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PETITIONER: M/S STEEMAN LTD

       Vs.

RESPONDENT: THE STATE OF HIMACHAL PRADESH AND OTHERS

DATE OF JUDGMENT:       06/03/1997

BENCH: A.S. ANAND, K. VENKATASWAMI

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Venkataswami, J.      On a  close and  careful scrutiny  of the facts we find that the  dispute  in  these  matters  lies  in  a  very  by referring to  matters which  have no  real relevance  to the actual disputes in these matters.      Brief facts  leading to the filing of these two matters are the following :      The work  of construction  of Sitla  Bridge over  river Ravi  at   Champa  was  awarded  after  negotiation  to  the applicant/petitioner (M/s  Steeman Ltd) on 31.2.1969. We are not giving  details as  they are not necessary. As there was some dispute  between the  parties regarding the progress of the works  and payments for the same. The petitioner Company submitted  disputes/differences   for  adjudication  by  and arbitrator as  per clause 29 of the agreement. While so, the Executive Engineer,  Champa division  imposed penalty of Rs. 63,000/- in  addition to rescinding the contract on imposing penalty, the petitioner Company successfully appealed to the Government of  Himachal Pradesh.  Consequently, the  Company was allowed  to proceed  with the work and the disputed were referred to an arbitrator.      As Arbitrator orginally appointed was not acceptable to the petitioner Company one, Mr. R.K. Sarkar was appointed as arbitrator by mutual consent of parties. The said arbitrator entered upon the reference.      While the  arbitration proceedings  were going  on  the respondents  again   rescinded  the   contract  finally   on 7.6.1972.      On  7.10.1972.   The   petitioner   Company   submitted additional claims  before the arbitrator consequent upon the rescinding of  the contract  finally. The petitioner Company also raised a question of law before the arbitrator. namely, whether the respondent was competent to rescind the contract on the  ground of  slow progress  when the matter in dispute was subjudice  before the  arbitrator during the pendency of the case.  The arbitrator referred that question for opinion of the  Himachal Pradesh  High Court  under Section 13(b) of the Indian  Arbitration Act.  While  that  was  pending,  it appears that  in the  place of  Mr. R.K.  Sarkar one Mr.O.B.

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Sablok  was   appointed  as   arbitrator.   The   petitioner challenged the  substitution of  the arbitrator  before  the High Court.  The High  Court while setting aside the removal of Mr. R.K. Sarkar and the appointment of Mr. O.B. Sablok as arbitrator. Since  no orders  were passed  by the High Court for proceeding  further  with  the  arbitration  matter  the petitioner company  moved  this  court  by  filing  Transfer Petition No,  233 of  1980 for transfer of the cases to some other High  Court.  This  court  disposed  of  the  Transfer Petition on 12.3.1984 by appointing on Mr. G.N. Ramaswamiah. Chief Engineer  (IPH) H.P.  P.W.D with the mutual consent of the parties with a direction to the said arbitrator to enter upon the  reference and directing both the parties to appear before him on 3.9.1984.      The said  arbitrator duly entered upon the office. held as many  as 10  sitting/hearings and  drew minutes  of every meeting in  detail. Based  that an  award  has  been  passed 14.6.1985.      The High  Court (before which the question of law above mentioned, was  referred to by Mr. R.K. Sarkar, the previous Arbitrator) disposed  of the matter on 3.7.1986 stating that since the successor Arbitrator had made the award, there was no need to answer the question. On that view. The High Court dismissed the  reference matter. Aggrieved by that the above special leave petition has been filed.      When we  asked the learned Senior Counsel appearing for the petitioner  whether anything  survives  in  the  special leaves petition not only in view of the issues raised before the Arbitrator  for adjudication  but also  having regard to the arbitrator  appointed by  this Court  passing the award, the learned counsel frankly submitted that the special leave petition has become infructuous. Accordingly, we dismiss the same as  having become  infructuous. Accordingly, we dismiss the same as having become infructuous.      Award has  been filed  in this  Court.  Petitioner  has filed objections to the award.      Challenging the  award as  such,  the  learned  counsel raised four points.      The first  point raised  is that  the arbitrator should have  answered   the  question  of  law  raised  before  the predecessor arbitrator and the failure to do so vitiates the award.      Secondly, the  arbitrator has made a non-speaking award and, therefore,  it is  not possible  to find out whether he has applied  his mind to that part of the claim amounting to rupees two  lakhs eighteen  thousand which  represented  the good sized after rescinding the contract.      Thirdly,  the   arbitrator  has   no  given  reasonable opportunity of  meeting the case of the respondents and also in establishing  the petitioner’s  case. In  support of this contention he  placed reliance  on Suresh  Ragho  Desai  and Another vs.  Smt. Vijaya  Vinayak Ghag (1988) 4 SCC 591) and Rajpur Development  Authority &  Others  vs.  M/s  Chokhamal Contractors & Others (1989) 2 SCC 721).      And the  last point is that the interest awarded was at too low a rate as the claim was for 18% and the award was at 6%.      So far as the first point is concerned. we do not think that the said question arises out of the present arbitration proceedings inasmuch  as this  Court appointed  the  present arbitrator to  go into  the disputes between the parties and the parties  were directed  to place  before the  arbitrator their respective disputes. As a matter of fact by consent of both  the   parties,  the   arbitrator  framed   issues  for adjudication and it does not appear from the issues that the

