Premier Road Carriers Ltd. vs Bharat Heavy Electricals Ltd. And ...
1991 Latest Caselaw 52 Del

JUDGMENT

S.N. Sapra, J.

(1) By this judgment, I propose to decide the objections filed by Bharat Heavy Electricals Ltd., respondent no.1 herein, under Sections 30 and 33 of the Arbitration Act, 1940, against the award dated November 15, 1986, made and published by Shri P.D. Chawla, respondent no. 2.

(2) In brief, the facts and circumstances, giving rise to the present case, are as under.

(3) Respondent no. 1, a Government Company, vide its communication dated July 4, 1980, made an enquiry from petitioner, regarding transportation of certain dectro-mechanical equipments, from its Bhopal works to Bhemphedi in Nepal, through Raxaul Border. Petitioner, vide letter dated 7th August, 1980, submitted its qnoiations, to respondent no. and the details of the rates per unit, chargeable by petitioner. Thereafter, negotiations followed between the parties, by means of correspondence. It appears that in course of such negotiations, petitioner submitted to respondent no. 1, a revised quotation, by its letter dated October 6, 1980. According to petitioner, under the revised quotation, in addition to the heavy units itemised therein, there would be packages, having comparatively lesser dimensions and weight of the aggregate, to the tune of 222 tons. In accordance with this, the rates were so quoted by petitioner.

(4) The negotiated amount of Rs. 6,80.451.00 as mentioned in the revised quotation, dated October 6, 1980, was, however, split up, by respondent no. 1, Into two parts as follows : Freight/Hamali charges Rs. 6,45,451.00 Road repairing/Bull Dodger charges at Rs. 35,000.00 special diversions: Total Rs. 6,80,451.00

(5) The aforesaid splitting up was communicated by respondent no. 1. to petitioner, by its letter dated December 22, 1980. The negotiations between the parties, were followed by a letter of intent, dated January 7, 1981 issued by respondent no. 1. to petitioner. Thereafter, a formal agreement dated January 13,1981, was entered into, between the parties, thereby, incorporating the terms and conditions, governing the transactions, between the parties.

(6) Petitioner commenced the work of transportation, with effect from January 29, 1981. According to petitioner, it was assigned, in the process, by respondent no. 1, the job of transportation of materials weighing over 79 metric tons, of which about 398 metric tons, consisted of major items, being 74 machines weighing over 2 tons, and 81 metric tons, consisted of light weight items, but big in dimensions whereas as per the contract, and according to the understanding, between the partics, major items, i.e. heavy machines, were to consist of 258 metric tons. Thus, according to petitioner, it was made to carry about 74 machines, whereas, as per contract, petitioner was supposed to carry only 32. Petitioner completed the work under the contract.

(7) Respondent no. 1 denied the allegations, as made by petitioner. According to respondent no. 1, petitioner undertook to transport entire quantity of goods, approximately weighing 480 tons. plus 10%, for a fixed remuneration of Rs. 6,45,451.00 . There was no definite commitment, on the part of respondent no. 1, about the number of machines or their dimensions. The question of dimensions was irrelevant for the purpose of contract. In any case, according to respondent no. 1, no prejudice had been caused to petitioner, if assuming that the number of machines was 74 and not 32. Respondent no 1 also denied that petitioner was forced to do anything other than, what he was expected to under the contract. Respondent no. 1 alleged that the work was delayed bypetitioner.

(8) After the completion of the work, disputes arose between the parties. Shri P.D. Chawla, respondent no. 2 herein, was appointed as sole arbitrator, on June 23, 1982, by the General Manager, Bharat Heavy Electricals Ltd., respondent no. 1 herein, to decide the disputes, as were raised by the parties. Petitioner agreed to the appointment of respondent no. 2, as the sole arbitrator.

