Punjab-Haryana High Court
Haryana State Warehousing ... vs Ram Avtar Gupta And Another on 6 July, 2022
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
FAO no. 839 of 2022 (O&M)
Date of Decision:06.07.2022
Haryana State Warehousing Corporation
......Appellant
Versus
Ram Avtar Gupta and another
...... Respondents
CORAM:- HON'BLE MRS.JUSTICE LISA GILL
Present: Mr. Lokesh Sinhal, Advocate
for the appellant.
*****
LISA GILL, J(Oral).
Appellant-Haryana State Warehousing Corporation (for short
'HSWC') has filed this appeal for setting aside order dated 11.08.2021,
passed by the learned Additional District Judge, Karnal as well as Award
dated 27.06.2016.
Brief facts necessary for adjudication are that appellant-HSWC
filed tenders for supply and installation of Galvalume sheet for Verandah
roofing for various food storage godowns constructed by Haryana
Warehousing Corporation at its eight centres situated at Nuh, Rattipur
(Palwal), Nissing, Barwala, Israna, Bani, Hansi, Gohana. With reference to
tender dated 30.06.2010, work was allotted to respondent no.1 on the quoted
rates of Rs. 36,88,108/- as per terms and conditions detailed in work-order
issued on 11.08.2010 which was followed by execution of contract dated
16.05.2011 containing detailed terms and conditions thereof.
Dispute arose between the parties. Sole Arbitrator was
appointed by the appellant-HSWC, vide order dated 18.10.2014 in terms of
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Clause 25-A of the agreement. Claim was submitted by respondent no.1 and
counter claim filed by the appellant.
Respondent no.1, the contractor/claimant filed his claim under
four heads as mentioned in Award dated 27.06.2016 and reproduced as
below:-
"Claim No.1. Towards difference of payment of the actual
work done and not paid. (as tabulated
below).
Sr. Name Qty. Approved Payable Amount Difference
No. of executed rate Amount in paid payable to
Centres in Sqm. Rs. contractor
1. SWH 230.36 1340.00 308682.00 195497 113185.40
Nuh
2. SWH 700.78 1340.00 939045.20 572666 366379.20
Rattipur
(Palwal)
3. SWH 195.74 1340.00 262559.60 151890 110669.60
Nissing
4. SWH 472.37 1340.00 632975.80 352947 280028.80
Barwala
5. SWH 394.92 1340.00 529192.80 333581 195611.80
Israna
6. SWH Work cancelled by employer
Bani
7. SWH 1194.36 1340.00 1599022.00 772428 826594.00
Hansi
8. SWH 323.29 1340.00 433208.60 280724 152484
Gohana
Total 3512.02 4704684.40 2659728 2044953.40
Claim no.2 Towards variation of the bid quotations
Rs.12,00,000.00
Claim No.3. Litigation Expenses & Arbitral fee.
Rs.3,50,000,00.
Claim No.4. Further and pendent lite interest.
A matter of calculation.
The claimant has submitted his claims totaling Rs.35,94,953.00,
besides the interest over the awarded amount from the cause of
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action of Oct-2011, when the work was completed."
Counter claim was filed by the appellant-HSWC on 25.02.2016
for a sum of Rs. 8,22,826/- towards recovery/adjustment from the final bills
of the contractor.
Claimant pleaded that 90% running payment was made in terms
of the agreement on completion of six SWH at various stations except Nuh,
on the basis of record entries made by the Engineer-in-Charge and accepted
by the claimant. However, while releasing final payment of each SWH
stores, the accepted measurements as well as the approved rate of Rs.1340/-
was stated to be arbitrarily and injudiciously reduced.
Learned Arbitrator looking into the material on record, facts and
circumstances of the case while passing the impugned award dated
27.06.2016 allowed Claim no.1 for a sum of Rs. 14,26,231/-, Claim no.2 for
award of compensation of Rs.12,00,000/- was rejected, Claim no.3 for
litigation expenses and arbitration fee was held to be excessive and
Rs.25,000/- as costs of litigation to be payable by the HSWC was awarded
and under Claim no.4, simple interest at the rate of 12% per annum on
Rs.14,26,231/- was awarded from the cause of action i.e., 22.11.2011 till
date of declaration of award and future interest at the rate of 18% per annum
to be payable after 90 days from the date of declaration of award till the
actual payment is made to the claimant. Counter claim filed by the appellant
was rejected.
It was held by the learned Arbitrator that there was no occasion
for the appellant to alter the tender rate which had been approved by the
competent authority of the Corporation unless a supplementary agreement
had been executed between both the parties with necessary changes.
Aggrieved therefrom, petition under Section 34 of the
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Arbitration and Conciliation Act (for short 'Arbitration Act') was preferred
by the appellant, which was dismissed by the learned Additional District
Judge, Karnal, vide order dated 11.06.2021.
Aggrieved therefrom, present appeal has been filed by the
appellant-HSWC.
Learned counsel for the appellant vehemently argues that both
the learned Arbitrator as well as learned Additional District Judge, Karnal,
have failed to appreciate report dated 19.09.2012 of the Committee, on the
basis of which the reduction in the rate was carried out. Respondent no.1, it
is submitted did not execute the work as per design and drawing provided by
the unit. Therefore, in this situation, appellant was well within its right to
have reduced the rate accordingly. The Committee, it is stated was
constituted by the Managing Director of the appellant after due deliberation
and discussion with the contractor. It is thus prayed that this appeal be
allowed.
I have heard learned counsel for the appellant and have gone
through the file with his able assistance.
