M/S Bharat Coking Coal Limited vs New Satnam Transport Company
2023 Latest Caselaw 755 Jhar

                     IN THE HIGH COURT OF JHARKHAND AT RANCHI

                               Arbitration Appeal No. 10 of 2008

                      M/s Bharat Coking Coal Limited             ...      ...      Appellant
                                          Versus
                      New Satnam Transport Company ...                ...       Respondent
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CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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                  For the Appellant       : Mr. Anoop Kr. Mehta, Advocate
                                          : Mr. Manish Kumar, Advocate
                  For the Respondents     : Mr. J.K. Pasari, Advocate
                                          ---
15/13.02.2023           Heard learned counsel for the parties.

2. The learned counsel for the appellant has submitted that the impugned order by which the award passed by the learned Arbitrator under the provision of Arbitration Act, 1940 has been made the rule of the court, is under challenge. The learned counsel submits that the learned Arbitrator has travelled beyond the contract of the parties and had committed jurisdictional error while pronouncing the award.

3. He submits that it is not in dispute that the rate as mentioned in the work order was already paid to the petitioner i.e., the rate of the year 1988-89 plus 15% and the claim of the petitioner was over and above the said rate which in turn was on the basis of certain communications issued by the petitioner. Learned counsel has also submitted that under clause 14 of the work order, no escalation was payable . He submits that once the rate was fixed through the work order which was never modified by any modification of contract between the parties, there was no scope for directing any additional payment over and above the rate which was fixed and paid by the appellant to the claimant. The learned counsel submits that mere silence on the part of the appellant to the communication issued by the respondents that the rate was not yet final, was not sufficient to grant any additional amount over and above the rate fixed on the basis of work order. He submits that even the learned Arbitrator did not record any finding that the rates stood modified. The learned Arbitrator only recorded that the silence of the appellant to the communication made by the claimant only amounted to the fact that the rates were not finalized. Learned counsel has further submitted that the awarded rate of interest is excessive. He submits that the learned Arbitrator has awarded interest @ 13% for the pre- reference period, pendente lite as well as future interest till payment.

4. The learned counsel has further referred to Section 29 of the Arbitration Act, 1940 to submit that it was the jurisdiction of the court concerned to award interest for the period post decree and therefore, the learned Arbitrator could not have awarded interest till payment.

5. Learned counsel for the claimant, on the other hand, has opposed the prayer of the appellant. He submits that this Court is exercising power under appellate jurisdiction to the order by which the award was made the rule of the court. The learned counsel submits that the scope of interference in the award is per se very restricted and is all the more constricted at the appellate stage. The learned counsel has relied upon a judgment passed by the Hon'ble Supreme Court in the case of M/s Ravindra Kumar Gupta Vs. Union of India reported in (2010) 1 SCC

409. Learned counsel has further submitted that the scope of interference in the matter of arbitral award is very limited even under the 1940 Act. He has relied upon the judgment passed by the Hon'ble Supreme Court reported in (2003) 7 SCC 396 (State of U.P. Vs. Allied Constructions). He has further relied upon the judgment passed by Hon'ble Supreme Court reported in (2007) 9 SCC 503 (BOC India Ltd. Vs. Bhagwati Oxygen Ltd.) para 27 and 28 to submit that even if the Arbitrator has taken the plausible view, then also, there is no scope for interference.

6. The learned counsel has vehemently submitted that interpretation of contract between the parties is in the exclusive jurisdiction of the learned Arbitrator and there is no scope for referring to the clauses of agreement between the parties and come to a different finding.

7. On the point of interest, the learned counsel for the respondent has relied upon judgment passed by Hon'ble Supreme Court reported in (2018) 9 SCC 266 (Reliance Cellulose Products Ltd. Vs. Oild and Natural Gas Corporation ltd.) para 24 to submit that the Hon'ble Supreme Court has clearly held that the learned Arbitrator under the 1940 Act had the power to grant interest for all the three periods; pre reference, pendente lite and future interest. The learned counsel submits that the Arbitrator having granted interest at the flat rate of 13% for pre reference, pendente lite and future interest till payment has not committed any illegality. He has also submitted that the said judgment has also been relied upon and followed by this Court in Arbitration

Appeal No.7 of 2003 vide judgment dated 01.11.2018 para 14 and 15 thereof.

8. The learned counsel for the claimant on the merit of the case has submitted that there was a clear communication from the side of the claimant that the rate which will be finalized for the period 1990-1991 would be the rate for the award for the contract period of 1991-1992 involved in the present case. The learned counsel submits that the Arbitrator has considered the said communication and has awarded a lump sum award and there is no scope for entering into the mental process of the Arbitrator once the calculation of the amount for which the award has been granted, has not been mentioned in the award. He submits that the claim was much higher and the learned Arbitrator has reduced the amount substantially though has not given any calculation. During the course of the Arbitration, the learned counsel has also submitted that with regard to other contractors, the rate for the period 1989-1990 and 1990-1991 was revised and therefore, the claimant was also entitled to such revision. The learned counsel for the claimant has submitted that the claim was calculated on the basis of such award passed in relation to third parties. However, from perusal of the award, no specific reference of any such award has been mentioned. The learned counsel does not dispute that so far as the amount of the rate of 1988-89 plus 15% is concerned, the same was already paid to the claimant and the claim was over and above the rate of 1988-89 + 15 %.

9. In response, learned counsel for the appellant has referred to judgment passed by Hon'ble Supreme Court reported in (2022) 3 SCC 739 para 21 (h) to submit that though there is limited scope in the matter of interpretation of contract as has been done by the learned Arbitrator, but still the award can be interfered with if it is found to be beyond the terms of the agreement. He submits that the rate is an important element of the agreement between the parties.

10. Argument concluded.

11. Post this case for judgment on 12.04.2023.

(Anubha Rawat Choudhary, J.) Saurav/