M/S. Cec Ltd. vs Indian Railway Corporation ...
2009 Latest Caselaw 4607 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI
+                        C.S. (OS) No. 292/2002
                                            11th November, 2009.


M/S. CEC LTD.                                         ..Petitioner
                         Through:   Mr. Shiv Khorana, Advocate.

                     VERSUS


INDIAN RAILWAY CORPORATION COMPANY LTD. ...Respondent
                         Through:   Mr. A. K. Singla, Advocate with
                                    Mr. Pankaj Gupta, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

     1. Whether the Reporters of local papers may be allowed to see
        the judgment?

     2. To be referred to the Reporter or not?

     3. Whether the judgment should be reported in the Digest?
 %
JUDGMENT (ORAL)

I.A. No.768/1997 in CS(OS) No.292/2002

1. These objections have been filed to the first Award dated

11.11.1996 passed by the sole Arbitrator.

2. The brief history with regard to what has transpired during

the hearing of the objections is necessary before I deal with these C.S(OS)No.292/2002 Page 1 objections on merits. The Arbitrator, in this case, had given a third

Award dated 4/28.7.1997 and objections of IRCON to which award

were dismissed by me alongwith objections of M/s. CEC Ltd. by my

order dated 29.10.2009.

3. It has indeed been difficult to go through the record of this

case because the complete arbitration record is not available in the

Court. In view of the aforesaid position this Court had, way back on

12.9.2006, specifically by order stated that since the arbitration record

is not available, to facilitate the hearing of the matter both the parties

were directed to give a compilation of their respective arbitral record

which they would be relying upon.

4. For the first time, I heard the counsel for the non-objector

in this case on 29.10.2009 when the objections with respect to third

Award were dismissed on 29.10.2009. On that date, the present

objections were adjourned subject to payment of costs of Rs.25,000/-

in view of the fact that counsel for the objector was not ready. This

case was also called out yesterday when out of the maze of the

documents and the record filed it was endeavoured to dispose of the

C.S(OS)No.292/2002 Page 2 present objections. Since the electronic display board of this Court

was not working and the counsel for the non-objector was not

present, this case was adjourned for today. Today firstly the objector

in person, namely, Mr. S.K. Chopra, started arguing this case in the

absence of Mr. Shiv Khorana. Thereafter, Mr. Shiv Khorana came and

was allowed to continue with the arguments. During the course of

the arguments, Mr. Shiv Khorana said that so far as the factual aspects

are concerned since he was not present before the Arbitrator and since

Mr. Chopra has argued his case Mr. Chopra should be allowed to

address the arguments limited to the factual issues. This prayer was

declined because the Court cannot hear different persons ,that is, first

the Advocate and thereafter his client on different issues which are

sought to be urged in this matter.

5. Ultimately, on account of whatever record is available and

the serious limitation of the incomplete record this Court has

endeavoured its best to hear and dispose of the objections.

6. The basic objections are two in number to the Award

dated 11.11.1996. The first objection pertains to claimNo.3 forming

C.S(OS)No.292/2002 Page 3 part of issue No.1 as decided by the Arbitrator. This claim pertains to

the claim of the objector for repair charges of the machinery which

was damaged and which machinery belonged to IRCON and which

was repaired by the objector/contractor. Though Mr. Singla has

referred to clauses 21 of the G.C.C. and 8 of the SCC as also clause 10B

to contend that the responsibility was of the contractor/objector to

maintain the machinery and to return it in good condition to IRCON,

I do not propose to go into the merits of the matter because qua this

claim the Arbitrator has held that such a claim falls outside the

purview of the contract and therefore outside the purview of the

arbitration clause.

7. Let us examine what has been held by the Arbitrator with

respect to this claim. The Arbitrator has given basically two findings.

The first finding is that the insurance policy for the plant and

equipment/machinery is only for the damage to the machinery within

the project area and not for every other area. The second finding is

that the accident which caused damage to the machinery fell outside

the project area. These are pure findings of facts based on the

C.S(OS)No.292/2002 Page 4 arbitration record, and which is not a complete record before me. In

