Tripura High Court
The State Of Tripura vs Shri Raja Raw Ghosh on 15 May, 2024
Author: Arindam Lodh
Bench: Arindam Lodh
Page 1 of 7
HIGH COURT OF TRIPURA
AGARTALA
Arb.A. No.5 of 2022
1. The State of Tripura, represented by the Secretary, Department of PWD,
Government of Tripura.
2. Executive Engineer, PWD (R&B), Bisramganj Division, Bisramganj,
Sepahijala District.
......... Appellant (s)
VERSUS
Shri Raja Raw Ghosh, Contractor, East Bank of Jagannath Dighi, P.O.
Radhakishorepur, Udaipur, Gomati Tripura, Pin-799120.
......... Respondent(s)
For Appellant (s) : Mr. P. Gautam, Advocate.
For Respondent(s) : Mr. A. Sengupta, Advocate.
HON'BLE THE CHIEF JUSTICE MR. APARESH KUMAR SINGH
HON'BLE MR. JUSTICE ARINDAM LODH
Date of hearing : 15.05.2024
Whether Fit for Reporting : NO
JUDGMENT & ORDER (ORAL)
Heard Mr. P. Gautam, learned counsel for the appellants and Mr. A.
Sengupta, learned counsel for the respondent.
[2] The instant appeal under Section 37(1)(c) of Arbitration and
Conciliation Act, 1996 read with Section 13(1A) of the Commercial Courts Act,
2015 seeks to challenge the judgment dated 25.02.2022 passed in Civil Misc.
(Arbitration) No.13 of 2018 by the Judge, District Commercial Court, West
Tripura, Agartala whereby the application under Section 34 of the Arbitration
and Conciliation Act, 1996 (for short, the Act of 1996) preferred by the
appellant-State of Tripura has been dismissed without any interference in the
impugned award.
[3] The brief facts which are borne from the record and have been also
referred to in paragraph-2 of the impugned judgment convey that the dispute
revolved around the agreement dated 16.07.2007 between the contractor and the
appellant-State of Tripura for construction of three numbers of RCC bridge out of
which two numbers of bridge were over river „Burimaa‟ at Takarjala and
Jampuijala market and another was over Senaigang-cherra at Gabordi under the
PWD(R&B), Bisramganj Division. The work order was issued on 29.07.2007
and the works were to be commenced from the 15th day of issuance of work order
and were to be completed within thirty months, i.e. on or before 12.05.2010. The
contractor could not complete the work within the scheduled time and
accordingly time was extended. The contractor, however, completed the work on
25.12.2014 but he failed to erect the Baily bridge for making diversion.
Thereafter, the contractor submitted his claims which was not allowed by the
employer. Consequently, on an application made under Section 11(6) of the Act
of 1996 before this Court, the matter was referred for adjudication to an
independent Arbitrator. The Arbitrator, upon consideration of the pleadings and
material documents placed on record, framed the following issues for
consideration:
"In course of hearing, the following issues were framed:
1) Whether the claimant is entitled to get balance payment
due on account of value of works done in the final bill
(since previous) or any higher or lower amount as per
record of the respondent?
2) Whether the claimant is entitled to get balance payment
due on account of price escalation as per clause 10 CC of
the agreement?
3) Whether the claimant is entitled to get damages suffered
for longer retention of site establishment, staff, plants and
machineries etc?
4) Whether the claimant is entitled to get refund of the
excess amount deducted as TST /TVAT in gross violation
of provision of the agreement?
5) Whether the claimant is entitled to get refund of security
deposit as per record of respondent?
6) Whether the claimant is entitled to get interest @18%
p.a. on the demanded sum w.e.f. 01.02.2016 till actual date
of payment?
7) Whether the claimant is entitled to cost of Arbitration
proceedings and incidental thereto?
Issue on the counter claim of the respondent was framed as
follows:
i) Whether the contractor breached the condition of the
contract by non supply of 3 Nos. of portable bailey bridge?"
