G.S. Jain And Associates vs Indian Oil Corporation Ltd. And ...
2006 Latest Caselaw 2272 Del

JUDGMENT

Pradeep Nandrajog, J.

1. The present decision disposes of the two captioned applications which lay a challenge to 2 awards published by Shri N. Guha Roy, the sole arbitrator appointed to decide the disputes and differences between Indian Oil Corporation and M/s. G.S. Jain & Associates. The two awards are dated 14.10.1987 and deal with similar issues.

2. The awards are non speaking awards.

3. Indian Oil Corporation invited offers for construction of skirted granular pile foundation for 1 MCO tank and 3 FO tanks at its on-going works at Haldia Refinery. Vide another notice inviting tender, Indian Oil Corporation invited offers for the construction of skirted granular pile foundation for 1 fire water tank within the precincts of the same refinery. M/s. G.S. Jain & Associates (here-in-after referred to as the contractor) had submitted offers as per tender documents in respect of both notice inviting tenders. The offer was accepted and contractor proceeded to execute the works in question.

4. For some period of time, Indian Oil Corporation paid money to the contractor as per bills raised but towards the end of the works, not only refused to pay the bills but even proceeded to make recoveries.

5. The genesis of the dispute could be traced, as was projected at the Bar by learned Counsel for the parties, to Clause 5.6 of the contract.

6. As per the contract, the contractor was to provide all materials required in the compacted bore-well. The price to be quoted was inclusive of the material to be used as also labour charges and charges for equipment to execute the works.

7. Under the caption CONSTRUCTION OF THE PILES pertaining to THE SPECIAL CONDITIONS OF CONTRACT, Clause 5.6 stipulated as follows:

A 45 cm diameter and required depth bore hole shall be made by auger boring or any other suitable means. The location of piles under the flexible shaft shall be as per drawing supplied by the Engineer-in-Charge. The stone aggregate (20 mm - 70 mm) shall be placed in the borehole in layers of 50 cm followed by 15 cm layer of sand over it and compacted by a hammer of not less than 250 kg in weight. The hammer will be used with a follower. The drop of the hammer shall not be less than 75 cm. Compaction of stone aggregate/sand shall be done under sluicing if necessary. The compaction will be considered complete when 25 mm set for a specified No. of blows is achieved. The contractor will be paid for 45 cm wide borehole made and the depth of borehole from the ground level per meter length. During compaction the diameter of boreholes made, will widen and contractor has to supply materials for the enlarged diameter of the bores. The tenderer is supposed to include the extra material and labour in the enlarged diameter of the boreholes during compaction, and no extra payment will be made for enlarged diameter of the completed granular pile. After the construction of the piles, the improvement in the soil strength shall be checked at random places as decided by Engineer-in-Charge between the piles, near the piles and on the piles by carrying out dynamic cone penetration test.

8. As projected by learned Counsel for the contractor, since Clause 5.6 of the contract clearly indicated to the bidders that though diameter of the borehole was 45 cms, during compaction, diameter could get enlarged and for excess material consumed, no extra payment would be made; while filling the tender, contractor kept this in view as also that there would be some voids in the stone aggregate when stacked for measurement, and while submitting the offer, vide letter dated 25.8.1981 (C-7), inter alia wrote as under:

2. Material consumed, as a total of individual ingredients in granular piles is assumed up to 20% more than the theoretical value of bore. Any consumption beyond shall be on pro-rata basis.

9. There were discussions between the parties. Indian Oil Corporation wanted the percentage of assumed allowance offered by the contractor to be increased from 20% to 23.5%.

10. Contractor agreed. Letter of acceptance issued by Indian Oil Corporation on 8.3.1982 (which formed part of the contract documents) recorded as under:

Material consumption, as a total of individual ingredients in granular piles is assumed up to 23.5% more than the theoretical bore volume. Any consumption beyond shall be on pro-rata basis.

11. Both parties were not at variance with each other that the intention in introducing the agreed variation was that if during execution of the works, it was found that the actual volume of material used in the bore-well exceeded the theoretical volume of the bore by more than 23.5%, the contractor would be paid for the labour and material involved in the execution of the works as it would be a case of excess expansion of the bore. To put it differently, within the quoted price, contractor was to provide material as also labour to accommodate an expansion of up to 23.5% in the cross-sectional area/volume of the bore.

12. However, disputes arose on 2 questions, namely:

(1) How was the volume of actual materials utilized in the theoretical bore volume to be determined?

(2) How are the excess materials, if any, utilized, to be paid for?

13. Whereas the contractor alleged that the volume of materials actually used in the bore volume would be the volume of loose stacked materials at site without any deduction in the stack measurements for voids, according to the Indian Oil Corporation, the volume of material actually used in the theoretical bore volume would be the compacted material determined after making due allowances for voids in the loose stacked material, which voids would obviously disappear on compaction.

14. Further, according to the contractor, the excess materials were to be paid for the entire work irrespective of whether or not the additional material necessitated the additional work or not. According to Indian Oil Corporation, payment was to be made only for the excess material and labour if any, involved, if the bore expanded beyond the limits specified.

15. But there was a problem. The borehole did not have a reinforced wall. It was akin to a pit dump in loose soil. Pile foundation work required stone of a particular diameter (20 mm to 70 mm) to be placed in the boreholes in layers of 50 cms followed by a layer of sand over it, having thickness of 15 cms. Compaction was to be done thereafter using a hammer of not less than 250 kg weight. As the site of the borehole was loose soil, when the stone aggregated and sand was compacted, resultant pressure was generated even sideways and due to this, the borehole increased in diameter. Once work was executed or was partially executed, it was just impossible to find out the extent of increase in diameter of the borehole as a result of compaction. According to the contractor, the only method to determine the extent of increase in the diameter of the borewell was to co-relate the volume of stone aggregate used for the work done. Contractor alleged that allowing the agreed variation limit of 23.5%, anything over and above on the theoretical consumption was obviously due to further increase in the diameter of the borehole. This was the foundation on which the contractor pleaded that the volume of materials actually used in the bore volume should be determined with reference to the volume of the loose stacked materials at site without any deductions in the stacked materials for voids. Contractor stated that 23.5% variation included the voids in stone aggregate.

16. Parties attempted to reason it out with each other and at that stage, pending settlement of the issue, Indian Oil started making ad-hoc deductions of 12.5% from the running account bills submitted by the contractor. These deductions were on account of estimated voids in the loose stacked materials, as per estimation of Indian Oil Corporation.

