount of contract to be accordingly varied. At the time of tender, the minimum wages of the State Government was said to be higher.9 A.S.No.174/2016
As per the contract, special condition 5.1 between the minimum wages of the State or the Centre, whichever was higher, was to be paid. At the time of tender, the minimum wages of Government was said to be considered as per State notifications. During the execution of work, the minimum wages were said to be increased by the Central Government from time to time, where the labour rate was increased more than 10% and this was said to be intimated to the applicant and claimed by the claimant in the running bills.
The minimum wages are said to vary as per Zones specified by the Central Government. At the time of submitting the application for tender, Belgaum was said to be in Zone C as per the Central Government and Zone B as per the State Government and the rate of minimum wages of the State Government were said to be higher. This Samra Village was said to be situated within 15 kilometers from the Cantonment Board of Belgaum and comprised of Zone B. The rate of the minimum wages for Zone B were said to be higher of the Central Government than the State Government Zone B. So, the labour to be paid in accordance to those specified for one B by Central Government.
10 A.S.No.174/2016During the progress of the work, the Muster Roll of the workers was to be signed and verified not nly by the Engineer-in-Charge, but also by the Assistant Labour Commissioner, from to time. The increase in the minimum wages paid by the respondent to labour as per the Government Notification is said to be to the tune of Rs.19,73,453- 36ps. The specification are said to be mentioned in the particular specification of the contract and if any discrepancy, the specification in the contract was to be taken as the final. Under clauses 12.11.1 to 12.11.2 for the cupboards, the shutter was to be of 12 mm think pre-laminated particle board with wooden frame.
As per the drawings, the respondent was directed to fit 30 mm think panel shutter inserting with 12 mm think pre-laminated particle board one side laminated. This is said to have resulted in variation of the costs on account of change in the specification and there was said to be difference of Rs.2,75,000/- and the applicant is said to have failed to make the payment. In spite of being intimated from time to time, the applicant is said to have not paid the increase of the minimum wages. Thereby there is said to be breach of the condition of the contract, for which there has to be compensation paid by the respondent. The increase wages were said to be paid, but to be not reimbursed till date.
11 A.S.No.174/2016This is said to have caused huge financial loss to the respondent to the tune of Rs.3-lakhs. The respondent is said to have completed the work on 25-6-2011 itself and thereafter the applicant to have paid the final bill. But they are said to have failed to pay the increased minimum wages to the labour. The applicant is said to have failed to reimburse the same and therefore liable to pay interest at 24% from the date of amount till reimbursement. The applicant is said to have failed to pay the legitimate claim of the respondent, thereby are liable to pay the cost of arbitration of Rs.2-lakhs.
That Additional amount of Rs.2,75,000/- is said to be towards the difference in respect of the cupboards and Rs.3-lakhs towards the breach of condition with interest at 24% on the increased wages. Ex.P3 is to provide for Schedule Minimum Fair Wages, published by the Government of India and thereby it is said to show that the minimum wages to be considered as on the date of receipt of the tender, which is dated:28-4-2009 and not the date of the acceptance of the tender-2-6-2009. The Engineer-in-Charge is said to have signed randomly, but it is said to be the duty of the Engineer to verify and sign the document.
12 A.S.No.174/2016The applicant, in the evidence, is said to have admitted that the principal employer Garrison Engineer to have not received any notice from the Labour Department about non-payment of the minimum wages that were said to be increased from time to time, which is said to support the claim of the respondent to have paid increased wages from time to time and therefore it is said to be disprove the claim of the claimant. Sufficient documents are said to have placed in order to show that the Sambra Village to be within the purview of B Class and not C Class. Ex.P35 is said to clearly show that the factory made shutters to be purchased which were verified by the Engineer-in-Charge of the applicant and Exs.P14 to P20 are the letters written from time to time to the applicant regarding the details of the cupboard in support of the claim of the respondent. Denying all the other averments of the claimant in the suit, therefore has sought for the dismissal of the application.
4. The counsel for plaintiff has filed a Memo dated:11-8-2017 that Notice to respondent No.2 not required as respondent No.2 is Arbitrator.