(9) Before the arbitrator, petitioner made the following claims, against respondent no. 1 : 1. Additional amount payable by the respondent to the claimant on the basis of revised rates as claimed in paragraph 14. Rs. 4,25,250.00 2. Hire charges paid by the claimant on account of the respondent to M/s. Fuji Electricals as stated in paragraph 16. Rs. 56,000.00 3. (i) Detention charges of the Indian made Trailers as stated in paragraph 16: Rs. 46,000.00 (ii) Expenses incurred by the claimant for unloading and loading consignment at Raxaul as stated in paragraph 17. Rs. 40,000.60 4. Refund of earnest money as stated in paragraph 19. Rs. 30,000.00- 31 5. Balance due of the contractual amount as stated in paragraph 20. Rs. 53,763.39 6. Interest on the amount of Rs. 6,51.01339 @ 18% per annum calculated from the dates when the aforesaid payments were to be made by the respondent to the claimant uptil the date of filing of the statement of claim. Rs. 1,17.180.00 Rs. 7,68,193.00

(10) Respondent no. 1 contested all the claims, made by petitioner. before the arbitrator. On the other hand, respondent no. 1, made the following counter claims against petitioner : a. Damages for delayed supply Rs. 81,500.00 b. Anticipated loss on account of liability to pay to M/s. Fuji Electricals. Rs. 4,07,000.00

(11) Before the arbitrator, both the parties produced documentary evidence.

(12) The time for making and publishing the award, was extended by the arbitrator, up to November 15, 1986, with the mutual consent of both the parties, in writing.

(13) The arbitrator made and published his award on November 15, 1986.

(14) The arbitrator awarded that respondent no. 1 would pay a total sum of Rs. 5.08,754.39, to petitioner.

(15) Petitioner filed a petition, under Section 14 of the Arbitration Act, 1940, for filing of the award, together with the arbitration proceedings and the documents, in the Court, and for passing a decree, in term of the award.

(16) Respondent no. 2, filed original award, the arbitration proceedings and all the other documents, in the Court.

(17) In its objections, filed under Sections 30 and 33 of the Arbitration Act, respondent no. 1 has challenged the award, inter-alia, on the grounds, that the time for making the award had long since expired, and the arbitrator bad become functus officio, the arbitrator has misconducted himself and the proceedings, as be failed to give proper hearing, reasonable time and opportunity to respondent, to substantiate its case and claim, arbitrator also acted in violation of the principles of natural justice and fair play ; the arbitrator misconducted himselt, inasmuch as, the non speaking award, given by him, was based on no evidence; arbitrator mishandled the arbitration proceedings and neglected his duty and responsibility, thereby resulting in gross miscarriage of justice.

(18) On the pleadings of the parties, following issues were framed : 1. Whether the award is liable to be set aside for reasons set out in the objection petition ? 2. Relief.

(19) Parties have filed affidavits, by way of evidence.

(20) Several contentions have been urged before me, by Shri V.K.Srivastva, learned counsel for respondent no. I, for setting aside the award. Before dealing with these contentions, I would like to state the legal position, with regard to setting aside of the award, under Section 30 of the Arbitration Act.

(21) The scope and extent of examination, by the Courts, of the award made by the arbitrator, has been laid down in various decisions. Under Section 30 of the Arbitration Act, one of the grounds, on which the award can be set aside is, if the arbitrator has misconducted himself or the proceedings. Apart from legal misconduct, which must be apparent on the face of the award, there can be a misconduct, which is personal to the arbitrator. The other type of misconduct, which is referred to in Section 30, is the misconduct of the proceedings As held, by the Division Bench of this Court, in College of Vocational Studies v. S.S. Jaitley Air 1987. Delhi 134, there are limits for judicial reviewability and the Courts do not exercise appellate jurisdiction over the verdict of an arbitrator, and, as such, cannot go into the merits of the case, nor the Courts can re-appraise and re-examine the evidence, led before the arbitrator. The Courts, also, cannot look into the insufficiency of the evidence, ied before the arbitrator.

(22) Unless it is specifically agreed, between the parties, by means of an arbitration agreement, the arbitrator is bound to give reasons for his verdict. In other words, the arbitrator can give a non speaking award. unless he is required, by means of an agreement or terms of reference to give reasons for his award.

(23) Where, under an agreement, the arbitrator is required to give reasons turn his award, he is not under an obligation to give reasons for his award, he is not under an obligation to give a detailed judgment or detailed reasons. By reason, it means, that the award should be speaking award. In such cases, what is expected from the arbitrator, is that he should indicate his mind, whereby, it can be ascertained, as to how, he has arrived at a particular conclusion. When, the finding of the arbitrator is based on no evidence, then certainly, the Courts can go into such finding and set aside the same, as the award, being perverse one. In other words, the Courts can set aside the award, only if, it is apparent on the face of the award, that there is no evidence to support the conclusions, or if, the award is based upon any legal proposition, which is erroneous. The arbitrator is entitled to decide rightly or wrongly, but if, an error of law appears on the face of the award, then, the Courts can interfere into the same.

