Amar Nath Mehra & Co. vs Union Of India
2009 Latest Caselaw 2066 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    Date of Decision: 15.05.2009

%                 CS(OS) 1220A/2005 & I.A. No.9532/2005


      AMAR NATH MEHRA & CO.                      ..... Plaintiff
                    Through:          Mr. B.K. Dewan and Mr. Bhavesh
                                      Kumar Sharma, Advocate

                     versus

      UNION OF INDIA                              ..... Defendant
                          Through:    Mr. R.C. Nangia, Advocate


CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI

1.    Whether the Reporters of local papers may          No
      be allowed to see the judgment?

2.    To be referred to Reporter or not?                 No

3.    Whether the judgment should be reported            No
      in the Digest?


VIPIN SANGHI, J. (Oral)

1. These are objections to the award made by the learned sole

arbitrator Mr. S.C. Jain dated 16.08.2005, preferred by the respondent,

Union of India, under Sections 30 & 33 of the Arbitration Act, 1940.

The petitioner had entered into an agreement with the respondent to

provide portage service to the respondent. Disputes arose out of the

said contract, which were referred to arbitration of Mr. S.C. Jain by

order dated 02.09.2004 passed in CS(OS) 1378A/1984. The learned

arbitrator has made an award in the sum of Rs.1,57,010/- in favour of

the petitioner/claimant, which is now under challenge. The

proceedings and the award are governed by the Arbitration Act, 1940.

2. The respondent/ objector has raised general grounds of

challenge to the award which need no mention. Specific challenge has

been raised in respect of claim Nos.1, 5, 8 to 11, 13, 16 & 17.

3. So far as the claim No.1 is concerned, the same had been

made for refund of Rs.88,803.71, which was stated to have been

wrongfully and unjustifiably recovered from the dues of the claim. The

respondent, Union of India, had sought to justify the deduction on

account of employment of departmental labour and bazaar labour to

the tune of Rs.83,599.09 due to the failure of the petitioner/claimant to

provide enough labour to do the work. Ex.1-G has been referred to by

the arbitrator in his award and, therefore, can be looked into by the

Court. Ex.1-G is a communication dated 12.11.1974 sent by the

Divisional Superintendent, New Delhi to the AAO (TA) Northern

Railway, Jalandhar City, which encloses a statement showing

particulars of engineering departmental as well as bazaar labour

utilized on behalf of the petitioner during their entire contact period.

Along with the said communication the tabulation showing the

engagement of bazaar labour as well as engineering departmental

labour has been enclosed. The learned arbitrator also takes note of

Ex.1-N dated 03.12.1974, which is a communication sent by the

Divisional Superintendent, New Delhi to the petitioner claimant. This

communication gives details of the bazaar labour and departmental

engaged on behalf of the petitioner during the period May, 1974 to 15th

August, 1974. The credit given to the petitioner, as per Ex.1-N, works

out to Rs.15,944.16. On the basis of these two documents, learned

arbitrator has concluded that the respondent has not been able to

justify the recovery of any amount beyond Rs.15,944.16. The

arbitrator has found that the actually deducted amount was

Rs.89,836.30. He has, therefore, awarded refund of amount of

Rs.73,892/- in favour of the petitioner/claimant. Learned counsel for

the objector, Mr. R.C. Nangia, has sought to read and rely upon

Annexures R-3 to R-7 filed along with the objection petition to say that

the claimant/petitioner was repeatedly put to notice about short supply

of labour. Firstly, it is not open to the Court to look into documents not

referred to in the award. Secondly, these documents, in any event, do

not throw light on the quantum of labour engaged by the respondent

on the petitioner's account. In my view, no error can be found in the

award of claim No.1. The objection is, therefore, rejected.

4. The next objection has been raised in respect of award on

claim No.5. This claim had been made of Rs.13,227.90 on the ground

that the same had been wrongfully and unjustifiably withheld as

demurrage charges. Mr. Nangia, counsel for the respondent/objector

has again sought to rely on various documents to show that the

petitioner/ claimant had been put to notice regarding supply of short

labour i.e. Annexures R-3 to R-7. He also relies on clause No.10 of the

contract which permits the levy of demurrage on the contractor on

account of his failure to provide sufficient labour, which causes delay in

the process of loading and unloading of the wagons.

