* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Date of Decision: 15.05.2009
% CS(OS) 1220A/2005 & I.A. No.9532/2005
AMAR NATH MEHRA & CO. ..... Plaintiff
Through: Mr. B.K. Dewan and Mr. Bhavesh
Kumar Sharma, Advocate
versus
UNION OF INDIA ..... Defendant
Through: Mr. R.C. Nangia, Advocate
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
1. Whether the Reporters of local papers may No
be allowed to see the judgment?
2. To be referred to Reporter or not? No
3. Whether the judgment should be reported No
in the Digest?
VIPIN SANGHI, J. (Oral)
1. These are objections to the award made by the learned sole arbitrator Mr. S.C. Jain dated 16.08.2005, preferred by the respondent, Union of India, under Sections 30 & 33 of the Arbitration Act, 1940. The petitioner had entered into an agreement with the respondent to provide portage service to the respondent. Disputes arose out of the said contract, which were referred to arbitration of Mr. S.C. Jain by order dated 02.09.2004 passed in CS(OS) 1378A/1984. The learned arbitrator has made an award in the sum of Rs.1,57,010/- in favour of the petitioner/claimant, which is now under challenge. The proceedings and the award are governed by the Arbitration Act, 1940. CS(OS) 1220A/05 Page 1 of 6
2. The respondent/ objector has raised general grounds of challenge to the award which need no mention. Specific challenge has been raised in respect of claim Nos.1, 5, 8 to 11, 13, 16 & 17.
3. So far as the claim No.1 is concerned, the same had been made for refund of Rs.88,803.71, which was stated to have been wrongfully and unjustifiably recovered from the dues of the claim. The respondent, Union of India, had sought to justify the deduction on account of employment of departmental labour and bazaar labour to the tune of Rs.83,599.09 due to the failure of the petitioner/claimant to provide enough labour to do the work. Ex.1-G has been referred to by the arbitrator in his award and, therefore, can be looked into by the Court. Ex.1-G is a communication dated 12.11.1974 sent by the Divisional Superintendent, New Delhi to the AAO (TA) Northern Railway, Jalandhar City, which encloses a statement showing particulars of engineering departmental as well as bazaar labour utilized on behalf of the petitioner during their entire contact period. Along with the said communication the tabulation showing the engagement of bazaar labour as well as engineering departmental labour has been enclosed. The learned arbitrator also takes note of Ex.1-N dated 03.12.1974, which is a communication sent by the Divisional Superintendent, New Delhi to the petitioner claimant. This communication gives details of the bazaar labour and departmental engaged on behalf of the petitioner during the period May, 1974 to 15th August, 1974. The credit given to the petitioner, as per Ex.1-N, works out to Rs.15,944.16. On the basis of these two documents, learned CS(OS) 1220A/05 Page 2 of 6 arbitrator has concluded that the respondent has not been able to justify the recovery of any amount beyond Rs.15,944.16. The arbitrator has found that the actually deducted amount was Rs.89,836.30. He has, therefore, awarded refund of amount of Rs.73,892/- in favour of the petitioner/claimant. Learned counsel for the objector, Mr. R.C. Nangia, has sought to read and rely upon Annexures R-3 to R-7 filed along with the objection petition to say that the claimant/petitioner was repeatedly put to notice about short supply of labour. Firstly, it is not open to the Court to look into documents not referred to in the award. Secondly, these documents, in any event, do not throw light on the quantum of labour engaged by the respondent on the petitioner's account. In my view, no error can be found in the award of claim No.1. The objection is, therefore, rejected.
4. The next objection has been raised in respect of award on claim No.5. This claim had been made of Rs.13,227.90 on the ground that the same had been wrongfully and unjustifiably withheld as demurrage charges. Mr. Nangia, counsel for the respondent/objector has again sought to rely on various documents to show that the petitioner/ claimant had been put to notice regarding supply of short labour i.e. Annexures R-3 to R-7. He also relies on clause No.10 of the contract which permits the levy of demurrage on the contractor on account of his failure to provide sufficient labour, which causes delay in the process of loading and unloading of the wagons.