(24) One of the grounds of challenge, raised by respondent no. 1, was, that the arbitrator had become functus officio, on the date of making the award, as the time for making the same, had long since expired, in the award, the learned arbitrator has specifically mentioned that the time for making and publishing the award, was extended, up to November 15, 1986, with the mutual consent in writing, of both the parties. This was factually correct. In view of this, learned counsel for respondent no. 1, has fairly given up this objection.

(25) Mr. Srivastva has urged that, the arbitrator, by giving the non speaking award, has violated the principals of natural justice. The arbitrator, according to him, could not give the nun speaking award, in the present case.

(26) Mr. P. G.Gokhle, appearing on behalf of petitioner, has contended that unless, the arbitrator was required, under an agreement or terms of reference to give reasons, he was not under any legal obligation to give reasons for his award He has placed reliance upon the judgment of the Supreme Court in Rajpur Development Authority etc. etc. v. M/s Chokhamal Contractors etc etc. Air 1990 Supreme Court 1426.

(27) The question with regard to non giving of reasoas, by the arbitrator, except under certain circumstabces, stands concluded, by the judgment of the Supreme Court in Rajpur Development Authority etc. etc. (supra)

(28) While considering the object, meaning and scope of Sections 16, 20, 21, 30 and 34 of the Arbitration Act, 1940, their Lordships of Supreme Court held: "This Court also relied on the decision in Haigh v. Haigh, (1861)31 Lj Ch 420 which required an arbitrator to act fairly in the course of its duties. The two well recognised principles of natural justice are (i) that a Judge or an arbitrator who is entrusted with the duty to decide a dispute should be disinterested and unbiased (nemo) judex in causa sua); and (ii) that the parties to dispute should be given adequate notice and opportunity to be heard by the authority (audi alteram partem) (see Administrative Law by H.W.R. Wade, Part V and Judicial Review of Administrative Action by S.A. de Smith, Third Edition, Chapter 4). Giving reasons in support of a decision was not considered to be a rule of natural justice either under the law of arbitration or under administrative law. Having given our careful and anxious consideration to the contentions urged by the parties we feel that law should be allowed to remain as it is until the competent legislature amends the law. In the result we hold that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support except where the arbitration agreement or the deed of submission or an order made by the Court such as the one under Section 20 or Section 21 or Section 34 of the Act or the statute governing the arbitration requires that the arbitrator or the umpire should give reasons for the award. These cases will now go back to the Division Bench for disposal in accordance with law and the view expressed by us in this decision, Order accordingly."

(29) In the present case, the arbitrator was not required, either by the agreement or by the terms of reference, or any other provisions of law, to give a speaking award. Therefore, the non speaking award, given by the arbitrator, is perfectly justified.

(30) The next contention, urged by Mr Srivastva, was that the arbitrator failed to observe, and follow the principles of natural justice and fair play, in dealing with the claims of the parties. Hence, the arbitrator misconducted himself and the proceedings. The arbitrator failed to give proper hearing and reasonable time and opportunity to respondent No. 1. to produce its witnesses and substantiate its case, before him.

(31) To rebut this contention, Mr. Gokhle has invited my attention to the order sheet, dated March 24, 1984. of the arbitrator.

(32) On March 24, 1984 the arbitration proceedings were held before the arbitrator. The parties were represented by their respective counsel. It is recorded, that all the documents, submitted by both the parties, had been admitted and no other documents, would be given by any party. Mr. Vijay Verma, counsel for respondent, during the proceedings before the arbitrator, was asked, whether any oral evidence or wimesses, were required to be produced by respondent. Counsel for respondent, submitted that he would inform within a period of 10 days. after consulting Mr. N K. Bhat. whether any oral evidence was to be led before the arbitrator or not. Similarly, counsel for petitioner undertook to inform within 7 days, whether any oral evidence was to be led before the arbitrator or not.

