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2016 (2) TMI 1257

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..... as constituting an error apparent on the face of the record. The court guided for future awards that reference to interest for pendente lite or future interest should always be 9% in light of the provisions of the Interest Act, 1978. The civil revision partially succeeds in restoring the award passed by the Arbitrator - the rejection of the claim to Clause No.2(L) by the two courts below stands confirmed - The reduction of interest rate at 9% per annum is also justified - revision allowed in part. - Civil Revision No.5770 of 2008 - Dated:- 25-2-2016 - Mr. K. Kannan, J. Mr. H.S. Tuli, petitioner in person. Ms. Deepali Puri, Advocate, for the respondent-UOI. K.Kannan, 1. I have today disposed of two other civil revision petitions between the same parties relating to a contract for construction of 'married accomodation' at Nahan. The contract in the present case was awarded about 10 years later for construction of a 'married accommodation' at Dharamsala. The matter refers to claim arising out of cancellation of a contract and the tenability of the award by the arbitrator appointed under the Arbitration Act of 1940. The revision is brought at the instance of the contrac .....

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..... nt of claim by the arbitrator on disputes which were not permissible under the conditions and adjudication amounted to exceeding jurisdiction and could be interfered while considering the question of making the award rule of the Court. iii) As regards unreasoned award, limited jurisdiction of the Court in this case permitted it to lift the veil and to see whether arbitrator acted against contract in deciding the claims in question. iv) As regards Claim No. 2(K), the damages on account of wrongful cancellation of contract quantified by contractor at ₹ 2,94,000/- but allowed by arbitrator ₹ 50,000/- only and denied completely by Lower Court. The lower Appellate Court held that petitioner contractor was not entitled to any damages on this account and claim was rightly rejected having been allowed by Arbitrator against terms and conditions of agreement. v) Claim No. 2(L): Regarding increase in price of material, the court reasoned hat it was rightly rejected being not permissible under contract as the contractor did not fulfill the requirements of the claim. vi) Claim 2(M): Regarding payment of tools, plant, machinery, furniture and material lying at site at the time of can .....

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..... damages on account of wrongful cancellation and the Arbitrator has actually admitted such a claim to ₹ 50,000/- as against the claim of ₹ 2,94,000/- made by the contractor, then it must be understood that the Arbitrator was holding a cancellation of contract to be wrong and he was scaling down the quantum by a calculation, which though not revealed was applied by the Arbitrator. There could have been no scope for intervention by the court if neither of the grounds under clause (a) or (c) could be invoked. Indeed, there was not even a reference to a misconduct by the Arbitrator or that it had been improperly procured. The claim No.2(K) was rejected on the following reasons:- (i) Clause 54 of the agreement stated that the contract may be cancelled after giving reasonable notice and if the government completed or decided to complete the work the decision made by C.W.E. would be final and binding. As per the trial Court once such a decision was made final and binding it was taken out of the Arbitrator s purview and hence it was held that the arbitrator was not competent to adjudicate upon this item. (ii) The Lower Appellate Court held that the Union validly cancelled the co .....

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..... tor to furnish the details of variation in prices and the CWE would take a decision whose decision shall be final and binding. The CWE has also a power to decide if there was any delay attributable to the execution of the contract within the control of the Arbitrator, in which case, the amount claimed as increase in prices in materials would not be claimed. To the extent to which the redressal mechanism was also provided and the failure of the contractor to lead any evidence or make a statement that he had applied to CWE for such payment, the award by the Arbitrator was truly on a head of claim that must only be reckoned as 'improperly procured or otherwise invalid'. I uphold the rejection of the claim made by the court of first instance, as approved by the Appellate Court also, on the ground that even in the grounds of revision, there is no contention raised that the contractor has ever applied to CWE for payment of the difference due to price in increase in terms of Condition No.63. 9. As regards the modification of claim permitted with reference to claim No.2(M) for the value of the tools, plants and machineries lying on site, the Arbitrator had allowed for ₹ 4,55, .....

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