any case, the onus was on the objector to show as to why these

factual findings are incorrect because sitting as a court hearing

objections under Sections 30 and 33 of the Arbitration Act, 1940,

more so in the present case with a long and chequered history, the

findings of the Arbitrator have ordinarily to be accepted by the Court

as correct unless the same are shown to be drastically incorrect

amounting to perversity. I have asked Mr. Khorana to refer to me the

insurance policy and also the facts and findings as to how the accident

did not happen beyond the project site/area but in fact happened

within the project site. Mr. Khorana has expressed his inability to

refer to any such documents. Ordinarily, therefore, objections in this

regard would have been dismissed by me for non-prosecution because

by the order dated 12.9.2006 parties were directed to file the

necessary record on which they rely in support of their claims and

which has not been done. In any case, since the Arbitrator has said

that the accident happened outside the project area which is not

covered by the insurance taken by the IRCON (and keeping in mind

though not for the determination of this issue) since the basic liability C.S(OS)No.292/2002 Page 5 under the contract to maintain the equipment and to return the

equipment/machinery in proper condition to IRCON was of M/s. CEC

Ltd., I am not agreeable that this objection can be sustained because

the Arbitrator has rightly held the claim to fall outside the contract.

The challenge in this regard to the Award for claim No.3 for the

reimbursement and repair charges of IRCON equipment of Iraqi Dinar

31,960.248 is therefore dismissed.

8. This takes me to the second issue which has been urged by

the objector that is with respect to its claim for recoveries made by

IRCON for the price of machinery that the Arbitrator was not justified

in holding that the claims are barred by limitation. I may again note

that the Arbitrator has arrived at a factual finding that this claim was

not raised by the Contractor in the final bill dated 21.2.1984 but was

raised thereafter for the first time on 27.5.1984. The Arbitrator also

arrived at a finding of facts that this claim is thereafter not at all

pursued thereafter right till litigation began in around 1991. In fact,

even in 1990 when the objector wrote its letter dated 24.4.1990, no

such claim was made. Accordingly, the Arbitrator has held that claim

C.S(OS)No.292/2002 Page 6 stands barred by limitation on 21.2.1991, the date of request for

appointing an Arbitrator. At this stage, I may observe that though the

Arbitrator has already held the claims to be barred by limitation, I find

that effectively the Arbitrator has also said that the claims are in fact

not live claims because neither the same were raised in the final bill

dated 21.2.1984 nor in the letter of 24.4.1990 when other claims were

raised for reference to arbitration. The complete silence of the

petitioner for over 6-7 years is surely an indication that there were no

live claims and in fact no claim or dispute survives under this head

because admittedly in the final bill of the claimant/objector itself no

such claim was raised and in fact in the Final Bill prepared by the

objector itself the recoveries under this head were shown as proper

recoveries. Accordingly, looking at it from the point of view of the

same claim being of limitation or being not live claim this objection is

not well merited. Mr. Khorana has sought to place reliance upon a

contractual clause which provides that the claims have to be raised

after the completion certificate is issued. Mr. Khorana says that no

completion certificate was issued and therefore his claims are within

limitation. I may note that really the issue may not be actually with C.S(OS)No.292/2002 Page 7 regard to applicability of this clause, but with regard to the fact that

this claim was not even made in the final bill of the

objector/claimant/contractor itself and in fact thereafter there was

complete silence. Had the claim been a genuine and a live one, the

contractor would not have remained quiet and surely this claim would

have featured in the letter dated 24.4.1990 as given by the contractor

to IRCON. The finding of facts which have therefore been arrived at

by the Arbitrator with respect to this claim being barred by limitation

and effectively not being a live claim is such a finding where two

views are possible and even if one view is a view which can be based

upon clause 19(6) of the contract, sitting and hearing objections under

Sections 30/33 of the Act where the settled law is that the Court will

not interfere merely because two views are not possible, I find that in

the facts and circumstances of this case considering that I have already

dismissed the objections of IRCON to the final Award wherein monies

are now payable to the present objector and also the fact of the

necessary record as regard the facts being not referred to, I have no

hesitation therefore in dismissing these objections.

C.S(OS)No.292/2002 Page 8

9. I have already imposed costs upon IRCON for dismissal of

their objections by the order dated 29.10.2009. Accordingly, these

objections are also dismissed with costs quantified at Rs.50,000/- to be

paid within a period of two weeks from today.

10. With these observations, the suit and the objections stand

disposed of.

11. Counsel for both the parties want the Court to record that

after passing of the present order, there are no pending objections of

either of the parties to any of the Awards and if there are any such

applications/objections, both the parties agree that they shall be

deemed to be withdrawn today. The statements of the counsel for

the parties are therefore taken on record accordingly and accordingly,

all the pending applications/objections, namely, CS(OS) No.1007/97,

CS(OS) No.869/1991 and CS(OS) No.741/1999 are disposed of.

                                             VALMIKI J.MEHTA, J
November 11, 2009
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C.S(OS)No.292/2002                                                Page 9