(33) It is also on record that within the period of 10 days, petitioner did not inform he arbitrator, whether any witnesses were to be produced or not. On the other band, Mr. K.N. Bhat, senior advocate for respondent no. 1, vide his letter dated May 1. 1984, confirmed that he would not be examining any witness, in the matter, and that reliance would be placed on the affidavits and documents This was confirmed by Mr, Bhat. in reply to the letter, written by counsel for petitioner. Pursuant to that, counsel for petitioner. informed the arbitrator that as, respondent had no wish to examine any witness, the matter be decided on the basis of the documents, filed before him and the arguments, that might be advanced by counsel for parties.

(34) I have also perused the records of the proceedings, as maintained by the arbitrator and I find that the arbitrator was giving reasonable and adequate opportunity, to both the parties and parties were given proper bearings. Under the circumstances, I do not find any substance, in the contentions, as urged by Mr. Srivastva, that the arbitrator failed to observe the principles of natural justice and fair play.

(35) The last contention, urged before me, by Mr. Srivastva was, that in the agreement, as entered into between the parties, there was no provi- 35 sion for escalation. and the charges were firm and the amount was fixed for transportation. Petitioner agreed to transport various items as detailed in the agreement, for a total charges of Rs.6,45,451.00 . By awarding the extra amount, the arbitrator misconducted himself and there was nonapplication of mind, on his part. As. the contract did not contain any clause, with regard to escalation, so, petitioner could not claim any amount on account of escalation or rise in costs. By awarding the additional amount, in favor of petitioner, the arbitrator has ignored the specific terms of the agreement and letter of intent Hence, the arbitrator has misconducted himself. The findings, as given by the arbitrator, are also erroneous. Moreover, the documents produced on record, do not support the case of petitioner.

(36) Mr. Srivastva, has further submitted that the agreement is part of the records and Court can look into the various terms of the agreement, to see whether, the arbitrator could award he amount to petitioner, especially when the award is non speaking one. Further, the claim, made by petitioner. was beyond the terms of the agreement. The arbitrator could not go beyond the agreement and letter of intent. By allowing various claims of petitioner, arbitrator has exceeded his jurisdiction.

(37) Reliance has been placed upon the judgments in Ceekay Grease and Chemicals (P) Ltd. v. Union of India, ; M/s. Alopi Pershad and sons Ltd. v. Union of India, ; Continental Construction Co. Ltd. v. State of Madhya Pradesh and Dandusi Sahuv. State of Orissa 1990 (1) Arbitration Law Reporter, S.C. 5.

(38) In Ceekay Grease and Chemicals (P) Ltd. (supra), Mr. Justice C.L. Chaudhary held: "I have considered the relevant contentions of the parties and have gone through the record. The arbitrator dismissed the claim of the petitioner for Rs. 1,33,496.50 as increase in excise duty. In fact the petitioner had not claimed any amount on account of increase in the excise duty. The case of the petitioner was that though the excise duly on grease was withdrawn w.e.f. 30-3-1978 yet there was an element of excise duty paid on the base oil which is one of the ingredients for manufacture of grease as such they were entitled to the excise duty paid on the base oil. The arbitrator, it appears, has not appreciated the scope of the reference and scope of the claim of the contractor as laid before the Arbitrator. It is a clear case of non application of mind and there is an error apparent on the face of the award. I agree with the law laid down in Fertilizer Corporation's case (supra), which laid down that an award which is the product of non application of mind of the arbitrator cannot be permitted to sustain in law. The arbitrator has not decided the real question at issue at Issue which was "whether the claim of the petitioner for payment of excise duty on base oil was justified or not."