17. Attempts were made to theoretically calculate the voids involved. But no acceptable formula could be derived. Indian Oil Corporation requested the contractor to conduct field exercises to determine the voids involved. The contractor did not agree thereto. Indian Oil Corporation claims to have unilaterally conducted some tests and according to the same, average voids of 38.38% in loose stacked materials were found. Contractor stuck to his stand that voids could not be deducted as 23.5% agreed variation included everything.

18. Accordingly, Indian Oil Corporation recalculated the volume of materials used in the pile fillings and arrived at a quantity of 123.87 cum of excess material used in the bore fillings on which only a sum of Rs. 36,353.64 was payable to the contractor as against a sum of Rs. 46,68,656.10 claimed and in respect whereof Indian Oil Corporation stated that it had already made excess payments in sum of Rs. 32,21,106.16.

19. I may clarify, aforesaid related to the contract involving 1 MCO and 3 FO tanks. Regarding the fire water tank, no excess material was found to have been used in the pile fillings and accordingly, Indian Oil Corporation claimed that excess payment in sum of Rs. 1,40,064.14 was made to the contractor.

20. As the parties could not sort out the disputes, there being an arbitration clause, disputes were referred to the sole arbitration of Shri N. Guha Roy, a retired engineer and an ex-employee of Indian Oil Corporation.

21. But, the contractor had 3 other claims pertaining to the work relating to 1 MCO and 3 FO tanks and 1 claim pertaining to the water tank.

22. Unfortunately, only dispute referred to arbitrator was whether Indian Oil Corporation was justified in making deductions on account of calculating voids in the loose stacks of stone aggregate and was entitled to effect further recoveries.

23. Learned arbitrator entered upon reference somewhere in the month of May 1987.

24. Indian Oil Corporation filed a statement of claims. Response thereto was filed by the contractor. Learned arbitrator notified to the parties that he would be hearing their respective versions on 10.7.1987 and 11.7.1987.

25. A hearing was admittedly held on 10.7.1987. What transpired therein is a subject matter of dispute. From here starts the grievance of Indian Oil Corporation which has alleged mala fide and prejudice of the arbitrator against Indian Oil Corporation.

26. It would be useful to note the language of Indian Oil Corporation, in its pleadings and affidavit by way of evidence, to highlight the nature of grievance.

27. In paras 6 and 7 of the affidavit by way of evidence filed by Shri Yogendra Singh, Manager (Civil), Indian Oil Corporation, it is stated as under:

6. At proceedings held by the Ld. Arbitrator at New Delhi on 10.7.1987 the Ld. Arbitrator (respondent No. 2) to the surprise of the Applicant/Respondent No. 1 expressed reluctance to proceed with the reference or to consider the claims of the Applicant/Respondent No. 1 unless the Respondent corporation agreed also to the reference on the contractor's claims before the Respondent No. 2. The learned Arbitrator (Respondent No. 2) expressed resentment at the fact that the Applicant/Respondent No. 1 Corporation had thought fit to challenge his jurisdiction to go into and give an award on the Petitioner's claims, and insisted that it would be in the fitness of things if the Respondent No. 1 Corporation sits with the Petitioner and drawn up fresh terms of reference to the ld. Arbtirator covering therein the Petitioner's claims.

7. I say that it was the contention of Mr. V.N. Koura, Counsel for the Respondent No. 1 before the ld. Arbitrator that the ld. Arbitrator could not dictate as to what should be the scope of reference and whether the Petitioner's other claims should also be included within the reference. So far as the Respondent No. 1 was concerned, the only dispute referred to arbitration was the dispute arising out of the Respondent No. 1's claims and the Petitioner's counter-claim as set out in Annexure "B-1" and "B-2" to the Application and nothing else. Mr. Koura also pointed out to the ld. Arbitrator that in its letter dated 6.5.1987, the Petitioner had raised certain additional claims. So far as the Respondent No. 1 was concerned, all these claims were beyond the scope of the reference and of the arbitration clause, and that if the Petitioner disputes this the proper course for the Petitioner was to move an application under Section 20 of the Arbitration Act and not to move ld. Arbitrator for enlargement of the scope of reference.

28. However, the record of the learned arbitrator shows that all was well on 10.7.1987 and that after discussing the reference made and probably noting its limited scope, parties agreed to file fresh agreed terms of reference and that on 11.7.1987 the same i.e. fresh terms of reference were filed. Learned arbitrator has recorded a composite minutes of the sittings held on 10th and 11th July 1987. The minutes recorded in writing by the learned arbitrator read as under:

1) During the proceedings held on 10th July, 1987, a dispute arose on the question of terms of reference to the arbitration. After detailed discussion, it has been agreed that both the parties shall sit together and try to settle an agreed points of reference and submit in the next proceedings i.e. on 11th July, 1987.

2)(a) During the proceedings on 11th July, 1987, a joint application on behalf of Indian Oil Corporation Ltd., and M/s. G.S. Jain & Associates agreeing the terms of reference has been filed to the Arbitrator. Henceforth, the statement of claims of M/s. G.S. Jain & Associates and that of Indian Oil Corporation Limited, as recorded in the joint-application as stated above, shall be the points of reference to the Arbitrator.

(b) In reference to Item (i) of the Statement of Claims of M/s. G.S. Jain & Associates as recorded in the joint application stated above, it has been agreed that the final bill (including extra items) will be examined at Haldia site between the parties and the agreed figure will be placed before the Arbitrator by the first week of August, 1987. In case of any dispute arising for settling the final bill, both the parties may refer the points of dispute to the Arbitrator, which will be looked into and settle it within the period stipulated above i.e. first week of August, 1987.

(c) The representative of Indian Oil Corporation Limited has sought time to prepare the statement of claims along with the relevant supporting documents and agreed to submit the aforesaid Statement to the Arbitrator and also the other party M/s. G.S. Jain & Associates by 12th August, 1987.

(d) As per the request of both the parties, it has been decided that the next hearing will be held in Calcutta on 28th, 29th and 30th August, 1987. The time to start the proceedings will be at 11.00 am every day and the venue will be arranged by Indian Oil Corporation Limited and to be notified to the Arbitrator and M/s. G.S. Jain & Associates accordingly.