5. Records have been called for. Written Arguments filed and on hearing the arguments, the Points that arise for consideration are as follows:
13 A.S.No.174/20161. Whether the grounds raised by the plaintiff furnish the proof that the Award dated:24-8-2016 passed in AC No.94/2015 is against the public policy, as per Section 34(2)(b)(2) of the Arbitrator and Conciliation Act, 1996?
2. What Order?
6. The findings on the above Points are as under:
Point No.1 - in the negative, Point No.2 -as per Final Order below, for the following:
Reasons
7. Point No. 1 : The undisputed facts is that the plaintiff had accepted the Tender submitted by the respondent bearing Contract Agreement (CA) No.CE(AF)/BAN15/2009-2010 allotted to the respondent/defendant, is dated:5-6-2009, as per Ex.P3. It pertains to the construction of the living accommodation and the mess, with cooking house and dining hall for 100 SNCOs at Belgaum. On the basis of the pleadings, the Terms of the Reference before the Arbitrator are as follows:
"1. Whether the claimants prove that they are entitled to Rs.19,73,453.36/- towards increase in minimum wages of labourers from the respondents?14 A.S.No.174/2016
2. Whether the claimants prove that they are entitled to Rs.2,75,000/- towards the additional amount spent by them for prelaminated particle board from the respondents?
3. Whether the claimants prove that they are entitled to Rs.3,00,000/- towards compensation for breach of condition by the respondents?
4. Whether the claimants prove that they are entitled to interest at the rate of 24% per annum on the amounts due from the respondents?
5. Whether the respondents are liable to pay Rs.2,00,000/- to the Claimants as cost of Arbitration or whether the claimant is liable to pay the cost of Arbitration to the respondent?
6. What Award or Order the parties are entitled to?"
The Condition 63 of the Order of the Conditions provides for reimbursement/refund on variation in the price, which reads as follows:
"63. Reimbursement/refund in variation in price,-If during the progress of the Works the price of any materials required to be incorporated in the Works (not being a material supplied from the G.E.'s stores in accordance with Condition 10 hereof) and/or wages of labour increases as a direct result of the coming 15 A.S.No.174/2016 into force of any fresh law or statutory rule or order (but not due to any changes in sales tax) and such increase exceeds ten per cent of the price and/or wages prevailing at the time of acceptance of the tender for the Work and the Contractor there upon necessarily and properly pays, in respect of that material (incorporated in the Works) such increased price and/or in respect of labour required for and engaged on the execution of the work such increased wages, then the amount of contract shall accordingly be varied protanto, provided always that any increase so payable is not in the opinion of the C.W.E. (whose decision shall be final and binding) attributable to delay in the execution of the contract within the control of the contractor.
Provided, however, no re-imbursement shall be made if the increase is not more than 10% of the said prices/wages and if so, the re- imbursements shall be made only on the excess over 10% and provided further that the any such increase shall not be payable if such increase has become operative after the contract or extended date of completion of the work in question.
If during the progress of the Works, the price of any material incorporated in the Works (not being a material supplied from the G.E.'s stores in accordance with Condition 10 hereof) and/or wages of labour is decreased as a result of coming into force of any fresh law or statutory rule or order (but not due to any changes in sales tax) and such decrease exceeds ten per cent of the prices and/or wages prevailing at the time of acceptance of the 16 A.S.No.174/2016 tender for the Work, Government shall in respect of materials incorporated in the Works (not being materials supplied from the G.E.'s stores in accordance with Condition 10 hereof) and/or labour engaged on the execution of the Work after the date of coming into force of such law, statutory rule or order be entitled to deduct from the dues of the Contractor such amount as shall be equivalent to difference between the prices of materials and/or wages as they prevailed at the time of acceptance of tender for the Work minus ten percent thereof and the prices of materials and/or wages of labour on the coming into force of such law, statutory rule or order.
The Contractor shall, for the purpose of this condition keep such books of accounts and other documents as are necessary to show the amount of any increase claimed or reduction available and shall allow inspection of the same by a duly authorized representative of Government, and further shall, at the request of the Garrison Engineer furnish, verified in such a manner as the Garrison Engineer may require, any documents so kept and such other information as the G.E. may require.
