Mahesh Bansal vs Executive Engineer (Fcd. 1)
1995 Latest Caselaw 375 Del

JUDGMENT

Usha Mehra, J.

(1) Shri Mahesh Bansal entered into an agreement with the Executive Engineer (FCD.1) regarding the work of "construction of puce drain in between R.D.1200 to R.M.18(X) of Nasirpur Link Drain", An agreement was entered into between the parlies. The said agreement contained an arbitration clause No.25. Disputes arose between the partics. The petitioner asked for the appointment of an Arbitrator pursuance to Clause 25 of the agreement. When the respondent failed to do so, he moved a petition in this Court under Section 20 of the Arbitration Act. This Court vide order dated 20th Septcmber,1990 directed the respondent to appoint an arbitrator to adjudicate the disputes arisen between the parlies. Pursuance to the said order, Chief Engineer (I & P), Delhi Administration appointed Shri S.S.K.Bhagat, Chief Engineer (Civil), N.D.M C. as the- sole arbitrator.

(2) The said arbitrator has made and published his award dated 12th March,1991. The said award was Filed in the Court by the arbitrator on 17th May,1991. Notice of the Filing of the award was issued. Mr.S.K.Mittal, Advocate appearing for the petitioner accepted the notice on 17th May,1991 whereas the respondent was served with the notice of the Filing of the award. After the service of the notice, the respondent Filed the present objections to the award vide IA.No.9796/91.

(3) The award has been challenged, inter alia, on the grounds that the arbitrator misconducted the proceedings by collecting the information and had the site inspection done behind the back of the respondent. He collected the data without the knowledge and notice to respondents. In the body of the award the arbitrator himself has admitted this when he observed that he relied on the "detailed site inspection of the work". According to the respondent, no site inspection of the work ever look place in the presence of the respondent, and therefore, the reliance by the arbitrator on site inspection which was conducted by him without notice to respondent amounts to misconduct. Moreover, the arbitrator being a public servant could not accept money from the petitioner by way of fees. He was not entitled to charge any cost.. He also exceeded his authority by awarding interest. Against claim No.6 the arbitrator has awarded damages for idle establishment and for rise in costs due to delay in work. For the claim of idle establishment, the petitioner failed to produce actual record like acquittance roll. This fact is admitted by the arbitrator himself in his proceedings. Therefore, in the absence of any evidence, the award of damages on account of idle establishment is based on surmises and conjectures. In the absence of any proof the awarding of damages to the tune of Rs.30,000.00 amounts to misconduct on the part of the arbitrator. No delay could be attributed to the respondent and, therefore, damages could not be awarded. The claim No.3 based on Clause 10(c) was also against the facts on record. Under Clause 10(c) of the agreement, the petitioner was required to give notice before prefering a claim. Having not complied with the provisions of Clause 10(c), the arbitrator ought not to have awarded the amount against this claim. The arbitrator had no authority to set aside the levy of compensation imposed by the Superintending Engineer under Clause 2 of the Agreement. Therefore, the award of Rs.432.00 against Claim No.4 was beyond his purview. The award of Rs.11,228.00 against Claim No. I is also based on no evidence. No payment could be made for executing the work in walls as the payment could only be made for the work done under the foundation. As per Clause 12 of the contract for storm water drains all items of work related to foundation except lining of drain. Therefore, R.C.C. work which was executed for construction of toe wall in a lined storm water drain, the respondent was justified to pay it under foundation rather than in walls. Therefore, the award suffers from this infirmity. The arbitrator did not follow the principles of natural justice and thus misconducted himself and the proceedings.

(4) These objections have been refuted by the petitioner mainly on the ground that finding of fact arrived at by the arbitrator cannot be upset by this Court because this Court is not sitting as a Court of appeal on the Finding of facts arrived at by the arbitrator. The arbitrator did not conduct site inspection of the work during the course of the proceedings. There was no question of collecting the information behind the back of the respondent. The arbitrator was justified in awarding the amount of interest. Even the award against Claims No. 1, 3 and 6 is justified on all accounts. It is the respondent who committed breach resulting into the delay in execution of the work. The arbitrator has given detailed reasons for .awarding the amount of Rs.30,000.00 as against the claim of the petitioner of Rs. 1,50,000.00 . Similarly, the award of Rs.3,620.00 against Claim No.3 is justified because the arbitrator took into account increase in cost of labour due to increase in labour wages. Under Clause 10(c) the petitioner had submitted detailed analysis justifying his claim of Rs.20,700.00 against this Claim. But inspite of the documents justifying this claim for the full amount, the arbitrator awarded only Rs. 3,620.00 . While awarding this amount the arbitrator relied upon the documents filed by the parties and set aside the levy of compensation to the tune of Rs.432.00 because the arbitrator found it to be wrongly imposed by the respondent. This Court cannot upset the award of the arbitrator in this regard. Similarly, against claim No.1, the arbitrator was fully justified in awarding Rs. 11,228.00 and while awarding this amount the arbitrator relied upon various specifications and clauses of the agreement entered into between the partics. In fact this claim was not denied by the respondent at any stage, therefore, the award in question should be made a rule of the Court.