29. To explain the aforesaid conduct of Indian Oil Corporation in filing agreed revised terms of reference, in para 7 of the affidavit by way of evidence, Shri Yogendra Singh has stated as under:

7. ...The ld. Arbitrator appeared to take serious and severe umberage to these remarks and became agitated, excited, angry and aggressive as a result thereof. Consequently, it was with a view to appease the ld. Arbitrator and to prevent further displeasure of the ld. Arbitrator against the Respondent No. 1 that the representative of the Respondent No. 1 informed the learned arbitrator that the counsel representing the Respondent No. 1 would sit with the Petitioner's counsel and draw up fresh terms of reference covering within the scope of reference the claims of the Petitioner as instructed by the ld. Arbitrator. I say that the counsel and the representative of the Respondent Corporation thereafter sat down with the counsel and the representative of the Petitioner and drew a fresh terms of reference covering within the scope of reference all substantial claims of the Petitioner. Copies of the enlarged terms of reference drawn up in this behalf and submitted to the ld. Arbitrator have been annexed with the Application No. I.A. No. 988 of 1987 of Respondent No. 1 as Annexure 'D-1' and 'D-2'.

30. Be that as it may, as recorded in the minutes of the hearing held on 10th and 11th July 1987, Indian Oil Corporation submitted revised statement of claim and the contractor filed reply thereto.

31. Parties assembled at Calcutta on 28th August 1987. Indian Oil Corporation had submitted revised statement of facts and so had the contractor.

32. Pertaining to the work relating to 1 MCO and 3 FO tanks, the claims of the contractor were as under:

(a) Rs. 6,05,584.73 for full work done and as reflected in the final bill.

(b) Rs. 14,11,196.16 for refund of deductions effected on account of amount deducted towards voids.

(Note: This claim was as per original reference.)

(c) Rs. 2,01,880/- for mobilizing 4 additional vigs.

(d) Rs. 3,12,266.26 for using 100-150 mm size broken stone metal.

33. Pertaining to the work relating to the water tank, the claim of the contractor was:

(a) Rs. 1,29,837.72 for full work done and as reflected in the final bill.

(b) Rs. 72,838.30 for refund of deductions effected on account of amount deducted towards voids as also refund of Rs. 36,856/- received by Indian Oil Corporation after encashing a bank guarantee.

(Note: This claim was as per original reference.)

34. Hearings were held on 28th, 29th and 30th August 1987.

35. Pertaining to claim No. 1, for both works, parties arrived at a settlement. They debated qua the others.

36. A combined minutes of the proceedings held on 28th to 30th August 1987 was recorded by the learned arbitrator. The minutes drawn are as under:

1. As decided in the proceedings held at New Delhi on 10th and 11th July, 1987, the next hearings were held at Calcutta from 28th to 30th August, 1987.

2. Claim Nos. 2, 3 and 4 have been presented by both the parties on these three days.

3. Regarding Claim No. 1, as decided earlier, the representatives of IOCL and M/s. G.S. Jain & Associates have been able to come a mutual settlement for the amount as detailed below:

  a) MCO Tanks -         1 No. - Rs. 5,23,765.03
b) FO tanks              -     3 Nos.
c) Fire Water Tank   - 1 No. - Rs. 1,28,150.34
 

Figs. above are subject to Arithmetical check
 

4. Regarding Claims No. 3 & 4, both the parties have submitted their relevant documents during the proceedings and regarding Claim No. 2, M/s. IOCL have expressed that they will submit few more documents in respect of their claims and it has been suggested by the undersigned that these documents should be brought by the Representative of IOCL along with the representative of M/s. G.S. Jain & Associates within a fortnight and they should come to Calcutta to apprise the undersigned. Copies of those documents which are to be submitted by the IOCL, should also be forwarded to M/s. G.S. Jain & Associates in advance in order to enable M/s. G.S. Jain & Associates to take necessary action as suggested above. On going through the documents, the undersigned will decide whether any further sitting will be necessary and if so, the undersigned will inform both the parties accordingly within a week's time from the date of that meeting. Regarding Claim 3, IOCL has been directed to submit details when shirtwall drawings for execution given to the contractor.

5. In view of the above, both the parties have requested that time for making and publishing the award of the Arbitration may be extended up to 31st October, 1987.

6. As per the request of the parties, the time is accordingly extended up to 31st October, 1987 for making and publishing the award.

37. Indian Oil Corporation has a rival version. It is set out in an affidavit filed by Shri K.V. Guruswamy, Dy. G.M. (Indian Oil Corporation). It is reflected in paras 11 to 13 of his affidavit dated 4.8.1989. Said paras read as under:

11. I say that the petitioner filed further pleadings and documents at the proceeding held at Calcutta between August 28 and 30, 1987. It was expected that admission/denial of the documents filed by the parties would be completed at these proceedings where after the parties would open and state their respective cases, consequent upon which the matters in controversy or issue would be defined and the parties would have opportunity to lead evidence in respect thereof. However, much to the surprise and consternation of the respondent No. 1, the ld. Arbitrator directed that the parties should forthwith proceed to argue their cases on the basis of the pleadings and documents as filed during the course of the proceedings without necessity of any proof. Mr. V.N. Koura, counsel for the respondent No. 1 raised the question that first and foremost the documents filed by the parties should be admitted and denied, on the basis whereof the issues could be framed and the parties could decide what further documents to file and evidence to lead or what affidavit in evidence to file with opportunity to the other party to cross-examine the deponents of each party. The ld. Arbitrator stated that before he could decide on the procedure to be adopted, it was necessary that each party gave the ld. Arbitrator a bird's eye-view of the case and documents/evidence relied upon in support of its case and once he understood this, he would be in a better position to determine the procedure to be followed. The ld. Arbitrator stated that he would decide on the procedure to be adopted after the parties had explained their case and documents. Mr. V.N. Koura, counsel for the respondent No. 1 (who was the claimant in the original reference and whose claims were originally referred to arbitration) commenced explaining the Respondent No. 1's claim. However, before he could proceed, the ld. Arbitrator informed counsel for respondent No. 1 that as far as he was concerned, the petitioner was the claimant and the respondent No. 1 was the respondent in the arbitration proceedings, and the petitioner should therefore first explain its case.

12) I say that the petitioner's counsel commenced explaining the petitioner's claim No. 3 and 4 and took most of the reminder of August 28 and the whole of August 29 and part of August 30, 1987 in explaining these claims, and during the course of this explanation, the petitioner read and explained all the documents as also filed additional documents.