The Contractor shall within a reasonable time of his becoming aware of any alteration to the pries of any such material, and/or wages of labour, give written notice thereof to the G.E. stating that the same is given in pursuant to this condition together with all information relating thereto which he may be in a position to supply."17 A.S.No.174/2016
The above noted Condition No.63 provides for increase in the wages of the labour, materials if exceeds 10% of the price and the wages prevailing at the time of acceptance of the Tender, then such increased price are in respect of the labour required, then the amount of the contract to be accordingly be varied protanto. There is reference of the Condition No.10 in this Condition No.63 and that pertains to the materials to be provided by the contractor. As per this Condition No.10, all the charges on account of the octroi, terminal or sales tax and other duties on materials obtained for Works from any source, excluding the materials supplied by the Government, it has to be borne by the contractor himself. It also provides for materials to be supplied by the Government which are as per the Schedule B. The Condition No.63 provides for the increase in the charges. When there is decrease in the wages of the labour, as a result of new law and that exceeds 10% of the prices or the charges prevailing at the time of acceptance of the tender for the work, the Government shall in respect of the materials incorporated in the works and the labour engaged on the execution of the work after the date of coming into force of such law, that has to be deducted from the dues of the contractor and the amount to be equivalent to the difference between the prices of materials and the wages that were prevalent at the 18 A.S.No.174/2016 time of acceptance of the tender for the Work minus ten percent. In the Condition 63, if there is increase for the price of the materials or the labour by about 10% then the increased price has to be varied accordingly. Thereby, this Condition 63 provides for both increase as well as decrease in the price of the materials and the labour. The grievance of the plaintiff has been that, the contract was received on 28-4-2009 and to have been accepted on 2-6-2009, which is after one month and four days taken in scrutiny and assessing the reasonability of the rates. The increase in the labour charges in excess of 10% is to be counted with reference to the labour wages prevailing on 2-6-2009 and not 28-4-2009. As noted above, the increase in the labour and the materials that exceeds 10% of the rate that was prevailing at the time of acceptance of that tender, that increased price in respect of the labour required for engage in the execution of the work, it has to be accordingly varied. Specifically, when there is decrease in the wages or the labour, the differentiated amount has to be calculated on the rate prevalent at the time of acceptance of the tender and the price of the materials on coming into force of such law. Such a method of calculation of the rate is not forthcoming towards the increase in the rate of the labour or the materials. It only provides for increased price in the labour or the wages, if was incorporated during the 19 A.S.No.174/2016 progress of the work, then that amount of the contract is to be accordingly varied protonto. In respect of the claim and the terms of the reference, the documents that were produced are the various correspondence that had taken place on various dates. Among them, relevant document-Ex.P6 is the Order of the Government, dated:30-9-2009 shows that the Ministry of Labour and Employment revised the rates of the Variable D.A. on the basis of the average consumer price index number for the period of six months ending on 30-6-2009. Thereby there is increase of 16.66 points for industrial workers. Further it shows the minimum rates of wages showing the basic rates and Variable D.A. with effect from 1-10-2009 for the various category of workers, namely, unskilled, semi-skilled, supervisory, skilled/ clerical, highly skilled. Thus, as per this notification of the Government, the revised D.A. is with effect from 1-10-2009. Ex.P8 is another copy of the Order of the Government, Ministry of Labour and Employment dated:25-3-2010 and it pertains to the revised Variable D.A. and it is with effect from 1-4-2010. Ex.P10 is the copy of the another such Order dated:20-9-2010 and it is with effect from 1-10-2010. Ex.P12 is similar such Order pertaining to the revised rate of D.A. with effect from 1-4-2011. Ex.P13 is the notification of the Ministry of Labour and Employment, dated:20-5-2009, which states 20 A.S.No.174/2016 that the minimum rates of wages to be effect from the date of this notification. Ex.P37 is the working details in respect of cupboard shutters, supported by the Running Account Receipt-Ex.P38. On