(39) In M/s. Aiopi Pershad and sons, Ltd. (supra), one of the questions. for determination, before their Lordships of the Supreme Court, was that, when the contract had expressly stipulated, for payment of chargsn, at rate specified therein, in that case, the arbitrator could not ignore the express covenants, between the parties and award amount to Agents, when the Government had not agreed to pay to the Agents, under an agreement. It was held: "The extent of the jurisdiction of the court to set aside an award on the ground of an error in making the award is well defined. The award of an arbitrator may be set aside on the ground of an error on the face thereof only when in the award or in any document incorporated with it, as for instance a note appended by the arbitrators, stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous Champsey Bhara & Co. v. Jivraj Ballo Spinning and Weaving Co. Ltd, 50 Ind App 324 : (AIR 1923 Pc 66). It. however, a specific question is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law, does not make the award bad on its face so as to permit of its being set aside, In re King and Duveen,l9l3-2 Kb 32 and Govt. of Kelantan v Duff Development Co. Ltd, 1923 Ac 395 Was the reference made by the parties to the arbitrators a specific reference, that is, a reference inviting the arbitrators to decide certain questions of law submitted to them". If the reference is of a specific question of law, even if the award is erroneous, the decision being of arbitrators selected by the parties to adjudicate upon those questions, the award will bind the parties. The original agreement dated May 3,1987, was modified by the supplementary agreement dated June 20, 1942, and the arbitrators have held that the modified agreement was binding-upon the Agents. By the agreement as modified, a graded scale was fixed for the establishment and the contingencies to be paid to the Agents, and also for the mandi charges and overhead expenses. The arbitrators still proceeded to award an additional amount for establishment and contingencies and an additional amount for mandi charges. By clause 14(a), read with clause 12(b) (2) of the agreement, the rate at which establishment and contingency charges were to be paid, was expressly stipulated, and there is no dispute that the Government of India have paid to the Agents those charges at the stipulated rate for ghee actually purchased. The award of the arbitrator shows that the amount actually received from the Government, totalled Rs. 6,04,700-9-0, whereas according to the accounts maintained by the Agents, they had spent Rs. 6.77,542-0-3. Granting that the Agents bad incurred this additional expenditure under the head establishment and contingencies, when the contract expressly stipulated or payment of charges at rates specified therein, we fail to appreciate, on what gronnd, the arbitrators could ignore the express covenants between the parties, and award to the Agents amounts which the Union of India had not agreed to pay to the Agents. The award of the arbitrators, awarding additional expenses under the head of establishment and contingencies, together with interest thereon. is on the face of its, erroneous."

(40) In Continental Construction Co. Ltd., (supra), the Lordships of Supreme Court held: "In the aforesaid light, we are of the opinion, the High Court was right that the District Judge was entitled to examine the contract in order to find out the legality of the claim of the appellant regarding extra cost towards rise in prices of material and labour. As was pointed out by the learned District Judge clauses 2.16 and 2.4 stipulated that the contractor had to complete the work in spite of rise in prices of materials and. also rise in labour charges at the rates stipulated in the contract. There was a clear finding of the arbitrator that the contract was not rendered ineffective in terms of Section 56 of the Act due to abnormal rise in prices of material and labour. This being so and the contractor having completed the work, it was not open to him to claim extra cost towards rise in prices of material and labour. The arbitrator misconducted himself in not deciding this specific objection raised by the State regarding the legality of extra claim of the appellant."

(41) In Dandasi Sahu (supra), it was held : "As is seen from the award though it refers to getting all the relevant records from the ex arbitrator there is no reference to the hearing of the parties or consideration of the documents relating to the original claim made on 6-4-1977. In the order-sheet it has been mentioned that both parties had agreed that they had nothing more to add except what had been already given in their respective claim and counter statement and what had been recorded in the depositions already made before the previous arbitrator. The reference to depositions already made is incorrect as it is admitted by both the parties that no deposition was at all recorded before the previous arbitrator nor there is any record of the previous arbitrator showing such oral evidence was recorded by him. Neither of the parties adduced any oral evidence before the new arbitrator. Though the arbitrator is not bound to disclose as to what interpretation he has made and what inference he has derived from the documentary evidence, he is bound to refer in the award that he had considered all the documents placed before him no matter whether he relies on them or discards them from consideration The arbitrator in his award ex facie does not mention that he has referred to or considered the documents placed before him in respect of the original claim. The order sheet mentions about the hearing on different dates relating to the supplemental claim statement which was filed before him It is this argument in respect of the supplemental claim that has been mentioned in the award."

(42) Besides other amounts, petitioner claimed a sum of Rs. 4,25,250.00, from respondent, on account of additional amount, on the basis of revised rates. The question, which arises for consideration is, whether, petitioner did claim the additional amount of Rs. 4,25,250 00, on account of escalation or rise in cost of transportation.