13) I say that the counsel for the respondent No. 1 thereafter gave a bird's eye-view of the respondent No. 1's case on the petitioner's claims Nos. 3 & 4 and the document which the respondent No. 1 primarily relied upon in support thereof, and the petitioner's counsel gave a rejoinder. Thereafter the petitioner commenced discussion on the petitioner's claim No. 2 and during the course of this discussion presented further documents. Even during the course of arguments of these claims the petitioner was allowed by the ld. Arbitrator to raise arguments on various matters which were not specifically raised in the pleading as also to file fresh documents in support thereof. By then it was too late for Mr. Koura to even open the respondent No. 1's case on the petitioner's claim No. 2, since he was booked by 5 o'clock flight back to Delhi. He, therefore, asked the ld. Arbitrator to fix a further date for hearing and fix a date for filing further documents meanwhile, in the light of the documents filed by the petitioner. In response, however, the ld. Arbitrator proposed that he would like to forthwith announce and publish his award. Counsel and the representatives of the applicant/respondent No. 1 present at the proceedings protested against this on the ground that the respondent No. 1 Corporation had not been given a proper opportunity to state or represent its claims and to file evidence in support thereof or to counter even the arguments raised by the petitioner in opening its case in support of its claims, specifically bearing in mind that 'fresh arguments had been raised and fresh documents had been filed for the first time on behalf of petitioner during the opening arguments in Rejoinder without the respondent No. 1 having been given any opportunity to refute even these arguments or to file evidence or documents in support thereof. The ld. Arbitrator, however, was of the view that the matter was quite clear in his mind and that he saw no necessity of further documents or arguments by the respondent No. 1 corporation and that so far as the respondent corporation's claims were concerned, the respondent No. 1, if it thought fit, could file further documents or evidence in support thereof, but to his mind no such arguments, evidence or documents would serve any useful purposes, with the greatest reluctance the ld. Arbitrator eventually agreed to give the respondent No. 1 a limited opportunity to file further documents only with regard to claim No. 2 of the petition, but stated that there would be no further hearing in the matter unless in his opinion such a hearing would serve a useful purpose. The ld. Arbitrator also observed that in the circumstances the respondent No. 1 would have to agree to extend time for making and publishing the award. Counsel and the representatives of the respondent No. 1 however explained that while ordinarily there could be no objection to the respondent No. 1 agreeing to any extension of time reasonably required to make and publish an award, clearance, in this behalf would have to be obtained from the authorities concerned in the respondent No. 1 Corporation in accordance with the internal procedure of the respondent No. 1, and that agreement of the extension of time could be conveyed only thereafter. After the conclusion of the proceedings and after the counsel for the respondent No. 1 had departed, the ld. Arbitrator prepared minutes of the proceedings and delivered copies thereof to a representative of the respondent No. 1 corporation against his signatures. A copy of the Minutes of the proceedings held at Calcutta between August 29 and 30, 1987 as prepared by the ld. Arbitrator are annexed to the application of respondent No. 1 under Sections 30 and 33 of Indian Arbitration Act 1940 and marked as Annexure "F" therein the contents of which are self-explanatory.

38. On 28.9.1987, the arbitrator intimated to Indian Oil Corporation and the contractor as under:

REGISTERED A/D No. Date: 28.9.1987.

SHRI M.P. MURTHY Chief Project Manager, Project & Engineering Cell - I, 3rd Floor, Kailash Building, 26, Kasturba Gandhi Marg, New Delhi - 110001.

Sub: Arbitration for Adjudication of the disputed claims between M/s Indian Oil Corporation Ltd. & M/s. G.S. Jain & Associates for the work of construction of skirted Granular piles foundation for (i) I No. Fire Water tank at Haldia Refinery (ii) I No. MCO tank & 3 Nos. F.O. Tanks at Haldia Refinery.

Dear Sir,

This has reference to the proceedings dated 30.8.1987 and letter dated 19.9.87. Inspite of the opportunities having been given, IOCL failed to submit the same. In the interest of justice I give the last opportunity and fix 12th October, 1987 at 2.30 P.M. in my office at 129A, S.P. Mukherjee Road, 4th Floor, Calcutta-26, for this purpose and the clarification if any.

Thanking you,

Yours faithfully,

Sd/

(N. GUHA ROY)

Arbitrator.

39. Indian Oil Corporation claims that before letter dated 28.9.1987 written by the arbitrator reached it, Indian Oil Corporation addressed letter dated 30.9.1987 to the arbitrator, informing as under:

Dear Sri Guha Roy,

Re: Arbitration proceedings between G.S. Jain & Associates and Indian Oil Corporation Ltd. arising out of contract No. PJ/H-3/4/E/32 dated 8-3-82 and PJ/H-3/E/34 dated 17-5-83 for the construction of Foundations for I MCO Tank and 3 FO Tanks and 1 Fire Water Tank respectively at Haldia Refinery.

Let me thank you at the outset for the courtesy of permitting Sri K.V. Guruswamy, Deputy General Manager (Project) to discuss the above case with you during your last visit to Delhi. He, however, got the distinct impression that you had apparently a closed mind on the issue with regard to the measurement of fill materials incorporated in the piles, without the Corporation having yet opened its case in the proceedings of led evidence or addressed arguments. The Corporation has since unfortunately received even more disturbing reports about the conduct of the proceedings from the officers representing the Corporation in the proceedings, the list of the reports being that:

(i) You have displayed different standards of appreciation and receptiveness between the parties. While you have given the Contractor every possible opportunity to file the documents, to address arguments even in person and to raise fresh points even during arguments, you have expressed a singular unwillingness, to extend the same courtesy to the Corporation, and an unwarranted brusqueness, impatience and lack of receptiveness while dealing with the Corporation's case.

(ii) You have made it quite clear in unequivocal terms that if the Corporation has made a mistake in measuring the quantities of fill and in over paying the Contractor, then it must bear the loss and consequences arising out of the mistake.

In these circumstances, a serious doubt has arisen on the quality of justice which the Corporation may expect in these proceedings and whether any meaningful purpose will be served in the continuation of these proceedings, specially since you have shut out a great deal of further documents, evidence and arguments which the Corporation would have liked to produce and address before you in support of its case on the Contractor's Claims Nos. 2 and 3. Consequently, the Senior Management of the Corporation has reluctantly decided that I should address you on behalf of the Corporation to request you not to proceed further in the matter.

We trust that you will appreciate the great deliberations undertaken before arriving at this decision.

Yours truly,

for INDIAN OIL CORPORATION LTD.