the other hand, the respondent herein had produced the copy of the Appendix-A, along with Statement of Objections. It states that, CA.No.CE(AF)BAN/SAM/ 15/2009-10, contract work was accepted on 2-6-2009 by the Head Quarters and the work to have commenced from 15th June 2009 and completed on 25-6-2011 by accepting the extension time and it was in two phases. The escalation of the labour was accepted in terms of Condition 63. But this document is only to the effect about some discrepancies to have been found in the maintenance of the Security Register and the Register of Wages. Ex.R6 is the Schedule pertaining to the Construction or Maintenance of the Roads in the Building Operations and Exs.R7 to R9 proves for the details of the labour charges, escalation and the details of the cupboard shutters has been marked as Ex.R10. By virtue of the grounds that have been taken up in the present application filed under Section 34 of the Arbitrator and Conciliation Act, Ex.P3 dated:
5-6-2009 states, the Certified True Copy of the Contract Agreement, along with drawings to have been forwarded to the defendant-Company. The Work Order for the construction of the Living 21 A.S.No.174/2016 Accommodation and Mess, with Cook House and Dining Hall for 100 SNCO's at Belgaum. In this Ex.P3, the letter dated:19-2-2009/14-3-2009 one of the enclosures has been to the effect that the tender would be received up to 1500 Hours by March 2009. In Ex.P13, the Notification dated:20-5-2009 pertains to revised minimum rates of wages payable to the employees employed in the Scheduled employment. The minimum rates of wages is effective from the date of the notification. The relevant portion in this Ex.P13 is:
"The minimum rates of wages, which will be effective from the date of this notification shall consist of-
(a) basic rates of wages as set out in columns (2), (3) and (4) of Part-I of the Schedule annexed herewith and payable to the categories of employees working in areas mentioned in Columns (2), (3) and (4) thereof; and
(b) a special allowance (hereinafter referred to as Variable Dearness Allowance) in Part-II of the said Schedule shall be adjusted by the Chief Labour Commissioner (Central) at an interval of six months commencing on 1st October and 1st April on the basis of average 22 A.S.No.174/2016 Consumer Price Index Number for Industrial Workers for the each preceding period of six months ending on 30th June and 31st December every year respectively, at the rate mentioned in Columns (2), (3) and (4) of Part-II of the said Schedule."
There is Explanation Clause of Area "A" and "B" and "C", which reads as follows:
"1 a) Area "A" and Area "B" shall respectively comprise of all the places as specified in the Annexure to this notification and include all places within a distance of fifteen kilometers from the periphery of Municipal Corporation or Municipality or Contonment Board or Notified Area Committee of a particular place, and Area "C" shall comprise of all the other places not mentioned in the Annexure to which the Minimum Wages Act,1948 (11 of 1948) extends."
As per Ex.P2 and page 133 of Ex.P3, the tender of the defendant was accepted on 2-6-2009. In fact, the date is clearly stated in this document. Specifically, Ex.P2 has the reference of the receipt of the tender from the defendant and the reopened date 28-4-2009. Page 133 of Ex.P3 states that it is a 23 A.S.No.174/2016 document about acceptance of the tender on 2-6-2009.
In the Award at page 20, the " Schedule of Minimum Fair Wages" provides specifically as follows:
"It is hereby agreed by us that the schedule minimum fair wages (SMFW) as published vide Government of India which specified minimum rates of wages for various categories of workman as applicable on the last due date of receipt of this tender shall form part of the tender documents and if no were in their possession we have read and understood the provisions contained in the aforesaid schedule of minimum fair wages before submission of the tender."
This Condition No.63 above noted is in reference to the reimbursement or refund in variation in the price. Condition 58 noted above mandates the contractor to pay not less than the fair wage as defined below or the minimum wages fixed under the Minimum Wages Act whichever is higher to the labourers.
There is also definition of the 'Fair Wage' under Condition 58 and it reads as follows:
24 A.S.No.174/2016"58 Fair Wage-
(a) The Contractor shall pay not less than the "fair wage" as defined below or the minimum wage fixed under the Minimum Wages Act, whichever is higher to labourers engaged by him on the Work.
"Fair Wage" means wage whether for time or piece-work notified at the time of inviting tenders for the Work and where such wages have not been so notified the wages prescribed by the Chief Engineer for the stations at which the Work is done.
