Himachal Pradesh High Court
Himachal Pradesh Tourism ... vs M/S Modern Sanitary Engineers on 30 October, 2023
Bench: Mamidanna Satya Rao, Jyotsna Rewal Dua
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Arb. Appeal No. 1 of 2014
Reserved on : 16.10.2023
.
Date of decision : 30.10.2023
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Himachal Pradesh Tourism Development Appellant
Corporation.
Versus
M/s Modern Sanitary Engineers Respondent
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Coram :- r
The Hon'ble Mr. Justice M.S. Ramachandra Rao, Chief Justice
The Hon'ble Ms. Jyotsna Rewal Dua, Judge
Whether approved for reporting? Yes
_________________________________________________________
For the Appellants : Mr. Sumeet Raj Sharma, Advocate.
For the Respondent: Mr. J.S. Bhogal, Senior Advocate, with
Ms. Swati Verma, Advocate.
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Jyotsna Rewal Dua, Judge
Learned Single Judge did not find any merit in the
Arbitration Case No. 52 of 2007 filed under Section 34(3) of the
Arbitration & Conciliation Act 1996 (in short the Act) by the Himachal
Pradesh Tourism Development Corporation (HPTDC) against the
award passed by the learned Arbitrator on 26.09.2007 as supplemented
on 04.07.2011. The Arbitration Case was dismissed on 01.07.2013.
.
Taking exception to this judgment, the HPTDC has filed this
Arbitration Appeal under Section 37 of the Act.
2. Brief reference to the facts leading to filing of instant
appeal may be made :-
2(i)
A notice dated 29.07.2002 was served by the respondent
upon the appellant-Corporation that despite completion of the work
awarded to it, on 31.10.1999, the payments due to it had not been
released. A request was made to appoint an Arbitrator for adjudicating
the dispute between the parties.
2(ii) In Arbitration Case No. 69 of 2002 filed by the
respondent under Section 11(6) of the Act, a retired Chief Engineer was
appointed as Arbitrator by the Court on 14.03.2003. However, in view
of the request made by the Arbitrator, so appointed, the order dated
14.03.2003 was modified on 09.07.2004 by appointing another retired
Chief Engineer as the sole Arbitrator in place of the earlier appointed
Arbitrator.
2(iii) The Arbitrator entered upon the reference. The award
was announced on 26.09.2007. The respondent/claimant had claimed
following amount in its claim petition.
.
"Claim No. 1 : On account of payment of the final bill for
Rs. 8,00,000/-.
Claim No. 2 : On account of release of Security Deposit, for an
amount of Rs. 1,00,000/-.
Claim No. 3 : On account of damages for the prolongation of the
work for an amount of Rs. 4,32,000/-.
Claim No. 4 : On account of payment of price escalation, for an
amount of Rs. 2,62,724/-.
Claim No. 5 : For allowing interest @ 24% on all the claims 1 to
r 4 with effect from 30.04.2000 till date of
payment."
In the present appeal, learned counsel for the appellant
has confined his submissions only to the amount awarded by the
Arbitrator under claim No. 1. Hence, discussions made hereafter are
only in reference to claim No.1.
2(iv) The Arbitrator in his award dated 26.09.2007 allowed a
sum of Rs. 5,13,312/- to the respondent under Claim No.1.
The appellant assailed the award dated 26.09.2007 before
this Court in Arbitration Case No. 52 of 2007. The appellant's main
objection was that though the claim of the respondent was initially for a
sum of Rs. 4,00,000/-, but it was enhanced to Rs. 8,00,000/- in the
claim petition. This, according to the appellant, was not permissible. It
was contended that the learned Arbitrator had not given reasons in the
.
award for coming to the conclusion that under Claim No.1, the claimant
was entitled to a sum of Rs. 5,13,312/-.
2(vi) Learned Single Judge while deciding the Arbitration
Case found substance in the plea of the appellant/objector that
Arbitrator had not given reasons for arriving at the conclusion that the
claimant was entitled to a sum of over Rs. 5,00,000/- for claim No.1.
For that reason, vide order dated 11.09.2009, the award was remitted
back to the Arbitrator under Section 34(4) of the Act for giving reasons
in support of findings on claim No.1.
2(vii) In compliance to the directions passed in Arbitration
Case No. 52 of 2007, the Arbitrator again held proceedings and on
04.07.2011 supplemented his award dated 26.09.2007 by recording
following reasons :-
"In compliance to the orders of the Hon'ble H.P. High Court, I
give the reasons as under :-
At the time of making the Award, I had examined the statement of
the claimant in which he had claimed a sum of Rs. 6.39 lacs a shown in
Annex. C6 (page 291 of the arbitration file). I also found that the claimant,
with his letter dated 18.3.99, did not provide rate-analysis for the item of
'built-up steel', to which the respondent had objected. Therefore, I
.
considered it appropriate not to allow the amount (Rs. 55,986.00) claimed
for this 'built-up steel' item of work and rejected this item.
In the same statement, there were other items, like '1/2 brick
masonry', 'brick masonry in foundations', 'brick masonry in super-
structure', 'shutters with laminated board' and 1.25 mm thick HB sheets,
for which the clamant did not provide analyses of rates with his letter
dated 3.4.99. The total amount claimed under all these items works out as
Rs. 69,469.47. The respondent had denied the receipt of claimant's letter
dated 3.4.99 and in the absence of specific admission by the respondent, I
had decided not to allow these items.
By disallowing all the above items, the balance amount payable to
the claimant became Rs. 5.13 lacs (against claimed amount of Rs. 6.39
lacs) and after rounding off this figure, I awarded an amount of Rs. 5.00
lacs under claim No.1."