Sd/

(S.N. SARKAR)

Chief General Manager

HALDIA REFINERY.

40. Indian Oil Corporation did not join the proceedings held on 12.10.1987. The arbitrator published the awards on 14.10.1987. Claims of the contractor was allowed. Recoveries effected by Indian Oil Corporation were held unjustified. It may be noted that claim No. 1 (both cases) were settled as per agreement noted in the minutes recorded for hearing held on 10th and 11th July 1987 and said sums were awarded.

41. The awards are non speaking awards. The challenge is predicated on bias and mala fide of the arbitrator.

42. Indian Oil Corporation seeks to establish bias by pleading, and I can do no better, but to quote from the affidavit of Shri K.V. Guruswamy, as under:

(iii) M/s. Patron Engineering Construction Pvt. Ltd., (hereinafter called "Patron") was awarded a contract for fabrication and erection of air pre-heater system including civil, structural and electrical work at Haldia Refinery on August 18, 1986 for a total estimated contract value of Rs. 1,07,51,187/16. A copy of the applicant/respondent No. 1 corporation's letter of indent dated August 18, 1986 in this behalf is annexed to the application of respondent No. 1 under Section 30 & 33 of Indian Arbitration Act 1940 and marked Annexure "H" therein.

(iv) On October 17, 1986, Patron appointed Granger as its sub-contractor to undertake the work for a total contract value of Rs. 22,83,088/- (Rupees Twenty Two lakhs eighty three thousand and eighty eight only). A copy of Patron's letter dated October 17, 1986 in this behalf is annexed to the Application of Respondent No. 1 under Sections 30 and 33 of Indian Arbitration Act and marked as Annexure "I" therein.

(v) On May 20, 1987, Granger was directly awarded by the Haldia Refinery of the Respondent No. 1 corporation the work of fabrication and erection for one Tolusna Tank (capacity 350 m.cu.) at Haldia Refinery for a total contract value of Rs. 66,880/- (Rupees sixty six thousand eight hundred and eighty only). A copy of the respondent No. 1 corporation's letter of Indent dated 20.5.1987 in this behalf is annexed to the application of respondent No. 1 under Sections 30 & 33 of Indian Arbitration Act and marked as Annexure "J" therein.

(vi) The ld. Arbitrator entered upon the reference on May 25, 1987 by his letter dated 25.5.1987. A copy of ld. Arbitrator's letter dated May 25, 1987 is annexed to the Application of respondent No. 1 under Sections 30 & 33 of Indian Arbitration Act and marked Annexure "K" therein.

(vii) Meanwhile, the respondent No. 1 corporation through its Engineer-in-Charge, Engineers Indian Ltd. had made serious and repeated complaints to Patron with regard to the poor performance and unsatisfactory progress of the work awarded to it and had issued various and serious warnings and admonitions to Patron in this behalf. Patron had in turn passed on these complaints to Granger and had expressed its own serious dissatisfaction to Granger, who was to undertake the performance of the work, and a situation had even been reached in which Patron would have to either terminate the contract of Granger or face termination of its own contract by the respondent No. 1 corporation. These communications were also addressed to and dealt by Shri N. Guha Roy as Granger's Managing Director.

(viii) The situation was the same with regard to the contract for the construction of the Toluene Tank directly awarded to Granger by the Respondent No. 1 Corporation's Haldia Refinery. This work has to be completed by August 26, 1987 but had barely commenced by them, resulting in the respondent corporation having had to address several admonitions and warnings to Granger in this behalf, which were also addressed to and dealt by Shri N. Guha Roy, its Managing Director.

(ix) Consequently, Granger and particularly, the ld. Arbitrator as its promoter and Managing Director had been the recipient of serious admonitions at the hands of the respondent No. 1 corporation during the pendency of the arbitration proceedings and was on the threshold of economic loss by virtue of imminent termination of the contracts awarded to Granger at Haldia Refinery.

(x) This obviously had resulted in the ld. Arbitrator developing a strong and unconcealed bias against the Respondent No. 1 corporation in the arbitration proceedings involving the respondent No. 1 corporation pending before him.

15. I say that this bias was accentuated by the fact that Patron had threatened to terminate at Granger's risks and costs a large part of the contract of Granger on October 12, 1987 and that the termination of the contract directly awarded by the respondent No. 1 corporation to Granger at the risks and costs of Granger was increasingly imminent.

43. In paras 16 and 17 of his affidavit, Shri K.V. Guruswamy has further deposed as under:

16. I say that in the circumstances, the Senior Management of the respondent No. 1 corporation was compelled to consider the steps which could be taken to protest the interest of the respondent No. 1 in the matter, resultant upon which it was decided to move in three phases, as necessary, with a view to maintaining, so far as possible, the dignity of the Respondent No. 2 as an erstwhile senior officer of the respondent No. 1 corporation and at the same time ensuring that he does not proceed further in the matter. To this end, it was decided that:

(i) Shri K.V. Guruswamy (the deponent) as the senior most officer of the respondent No. 1 corporation dealing with the case and an erstwhile colleague of the respondent No. 2 could in the first instance tactfully speak to the respondent No. 2 and request him to consider withdrawing from the reference on the ground that the respondent corporation had taken a decision that ex-officers of the respondent No. 1 corporation shall not act as arbitrators in matters involving the respondent No. 1 corporation.

(ii) If the respondent No. 2 refused to be deterred from proceeding further in the matter by virtue of gentle persuasion, then the respondent No. 1 should politely but firmly address the respondent No. 2 in writing informing him of the apprehensions of the respondent No. 1 corporation in the matter and requesting him to withdraw from the reference in view thereof.

(iii) If the ld. Arbitrator was nonetheless adamant to proceed with the matter, then to apply to the Court to withdraw the authority of the ld. Arbitrator pursuant to the provisions of Section 5 of the Arbitration Act.

17. I say that according to the course of action decided upon as specified above, Shri K.V. Guruswamy (the deponent), spoke twice over the telephone to the ld. Arbitrator at Calcutta during the 2nd and 3rd weeks of September, 1987 and requested him to consider withdrawing from the reference in view of the decision taken by the respondent No. 1 corporation that it was improper for the ex-officers of the respondent No. 1 corporation to act as arbitrators in matters involving the respondent No. 1 corporation. The respondent No. 2, however, stated that since he had been appointed before this decision, the impropriety did not attach to his appointment. Consequently, the respondent No. 1 corporation was constrained to formally address the respondent No. 2 in terms of a Regd. A.D. letter dated September 30, 1987 informing the respondent No. 2 in clear and unequivocal terms, that the ld. Arbitrator had adopted a totally biased approach in the matter and that in the circumstances no serious doubt has arisen on the quality of justice which the Corporation can expect in these proceedings, and whether any meaningful purpose will be served in the continuation of these proceedings.

