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TMI Blog2016 (2) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... sala. 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 contractor against rejection of certain portions of the claims by the Courts that were allowd by the Arbitrator. The Union itself has not challenged the award already passed in favour of the contractor and the rejection of the appeal by the lower Appellate Court. The minimal facts that are necessary are as follows: I. Facts of the case: 2. On 30-3-1978 parties enter into contract for a provision of married accommodation at Dharamshala to be completed by 11.10. 1980. The petitioner contractor failed to execute the work as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced to sum of Rs. 2,18,657.12 and accordingly, made rule of Court. All other claims were upheld. Both parties appealed against lower Court judgment. III. Lower Appellate Court:- 4. Dismissing the appeals, the Appellate Court reasoned that; i) In light of clause 70 of contract, Cause of action was taken to arise on 15.11.1983 when work was completed. ii) Entertainment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside. Hence, no illegality in findings of lower court was found by the Appellate Court. Regarding interest, no change was made to the lower Court order, thereby affirming the award of the arbitrator. IV. Present disposition: 5. The scope for intervention for a Civil Court to a decision of an Arbitral Tribunal under the Arbitration Act of 1940 shall be restricted only to the grounds mentioned under Section 30 of the Arbitration Act of 1940 which reads as under:- "30. Grounds for setting aside award. An award shall not be set aside except on one or more of the following grounds, namely:- (a) That an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (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 contract under condition 54(d) of the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement (which stated interalia that C.W.E. was to decide about amount to be allowed to the contractor on account of increase in prices) held that since the contractor did not lead evidence to show that he applied to C.W.E. for such payment of difference due to increase in price, the arbitrator was not competent to pass the award, his jurisdiction being barred under condition 63 of the agreement. (ii) The Lower Appellate Court in upholding the trial court reasoning and rejecting the claim passed by the Arbitrator, relied upon certain requirements under condition 63 that the contractor was required to fulfill to seek the reimbursement, but did not. The Claim was therefore rejected as being not permissible under the terms and conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the arbitrator which was based on the valuation brought forward by the petitioner contractor. The Courts' reasoning was guided by condition 54 of the agreement which provided for the valuation done by the G.E. to be final and binding. Accordingly, the improperly secured claim of the petitioner was replaced by the value admitted to by the Union, and on this basis the Award was modified. The court was modifying it on the basis of the valuation made by the GE as per condition No.54 which stated the valuation to be final and binding. I have examined Condition No.54 which deals with cancellation of contract in part or in full for contractor's default. If the Arbitrator was allowing for damages for wrongful cancellation, he was literal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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