2(viii) The appellant Corporation, not satisfied with the reasons
assigned by the Arbitrator, again assailed the award before the learned
Single Judge. The learned Single Judge did not find favour in the
challenge laid by the appellant. The Arbitration Case No. 52 of 2007
was finally dismissed on 01.07.2013. Aggrieved, the HPTDC has now
invoked Section 37 of the Act in the instant appeal.
3. The points urged by learned counsel for the appellant-
.
Corporation are that firstly, the respondent-claimant having served
notice upon the appellant-Corporation for claiming a sum of
Rs. 4,00,000/- under claim No. 1 could not have enhanced its claim to
Rs. 8,00,000/- before the Arbitrator and secondly, that the award passed
by the Arbitrator allowing a sum of Rs. 5,13,312/- in favour of the
claimant under claim No. 1 is without any reason and contrary to clause
12 of the Arbitration Agreement. The learned Senior Counsel for the
respondent-claimant defended the impugned award passed by the
Arbitrator.
4. We have heard learned counsel on both sides and
considered the case record. Our observations in the matter are as
under :-
4(i) It is well settled that the Court cannot sit as an appellate
authority to re-appreciate the evidence led by the parties before the
Arbitrator. The Arbitrator is the final Arbiter for the dispute between
the parties. It is not open to challenge the award on the ground that the
Arbitrator has drawn his own conclusion or has failed to appreciate the
facts. The Court cannot substitute its own evaluation of the conclusion
of law or facts to come to the conclusion that the Arbitrator had acted
.
contrary to the bargain between the parties. Whether a particular
amount was liable to be paid, is a decision within the competence of
the Arbitrator. By purporting to construe the contract, the Court cannot
take upon itself the burden of saying that this was contrary to the
contract and as such beyond jurisdiction. Where the reasons have been
given by the Arbitrator in making the award, the Court cannot examine
the reasonableness of reasons. If the parties have selected their own
forum, the deciding forum must be conceded the power of appraisement
of evidence. The Arbitrator is the sole judge of the quality as well as the
quantity of evidence and it will not be for the Court to take upon itself
the task of being a judge on the evidence before the Arbitrator. [ see:
2018 (16) SCC 219 Oswal Woollen Mills Limited Vs. Oswal Agro Mills
Limited].
4(ii) In the instant case, the Arbitrator has recorded reasons
for allowing claim of Rs. 5,13,312/- to the respondent under claim No.
1. The Arbitrator has noted that according to the parties, there was no
dispute with regard to the quantity executed at the site except about the
market rate payable for various items. The respondent's plea was that it
had submitted its rates to the appellant-Corporation with proper analysis
.
of rates, but the appellant kept on paying lower rates, terming such rates
as payable market rates. The Arbitrator in his award dated 26.09.2007
noticed contract clause 12-A relied upon by the appellant which read ;
"in case if contractor fails to lodge claim supported by proper analysis
of rates in respect of such quantities in excess of the deviation limit, the
rates quoted by the contractor for individual items shall be binding
beyond deviation limit." The Arbitrator found that appellant had not
taken timely action to reject the rates demanded by the respondent-
claimant. That the respondent-claimant continued to carry out the work
on the presumption that the rates demanded by it were genuinely
payable and deemed to have been accepted by the appellant. The
Arbitrator allowed a claim of Rs. 5,08,465 + 4,847 = 5,13,312/- to the
respondent against claimed amount of Rs. 8,00,000/- under claim No. 1.
Pursuant to directions of the Court, the Arbitrator on 04.07.2011 gave
further reasons in support of award dated 26.09.2007. On the plea of the
appellant that the respondent had not given proper rate analysis, the
Arbitrator held that the respondent in its letter dated 18.03.1999 did not
provide rate analysis for the items of 'built up steel' to which the
appellant had objected to. For that reason, an amount of Rs. 55,986/-
.
claimed for the 'built up steel' was not allowed. Similarly, certain other
amounts claimed by the respondent were not allowed as the appellant
had objected to the rates quoted by the respondent of other items at the
relevant time. The Arbitrator held that by disallowing these specific
items, where contractor's quoted rates were objected to by the
appellant, the balance amount payable to the respondent became Rs.
5,13,312/-. The award passed by the Arbitrator cannot be said to be
unreasoned award.
4(iii) Learned counsel could not substantiate his other plea that
the respondent was debarred from claiming an amount of over Rs.
4,00,000/- merely because in the notice seeking appointment of
Arbitrator and in the application made under Section 11 of the Act,
Rs. 4,00,000/- was mentioned as the amount due to it. Notice seeking
appointment of the Arbitrator need not even quantify the amount
claimed. It is well settled that an application under Section 11 of the
Act need not set out in detail the disputes or the claims and may briefly
refer to the subject matter or broad contours of the dispute. It is not in
dispute that the respondent in its claim made before the learned
Arbitrator had claimed Rs. 8,00,000/- under Claim No. 1. After
.
consideration, this claim was allowed by the Arbitrator for
Rs. 5,13,312/-.
4(iv) There is no error apparent on the face of record/award,
which can be said to be falling under any one of the exceptions carved
out under the provisions of Section 34 of the Act. The learned single
Judge did not commit any error in dismissing the Arbitration Case
instituted by the appellant.
5. For the aforesaid reasons, we do not find any merit in this
appeal and the same is accordingly dismissed. Pending applications, if
any, also stand dismissed.
( M.S. Ramachandra Rao )
Chief Justice
30th October, 2023 (K) ( Jyotsna Rewal Dua )
Judge
