Bahl Builders Pvt. Ltd. vs Union of India (UOI)

Mukul Mudgal, J.—This appeal challenges the judgment of the learned Single Judge dated 13th August, 2008. By the impugned judgment, the award of the Sole Arbitrator dated 24th April, 2003 whereby the claim was allowed to the extent of Rs. 2,30,000/- in favour of the appellant contractor with interest @ 15 per cent per annum was set aside.

The appellant/contractor sought to challenge the judgment of the learned Single Judge on the ground that judgment of the Hon''ble Supreme Court in the case of Ramnath International Construction Pvt. Ltd. Vs. Union of India (UOI) and Another, Supreme Court Cases 453 was not applicable but, in fact, the issue involved was covered by a three judges Bench decision of the Hon''ble Supreme Court in the case of K.R. Raveendranathan Vs. State of Kerala and Another, . Learned Counsel submitted that in view of this judgment, the learned Single Judge ought not to have relied on Ramnath International (supra) and ought to have relied on K.R. Raveendranathan (supra). However, it has not been disputed before us that Clause 11 involving interpretation in Ramnath International (supra) was identical to Clause 11 in the present appeal. The orders passed in the cases of K.R. Raveendranathan (supra) and Shyama Charan Agarwala & Sons v. Union of India 1999 (1) Arb. LR 699 have been produced by the appellant before us.

The order passed in Shyama Charan Agarwala (supra) followed the judgment of Hon''ble Supreme Court in K.R. Raveendranathan (supra) and stated no other issue; and the order passed in K.R. Raveendranathan (supra) followed the judgment of the Hon''ble Supreme Court in Sudarsan Trading Co. Vs. Government of Kerala and Another, and Indra Kumar Chopra Vs. Pradeshik Co-operative Dairy Federation Ltd. and others, .

In our view, the learned Single Judge has correctly analyzed Clause 11 and decision in judgment of Ramnath International (supra) which squarely covers the issue involved as the clauses are identical. It is also apparent that there is nothing in the two orders cited by the appellant to suggest that the view taken in Ramnath International (supra) is contrary to the said views.

Accordingly, we are satisfied that learned Single Judge was justified in applying Ramnath International (supra). The clause involved in Ramnath International (supra) was identical to the clause involved in the present appeal. The learned Single Judge has rightly held that the award was in respect of a matter that was clearly beyond the jurisdiction of the Arbitrator, being an "excepted" item. Learned Single Judge has correctly come to the conclusion that the award betrays non-application of mind to the facts as the appellant''s letter of extension dated 12th August, 1997 had clearly posited that it was subject to "Nil" financial implication. This meant that the contractor could not have claimed any amount, towards the head which was ultimately awarded. Learned Single Judge also took note of the fact that nothing was shown from the correspondence or the record to support the contractor''s disclaimer or protest against this conditional extension of time. Learned Single Judge, thus, in our view, correctly held that the Arbitrator could not have awarded the sum that he did.

Accordingly, the appeal is dismissed.

The deposits made pursuant to the order of learned Single Judge are now permitted to be withdrawn by the Union of India upon an appropriate application being made before the Registry.