(5) I have heard Mr. S. K. Mittal, counsel for the petitioner and Mr. Sharad Aggarwal, counsel for the respondent/MCD. At the outset, it must be mentioned that so far as the award of interest is concerned i.e. against claim No.7, the counsel for the respondent fairly conceded that in view of the law now settled by the Supreme Court, he was not pressing this claim. At the time these objections were filed, the position with regard to award of interest presuit, pendente lite and future was not very clear. But now the law has been settled by the Supreme Court. The arbitrator can award interest pro-suit, pendente lite and future. Therefore, this objection has no force.

(6) Reverting to the award of cost and fixing his fee, the arbitrator is within his right to award the cost or fixing his fee. There is no bar for a public servant who acts as an arbitrator and fix his fee and incidental expenses. Therefore, awarding of cost or fee by the arbitrator would not vitiate the award. I find no merits in this objection.

(7) As regards claim No.1, the arbitrator has awarded a sum of Rs. 11,228.00 . It has been noted that the arbitrator took into account the pleadings and the arguments advanced by the parties. This was a claim made by the petitioner for the centering and shuttering of the toe portion of retaining wall. The issue, before the arbitrator, was the interpretation as to whether the R.C.C. under the walls over the fooling should be paid under the item of R.C.C. work in walls or paid under the foundation? The respondent before the arbitrator based its argument on the definition of the foundation given in Clause 12 (VII f) of the agreement. During the course of the execution of the work the petitioner had raised this claim vide exhibit 'C-2'. The respondent acknowledged the same vide exhibit 'C-10'. Vide exhibit 'C-10 it was indicated that extra payment on this account was under the active consideration of the Department. Moreover, the arbitrator concluded while interpreting Clause 12(VII-F) that the agreement did not envisage the centering and shuttering of the R.C.C. in walls to be paid in foundation. Para B of clause 12 makes it clear that abutments and piers shows tha the bed of floor level is only to be considered as foundation and all other works executed above the bed level should be considered as a structure above the foundation. Therefore, relying on the observations of the Supreme Court in Civil Appeal No.205/64 that the moment Executive Engineer concerned assures the petitioner that his claim was receiving attention, such a claim at a subsequent stage cannot be rejected. Hence on the basis of exhibit 'C-10' the arbitrator contended that the structure of toe walls comprised of 2 parts namely (i) foundation slab; and (ii) the stem 1.2 Mt. high tampering from 10 cm. at top to 15 cm. at bottom. The element of centering and shuttering was higher than the foundation portion of mass concrete, and therefore, the claimant was found to be entitled for the difference of rates between the centering and shuttering paid by the respondent under the foundation items. In view of these reasons given by the arbitrator based on the documentary evidence placed before him and his interpreting the Clauses of the agreement, it cannot be said that there is any error apparent on the face of the award nor can it be said that the interpretation given by him of Clause 12 is erroneous or wrong. It is a settled proposition of law that if two interpretations are possible, then the one given by the arbitrator, if not erroneous should be accepted. This Court is not silting as a Court of Appeal on the decision of the arbitator nor can impose its reasonings to the reasoning given by the arbitrator,

(8) So far as Claim No.3 is concerned, the claimant had claimed increase in the cost of labour due to increase in labour wages on account of Delhi Administration Notification. Minimum labour rates were quoted at the time the lenders were submitted. These rates were revised w.e.f. 1st June,1984 by Delhi Administration. Hence the petitioner was duly bound to pay the revised wages to his labour. The only objection taken by the respondent is that notice as required under Clause 10(c) had not been served on the respondent before making this claim. Secondly record had not been produced to substantiate the same. Both these objections have been turned down by the arbitrator primarily on the ground that the respondent submitted a statement showing the amount of work done after 1st June.1984 i.e. exhibit 'R-11'. He also look into consideration the labour component from exhibit 'R-l I' which worked out to he 23.5% as per the norms of C.P.W.D. There.fore, he concluded that the petitioner would be justified to claim escalation as worked out on the basis of exhibit 'R-11' while absorbing 10% and, therefore, concluded that award of Rs.3,620.00 would be just as against the claim of Rs.20,700.00 . So far as serving of notice is concerned, admittedly Clause 10(c) provides that notice had to be given but that by itself is no ground to reject the claim if otherwise found due. Clause 10(c) does not stipulate that if notice is not given than .statutory increase in labour wages paid by the contractor would not be given. In the absence of any bar, the arbitrator was within his right to conclude that the contractor having paid the revised wages which he calculated on the assumed the labour component of 23.5%; as per the norms of the C.P.W.D. and therefore, relying on the document filed by the respondent exhibit 'R-l 1', he calculated the escalation of the labour component and awarded the amount. I see no reason to interfere in the same.