5. I find no merit in the objection raised by the respondent. A perusal of the reply given in response to claim No.5 before the CS(OS) 1220A/05 Page 3 of 6 arbitrator shows that the reply is totally vague and devoid of any particulars. Learned arbitrator has found that the respondent has not shown any calculation to arrive at the amount deducted towards demurrage. Even if the respondent was entitled to claim demurrage for the alleged short supply of labour by the petitioner/claimant, it was for the respondent to justify the computation of the amount of demurrage levied upon the petitioner, which had not been done. No error can be found in the award made on claim No.5. The objection is rejected.
6. So far as the award on claim No.8 is concerned, it had been made for Rs.18,000/- for payment of less rates for loose goods at the rate of Rs.21/- per wagon as against the petitioner's claim of Rs.80/- per wagon. Claim No.9d had been made for Rs.9,000/- for labour employed in transshipment of meter gauge wagon to box wagon. The award is not reasoned and it is not permissible for the Court to go behind the award. Moreover, in response to the reliance placed on Note 12 to the agreement which relates to rates for "special goods", by learned counsel for the respondent/objector, the petitioner has placed reliance upon Appendix A Entry 2(i) of the contract, which contains the rates applicable to "loose goods". Award on claim No.8 shows that it pertains to "loose goods" and therefore, there is no merit in the submission of the respondent. The objection to award on claim No.8 is rejected. Similarly, the award on claim No.9 cannot be questioned as the respondent has not established that the work of transshipment from meter gauge wagon to box wagon was covered within the scope CS(OS) 1220A/05 Page 4 of 6 of the petitioner's contractual obligation. It is not for the Court to interpret the agreement. As aforesaid, the award is unreasoned and the Court cannot examine the basis on which the award has been made in these circumstances. The objections are rejected.
7. The objection to the award on claim No.10, which were made for supply of labour for loading coal sweeping in wagons, for supply of coal to Loco Shed and also for carrying by head load for feeding the crane for over 800 yds., is without any reason and it is not open to the Court to go into the mind of the arbitrator and examine the basis on which the award has been made. Similarly, the objection to the award on claim no.11 for payment of goods dumped on the ground and loaded after 24 hours (mid night) is claimed as a fresh operation under Clause 4 (iii) of the agreement, is also unreasoned and the same does not disclose any error on the fact of it. I may also note that in response to claim Nos.10 & 11, in the reply before the arbitrator, the only response of the respondent was that payment had been made in accordance with the contract.
8. The position with regard to the award on claim No.13 is also the same. The award is unreasoned. The said claim had been made for Rs.8,000/- on account of wagon being declared damaged by TXR for load adjustment after loading as it required further labour. Since no reasons have been given, it is not possible for the Court to go behind the award. The objection to claim No.13 is, therefore, rejected.
9. The award on claim No.16 was made on account of failure of CS(OS) 1220A/05 Page 5 of 6 the respondent to make payment of the claimant's bills. The learned arbitrator has awarded an amount of Rs.6,000/-, as opposed to the claim of Rs.25,000/- made by the claimant/petitioner. The arbitrator has recorded that he has gone into the record. He has, in fact, granted a reduced amount by taking note of the usual delays involved in making payment by the Railways, which is a government department. I see no reason to interfere with the award made on claim No.16.
10. Under claim No.17 the learned arbitrator has awarded interest @ 12% per annum from 21.11.1981 i.e. the date of invocation of arbitration till payment. Considering the fact that the award pertains to the period 1973-74, as also the fact that the arbitration had been invoked in the year 1981 when the rates of inflation/interest were considerably high, I find no justification to interfere with the award of the arbitrator on the aspect of the interest. Accordingly, the award is made `Rule' of the Court. The petitioner shall also be entitled to further interest @ 9% per annum from the date hereof on the principal amount of Rs.1,51,010/- till payment. The petitioner shall also be entitled to costs quantified at Rs.10,000/-.
VIPIN SANGHI, J.
MAY 15, 2009 rsk CS(OS) 1220A/05 Page 6 of 6