9911796707
TMI Blog1999 (4) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... to be completed within three years, i.e., by 16th December, 1970, the same was, however, completed on 26th February, 1978. The claim of the respondent, which gave rise to the arbitration proceedings with which we are concerned, was made in its letter dated 30th April, 1974 when it informed the Superintending Engineer that work in excess of Rs.540 lacs had been undertaken which was about Rs.36 lacs in excess of the contract value. According to the respondent as the total work as provided in the contract had increased beyond the deviation limit of 20 per cent it was entitled to revision of rates in respect of the works which it had carried out beyond this deviation limit. According to the respondent the contract envisaged rates for extra itmes as consisting of two categories; (a) item not included in the original tender; and (b) quantities in excess of the deviation limit for items included in the tender. For these items the rates had to be fixed by mutual agreement between the parties failing which they were to be fixed by reference to arbitration. According to the claimant it was entitled to revision of rates as the contract value had exceeded by 20 per cent and the claim was bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered for the purpose of deviation limit where original item of work is executed along with allied items of work for which rate is decided from tender schedules. Dispute No. 5. The rates payable for the following items of work at different periods of time during the execution of the works. (0 Structural steel work item No.6 of the schedule 5.2 of the contract. (ii) Providing RCC 2500 p.s.i. in walls and cut offs-Item No.9 of Schedule 5.1 of the contract. (iii) Providing RCC 2500 p.s.i. in wall and cut-offs-Item No.9 of Schedule 5.1 of the contract Dispute No. 6. The rate for excavation of the Tunlog Access Tunnel considering the revision of the rates for the excavation of the main tunnel. Dispute No, 7. Reimbursement of extra electrical charges recovered by the Respondents due to change in rates for electricity supply." It would be appropriate at his stage to set out the clauses of the contract which were relied upon by the parties before the arbitrators in support of their rival contentions. As far as the respondent is concerned its claim for escalation, when the total value of the work exceeded 20 per cent of the total value was based on Clause 3.2 (e)(ii) which rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preceding paragraph shall equally apply to the decrease in the rates of items for quantities in excess of the deviation limit, notwithstanding the fact that the rates for such items exist in the tender for the main work or can be derived in accordance with the provisions of sub-clause (ii) of the preceding Clasue 12 and the Engineer- in-Charge may revise such rates having regard to the prevailing market rates." On 20th November, 1976 the arbitrators gave their award. Disputes no. 1,2 and 4 were dealt with together and the arbitrators, without assigning any reason, directed the appellant board to pay to the respondent a sum of Rs.47 lacs from the date of the deviation upto to 30th June, 1975, in addition to the payment already made. For the work done after 30th June, 1975, the appellant board was required to pay to the respondent for the items at the rate stated in the award. There were 22 items which wre listed for which the enhanced rate was to be given, though the respondent had made a claim in respect of 108 items. In respect of dispute No.7 the appellant herein was held to be entitled to recover only the variations in the electricity duty and not the variations in the tariffs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the award of interest and, therefore, award of interest by the arbitrators could also not be sustained. Sh. Atul Chitale, learned counsel for the respondent, however, submitted that the claim of the respondent for revised rates was based on the interpretation of the contract and this point was specifically referred to the arbitrators and, therefore, the award of the arbitrators was final and binding and could not be set aside. He further submitted that implied term of the reference was that the arbitrators could award interest. In support of his contention that the non-reasoned award was in excess of the authority given to the arbitrators by the express provisions of the contract and, therefore, the award was without jurisdiction and was liable to be set aside, Sh. Maninder Singh, learned counsel for the appellants, placed strong reliance on the judgments of this Court, namely, Associated Engineering Co. v. Government of Andhra Pradesh and Anr., [1991] 4 SCC 93 and New India Civil Erectors (P) Ltd. v. Oil and Natural Gas Corporation, [1997] 11 SCC 775. As we shall presently see these decisions are clearly distinguishable and do not help the appellant. Mustill and Boyd in their b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case it was observed at page 371 in U.P. Hotels' case as follows : "If a question of a law is specifically referred and it becomes evident that the parties desired to have a decision on the specific question from the arbitrator rather than one from the court, then the court will not interfere with the award of the arbitrator on the ground that there was an error of law apparent on the face of the award even if the view of law taken by the arbitrator did not accord with the view of the court. A long line of decisions was relied upon by this Court for that proposition." On the facts of that case it was held that "a question of law arose certainly during the course of the proceedings. Such a question has been decided by the Umpire on a view which is a possible one to take. Even if there was no specific reference of a question of law referred to the Umpire, there was a question of law involved. Even on the assumption that such a view is not right, the award is not amenable to interference or correction by the courts of law as there is no proposition of law which could be said to be the basis of the award of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that "The Court in dealing with an application to set aside an award has not to consider whether the view of the arbitrator on the evidence is justified. The arbitrator's adjudication is generally considered binding between the parties, for he is a tribunal selected by the parties and the power of the Court to set aside the award is restricted to cases set out in S.30. It is not open to the Court to speculated, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. On the assumption that the arbitrator must have arrived at his conclusion by a certian process of reasoning, the Court cannot proceed to determine whether the conclusion is right or wrong. It is not open the Court to attempt to probe the mental process by which the arbitrator has reached his conclusion where it is not disclose by the terms of his award." In M/s Kapoor Nilokheri Co-op. Dairy Farm Society Ltd. v. Union of India and Ors., [1973] 1 SCC 708 at page 713 in paragraph 12 the Court held : "Mr. Nariman, the Additional Solicitor General appearing on behalf of the respondents also contended that the appellants having specifically stated that their clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; "The learned counsel for the appellant points out that the question in issued in the present appeals is squarely covered by the decision of this Court in Hindustan Construction Co. Ltd. v. State of J & K. In particular, it drew our attention to para 10 of the judgment and the portion extracted from the decision in Sudarsan Trading Co. case , wherein it was said that by purporting to construe the contract the Court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiciton. That is exactly what the Court has done in the instant case. Therefore, the issue stands covered by this decision and the learned counsel for the respondents could not in the face of this decision argue otherwise." From the aforesaid decision of this Court, and the last one in particular, it is clear that when the arbitrator is required to construe a contract then merely because another view may be possible the court would not be jusitified in construing the contract in a different manner and then to set aside the award by observing that the arbitrator has exceeded the jurisdiction in making the award. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any way persuade us to take a view different than the view arrived at by the High Court. At page 103 Thommen, J. speaking for the Court observed as follows : "The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interefered with unless he has given reasons for the award disclosing an error apparent on the face of it." Applying the ratio to the present case it is not possible to say that the arbitrator in the present case travelled outside the bounds of the contract. Correspondence exchanged between the parties prior to the making of the reference shows that the arbitrators were called upon to construe the contract in order to determine whether the contractor was entitle to claim revision of rates and if so what should ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