(b) The Contractor shall notwithstanding the provision of any Contract to the contrary, cause to be paid a 'fair wage' or minimum wage fixed under the Minimum Wages Act whichever is higher to labourers indirectly engaged on the Work including any labour engaged by his sub-
contractors in connection with the said Work, as if the labourers had been directly employed by him.
(c) .........
(d) .........
(e) .........
(f) ......... ..."
On account of the document being signed by both the parties with the consent, therefore by virtue of the principles of Ejus dem generis, then this Schedule has to prevail over the condition No.63.
25 A.S.No.174/2016With reference to the ground about the cupboard specification, there has been specific conditions in the contract, for which the concerned documents have been produced. The relevant clauses are 17.20, 12.11.2. In accordance to these clauses only, there has been use of the factory made shutters, for which there is no particular specification and accordingly, the calculation has been made.
8. Question of facts are not within the scope of the grounds to set aside the award under the Application under Section 34 of the Arbitration and Conciliation Act. The contract has been issued on 28-4-2009 and based upon the contract, the terms and conditions and the principles governing the application of the conditions, how can the award be against the public policy, is not forthcoming in the documents produced. On acceptance of the tender only, the contract has been allotted to the defendant. The admitted facts, documents and the admitted documents, in the light of the citations reported in:
(1) 2015 (1) CTC 191 {Associate Builders vs. Delhi Development Authority}, wherein it has been held as follows:26 A.S.No.174/2016
"Arbitration and Conciliation Act, 1996 (26 of 1996), Sections 5 & 34-
Scope of Appeal against Award- parameters of interference-Expression "Public Policy"-Nature and scope of, in Arbitral Awards-Arbitrator is ultimate master of quantity and quality of evidence to be relied upon when Award is delivered-Award based on little evidence or no evidence which does not measure up in quality to trained legal mind would not warrant setting aside A ward-
Court deciding matter under Section 34 is not Court of Appeal and errors of fact cannot be corrected-Arbitrator must have judicial approach and must not act perversely-Arbitral Tribunal has last word on facts so long as approach of Arbitrator is not arbitrary or capricious.
It must clearly be understood that when a Court is applying the "Public Policy" Test to an Arbitration Award, it does not act as a Court of Appeal and consequently errors of fact cannot be corrected. A possible view by the Arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his Arbitral Award. Thus, an Award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the Arbitrator's approach is not arbitrary or capricious, then he is the last word on facts."
(2) (2018) 1 SCC 718 {Sutlej Construction Ltd., vs. Union Territory of Chandigardh} wherein it is held as under:
27 A.S.No.174/2016"Arbitration and Conciliation Act, 1996- Section 34 and 37-Award-Non-interference with, when the same is reasonable and on the basis of a plausible view-Reappreciation of evidence-When cannot be done-
Reiterated, when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the Court, and would not include what the Court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice."
Even in the present facts of the case, the relevant correspondences have taken place between the parties about the details of the labour escalation, details of the quantity of the cupboard shutters, thereby there has been proper communication with the plaintiff herein and both the parties are governed by their contract. There has been various correspondences taken place between the parties in reference to the claims and none of those documents are disputed by the plaintiff.
Such being the admitted facts of those documents and the admitted facts of the documents being consented by both the parties in view of the contract, the materials placed before the Court do not make out the ground for setting aside the award as sought for. Such being the case, no grounds of variation of the public policy is proved and the Point is answered in the negative.
28 A.S.No.174/20169. Point No. 2: In view of the foregoing reasons and in the result, following:
ORDER Arbitration Suit filed under Section 34 of the Arbitration and Conciliation Act, 1996 is hereby dismissed.
Parties to bear their own costs.
(Dictated to the Judgment Writer, transcribed and computerised print-out taken thereof is corrected, signed and then pronounced by me in Open Court on this the 2nd day of April, 2018.) (VELA.D.K.) XXII Addl. City Civil & Sessions Judge, *sb Bengaluru.29 A.S.No.174/2016
2-4-2018 Judgment passed and pronounced in Open Court. (vide separate Judgment). Operative portion thereof reads as under:
Order Arbitration Suit filed under Section 34 of the Arbitration and Conciliation Act, 1996 is hereby dismissed.
Parties to bear their own costs.
XXII A.C.C. & S.J., Bengaluru.