Delhi High Court
Pcp International Ltd. And Anr. vs Gas Authority Of India on 5 March, 2010
Author: Manmohan
#F-18-19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
18
+ O.M.P. 208/2001
GAS AUTHORITY OF INDIA ..... Petitioner
Through Mr. Rajiv Bansal, Advocate
versus
PCP INTERNATIONAL LTD.
AND ANR. ..... Respondents
Through Mr. N.B. Joshi with
Mr. Kaushik Dey, Advocates
AND
19
+ O.M.P. 217/2001
PCP INTERNATIONAL LTD.
AND ANR. ..... Petitioners
Through Mr. N.B. Joshi with
Mr. Kaushik Dey, Advocates
versus
GAS AUTHORITY OF INDIA ..... Respondent
Through Mr. Rajiv Bansal, Advocate
% Date of Decision : March 5, 2010
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
1. Whether the Reporters of local papers may be allowed to see the judgment? No.
2. To be referred to the Reporter or not? No.
3. Whether the judgment should be reported in the Digest? No.
JUDGMENT
MANMOHAN, J (ORAL)
1. By way of present petitions both Gas Authority of India (in
short "GAIL) and PCP International Ltd. (in short "PCP") have filed
objections under Section 34 of Arbitration and Conciliation Act, 1996
(hereinafter referred to as "Act, 1996") challenging the Award dated
8th January, 2001 passed by the Sole Arbitrator, Mr. Justice (Retd.)
M.S. Gujral. While OMP No. 208/2001 has been filed by GAIL,
OMP No. 217/2001 has been filed by PCP.
2. The controversy pertains to a contract between the parties
executed on 24th October, 1994 for construction of certain buildings
etc. at the site of GAIL in Uttar Pradesh. Suffice it to say that
disputes arose between the parties which led to arbitration clause
being invoked in respect of the disputes. PCP filed its statement of
claims to which GAIL filed its written statement/objections and raised
certain counter claims. The arbitral proceedings culminated in the
Award dated 8th January, 2001.
3. After the passing of the Award, both GAIL and PCP filed
applications under Section 33 of Act, 1996 before the Arbitrator.
Both the applications were disposed of by the Arbitrator vide order
dated 3rd March, 2001. The Arbitrator made a minor correction in the
Award which was in the nature of correcting typographical error and
other than that correction, the Arbitrator dismissed both these
applications.
4. Both the parties before the Arbitrator approached this Court by
way of their OMPs. As both the parties had impugned the Award as
well as the order of the Arbitrator dismissing their applications under
Section 33 of Act, 1996, there was no question of executing the
Award. Pleadings being complete in the two OMPs and the arbitral
record having been summoned, both the parties were heard at length.
5. During the course of arguments, Mr. N.B. Joshi, learned
counsel for PCP argued that the Arbitrator has not considered the
evidence and has made the Award without taking into account the
documentary evidence on record, even though the Arbitrator has
stated in the Award that the questions would be decided on the basis
of documentary evidence.
6. Similarly, Mr. Rajiv Bansal, learned counsel for GAIL has
argued that the Arbitrator has not decided the controversy with respect
to liquidated damages. Both the learned counsel have in effect argued
that the determination of facts made by the Arbitrator is faulty and
that such determination is perverse.
7. Mr. Joshi has further argued that assuming that the findings of
the Arbitrator are not to be interfered with, the Arbitrator has made
grave errors of arithmetical calculation and has worked out a final
figure of Rs.49,29,,824 as the principal sum payable by PCP to GAIL
under the Award. Mr. Joshi contended that while arriving at such a
figure, the Arbitrator has not taken into account the amounts already
received by GAIL by way of encashment of bank guarantees and that
the Arbitrator has not given PCP the credit of the final bill. According
to Mr. Joshi, even if impugned Award is allowed to stand, it is only a
sum of Rs.16,64,453/- which can be said to be payable by PCP to
GAIL.
8. In a similar vein, Mr. Bansal argued that it is on account of an
arithmetical error/calculation mistake that the learned Arbitrator has
left out the amount of Rs. 5,94,617, being the interest accrued on the
sum of Rs. 35 lakhs disbursed by GAIL to PCP as Special Advance
for the period commencing from the date of release till 4th October,
1996. His submission therefore is, that this amount of Rs. 5,94,617/-
should have been awarded to GAIL.
9. The substantive challenge to the Award by both the parties in
effect requires this Court to appreciate the evidence afresh and come
to a finding of fact different from the finding arrived at by the
Arbitrator. The scope of Section 34 of the Act, 1996 is very limited.
Section 34 does not permit this Court to re-appreciate evidence. This
Court does not exercise appellate jurisdiction over the award passed
by the Arbitrator. The grounds on which this Court can interfere with
the Award have been enumerated in section 34(2) of the Act, 1996. I
find no such infirmity in the impugned Award.
10. It was urged by Mr. Bansal that the claim of GAIL with respect
to liquidated damages was not adjudicated by the Arbitrator as should
have been done. Having gone through the Award and having
examined the contract between the parties, I find that Clause 27 of the
contract specifically states that on this aspect, it is the decision of the
Engineer-in-charge which would be binding on the parties. Thus, I
find no infirmity in the Award. The Arbitrator could well not have
given any finding on GAIL's claim of liquidated damages, as it was
beyond the purview of the arbitration and did not form the subject
matter of an arbitral dispute. I, therefore, find no merit in the
objections of GAIL to the impugned Award. OMP No.208/2001
preferred by GAIL is, therefore, dismissed, subject however, to the
directions given hereunder.
11. I have no hesitation in dismissing OMP No.217/2001 on the
same grounds i.e. that this Court cannot go into the evidence and
come to a finding of fact different from the finding arrived at by the
Arbitrator.
12. Nevertheless, I find merit in the contention of Mr. Joshi that
the computation of the total amount payable by PCP to GAIL where
such a computation arises out of the Award itself requires
examination. For this, Mr. Joshi has placed reliance on an illustrative
Chart at Page 124 of the paper book in OMP No. 217/2001, which
appears to be based on figures culled out of the amount awarded with
credit being claimed by PCP from the bank guarantee amounts as well
as the final bill.
13. Consequently, I direct the General Manager (Law), GAIL to
appoint a Chartered Accountant within ten days from today.
Similarly, PCP will also appoint a Chartered Accountant within ten
days from today. Both the Chartered Accountants will meet as often
as may be required in the week commencing 15th March, 2010. They
will reconcile the amounts payable by PCP to GAIL with reference to
the Chart referred to hereinabove. They shall also verify whether it is
on account of an arithmetical error/calculation mistake that the
Arbitrator has left out the amount of Rs. 5,94,617, being the interest
accrued on the sum of Rs. 35 lakhs disbursed by GAIL to PCP as
Special Advance for the period commencing from the date of release
till 4th October,1996. The Chartered Accountants shall submit their
joint report to this Court not later than 5th April, 2010 with advance
copies to both the parties.
14. List this matter for directions in the category of short matters on
16th April, 2010.
15. Order Dasti to both the parties under the signature of the Court
Master.
MANMOHAN,J
MARCH 05, 2010
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