Jharkhand High Court
N.R. Construction Private ... vs The State Of Jharkhand And Others on 5 May, 2023
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Appeal No. 13 of 2009
N.R. Construction private Limited ... ... Appellant
Versus
The State of Jharkhand and others ... ... Respondents
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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
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For the Appellant : Mr. Indrajit Sinha, Advocate
Ms. Puja Agarwal, Advocate
For the Respondents : Mr. Sachin Kumar, A.A.G. II
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13/05.05.2023 Learned counsel for the parties are present.
Arguments of the Appellant
2. Learned counsel for the appellant has submitted that the learned
court below has set aside the award by referring to Clause 11 of the
agreement by holding that as per clause-11, it was specifically
provided that the contractor shall not be entitled for any payment for
any additional work unless he has received an order in writing from
the in-charge for the additional work in terms of clause 11 of the
agreement.
3. The learned counsel submits that the impugned order has been
passed by which the award has been set aside by holding that the
learned Arbitrator has passed the award by ignoring clause 11
(proviso) of contract/agreement and therefore the learned Arbitrator
had travelled beyond his jurisdiction and in the interest of justice the
award has been set aside.
4. The learned counsel has submitted that before the learned
Arbitrator, neither any ground of jurisdiction was raised nor any
reliance was placed upon clause 11 of the contract to show that the
sanction for additional work having not been granted in terms of
clause 11, no payment was admissible. The learned counsel has also
submitted that the specific case of the respondents herein before the
learned Arbitrator was that the entire work was already completed. He
has referred to paragraph 23 of the award. He has also submitted that
before the learned Arbitrator, the respondent had admitted that the
appellant was entitled for payment to the extent of a sum of Rs.
14,13,779/-. The learned counsel submits that though the point of
sanction was bone of contention between the parties before the learned
arbitrator, but no specific plea regarding point of jurisdiction or any
objection with regard to clause 11 of the contract having been raised
by the respondents before the learned Arbitrator, such ground could
not have been a reason for setting aside the award under Section 34 of
the Arbitration and Conciliation, act, 1996. He has also submitted that
no reference was even made to clause 11 of the contract in the petition
for setting aside the award filed under section 34 of the Act of 1996.
The learned counsel submits that new plea could not have been raised
for the first time at the stage of argument before the learned court
below. He has also submitted that no such plea was raised in the
petition filed under Section 34 of the Arbitration and Conciliation Act,
1996 that the learned arbitrator had ignored any term of the contract.
5. The learned counsel has referred to para 17 and 18 of the
judgment passed by the Hon'ble Supreme Court reported in (2020) 11
SCC 161 to submit that there cannot be any statutory limitation or bar
for the claim in all circumstances. He has submitted that whether the
claim was admissible or not is essentially a question of fact and once
the work was already done, there was no question of denial of any
payment. The learned counsel has submitted that no such plea was
raised that the claim, which was made for extra work, was beyond the
terms of agreement between the parties and was outside the scope of
work before the learned Arbitrator. Although such plea ought to have
been raised under Section 16 of the Act of 1996, but neither any such
plea was raised under Section 16, nor any such plea was raised before
the learned arbitrator at any point of time.
6. He has also relied upon a judgment passed by the Hon'ble
Supreme Court reported in (2016) 4 SCC 119 and has submitted that
similar clause as that of clause 11, was subject matter of consideration
by the Hon'ble Supreme Court. He has referred to paragraph No. 18 of
the said judgment to submit that while considering the judgment of the
High Court, the Hon'ble Supreme Court has also recorded that while
relying upon clause 11 of the contract, the High Court had brushed
aside the admission of the witness that extra work was done and the
High court was not right in ignoring the same to hold that the
admission of a witness cannot have any effect on the contractual
obligation of the parties. It was also pointed out that the respondent of
the said case had not raised any plea relying upon clause 11 of the
contract.
7. The learned counsel submits that in the present case also, the
work was already done and the sanction/ approval was sought for, but
it cannot be said that the learned arbitrator has travelled beyond
jurisdiction to award the amount on the account of the work already
done. Learned counsel submits that the award did not call for any
interference within the permissible limit of interference under Section
34 of the Arbitration and Conciliation Act, 1996. He submits that the
impugned order is fit to be set-aside.
Arguments of the Respondents.
8. Learned counsel appearing on behalf of the respondents has
submitted that the award of the learned arbitrator clearly indicates that
no sanction was given for extra work and accordingly the learned
court below has rightly set aside the award which was primarily for
the claim of the extra work.
9. He has also submitted that the learned Arbitrator had travelled
beyond his jurisdiction while passing the award in connection with the
extra work.
10. He has submitted that the learned arbitrator had ignored clause
11 of the contract while awarding the amount.
11. The learned counsel has further submitted that merely a
statement made by the Executive Engineer before the learned
Arbitrator that the work was completed cannot be used as an estoppel
against the respondents to take a plea that the work was actually not
completed. Learned counsel has submitted that the work was actually
not completed and the appellant has been awarded the amount without
completion of the work.
12. He has further submitted that so far as argument of the
appellant that clause 11 was not referred to or relied upon before the
learned Arbitrator is concerned, it was for the learned Arbitrator to
refer to the various clauses of the agreement and see whether any
amount was admissible on the face of clause 11 of the contract.
13. While referring to the grounds, the learned counsel has stated
that it has been specifically raised in the petition under Section 34 of
the Arbitration and Conciliation Act, 1996 at paragraph 13 that the
additional amount of claim was never sanctioned/approved by the
competent authority and such plea was referable to clause 11 of the
contract. The learned counsel has submitted that the learned court
below has set aside the award by referring to clause-11 (proviso) of
the contract and has rightly held that the learned Arbitrator has
travelled beyond his jurisdiction. He has relied upon the judgment
passed by the Hon'ble Supreme Court reported in 2022 Live Law (SC)
121, paragraph 40 and 44, to submit that an arbitral tribunal being a
creature of contract is bound to act in terms of the contract under
which it is constituted and award can be said to be patently illegal
where the arbitral tribunal has failed to Act in terms of the contract or
has ignored the specific terms of a contract.
14. The learned counsel has further submitted that it is a case where
the learned Arbitrator has ignored the specific terms of the contract i.e
clause 11 of the agreement. He has also relied upon the judgment
reported in (2014) 9 SCC 246 to submit that the said case was relating
to excepted matter and it was held that the learned Arbitrator, while
deciding the claim specifically excluded from arbitration by the
agreement, cannot give an award on such count.
15. Arguments concluded.
16. Post this case for dictation of judgment in open court on
12.05.2023.
(Anubha Rawat Choudhary, J.)
Binit