(9) As regards Claim No.4 i.e. levy of compensation, as per Clause 2 of the agreement I am completely in agreement with the arguments-of the learned counsel for the respondent/MCD that the arbitrator had no jurisdiction to award the same as held by this Court in the case of D.D.A. Vs. Sudhir Brothers in FAO(OS) 104194 decided on 15th December,1994. Therefore, this claim is liable to be set aside.

(10) So far as the challenge to Claim No.6 is concerned which was based on the claim of damages on account of non-availability of staff, prolongation of contract, delays in decisions etc., the arbitrator relied on various clauses of the contract and the documentary evidence placed before him and thereafter concluded that there was delay of 307 days i.e. about ten months. Taking that factor into consideration, the arbitrator awarded an amount of Rs. 30,000.00 as against the Claim of Rs. 60,000.00 . Whereas on account of second aspect of the claim regarding the escalation for the work done beyond the stipulated date the same has been rejected. I find no infirmity in the award rather the arbitrator has given sufficient reasons for arriving at this conclusion. He worked out the days of delay and the initial hindrances namely standing crop, delay due to late conveying the decision for allowing the concrete in toe wall for the work portion. Because of standing crops up to the edge of drains and the villagers not allowing the dumping or earth or taking material for laying concrete slopes, he found the delay. Thus he made the award after considering the evidence produced before him by the parties and after relying on the clauses of the agreement. It would not be right for this Court to re-evaluate or re-assess the evidence already evaluated by the arbitrator.

(11) The basic tenet of all arbitral jurisdictions is that the parties shall be left to their bargains and the arbitral tribunals which they have chosen. If that be so, an assumption cannot easily be made that the Court shall, as a mailer of course, interpose itself or merely because the conclusion arrived at by the arbitrator is not liked by one or the other party. If it be held otherwise then no sanctity will be attached to the arbitral tribunal chosen by the parties. One or the other party is bound to feel aggrieved ' because of the decision of the arbitrator, then whole mailer will be re-opened. In order to avoid this wrong and prolong litigation, the parties chose their arbitral tribunal for adjudication of their disputes to be decided in a summary manner. That is why in the arbitration agreement provisions are made for a summary determination of the disputes between the parties which is always treated as inviolable. The Courts have also to the extent possible refrain from interfering in the award made by the chosen arbitral tribunal of the parties unless there is an error apparent on the award. If two interpretations are possible then the interpretation given by the arbitrator has to be accepted,. Therefore, so far as the objection to the awards are concerned, I find no merits in the same.

(12) However, a very interesting point has been raised by the respondent/objector that the arbitrator in the body of the award while reciting the facts has mentioned that while considering the claims of the parties be took into consideration and perused the pleadings and considered the material and the submissions made "including the detailed site inspection of the work". Much has been stated about this line , but nothing turns of the same. Mr.Mittal rightly contended that it is not the arbitrator who inspected the site of the work at the hack of thq respondent, but he took into consideration the detailed site inspection and the work done by the Department i.e. the documents produced before him and after considering the same award has been given. I find force in the submission of Mr.Mitlal because reading of this para clearly shows that the words "including the detailed site inspection of the work" mean the inspection of the work done by the parties and not by the arbitrator. The para reads as under : Now, after perusal of the pleadings, hearing the parties and their counsels at length, examining and carefully considering the material, in the documents produced, the evidence adduced, submissions made, the contentions and arguments advanced by them, including the detailed site inspections of the work, I S.S.K.Bhagat do hereby make and publish the award as below"

(13) From the reading of this para, it cannot be said that the arbitrator conducted site inspection behind the back of the respondent and thus misconducted himself. On this score also, I Find no merits in the objection. The same is liable to be rejected.

(14) For the reasons stated above, award: made and published by the arbitrator dated 12th March,1991 subject to the modification against Claim No.4 is hereby made rule of the Court. The claimant shall be entitled to Rs.45,063.00 and interest as awarded by the arbitrator plus the cost of the arbitration of Rs.1,650.00 . If the decrial amount is paid within one month then petitioner will not be entitled to any further interest, otherwise the petitioner will also he entitled to simple interest at the rate of 12% from the date of decree till realisation.