IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
FAO no. 839 of 2022 (O&M)
Date of Decision:06.07.2022
Haryana State Warehousing Corporation
......Appellant
Versus
Ram Avtar Gupta and another
...... Respondents
CORAM:- HON'BLE MRS.JUSTICE LISA GILL
Present: Mr. Lokesh Sinhal, Advocate
for the appellant.
*****
LISA GILL, J(Oral).
Appellant-Haryana State Warehousing Corporation (for short 'HSWC') has filed this appeal for setting aside order dated 11.08.2021, passed by the learned Additional District Judge, Karnal as well as Award dated 27.06.2016.
Brief facts necessary for adjudication are that appellant-HSWC filed tenders for supply and installation of Galvalume sheet for Verandah roofing for various food storage godowns constructed by Haryana Warehousing Corporation at its eight centres situated at Nuh, Rattipur (Palwal), Nissing, Barwala, Israna, Bani, Hansi, Gohana. With reference to tender dated 30.06.2010, work was allotted to respondent no.1 on the quoted rates of Rs. 36,88,108/- as per terms and conditions detailed in work-order issued on 11.08.2010 which was followed by execution of contract dated 16.05.2011 containing detailed terms and conditions thereof.
Dispute arose between the parties. Sole Arbitrator was appointed by the appellant-HSWC, vide order dated 18.10.2014 in terms of 1 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 2 Clause 25-A of the agreement. Claim was submitted by respondent no.1 and counter claim filed by the appellant.
Respondent no.1, the contractor/claimant filed his claim under four heads as mentioned in Award dated 27.06.2016 and reproduced as below:-
"Claim No.1. Towards difference of payment of the actual work done and not paid. (as tabulated below).
Sr. Name Qty. Approved Payable Amount Difference
No. of executed rate Amount in paid payable to
Centres in Sqm. Rs. contractor
1. SWH 230.36 1340.00 308682.00 195497 113185.40
Nuh
2. SWH 700.78 1340.00 939045.20 572666 366379.20
Rattipur
(Palwal)
3. SWH 195.74 1340.00 262559.60 151890 110669.60
Nissing
4. SWH 472.37 1340.00 632975.80 352947 280028.80
Barwala
5. SWH 394.92 1340.00 529192.80 333581 195611.80
Israna
6. SWH Work cancelled by employer
Bani
7. SWH 1194.36 1340.00 1599022.00 772428 826594.00
Hansi
8. SWH 323.29 1340.00 433208.60 280724 152484
Gohana
Total 3512.02 4704684.40 2659728 2044953.40
Claim no.2 Towards variation of the bid quotations Rs.12,00,000.00 Claim No.3. Litigation Expenses & Arbitral fee.
Rs.3,50,000,00.
Claim No.4. Further and pendent lite interest.
A matter of calculation.
The claimant has submitted his claims totaling Rs.35,94,953.00, besides the interest over the awarded amount from the cause of 2 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 3 action of Oct-2011, when the work was completed."
Counter claim was filed by the appellant-HSWC on 25.02.2016 for a sum of Rs. 8,22,826/- towards recovery/adjustment from the final bills of the contractor.
Claimant pleaded that 90% running payment was made in terms of the agreement on completion of six SWH at various stations except Nuh, on the basis of record entries made by the Engineer-in-Charge and accepted by the claimant. However, while releasing final payment of each SWH stores, the accepted measurements as well as the approved rate of Rs.1340/- was stated to be arbitrarily and injudiciously reduced.
Learned Arbitrator looking into the material on record, facts and circumstances of the case while passing the impugned award dated 27.06.2016 allowed Claim no.1 for a sum of Rs. 14,26,231/-, Claim no.2 for award of compensation of Rs.12,00,000/- was rejected, Claim no.3 for litigation expenses and arbitration fee was held to be excessive and Rs.25,000/- as costs of litigation to be payable by the HSWC was awarded and under Claim no.4, simple interest at the rate of 12% per annum on Rs.14,26,231/- was awarded from the cause of action i.e., 22.11.2011 till date of declaration of award and future interest at the rate of 18% per annum to be payable after 90 days from the date of declaration of award till the actual payment is made to the claimant. Counter claim filed by the appellant was rejected.
It was held by the learned Arbitrator that there was no occasion for the appellant to alter the tender rate which had been approved by the competent authority of the Corporation unless a supplementary agreement had been executed between both the parties with necessary changes.
Aggrieved therefrom, petition under Section 34 of the 3 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 4 Arbitration and Conciliation Act (for short 'Arbitration Act') was preferred by the appellant, which was dismissed by the learned Additional District Judge, Karnal, vide order dated 11.06.2021.
Aggrieved therefrom, present appeal has been filed by the appellant-HSWC.
Learned counsel for the appellant vehemently argues that both the learned Arbitrator as well as learned Additional District Judge, Karnal, have failed to appreciate report dated 19.09.2012 of the Committee, on the basis of which the reduction in the rate was carried out. Respondent no.1, it is submitted did not execute the work as per design and drawing provided by the unit. Therefore, in this situation, appellant was well within its right to have reduced the rate accordingly. The Committee, it is stated was constituted by the Managing Director of the appellant after due deliberation and discussion with the contractor. It is thus prayed that this appeal be allowed.
I have heard learned counsel for the appellant and have gone through the file with his able assistance.