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question of  law not  being raised  was one  of the  issues, further the  so called  question of law loses its relevance, after the  appointment of  the new arbitrator by this Court, as indeed no act of rescinding the contract took place after this court  appointed the Arbitrator. Therefore, there is no substance in the first point.      Regarding the  second point,  the facts  are like this. The petitioner  company’s demand in the original claim under clauses I & II read as follows :-             (in round figure             of 1000 rupees)      1.   The work  done by  the company      upto 16.9.1972 when it was forcibly      dispossessed, approximately                       .....  12,00,000/-      Less value  received from H.P. PWD,      in the shape of cash or material                       ....    3,00,000/-                       ------------------                               9,00,000/-      Plus for  property of  the  company      illegally  &  forcibly  taken  over      on 16.9.72 by the Department                      (+)     4,18,000/-      Less  value   of  material   handed      over to the company                      (-)     2,00/000/-                    ---------------------                             11,18,000/-      Total mount on account of work done      and property  forcibly  taken  over      plus interest @ 18% p.a. from 16-9-      72    to 15-9-84, i.e. for 12 years                        (+)   24,15,000/-      The total  sum to which the company      is entitled  as  on  15-9-84  under      this head                              32,33,000/-      II.  Damages  on  account  criminal      breach of        Trust, fabricating      false evidence,  mischief, forgery,      cheating, with  intent to  cause in      just  loss   and  injury   to   the      petitioner. The  company  claims  a      illegally deprived of                              11,18,000/-      The above  claims  were  modified  before  the  present Arbitrator which read as follows:-      Claims     preferred     by     the      Petitioner:-      I (a) Claim on works done by the      Company upto                     Rs.     11,18,000/-      (b) Interest  on the  amount  under      I(a) @  18% per  annum for a period      of 12 years.                         Rs. 24,15,000/-      II.  Claim  made   by  the  company      under   reasons whatsoever  as  per      clause of the agreement                         Rs. 11,18,000/-      [Other  clauses   omitted  as   not      relevant]      The Arbitrator has passed the award on the basis of the amended claim as follows :-