[4] The learned Arbitrator, upon consideration of the rival submissions
of the parties and the materials on record, rendered the following award:
"The total amount of award is stated below:
Sl. Claim Particular of Amount Amount allowed
No. no/ claim/ claimed Rs. Rs
Issue counter
no claim
1 1 Balance 13,55,857.00 6,56,067.00 Six
payment of Thirteen lakh lakh fifty six
final bill fifty five thousand sixty
thousand eight seven only
hundred fifty
seven only
2 2 Escallation 1,02,36,699.00 1,02,36,699.00
as per One crore two One crore two
clause 10 lakh thirtysix lakh thirtysix
CC thousand six thousand six
hundred ninety hundred ninety
nine only nine only
3 3 Damages 45,48,000.00 32,29,000.00
for longer Forty five lakh Thirty two lakh
retention of forty eight twenty nine
men, thousand only thousand only
machineries
4 4 Refund of 9,19,480.00 9,19,480.00
excess Nine lakh Nine lakh
deduction nineteen nineteen
of TVAT thousand four thousand four
hundred eighty hundred eighty
only only
5 5 Refund of 71,47,598.00 71,47,598.00
security Seventy one Seventy one
deposit lakh forty lakh forty seven
seven thousand thousand five
five hundred hundred ninety
ninety eight eight only
only
6 6 Interest As may be Simple interest
decided by the on the total
Arbitrator amount awarded
at the current
rate of interest
plus 2% on
higher side,
w.e.f. the date of
award if the
amount is not
paid within
3(three) months
from the date of
communication
of award to the
respondent till
payment.
7 7 Cost of As may be Nil
arbitration decided by the
Arbitrator
2,21,88,844.00
(Rupees two crore twenty one lakh eighty eight thousand eight
hundred forty four only)".
[5] Being aggrieved by findings on certain Issue Nos. (2), (3) and (5)
the State of Tripura preferred an objection application under Section 34 of the
Act of 1996. It was submitted that the impugned findings do not refer to the delay
of 927 days out of 1618 days caused by the contractor. Apart from that non
communication of decision of SPT bridge in place of Baily bridge was actually
attributable to the contractor. The contractor did not supply the components of
Baily bridge in time. The appellant-State of Tripura further contended that the
Arbitrator while deciding the Issue No.(3) awarded an amount of Rs.32,29,000/-
which is not permissible due to the fact that the claimant was responsible for the
delay and such fact was not considered by the Arbitrator. Apart from that the
Arbitrator had awarded an amount of Rs.71,47,598/- without considering the fact
that the contractor had not completed the work. That apart, the learned Arbitrator
had failed to frame any Issue on the counter claim filed by the appellant-State of
Tripura in view of Section 23(2-A )of the Arbitration Act.
[6] The learned Commercial Court in the major part of the judgment has
referred to the decisions of the Apex Court on the scope of interference in an
application under Section 34 of the Arbitration and Conciliation Act, 1996 and
summarily concluded at paragraph-7 as under:
"7. On the basis of the citation of law as referred to above
coupled with the provisions of Section 34 of the Arbitration
Act, it seems to us that the scheme and scope of the
provisions of Section 34 of Arbitration Act aims at keeping
the supervisory roles of the court at minimum level,
therefore, we cannot correct the errors so done by the
arbitrator by entering into the merits of the case through re-
appreciation of the materials on record by sitting as an
Appellate Court, it can only be quashed leaving the parties
to begin the arbitration again if it is desired. The issues so
raised for and on behalf of the petitioner seeking
interference of this court are related to merits of the case
and do not come within the mischief of any of the grounds
as enumerated in Section 34(2) or Section 34(2A) of the
Arbitration Act and as such we are lacking in jurisdiction to
interfere with the findings and decision so arrived at by the
Arbitrator".
[7] Mr. P. Gautam, learned counsel for the appellant-State of Tripura
has assailed the impugned finding on the ground that there is no analysis in
respect of the findings rendered by the learned Arbitrator on Issue Nos. (2), (3)
and (5) which were specifically under challenge. The learned Arbitrator has
straightaway rendered his opinion that the Court under Section 34 exercised
supervisory role which cannot correct the errors of the Arbitrator by entering into
the merits of the case through re-appreciation of the materials on record. Learned
Court went on to observe that the Issues raised by the appellant are related to
merits of the case and do not come within the mischief of any of the grounds as
enumerated under Section 34(2) or Section 34(2A) of the Arbitration Act. As
such the application was dismissed.