Facts regarding allotment of the work and arising of the dispute between the parties as well as appointment of Arbitrator etc., are not in dispute. The entire foundation of arguments addressed on behalf of the appellant rest on the recommendation/report dated 19.09.2012 of the Committee constituted by the Managing Director. Learned Arbitrator while considering this aspect specifically observed that allegations against the claimant/contractor stand diluted when the Engineer-in-Charge records a certificate in the measurement book, which is a booklet of prime importance for the contract, to the effect that work has been carried as per PWD specifications, design and drawing of the HSWC. Certificates, which were admittedly recorded for all the SWH centres by the Engineer-in-Charge have 4 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 5 been duly recorded in the award dated 27.06.2016. Claimant-respondent claimed to have completed the work as per entire satisfaction of the Engineer-in-Charge and concerned Sub-Divisional Engineer/J.E. Incharge of the individual State Warehouse Godowns (for short 'SWH') recorded the certificate in the measurement books which reads as under :-
"1. Certified that the work has been done by the agency as per PWD specifications & as per HWC design & specifications.
2. Water & electricity arrangement has been done by the agency."
It is further noted by the Arbitrator that there is no evidence on record that truss is of underweight, none of which have been actually weighed and furthermore, committee's recommendations are based on theoretical calculations which carry no weight in the eyes of law. It is observed that thickness of the sheet in question has never been tested and the recommendations are without any site verification and supervision. Learned Arbitrator has further observed that;
'the M.B is a important document and the codal rules doesn't allow to make cutting of the record entries once entered. If there is any ambiguity the measurements done by a Junior Engineer/ Sub Divisional Engineer, the same can be check measured by a Senior officer above the person who had made entries, moreover there are rules to check @ 5% of the work by the Executive Engineer which has not been done when lot of deficiencies have been said to be existed in the work under question. The re-measuring is required to be entered in a separate M.B named as check measurement book. But this exercise has not been done by the respondent. In this regard the recommendations of a committee constituted of Two nos Sub Divisional Engineers, two nos., JEs, one SAMA and the HDM do 5 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 6 not posses any powers to alter the tendered rate which has been approved by the competent authority of the corporation, unless otherwise a supplementary agreement is executed between both the parties with necessary changes. However the feasible points recommended by the committee are being taken care of for computing the payable amount to the contractor.' Perusal of award reveals that instead of claim of Rs.20,44,953/-
under the Claim No.1, learned Arbitrator has awarded a sum of Rs. 14,26,231/- only after duly taking into account the feasible points recommended by the committee and as borne out from the record.
It is a settled position that this Court does not sit in appeal over an award passed by the learned Arbitral Tribunal. Even though a different view may be possible in a given factual matrix, Court shall not interfere until and unless it is shown that award passed by the Arbitrator/Arbitral Tribunal suffers from perversity or error of law or that the Arbitrator has mis- conducted himself. These principals have been reiterated by the Hon'ble Supreme Court in NTPC Ltd. versus M/s Deconar Services Pvt. Ltd. 2021 AIR (Supreme Court) 2588. Hon'ble Supreme Court in the case of NTPC Ltd. (supra) has further held that to merely show existence of another reasonable interpretation or view on the basis of material on the record is not sufficient to allow for interference. Hon'ble Supreme Court in NTPS Limited's case (supra) has held as under:-
"12. Further, it is also a settled proposition that where the arbitrator has taken a possible view, although a different view may be possible on the same evidence, the Court would not interfere with the award. This Court in Arosan Enterprises Ltd. v. Union of India, (1999) 9 SCC 449 held as follows:
"36. Be it noted that by reason of a long catena of cases, it is now a well-settled principle of law that 6 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 7 reappraisal of evidence by the Court is not permissible and as a matter of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under section 30 of the Arbitration Act. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event, however, there are reasons, the interference would still be not available within the jurisdiction of the Court unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law. In the event however two views are possible on a question of law as well, the court would not be justified in interfering with the award.
37. The common phraseology "error apparent on the face of the record" does not itself, however, mean and imply closer scrutiny of the merits of documents and material on record. The court as a matter of fact, cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of the arbitrator is a possible view the award or the reasoning containing therein cannot be examined..."
13. From the above pronouncements, and from a catena of other judgments of this Court, it is clear that for the objector/appellant in order to succeed in their challenge against an arbitral award, they must show that the award of the arbitrator suffered from perversity or an error of law or that the arbitrator has otherwise misconducted himself. Merely showing that there is another reasonable interpretation or possible view on the basis of the material on the record is insufficient to allow for the interference by the Court [See State of U.P V. Allied Constructions, (2003) 7 SCC 396; Ravindra Kumar Gupta and Company v. Union of India, (2010) 1 SCC 409; Oswal Woolen Mills Limited v. Oswal Agro Mills Limited, (2018) 16 SCC 219]."
Learned counsel for the appellant is unable to point out any illegality or infirmity in order dated 11.08.2021 passed by the learned Additional District Judge, Karnal or any other ground for setting aside award dated 27.06.2016 passed by the learned Arbitrator.
7 of 8 ::: Downloaded on - 25-07-2022 02:36:11 ::: FAO No. 839 of 2022 (O&M) 8 No other argument has been addressed.
Appeal is, accordingly, dismissed with no order as to costs.
[LISA GILL]
06.07.2022 Judge
s.khan
Whether speaking/reasoned : Yes/No.
Whether reportable : Yes/No.
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