(43) With respect to first claim of Rs. 4,25,250.00, the contents of paras 12, 13, 14, 15 and 16 of the statement of claim of petitioner, are reproduced, as under :- "12. Pursuant to and acting upon the said transport contract between the parties, the claimant commenced the work of transportation since January 29, 1981. The claimant was assigned in the process by the respondent the job of the transportation o f materials weighing over 479 metric tons, of which about 398 metric tons consisted of major items being 74 machines weighing over 2 tons and about1 metric tons only consisted of light weight items but big in dimensions whereas as per the contract and according to the understanding between the parties major items i.e. heavy machines were to consist of 258 metric tons of miscellaneous packages and minor items were to consist of 222 metric tons aggregating 480 metric tons. The claimant was made to carry about 74 machines whereas, as per contract the claimant was supposed to carry only 32. 13. Byforcing upon the claimant the task of transportation of the materials in the proportion as aforesaid, the respondent has altered the very basis and context of the negotiations between the parties leading to the said contract. The claimant, however, carried out the work of transportation in order that there be no resultant failure on the part of the respondent in making available the materials in question for the construction of the project at Bhempedi in Nepal, subject to the claimant's claim for the consequential revision in the price schedule and/or total consideration. 14. As per the unit rates leading to the settlement of the aggregating value of the contract, subject to the discounts made available to the claimant to the respondent the claimant would be entitled to a further sum of Rs. 4,25,250.00 details whereof will appear from annexure 'E' hereto. The claimant craves leave thereto at the hearing. 15. One of the items of heavy machinery transported by the claimant under the said contract is four numbers of Stator Segment weighing in the aggregate about 14 tons. Under the provision of the Agreement in writing between the parties dated January 13, 1981, the choice as to the kind of vehicle being engaged for transportation of such materials rested with the respondent. In purported exercise of such power, the respondent contrary to the specific advice of the claimant insisted and made the claimant te carry the said four members of Stator Segments in low beo trailers in eight several consignments. The claimant advised against the engagement of law bed trailers inasmuch as the said Indian made trailers are 351 feet long and cannot take turn in the up-hill winding roads on the bills of Nepal and Bhopal to Raxaue will take more time. However, at the insistence of the rcspon-1 dent the claimant engaged six such Trailers for the transportation of the said consignments of Stator Segments, at considerable expense. As correctly anticipated by the claimant the said trailers carrying the said eight consignments were unable to move beyond the indo-Nepalese Border at Raxaul. 16. In order to solve the said impasse and/or stalemate the claimant with the notice, knowledge, consent and/or concurrence of the respondent hired from M/8. Fuji Electrical, a Japanese concern working at the project site of Bhempedi, Nepal their imported trailer of 20 long (special size) at an exorbitant rate of Rs. 8.000.00 per trip for the transportation of the said seven consignments from Raxaul to the project site of Bhempedi On account of such hire charges the claimant paid a total sum of Rs. 56,000.00 to the said Japanese concern, the claimant is entitled to and claims reimbursement thereof from the respondent." Clauses 2,3 and 4 of the agreement, which are relevant for the present case, read as under : "2. The total charges for transporting equipments covering 2 sets of Hydro Generator equipment and their auxiliaries weighing approximately 480 tons from Company works of Bhopal to Kulekbani Project site near Bhempedi in Nepal on door collection to door delivery basis including customs clearance at Border and unloading at site would be Rs. 6,45,451.00 (Rs. Six lacs forty five thousand four hundred fifty one only). The charges will be firm and no escalation will be admissible. The charges are inclusive of Road Tax, statistical charges, Bridge tax or any other taxes levied by Govt or local bodies. These will however, be exclusive of loading charges at Bhopal which will be done by Company and customs duty payable at Border. The customs clearance will be arranged by the Agent at checkpost and necessary bills will be submitted to company for reimbursement of customs duty subject to documentary evidence. All payments etc., required for the transportation will be arranged by the Agent. However, the Company will provide necessary certificate required for payment of customs duty at Border at concessional rate of 1 % (one per cent). 3. The charges cover transporting the items as detailed below. (a) Major items listed in annexure 1 weighing approximately 129 tons for one unit i.e. 258 tons for both the units. (b) Misc. packages weighing approximately 111 tons for each unit i.e. 222 tons for both units. 4. The quantity (weight) given above is only indicative and is liable to variation of plus minor 10% In case the variation is beyond this limit, the payment will be adjusted on pro-rata basis."

