Delhi High Court
Metha Teja Singh Co. vs Executive Engineer, Central ... on 2 May, 1985
Author: D Khanna
Bench: D Khanna
JUDGMENT
D.R. Khanna, J.
(1) The award dated 26.4.1979 delivered by Sh.M.S.Teleng who had acted as arbitrator inter-se parties with respect, to their disputes and differences arising under agreement No 11/EE.C.IX of 1976-77 was partly remitted back by the court to him on 25.11.1980. It was observed that the present case was governed by clause 12-A of the terms and conditions of the agreement, and not clause 12(vi)as held by the arbitrator. Deviations in excess of 20% in individual items were held determinable in terms of clause 12-A. Clause 12(vi) on the other hand dealt with deviation of items of any individual trade up to 50% either side of the value of trade in the contract. The Court, however, upheld the award in so far as the amount of Rs. 32.000.00 which had been disallowed.
(2) Now the learned arbitrator has again given his award dated 9.5.1983 after the said remission. Its perusal shows that the learned arbitrator has reiterated that his interpretation of the clauses 12-A and 12(vi) in the first award was correct, and that giving effect to the order of the court would render the provisions of clause 12(vi) of agreement otiose, After having observed all this, the arbitrator proceeded to consider, the case in the context of clause 12-A, and came to the view that as the contractor had not submitted his revised rates within 7 days of the receipt of the orders for additional or substituted items, he should be deemed to have executed them at the rates already submitted by him. On that score no payment was held due to the contractor.
(3) Against this award the contractor has again filed objections, and it is pleaded that even if no revised rates were given from May to Sept. 1977, the work continued up to 1981, and in the mean while letters Ex. C-l to Ex. C-5 had been submitted by the contractor mentioning further rates. As such it has been pleaded that the works which were executed after these submissions should have been governable by the rates mentioned in them. The Arbitrator in this regard is pleaded to have committed basic error.
(4) I have heard the parties and given my utmost consideration to all the circumstances. It must be said that when the Court had earlier remitted back the first award to the arbitrator, he should have abided by whatever view had been expressed by the court, and proceeded accordingly. It was not within his province to have made observations about the propriety of the order, and still persisted in erroneous view which he had taken earlier. It may be mentioned here that the Union of India went in appeal before the Supreme Court against the said remission order, but failed there. In the situation the arbitrator ought to have proceeded with the reference in terms of the interpretation placed by the court on the said two clauses.
(5) The conduct of the arbitrator in persisting on his earlier view has been assailed from the side of the contractor, and it has been urged that he could not be treated as having approached the controversy remitted back to him with an open mind, and seemed to have been already committed and labouring under prejudice to uphold the ultimate conclusion which he had arrived at the time of the giving of the first award. The arbitrator rather treated the entire matter as a prestige issue for him, and, therefore, had a determined and closed mind to reject the contractor's claim.
(6) I find force in these contentions of Mr. Rohtagi, appearing from the side of the contractor. An arbitrator is expected to proceed with reference with open mind. In case there are specific directions or orders of the court, he should gracefully accept and abide by them instead of sticking on the contrary position taken earlier. The manner in which the present arbitrator has conducted himself raises strong inference that he was prejudiced, and had unwarrantedly made a prestige issue of what should be the interpretation of the aforesaid two clauses. The contractor can, therefore, legitimately claim bias on his part. All this amounts to legal misconduct on the part of the learned arbitrator. I as such set aside the award and direct the Chief Engineer, Cpwd who is otherwise competent under the contract to appoint an arbitrator, to appoint such arbitrator in order to adjudicate the controversy arising with respect to the claim of the contractor for amount of Rs. 2,08,311.75 p. This appointment be made within a month of the communication of this order. The award be given within four months of the entering upon the reference.