Facts regarding allotment of the work and arising of the dispute
between the parties as well as appointment of Arbitrator etc., are not in
dispute. The entire foundation of arguments addressed on behalf of the
appellant rest on the recommendation/report dated 19.09.2012 of the
Committee constituted by the Managing Director. Learned Arbitrator while
considering this aspect specifically observed that allegations against the
claimant/contractor stand diluted when the Engineer-in-Charge records a
certificate in the measurement book, which is a booklet of prime importance
for the contract, to the effect that work has been carried as per PWD
specifications, design and drawing of the HSWC. Certificates, which were
admittedly recorded for all the SWH centres by the Engineer-in-Charge have
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been duly recorded in the award dated 27.06.2016. Claimant-respondent
claimed to have completed the work as per entire satisfaction of the
Engineer-in-Charge and concerned Sub-Divisional Engineer/J.E. Incharge of
the individual State Warehouse Godowns (for short 'SWH') recorded the
certificate in the measurement books which reads as under :-
"1. Certified that the work has been done by the agency as
per PWD specifications & as per HWC design &
specifications.
2. Water & electricity arrangement has been done by the
agency."
It is further noted by the Arbitrator that there is no evidence on
record that truss is of underweight, none of which have been actually
weighed and furthermore, committee's recommendations are based on
theoretical calculations which carry no weight in the eyes of law. It is
observed that thickness of the sheet in question has never been tested and the
recommendations are without any site verification and supervision. Learned
Arbitrator has further observed that;
'the M.B is a important document and the codal rules
doesn't allow to make cutting of the record entries once
entered. If there is any ambiguity the measurements
done by a Junior Engineer/ Sub Divisional Engineer, the
same can be check measured by a Senior officer above
the person who had made entries, moreover there are
rules to check @ 5% of the work by the Executive
Engineer which has not been done when lot of
deficiencies have been said to be existed in the work
under question. The re-measuring is required to be
entered in a separate M.B named as check measurement
book. But this exercise has not been done by the
respondent. In this regard the recommendations of a
committee constituted of Two nos Sub Divisional
Engineers, two nos., JEs, one SAMA and the HDM do
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not posses any powers to alter the tendered rate which
has been approved by the competent authority of the
corporation, unless otherwise a supplementary
agreement is executed between both the parties with
necessary changes. However the feasible points
recommended by the committee are being taken care of
for computing the payable amount to the contractor.'
Perusal of award reveals that instead of claim of Rs.20,44,953/-
under the Claim No.1, learned Arbitrator has awarded a sum of Rs.
14,26,231/- only after duly taking into account the feasible points
recommended by the committee and as borne out from the record.
It is a settled position that this Court does not sit in appeal over
an award passed by the learned Arbitral Tribunal. Even though a different
view may be possible in a given factual matrix, Court shall not interfere until
and unless it is shown that award passed by the Arbitrator/Arbitral Tribunal
suffers from perversity or error of law or that the Arbitrator has mis-
conducted himself. These principals have been reiterated by the Hon'ble
Supreme Court in NTPC Ltd. versus M/s Deconar Services Pvt. Ltd.
2021 AIR (Supreme Court) 2588. Hon'ble Supreme Court in the case of
NTPC Ltd. (supra) has further held that to merely show existence of another
reasonable interpretation or view on the basis of material on the record is not
sufficient to allow for interference. Hon'ble Supreme Court in NTPS
Limited's case (supra) has held as under:-
"12. Further, it is also a settled proposition that where the
arbitrator has taken a possible view, although a different
view may be possible on the same evidence, the Court
would not interfere with the award. This Court in Arosan
Enterprises Ltd. v. Union of India, (1999) 9 SCC 449
held as follows:
"36. Be it noted that by reason of a long catena of cases,
it is now a well-settled principle of law that
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reappraisal of evidence by the Court is not
permissible and as a matter of fact exercise of
power by the court to reappraise the evidence is
unknown to proceedings under section 30 of the
Arbitration Act. In the event of there being no
reasons in the award, question of interference of
the court would not arise at all. In the event,
however, there are reasons, the interference would
still be not available within the jurisdiction of the
Court unless of course, there exist a total perversity
in the award or the judgment is based on a wrong
proposition of law. In the event however two views
are possible on a question of law as well, the court
would not be justified in interfering with the award.
37. The common phraseology "error apparent on the
face of the record" does not itself, however, mean
and imply closer scrutiny of the merits of
documents and material on record. The court as a
matter of fact, cannot substitute its evaluation and
come to the conclusion that the arbitrator had acted
contrary to the bargain between the parties. If the
view of the arbitrator is a possible view the award
or the reasoning containing therein cannot be
examined..."
13. From the above pronouncements, and from a catena of
other judgments of this Court, it is clear that for the
objector/appellant in order to succeed in their challenge
against an arbitral award, they must show that the award
of the arbitrator suffered from perversity or an error of
law or that the arbitrator has otherwise misconducted
himself. Merely showing that there is another reasonable
interpretation or possible view on the basis of the
material on the record is insufficient to allow for the
interference by the Court [See State of U.P V. Allied
Constructions, (2003) 7 SCC 396; Ravindra Kumar
Gupta and Company v. Union of India, (2010) 1 SCC
409; Oswal Woolen Mills Limited v. Oswal Agro Mills
Limited, (2018) 16 SCC 219]."
Learned counsel for the appellant is unable to point out any
illegality or infirmity in order dated 11.08.2021 passed by the learned
Additional District Judge, Karnal or any other ground for setting aside award
dated 27.06.2016 passed by the learned Arbitrator.
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No other argument has been addressed.
Appeal is, accordingly, dismissed with no order as to costs.
[LISA GILL]
06.07.2022 Judge
s.khan
Whether speaking/reasoned : Yes/No.
Whether reportable : Yes/No.
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