5. I find no merit in the objection raised by the respondent. A

perusal of the reply given in response to claim No.5 before the

arbitrator shows that the reply is totally vague and devoid of any

particulars. Learned arbitrator has found that the respondent has not

shown any calculation to arrive at the amount deducted towards

demurrage. Even if the respondent was entitled to claim demurrage

for the alleged short supply of labour by the petitioner/claimant, it was

for the respondent to justify the computation of the amount of

demurrage levied upon the petitioner, which had not been done. No

error can be found in the award made on claim No.5. The objection is

rejected.

6. So far as the award on claim No.8 is concerned, it had been

made for Rs.18,000/- for payment of less rates for loose goods at the

rate of Rs.21/- per wagon as against the petitioner's claim of Rs.80/-

per wagon. Claim No.9d had been made for Rs.9,000/- for labour

employed in transshipment of meter gauge wagon to box wagon. The

award is not reasoned and it is not permissible for the Court to go

behind the award. Moreover, in response to the reliance placed on

Note 12 to the agreement which relates to rates for "special goods", by

learned counsel for the respondent/objector, the petitioner has placed

reliance upon Appendix A Entry 2(i) of the contract, which contains the

rates applicable to "loose goods". Award on claim No.8 shows that it

pertains to "loose goods" and therefore, there is no merit in the

submission of the respondent. The objection to award on claim No.8 is

rejected. Similarly, the award on claim No.9 cannot be questioned as

the respondent has not established that the work of transshipment

from meter gauge wagon to box wagon was covered within the scope

of the petitioner's contractual obligation. It is not for the Court to

interpret the agreement. As aforesaid, the award is unreasoned and

the Court cannot examine the basis on which the award has been

made in these circumstances. The objections are rejected.

7. The objection to the award on claim No.10, which were made

for supply of labour for loading coal sweeping in wagons, for supply of

coal to Loco Shed and also for carrying by head load for feeding the

crane for over 800 yds., is without any reason and it is not open to the

Court to go into the mind of the arbitrator and examine the basis on

which the award has been made. Similarly, the objection to the award

on claim no.11 for payment of goods dumped on the ground and

loaded after 24 hours (mid night) is claimed as a fresh operation under

Clause 4 (iii) of the agreement, is also unreasoned and the same does

not disclose any error on the fact of it. I may also note that in

response to claim Nos.10 & 11, in the reply before the arbitrator, the

only response of the respondent was that payment had been made in

accordance with the contract.

8. The position with regard to the award on claim No.13 is also

the same. The award is unreasoned. The said claim had been made

for Rs.8,000/- on account of wagon being declared damaged by TXR for

load adjustment after loading as it required further labour. Since no

reasons have been given, it is not possible for the Court to go behind

the award. The objection to claim No.13 is, therefore, rejected.

9. The award on claim No.16 was made on account of failure of

the respondent to make payment of the claimant's bills. The learned

arbitrator has awarded an amount of Rs.6,000/-, as opposed to the

claim of Rs.25,000/- made by the claimant/petitioner. The arbitrator

has recorded that he has gone into the record. He has, in fact, granted

a reduced amount by taking note of the usual delays involved in

making payment by the Railways, which is a government department.

I see no reason to interfere with the award made on claim No.16.

10. Under claim No.17 the learned arbitrator has awarded interest

@ 12% per annum from 21.11.1981 i.e. the date of invocation of

arbitration till payment. Considering the fact that the award pertains

to the period 1973-74, as also the fact that the arbitration had been

invoked in the year 1981 when the rates of inflation/interest were

considerably high, I find no justification to interfere with the award of

the arbitrator on the aspect of the interest. Accordingly, the award is

made `Rule' of the Court. The petitioner shall also be entitled to

further interest @ 9% per annum from the date hereof on the principal

amount of Rs.1,51,010/- till payment. The petitioner shall also be

entitled to costs quantified at Rs.10,000/-.

VIPIN SANGHI, J.

MAY 15, 2009 rsk