[8] It is submitted that there are grounds of patent illegality raised on
behalf of the appellant which have not been properly considered and discussed.
The findings of the learned Commercial Court are, therefore, without proper
application of mind and without any reasons. As such, the impugned judgment
may be set aside.
[9] Mr. A. Sengupta, learned counsel for the respondent-contractor has
opposed the prayer and inter alia submitted that the decision of the learned
Commercial Court does not suffer from any errors calling for interference in
appeal under Section 37(1)(c) of the Act of 1996. The learned Court was right in
holding that the grounds raised by the appellant-State in respect of the findings of
the learned Arbitrator on Issue Nos. (2), (3) and (5) invite interference on the
merits of the findings rendered by the learned Arbitrator and are, therefore, not
amenable to challenge under Section 34(2A). Therefore, the impugned judgment
is proper in the eye of law and needs no interference.
[10] We have considered the submissions of the learned counsel for the
parties and taken note of the material pleadings placed from record. We have also
gone through the impugned judgment. We have taken note of the grounds of
challenge raised by the appellant-State on Issue No.(2), (3) and (5) rendered by
the learned Arbitrator. Unfortunately, the learned Commercial Court has not even
touched upon the findings rendered by the learned Arbitrator on any of these
Issues to come to a considered finding that the grounds of challenge are without
merit and border on entering into re-appreciation of the materials on record as an
appellate Court in the findings of the learned Arbitrator. The learned Court has
only referred to decisions rendered by the Apex Court such as in the case of (i)
Assam State Electricity Board vs Buildworth Private Ltd. reported in AIR 2017
SC 3336; (ii) G. Ramachandra Reddy & Company vs Union of India & Anr.
reported in (2009) 6 SCC 414 (iii) Delhi Airport Metro Express Pvt. Ltd. vs
Delhi Metro Rail Corporation Ltd. decided on 09.09.2021 before coming to a
conclusion straightaway at paragraph-7 of the impugned judgment which has
been extracted above that none of the grounds fall within the mischief under
Section 34(2) or Section 34(2A) of the Arbitration Act. We are afraid in the
absence of any analysis of the findings of the learned Arbitrator on the grounds
raised by the appellant-State, the conclusions rendered by the learned
Commercial Court are without any reason. Reasons are the soul of any judicial
order. It reflects the application of mind of the concerned Court to the Issue at
hand in the context of the facts and the relevant law applicable to the case of the
parties. It also enables the appellate Court to examine as to whether the reasons
are proper in the eye of law. Unfortunately, the learned Commercial Court seems
to have been completely oblivious of the requirement of proper adjudication on
the grounds available under Section 34(2) or 34(2A) of the Act of 1996 in such a
matter. Such an approach of the learned Commercial Court has unnecessarily led
to delay in proper adjudication of the disputes between the parties at the stage of
Section 34 application. It has led to the appeal under Section 37(1)(c) before this
Court. In the absence of any discussion or analysis of findings rendered by the
learned Arbitrator on the grounds of challenge raised by the appellant on Issue
Nos.(2), (3) and (5) by the learned Commercial Court, we are unable to scrutinize
the grounds raised by the appellant at this stage. The contours of jurisdiction
under Section 37(1)(c) of the Act of 1996 by this Court are further narrowed than
what is available under Section 34(2) of the Act of 1996. In such a situation, we
are left with no other option than to remand the matter to the learned Commercial
Court for fresh adjudication on the grounds raised by the appellant-State in
accordance with law within a reasonable time preferably 12(twelve) weeks from
the date of receipt of a copy of this judgment after giving due opportunity to the
parties.
Accordingly, the instant appeal is disposed of. Pending
application(s), if any, also stands disposed of.
(ARINDAM LODH), J (APARESH KUMAR SINGH), CJ
Munna S MUNNA SAHA
Date: 2024.05.22 16:29:30 +05'30'