44. Shri Abhinav Vashisht, learned Counsel for Indian Oil Corporation conceded that since awards were non speaking, it would be difficult for him to get the same set aside with reference to the record of arbitration as the mental process of the arbitrator was not known and therefore bias of the learned arbitrator was the only ground available. Counsel urged that bias could be inferred from the following:

(a) The arbitrator was the Managing Director of a company Granger Engineering & Construction Pvt. Ltd. Indian Oil Corporation had awarded a contract to a company named Patron Engineering Construction Pvt. Ltd. Said contract was awarded on 18.8.1986. On 17.10.1986, Patron had sub-contracted, a part of the works awarded today by Indian Oil Corporation to Granger. Said works executed by Granger on behalf of Patron were found to be sub-standard and a dispute was pending between Indian Oil Corporation and Patron Engineering when learned arbitrator accepted assignment to act as an arbitrator. On 20.5.1987, Granger Engineering & Construction Pvt. Ltd. was directly awarded a contract by Indian Oil Corporation. Learned arbitrator was pressurizing Indian Oil Corporation not to take penal action under the contract between Indian Oil Corporation and Patron Engineering Construction Pvt. Ltd.

(b) In the same Haldia complex, wherein works were awarded to M/s. G.S. Jain & Associates (contractor), identical work for 3 MCO tanks were awarded to SEMINDIA Pvt. Ltd. at a contract value of Rs. 92.46 lacs per MCO tank. In the instant case, M/s. G.S. Jain & Associates had bagged the works for 1 MCO tank and 3 FO tanks for a sum of Rs. 1,71,48,717.05 value of the work pertaining to the MCO tank was Rs. 96,59,840.60. Whereas SEMINDIA Pvt. Ltd. did not seek any additional amount, M/s. G.S. Jain & Associates sought additional amounts. If award was upheld, M/s. G.S. Jain & Associates would get a sum much above what was paid to SEMINDIA Pvt. Ltd., meaning thereby, it would cease to be the lowest bidder.

(c) Adequate hearing was not given to Indian Oil Corporation. Nature of dispute was such that it was impossible for the parties to conclude submissions within 3 days. Learned arbitrator gave an extensive hearing to counsel for M/s. G.S. Jain & Associates. As far as Indian Oil Corporation was concerned, learned arbitrator made a pretence of giving a hearing.

(d) The award was published post haste. On 30.9.1987, Indian Oil Corporation notified the learned arbitrator that he should not proceed ahead with the hearing. A telegram was dispatched on 11.10.1987, requesting learned arbitrator not to proceed ahead with the matter. It was followed by a letter dated 12.10.1987. In spite thereof, learned arbitrator concluded the hearing on 12.10.1987 and published the award on 14.10.1987.

45. Learned Counsel for Indian Oil Corporation, Shri Abhinav Vashisht, cite various authorities on the issue, what is the test to apply to determine bias.

46. I need not note the authorities cited for the reason Shri Sandeep Sharma, learned Counsel for the contractor did not seriously dispute that the legal position appears to be well crystallized that actual bias need not be shown. As long as, from the objective facts brought before the Court, a reasonable inference of likelihood of bias can be inferred, decision of an adjudicatory authority would be liable to be set aside. I would therefore proceed on the basis that if Indian Oil Corporation can establish through the medium of objective facts, a likelihood of bias of the arbitrator, it would be a good ground to quash the awards. I would also decide whether in facts and circumstances of the case, Indian Oil Corporation is estoppel from alleging bias.

47. The two contracts in question, forming subject matter of the arbitration proceedings were formalized between M/s. G.S. Jain & Associates and Indian Oil Corporation in the year 1982. When dispute arose, contractor sought appointment of an arbitrator. On 28.2.1986, Indian Oil Corporation proposed 3 names, one of them being N. Guha Roy, (the arbitrator) for the contractor to exercise an option. On 9.5.1986, the contractor refused to accept any one of the three named persons for being appointed as an arbitrator. On 10.6.1986, Indian Oil Corporation stated that no other name could be sent as persons notified in letter dated 28.2.1986 were of standing and probity. On 8.8.2006, contractor selected N. Guha Roy to function as the arbitrator.

48. It is not in dispute between the parties that Shri N. Guha Roy was a retired General Manager in Indian Oil Corporation. One would not be wrong to presume that he was well known to the employees of Indian Oil Corporation. Said assumption is not my hunch or belief, but is grounded on the affidavits filed by Shri K.V. Guruswamy and Shri Yogendra Singh on behalf of Indian Oil Corporation in the present proceedings. Extracts of the affidavit filed by Shri K.V. Guruswamy as noted in paras 37, 42 and 43 above, as also para 53 hereinafter noted, show that the employee of Indian Oil Corporation were having fairly intimate personal relationship with the learned Various arbitrator.

49. As noted in para 44(a) Various above, (while noting the submissions of Shri Abhinav Vashisht, learned Counsel for Indian Oil Corporation), Granger Engineering & Construction Pvt. Ltd. was sub-contracted some work by Patron Engineering on 17.10.1986.

50. Notwithstanding contractor's letter dated 8.8.1986 accepting nomination of N. Guha Roy as the arbitrator, he was not formally appointed as the arbitrator. Various letters were written. It was only on 23.3.1987 that a formal letter was issued by Indian Oil Corporation appointing Shri N. Guha Roy as the arbitrator. Soon thereafter, as noted above, on 20.5.1987, Indian Oil Corporation awarded a contract to Granger Engineering & Construction Pvt. Ltd.