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------------------------------------------------------------ S.No. Claims preferred by     Amount          Awarded amount       the petitioner          claimed (Rs.) ------------------------------------------------------------ I.(a) Claim on work done      11,18,000/-     I award Rupees       by the company upto                     Forty Two       16.9.72.                                thousand Nine                                               hundred Forty                                               Nine and Sixty                                               three paisa                                               only                                               (Rs.42,949.63) (b) Interest on the         24,15,000/-       I award simple       amount under I(a)                       interest of                                               six per cent                                               for 12 years                                               upto this date                                               amounting to                                               Rupees Thirty                                               Thousand Nine                                               Hundred Twenty                                               Three and                                               Seventy three                                               paisa only.                                               (Rs.30,923.73) II.   Claims made by the      11,18,000/-     I award Rupees       company on damages                      Twenty Three       this is amended                         Hundred twenty       claim from the                          Five lying in       earlier item for                        deposit with       reasons whatsoever                       Respondent.       as per clause of the                    Further I       agreement), and                         award Rupees       amount is the same                      Fifty Thousand                                               on inventory                                               of stores etc.                                               totalling                                               Seventy Three                                               Thousand Two                                               hundred twenty                                               Five only).                                               (23,225+50,000                                                =73,22.00). ------------------------------------------------------------      The Arbitrator  was in  out opinion  quite justified in not awarding  any amount  under  a  separate  head  for  the property of  the Company  forcibly taken  possession  in  he light of  the amended  claims presented before him. There is thus  no  substance  in  the  argument  that  the  claim  as originally put  forward regarding company property allegedly taken possession  of by  respondent illegally  and forcibly, was not  separately considered  by the Arbitrator. Answer is obvious viz.  no.  such  separate  claim  was  made  by  the petitioner in the amended claim. Hence we have no hesitation to reject the second point also.      So far as the third point is concerned, namely that the petitioner  was   not  given   reasonable   opportunity   to substantiate the  case, we  do not  think that we can accept that contention  after perusing  the detailed minutes of the Arbitrator drawn  at the  sittings which  extended to  10 in number. As a matter of fact, we find that the Arbitrator had called upon the petitioner Company time and again to furnish document to support the claims. But. The petitioner has only partly complied  with the  directions of the Arbitrator. The Arbitrator had given full and reasonable opportunity to both

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parties to  put forward their respective claims. At the last sitting dated 5.4.85. the Arbitrator observed as follows :-      "As  far   as   oral   hearing   is      concerned, it is closed but in case      any clarifications  are  needed  by      the court  after receipt  of  final      reply from  both the parties within      the  dates  stipulated  above.  The      parties may  be summoned  at  short      notice to  seek such clarifications      needed by the court.      Pursuant to  the above,  it appears the Arbitrator sent letters to  both  parties  seeking  certain  clarifications. Taking advantage of that, learned counsel for the petitioner argued that  the arbitrator has not given reasonable time to the petitioner  to clarify  the doubts.  The learned counsel also invited  our attention  to a  post-script found  at the concluding part  of the  proceeding dated 30.5.85. The post- script reads as follows :-      "That  during  course  of  hearing,      petitioner   requested    of    and      interval to  see the  documents and      give  clarifications.  Accordingly.      The court  adjourned  for  half  an      hour  during   the  course  of  the      proceedings.      According to  the learned  counsel, the  time given  by Arbitrator was  totally inadequate toe clarify the doubt and therefore, there  was no  reasonable opportunity. As pointed out  earlier,   after  going  through  the  minutes  of  the Arbitrator drawn  during in the argument. Further neither of the counsel  was in a position to explain as to who made the post-script and  when was  it entered  in the proceedings of the Arbitrator.  The decisions  cited by the learned counsel for the  petitioner in  support of his argument that want or reasonable opportunity  would vitiate  the award by not come to his aid as we are satisfied on the facts of the case from the record  including the  minutes drawn  meticulously, that the Arbitrator  had given full and reasonable opportunity to both parties.  Accordingly we find no force in this point as well.      As regards  the last  point concerning the interest, we are informed  that there  is  no  clause  in  the  agreement regarding  interest.  Before  the  arbitrator  both  parties appear to  have agreed  on the  rate  of  interest  at  18%. However, the Arbitrator i the facts and circumstances of the case awarded  interest at  6%.  The  agreement  between  the parties does not mean that the Arbitrator was bogged down to that rate  irrespective of  other facts and circumstances of the case  on hand.  We have no good reason to think that the Arbitrator has  awarded interest  at 6% as against 18% claim without  taking   into  account   the  relevant   facts  and circumstances of  the case.  Further the jurisdiction of the Court to  interfere with  the award  is confined  to matters enumerated in  Section 30  of the  Arbitrator Act. We do not think that  the last  point resided  before  us  would  fall within the ambit of Section 30 to interfere with the award.      In the  result the  Interlocutory Application  1/90  in Transfer Petition  (Civil) No.  233/80 as  well  as  Special leave petition (Civil) No. 15978/86 stand dismissed. However there will be no order as to costs.