Pawan Kumar Gupta vs Union of India (UOI) and Others

J.P. Singh, J.—Sh. S.K. Gupta Additional Chief Engineer, appointed as Arbitrator by the Competent Authority pursuant to the orders made

by this Court in Arbitration Application No. 83/1992 on March 05, 1993, filed his Award in this Court which was registered as A.A. No.

189/1992.

Pursuant to the Notice issued by the Court to the parties on the filing of the Award, Union of India filed Civil Miscellaneous Petition No. 216 on

18.12.1995 under Sections 30/33 of the Arbitration Act seeking setting aside of the Award, inter alia, pleading that the Arbitrator had committed

an error apparent on the face of records in making the Award without there being any oral or documentary evidence in support of the Contractor's

Claims.

The issues arising out of the Union of India's challenge to the Award and the Contractor's Response thereto were framed as follows:

1) Whether the application filed by the petitioner/objector for setting aside the award is barred by time? OPR/nonobjector.

2) Whether arbitrator has mis-conducted himself or the arbitration proceedings? OPP/Objector.

3) Whether the award is otherwise invalid? OPP

4) Relief.

I have heard learned Counsel for the parties and gone through their pleadings and the Affidavits filed in support thereof. While allowing Claim

Nos. 2 and 3, the learned Arbitrator has indicated his findings as follows:

8.2 Claim No. 2 Extra expenditure done for dismantling the existing wind ties and cross ties and relaying the same with new screws, bolts and nuts

amounting to Rs. 16,500/-

8.2.1 It is an item rate contract wherein scope of each item and its rate is inserted in Sch 'A'. In the item rate contract mere mention of the item in

the particular specification is not sufficient and for it to be executed, its rate has to be inserted in the Sch 'A'. Perusal of Sch 'A' description reveals

that no such item is included in the scope. Since the work has been got done, it becomes payable. The claim is, therefore, fully sustained and I

award Rs. 16,500/-

8.3 Claim No. 3 Expenses incurred in dismantling existing Target not included under the scope of work Rs. 17,446/-.

8.3.1.It is an item rate contract wherein scope of each item and its rate is inserted in Sch 'A'. In the item rate contract mere mention of the item in

the particular specification is not sufficient and for it to be executed, its rate has to be inserted in the Sch 'A'. Perusal of Sch 'A' description reveals

that no such item is included in the scope. Since the work has been got done, it becomes payable. The claim is, therefore, fully sustained and I

award Rs. 17,446/-

Although the learned Arbitrator has indicated in paragraph No. 6 of the Award that the Claims have been considered in the light of written

submissions, pleadings and documentary plus oral evidence produced before him; but his records indicate that he had sustained Claim Nos. 2 and

3 without there being any oral evidence in support thereof, in that, the Contractor had not led any evidence before the Arbitrator.

The complexion of the Contractor's claims is purely factual in nature and unless some or the other evidence was led to prove that the Contractor

had incurred expenses and was entitled to the amounts claimed, these could not have been allowed, merely on the basis of the pleadings of the

Contractor, which had been emphatically controverted and denied by the Union of India. The records, therefore, amply demonstrate that the

Contractor's Claim Nos. 2 and 3 have been allowed by the Arbitrator without there being any evidence in support thereof. The statement made by

the Arbitrator in paragraph No. 6 of the Award that he had considered the Claims of the parties on the basis of oral evidence is, thus, found to be

factually incorrect. The Contract Agreement and the records of the case further reveal that the contract in question was not an item rate contract

and was infact a lumpsum contract based on pre-price schedule 'A'.

Condition 6A(B) of IAF 2249 forming part of the Contract Agreement, reads thus:

Lumpsum contracts based on pre-priced Sch. 'A':

The Contractor shall be deemed to have calculated his own unit rates from the drawings, specifications and other information furnished to him and

arrived at lumpsum price for each group of items as given in schedule 'A'. The lump sum price shall be worked out by him independently of the

prices or rates inserted by M.E.S. in the tender and irrespective of any errors of inaccuracies, therein. The percentage to be inserted by the

contractor, above or below the prices inserted by M.E.S. against a group of items, shall be derived by him from the amount tendered by him

against the group of items concerned as compared to the amount inserted by M.E.S. against it. In the event of a discrepancy between the lumpsum

quoted by the contractor and the percentage derived by him the lum sum shall be treated as binding and the percentage altered to agree with the

lump sum.

The tendered amount shall be deemed to include for the full and entire completion of the works and the contractor shall have no claim on account

of any errors in the unit rates/prices inserted by MES. In this view of the matter, unless the Contractor had led evidence to substantiate his Claim

Nos. 2 and 3 to prove that he was entitled to the amounts claimed by him, these could not have been awarded.

The error committed by the Arbitrator in allowing the Contractor's Claims without there being any evidence in support thereof is thus apparent on

the face of records demonstrating the Arbitrator's misconduct.

Contractor's legal representative's counsel's plea that the Petition filed by Union of India seeking setting aside of the Award was barred by time is

found to be untenable, in that, the records indicate Union of India to have filed the Civil Miscellaneous Petition for setting aside the Award, within

the statutory period of 30 days after the receipt of Notice from the Court on the filing of the Award and in this view of the matter, Union of India's

Petition cannot be said to be barred by time.

Learned Counsel's further plea that the Award was unreasoned and it was not open to Union of India to question it, too, is found to be

unsustainable as both the Claims allowed by the Arbitrator in favour of the Contractor are based on reasons which have not been found sustainable

for lack of evidence in support thereof.

In view of the above discussion, issue Nos. 2 and 3 are decided in favour of Union of India and No. 1 against the Contractor.

On the basis of the findings on issue No. 2, the Arbitrator's Award needs to be set aside. CMP No. 216/1995 filed by Union of India is,

therefore, allowed setting aside the Arbitrator's Award dated March 20, 1995.

AA No. 189/1995 shall, accordingly, stand disposed of.