51. Arbitrator entered upon reference on 25.5.1987.

52. Shri Sandeep Sharma, learned Counsel for the contractor urged that Indian Oil Corporation was the one which was acting mala fide. It was Indian Oil Corporation which would be guilty of attempting to either bribe the learned arbitrator by offering his company a contract and recognizing his company as a sub-contractor. Counsel urged that Indian Oil Corporation cannot cry wolf. Counsel urged that it was within the knowledge of Indian Oil Corporation that a company headed by N. Guha Roy had been awarded a contract by Indian Oil Corporation. Counsel further submitted that notwithstanding non acceptance by the contractor of any named person on the panel when Indian Oil Corporation wrote to the contractor to select one, Indian Oil Corporation compelled the contractor to choose one out of the three persons, name whereof was proposed by Indian Oil Corporation. Learned Counsel drew my attention to the assertions in the affidavit by way of evidence filed by Shri K.V. Guruswamy, (contents noted in para 42 above) which show that when arbitration proceeded, employees of Indian Oil Corporation knew about contract awarded by Indian Oil Corporation to Granger Engineering & Construction Pvt. Ltd. and Patron Engineering Construction Pvt. Ltd. sub awarding a contract to Granger Engineering & Construction Pvt. Ltd.

53. I have pondered over the rival submissions. At this juncture, I would also like to note a further deposition in the affidavit by way of evidence filed by Shri K.V. Guruswamy. In paras 9 and 10, Shri K.V. Guruswamy has deposed as under:

9. I say that since the respondent No. 1 corporation's claims were very substantial and had been made and finalized as a result of careful and detailed technical discussions and field exercises and were regarded by the management of the respondent No. 1 corporation as substantial and unworthy of such summary and derogatory dismissal, I, Shri K.V. Guruswamy, Deputy General Manager of the Projects Department of the Refineries and Pipelines Division of the Respondent Corporation and the officer in overall charge of the case on behalf of the Corporation, called on the respondent No. 2 with a view to explain to the ld. Arbitrator the gravity of the respondent No. 1's claims, and to request the respondent No. 2 not to summarily reject the respondent No. 1's claims and contentions without hearing the matter at length and giving the respondent No. 1 a full opportunity to explain its claim. The ld. Arbitrator, however, gave me the distinct impression that he had already made up his mind in the matter and that nothing further could in any manner alter his opinion.

10. I say that this led to a series of discussions between the officers of the respondent No. 1 corporation and its counsel on whether, in view of the apparently biased and pre-judged attitude displayed by the ld. Arbitrator, the respondent No. 1 corporation could expect substantial justice in the matter. Since the ld. Arbitrator had been a Senior Officer of the respondent No. 1 and since proceedings were yet at a preliminary stage, inasmuch as further pleadings were yet to be filed at the next date of hearing in the proceedings, it was felt that there was no urgency for the respondent No. 1 to take a decision in the matter, and that it was proper that a decision be withheld until the conclusion of the next sitting at Calcutta which was fixed for August 28, 29, and 30, 1987, during which the respondent No. 1 would hopefully have an opportunity of opening its case before the ld. Arbitrator. A copy of the minutes of the proceedings held at New Delhi on July 10 and 11, 1987 as recorded by the ld. Arbitrator and sent to the parties are annexed to the application of the respondent No. 1 under Sections 30 and 33 of Indian Arbitration Act, 1940 and marked Annexure "E" therein.

54. Indian Oil Corporation is precluded from urging bias for the simple reason it was fully aware of the contracts awarded by it to Granger Engineering & Construction Pvt. Ltd. of while N. Guha Roy was the Managing Director and that Patron Engineering Construction Pvt. Ltd. to which Indian Oil Corporation had awarded a contract had sub assigned a part thereof to Granger. The deposition of K.V. Guruswamy and Yogendra Singh shows that Indian Oil Corporation was aware of the dispute regarding works executed by Granger Engineering & Construction Pvt. Ltd. Yet Indian Oil Corporation, after compelling the contractor to choose an arbitrator from one of the three named persons, did not take recourse to legal proceedings to remove N. Guha Roy.

55. Pray! What did Indian Oil Corporation do?

56. Yogendra Singh, Manager (Civil) of Indian Oil Corporation (refer para 29 above) deposed : it was with a view to appease the arbitrator ...

57. K.V. Guruswamy, Dy. General Manager, Indian Oil Corporation deposed (refer para 43 above) that after hearings were held on 28th to 30th August 1987 he spoke twice over the telephone to the ld. Arbitrator at Calcutta during the 2nd and 3rd week of September, 1987 and requested him to consider withdrawing from the reference.

58. I must confess that that I heard the submissions of learned Counsel for the Indian Oil Corporation with a lot of discomfiture because I felt that it will be a sad day in the administration of justice through the forum of arbitration if a party who has a dominant role in the appointment of an arbitrator seeks to question his integrity.

59. It would not be irrelevant for me to note that as per the version of Indian Oil Corporation, evidenced from para 6 and 7 of the affidavit filed by Shri Yogendra Singh (contents noted in para 27 above) knowledge dawned on Indian Oil Corporation that the learned arbitrator had a bias when hearing was held on 10.7.1987. Evidenced by further deposition of Shri Yogendra Kumar as noted in para 29 above, Indian Oil Corporation agreed to modify the terms of reference to appease the learned arbitrator. As per version of Indian Oil Corporation reflected in para 13 of the affidavit filed by Shri K.V. Guruswamy (contents noted in para 37 above), the learned arbitrator had indicated on 30th August 1987 that he proposed to forthwith announce and publish the award. Shri K.V. Guruswamy has deposed that learned arbitrator did not do so when representatives of Indian Oil Corporation protested. Indian Oil Corporation has deposed through the affidavit of Shri K.V. Guruswamy (contents noted in para 43 above) that K.V. Guruswamy met the arbitrator and requested him to withdraw from the reference. Shri K.V. Guruswamy has deposed that the arbitrator refused to do so. According to Shri K.V. Guruswamy he met the arbitrator during the second and third weeks of September 1987.

60. Facts pleaded by Indian Oil Corporation show that it was aware of the reasons for the alleged bias when arbitration proceedings were being held. Yet it allowed the proceedings to continue. It took no steps to file an application before the arbitrator calling upon him to recuse from the proceedings. It took no steps for his removal. It allowed the proceedings to continue. Indian Oil Corporation is estoppel from raising a plea of bias. As observed in the report published as Ramsahai Sheduram v. Harishchandra Dullachandji if a party discovers that the arbitrator suffers from a personal disqualification the party must take immediate steps to stop arbitration. If the party fails to go to Court for revocation of reference and takes part in the proceedings, it cannot later on challenge the award on said ground.

