Sh. Ranjit Singh Rana vs Public Works Department and Another

Valmiki J Mehta, J.—The challenge by means of this First Appeal u/s 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act'') is to the impugned order of the Court below dated 22.11.2007 which has dismissed the objections of the Appellant/objector u/s 34 of the Act.

The facts of the case are that the objector was awarded by the Respondents the work of providing fencing on 60 meter right of road in Dwarka, Delhi, vide agreement dated 14.7.1992. Since the site of work was not handed over by the DDA to the Respondents, the work could not be executed and therefore the Respondents exercising its rights under Clause 13 of the agreement foreclosed the work. Disputes and differences arose between the parties whereupon the matter was referred to arbitration. I may note that the contract in question was foreclosed way back in the year 1992 and the arbitration in fact commenced after the series of litigation only when the Appellant filed its statement of claim under the cover of its letter dated 22.5.2006.

There were six claims which were raised by the Appellant before the arbitrator. The first claim was for the hire charges of machinery. While dealing with this claim, the Arbitrator has referred to the fact that since even the initial construction of the godown and water tank was not permitted by the DDA officials, therefore, the Appellant should not have unnecessarily mobilized any machinery. Further, the Arbitrator has held that there was physical verification of only two old concrete mixers and nothing more. The Arbitrator has also then referred to the fact that No. receipts were filed for payment of hire charges of the machineries and in fact claimants removed the machinery without joint inspection and therefore the claim remained unsubstantiated. A court hearing objections does not sit as an Appellate Court over the findings and conclusions of the Award. Merely because two views are possible, the court hearing objections cannot interfere with the Award. In my opinion, the Arbitrator has given the aforesaid valid reasons for denying this claim and I therefore reject the argument with respect to this claim.

Claim No. 2 as made by the Appellant was for supervisory staff and head office expenses. In this regard, the Arbitrator has noted that No. documentary evidence was there with respect to the deployment of a graduate engineer and with respect to the other staff it could not be said that the staff was exclusively allocated for the subject work only. Considering the facts and circumstances, the Arbitrator awarded a sum of Rs. 12,500/-. Issues of appreciation of evidence and determination of an amount, is in the realm of jurisdiction of the Arbitrator, and a court hearing objections does not sit as an Appellate Court, unless the findings are wholly illegal or beyond the provisions of the contract or perverse. In view of the facts as found by the Arbitrator, there is No. illegality or perversity or any violation of provisions of contract so as to held that Award with respect to the Claim No. 2 is liable to be set aside.

Claim No. 3 was the claim for loss of profit. The Arbitrator has referred to Clause 13 of the agreement which gave a right to the Respondents to foreclose the agreement without any consequential loss including the claim towards loss of profit. In the present case, since the site was not made available to the Respondents because the DDA refused to hand over the same the Respondents exercised its power under Clause 13 and therefore, the Arbitrator by referring to such Clause as applicable to the facts of the case has denied compensation towards loss of profit. Once again, I do not find any illegality or violation of the provisions of the contract or perversity in the Award for this Court to interfere.

The only other issue which was urged before this Court was that the interest should have been awarded with respect to Claim Nos. 4 and 6. I may note that the main arbitration proceedings commenced at the end of May, 2006 and the Award was passed on 14.10.2006. The Arbitrator in his wisdom has not granted any interest for this short period, and I do not propose to interfere with the Award on this basis inasmuch as the complete amount due under the Award has been paid by the Respondents within a period of three months of publishing of the Award.

The last claim was the claim of cost of arbitration proceedings. The claimant had claimed a sum of Rs. 10,000/- and the Arbitrator has awarded Rs. 5000/- as costs of arbitration. Unless the Award is wholly illegal or perverse, a court hearing objections or the Appellate Court will not unnecessarily interfere. I do not find any illegality or perversity in the facts and circumstances of the case and hold that the grant of costs of Rs. 5000/- instead of Rs. 10,000/- is in No. manner illegal or perverse.

The scope of hearing objections to an Award is limited. If the scope of hearing objections to an Award is limited, then the scope of hearing of an appeal against the order dismissing the objections has to be further limited. Unless there is a gross perversity or gross illegality, this Court cannot interfere in an appeal. In view of the above facts and conclusions with respect to each of the claim decided, I do not find that there is any gross illegality or perversity so as to interfere with the impugned order.

Learned Counsel for the Appellant states that though the cheque of the awarded amount was received, the same was not encashed, and he prays that fresh cheque may now be issued. Accordingly, let the Respondents issue a fresh cheque of the awarded amount to the Appellant within a period of 4 months from today on the Appellant returning the unencashed cheque within a period of one week from today.

With the aforesaid observations, the appeal stands dismissed, leaving the parties to bear their own costs.