Union Of India (Uoi) And Anr. vs R.S. Makkar
2002 Latest Caselaw 486 Del

JUDGMENT

Dalveer Bhandari, J.

1. The award of the Arbitrator has been made the rule of the Court by the learned Single Judge and consequently the Union of India was directed to pay Rs. 2,87,028 with interest at the rate of 12% per annum. The appellant aggrieved by the judgment of the learned Single Judge has approached this Court in appeal.

2. It is mentioned in the appeal that the learned Single Judge failed to appreciate that the Arbitrator held that the slads were not made as per specification. He further erroneously held that contractually and legally the respondents were right when they asked the claimant to cast the slab only after removing the defects and even the slabs were not cast after filling the cubes rating the concrete tests. It is urged in appeal that the learned Single Judge was wrong in making the award a rule of the Court when there are innumerable infirmities in the award. The Arbitrator mentioned that the respondents were justified in asking the claimant to dismantle a slab but in ultimate analysis, his decision that both the parties should bear their own damages, is totally perverse and contrary to the contractual obligation between the parties.

3. The order of the learned Single Judge has also been questioned on the ground that the contractor was to fulfil certain obligations and having upheld the dismantling of the slab by awarding dismantling cost etc. his further decision not to award Rs. 1,42,938.25b as compensation levied under Clause 14 of the agreement is totally misconceived.

4. The judgment has also been assailed on the ground that as against claim No. 1 and counter claim of respondent No. 2, the claimant claimed a sum of Rs. 1,36,851.29 but the Arbitrator in fact awarded a sum of Rs. 2,17,129 plus an additional sum of Rs. 3,000/- and refund of 50% of the over all relate award on additional sum of Rs. 15,521.55. None of these claims were raised before the Arbitrator.

5. It is also mentioned in the appeal that the Arbitrator has misconducted himself and the proceedings as against claim No. 4 contractor claimed Rs. 77,995/- whereas the Arbitrator calculated the total amount as regards the cost of the material and T&P officials as Rs. 2,08,924.31 out of which he has awarded sum of Rs. 1,05,122/- to the respondent, the amount recoverable from the claimant. The balance of Rs. 1,03,802.31 held payable to claimant, out of this Rs. 69,147.84 represents the net amount of material for which secured advanced was allowed earlier. The award and judgment of the learned Single Judge has been assailed on the ground that he failed to appreciate that the balance of Rs. 43,654.47 represents material taken over by the respondents. In addition to the above the Arbitrator wrongly awarded another Rs. 40,000/- towards cost of T & P and other material taken over by the respondent adding the two Arbitrator awarded Rs. 83,654.47 whereas the contractor's claim was Rs. 76,954/- on account of T & P and other materials.

6. It is stated that the Arbitrator has misconducted himself and the proceedings in awarding Rs. 40,000/- as cost of T & P and material when the cost of material is already added on the sum of Rs. 2,08,924.31. In fact the total cost of material is already added in the sum of Rs. 2,08,924.31. The award of the Arbitrator in awarding a sum of Rs. 40,000 only on general assessment basis is totally perverse and without any basis.

7. The appellants also urged that the Arbitrator was in error in rejecting the counter claim Rs.\4,04,979/- on account of work which was executed at the risk and cost of the claimant under Clause 3(a) and 3(b) especially so when he had held that contract was rightly rescinded. The Arbitrator hi,self held that the appellant Union of India was justified in asking the contractor to remove the defects and in fact awarded cost for dismantling of the defective slabs and he misconducted himself and the proceedings by not awarding damages of Rs. 4,09,979/- on account of work executed at the risk and cost of the claimant.

8. It is also alleged in the appeal that the Arbitrator was in error in disalowing the counter claim No. 8 for recovery of Rs. 1,18,956/- on account of compensation provided under Clause 2 of the agreement. It was submitted that the decision of the Superintending Engineer to levy compensation under Clause 2 is final and cannot be challenged before the Arbitrator. The Arbitrator cannot adjudicate on the same.

9. We are quite conscious of our limitations while dealing with this appeal. The scope of interference by the appellate court in a matter where the award has been made rule of the Court by the learned Single Judge is extremely limited. This appeal raises substantial questions of law and issues of great importance. The Arbitrator clearly exceeded his jurisdiction and awarded larger amounts than what has been claimed by the claimant. In this view of the matter, the Court would be justified in interfering with the impugned judgment. In view of the extraordinary features and circumstances, this Court is compelled to interfere with the impugned order by which the award has been made rule of the Court. The Courts have to be extremely vigilant wherever large public funds are involved. The Arbitrator has clearly misconducted himself in awarding larger amounts than what the claimant has claimed in his petition without any justification. We are constrained to interfere with the order of the learned Single Judge affirming the award.

10. The appeal is accordingly allowed and the order of the learned Single Judge is set aside and consequently the award is set aside.

11. In the facts and circumstances of this case, we direct that the disputes between the parties be referred to the arbitration of a retired Hon'ble Judge of this Court. We request Hon'ble Mr. Justice Jaspal Singh to Kindly accept this arbitration.

12. The parties are directed to appear before the Hon'ble Mr. Justice Jaspal Singh on 20.5.2002.