61. I must place on record my displeasure at the conduct of the employees of Indian Oil Corporation for having admitted meeting the arbitrator in private and discussing the matter with him as also requesting him to recuse. It is highly objectionable for any party to approach an arbitrator who is seized of the matter. If any party feels that an arbitrator should recuse from a matter referred to him, the correct and proper course is to file an application before the arbitrator setting out the facts on which claim is made. Copy of such application has to be made available to the opposite party who would have a right to make necessary submissions. The Arbitration Act 1940 has adequate safeguards to seek removal of an arbitrator who after entering upon reference commits a misconduct or suffers a disability to continue with the reference. Nothing of this sort was done. I may note that a few days prior to the publication of the award a petition was filed in this Court seeking removal of the arbitrator but before any orders could be obtained therein, the award came to be published.

62. Submissions predicated on the alleged similar contract with SEMINDIA Pvt. Ltd. are of no help to Indian Oil Corporation as I do not find that any such argument was raised in the pleadings before the arbitrator. No plea and no document pertaining to SEMINDIA Pvt. Ltd. finds a place in the record of arbitration. It is trite that no plea can be urged to question an award if not urged before the arbitrator.

63. On the last two submissions made, suffice would it be to note that length of hearing and length of arguments are no ground to infer bias.

64. Apprehension of bias must be judged from an average point of view and with a healthy and reasonable mind.

65. Learned arbitrator was an engineer. He would understand the technical nuances. He was no novice. He knew the language of mathematics. He had before him the following admitted facts:

a. Clause 5.6 of the special conditions of the contract provided:

i) Piles to be constructed of 45 cm diameter.

ii) Required depth bore hole should be made by auger boring or any other suitable means.

iii) The stone aggregate (20 mm to 70 mm) were to be placed in the bore hole in layers of 50 cm followed by 15 cm layers of sand over it.

iv) Aforenoted was to be compacted by a hammer of not less than 250 kgs in weight.

v) During compaction the diameter of the bore hole would widen.

vi) Contractor had to provide materials (included in the tender price) for the enlarged diameter of the bores.

b) In view of Clause 5.6 the offer was to include (in the price) the extra material and labour for the enlarged diameter of the completed granular pile.

c) In the offer, (letter dated 25.8.1981), the contractor has put the following stipulation:

2. Material consumption, as a total of individual ingredients in granular piles is assumed up to 20% more than the theoretical volume of bore. Any consumption beyond shall be on pro rata basis.

d) Thus keeping in consideration the volume of stack and stone grit to be poured in the bore hole, the contractor agreed for additional materials up to 20% more than theoretical volume of the bore.

e) After submission of offer dated 25.8.1981 by the contractor there were detailed discussions on each and every stipulations made and points submitted by the contractor.

f) In view of this Corporation requested the contractor to increase this allowance up to 23.5%, to which contractor agreed.

g) Accordingly Clause 5.6 of special conditions of the contract was modified/varied as per statement of agreed variations (Annexure-I with letter of acceptance dated 8.3.1982 (C-20). The same being as under:

STATEMENT OF AGREED VARIATIONS Sl.No. Page No. Clause No. Subject Agreed Variations of tender of tender document document

1) .... ... ... ....

2)          ...        ...        ...        ....
         xxxxx        xxxxxx     xxxxx 
           16)         126       5.6 of Materials 
                                 and job 
                                 specifications.
                                 Materials consumption

 

Material consumption, as a total of individual ingredients in granular piles is assumed up to 23.5% more than the theoretical bore volume. Any consumption beyond shall be on pro-rata basis.
 

h. In view of the above agreed variation, material consumption as a total of individual ingredients in granular piles was up to 23.5% more than the theoretical volume and beyond this percentage the material consumption was to be paid on pro-rata basis. The stipulation extracted above provides that any consumption beyond 20% (which was agreed to 23.5%) to be considered for payment on pro-rata basis.

i. The payment of the pile with material having been in meter, so the material consumed beyond 23.5% was to be converted into meters and length of this was to be paid as per the rate provided. This mode of measurements was acted upon by the parties. The payments were made to the contractor on the basis of this mode of measurements.

j. Item No. 7 of the schedule of rates stipulated:

Sl.No.

Description Unit Quantity Rate in Rs. Figures/Words Amount in Figures/ Words

7.

Supplying stone boulders of 150mm to 200mm size of approved quality free from rubbish and foreign matter including royalty transportation to site, stacking the same by the side of tank pads for all leads and lifts etc. (121/2% voids will be deducted for purposes of measurement).

complete M3

110/-

5,39,000/-

k. The item of work for which dispute was raised was item No. 1 of the schedule of rates and it stipulated:

Sl.

No.

Description Unit Quantity Rate in Rs. Figures/ Words Amount in Figures/ Words

1.

Construction and installation of 450 mm dia granular piles up to a depth of 15 metre from existing ground level with 70 to 20 mm size metal aggregate and duly compacted by a drop hammer of not less than 250 kg, using a follower and the fall of the hammer should not be less than 75 cm, to a specified set of 25 mm, compacting the metal aggregate in layers of 50 cm each followed by 15 cm layer of course sand, and maintaining the sides of bore holes vertical before and during compacting the aggregate and sand by using bentonite slurry if required, supplying all materials, all ancillary works adjunct to piling work, disposal of all surplus materials including earth up to a distance of 500 meter for all lifts and delifts, complete as per specifications, drawing and direction of Engineer-in-Charge.

M 1,20,000 99/-

1,18,80,000/-

l. Language of item No. 1 vis-a-vis item No. 7 showed that deduction towards voids was clearly contemplated and was envisaged by Indian Oil Corporation but was only provided for in item No. 7 and not in item No. 1.

m. While preparing the bills the following calculations were adopted by the Corporation for payment of item No. 1:

Bored Depth Original bore dia Stone Ballast Sand Total 12M 45cm 3.00 M3 0.50 M3 3.5M3

Theoretical bore volume = P x diameter2 x depth of pile bored

= 3.14 x 0.45 0.45 x 12 =1.908M3

add 23.5% =0.448M3 Total Volume =2.356M3 Additional consumption =1.144M3 above theoretical and 23.5%

66. The dispute was whether any deduction towards voids was to be made from stack measurements.

67. Before an expert 3 days' arguments were enough. The learned arbitrator was required to consider and analyze the facts noted in sub paras a to m of para 65 above.

68. Under the Arbitration Act 1940, a non speaking award is a legal and a valid award.

69. I find no merits in the objections.

70. IA Nos. 987/1988 and 988/1988 are dismissed.

71. Awards dated 14.10.1987 published by Shri N. Guha Roy are made a rule of the Court. Decree shall follow. Post decretal interest is awarded to the contractor and against Indian Oil Corporation @8% per annum from date of decree till payment.