(44) According to petitioner, it is thus seen, that the claim of Rs. 4.25.250.00 , was made, not on accent of any escalation, or rise in the cost of transportation. Under the agreement, charges for transporting, covered items, as mentioned in annexure I to the agreement.

(45) Petitioner made its claim, on the ground, that under the agreement, the major items, to be transported, consisted of 258 tons, for both the units and miscellaneous packages, weighing approximately 222 tons for both the units Under the agreement, it was the case of petitioner, that the quantity (weight) was liable to variation of plus/minus 10 per cent. In case the variation was beyond that limit, then, the payment was agreed to be adjusted on prorata basis.

(46) In the statement of claim, according to petitioner, it was assigned in the process, by respondent, the job of transportation of materials, weighing over 479 metric tons, of which about 398 metric tons, consisted of major items, being 74 machines, weighing about 2 tons and about 81 metric tons only. consisted of light weight items, but, big in dimensions, whereas, as per the agreement, the major items, i.e. heavy machines, were to consist of 258 metric tons of miscellaneous items, and minor items were to consist of 222 metric tons, aggregating 80 metric tons. It was further alleged by petitioner that petitioner was made to carry about 74 machines, whereas, as per the agreement, petitioner was supposed to carry only 32 machines.

(47) Thus, in my view, the claim made by petitioner, was not for additional amounts, on account of any escalation or rise in the cost of transportation, but, was made in accordance with the terms of the contract, The provided the prorats adjustment, if the variation ill the weight was beyond the limit of 10 per cent plus/minus.

(48) The arbitrator awarded a sum of Rs. 2,82,991.00 to petitioner against the claim of Rs, 4,25,250.00 . Thus, the facts and circumstances in the judgments in Continental Construction Co. Ltd. (supra) and Dandasi Sahu (supra), were different, from the facts of the present case, I do not find any error of law, on the face of the award. The arbitrator has not ignored the terms of the agreement and, as such, has not misconducted himself.

(49) Same is the position, with regard to the claim of Rs. 56.000.00 made by petitioner, on account of hire charges, paid to M/s. Fuji Electricals.

(50) Petitioner claimed a sum of Rs, 46.000.00 , on account of detention chaiges, of Indian made Trailers, and a further sum of Rs. 40.000.00 . on account of loading and unloading at Raxaul. These claims have been allowed by the arbitrator.

(51) By allowing these two claims, in my view, the arbitrator has ignored the express terms of the agreement, between the parties. It may be pointed out that respondent was not liable, on account of any detention charges of Indian made Trailers. It was the sole responsibility of the petitioner, to transport the items, as mentioned in the agreement.

(52) Similarly, petitioner could not claim Rs. 40,000/, on account of unloading and loading at Ranaul Under the agreement, the charges were exclusive of only loading charges at Bhopal, which were to be borne by respondent. Accordingly, the arbitrator has misconducted himself, in ignoring the express terms of the agreement.

(53) The other claims, relating to the refund of earnest money and the balance amount were made by petitioner, under the agreement. No error on 41 the face of the award, could be pointed out, with regard tu these claims, which have been allowed by the arbitrator. I also do not find any non-application of mind, on the part of the arbitrator or misconduct on his part. As, the award, with regard t Rs. 46,000.00 and Rs. 40,000.00 , on account of detention charger and unloading and leading is separable, from the other items, so the result is the award is modified only, with regard to these 2 items of Rs. 46,000.00 and Rs. 40,000.00 . After disallowing these two claims, the awarded.

(54) I am satisfied that the modified award is supported by evidence.

(55) Under the facts and circumstances of the case, the objections filed. respondent No. 1, are hereby dismissed. The award, as modified above, for Rs. 4,22,754.39, is made a Rule of the Court and decree is passed, in terms of the modified award, which will form part of the decree.

(56) If, the decretal amount, is not paid within 2 months, from today, in that event, respondent No. 1 will be liable to pay interest, at the rate of 12 per cent per annum, from the date of decree, till realisation.