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Judgment
This appeal under Section 39 of the Arbitration Act, 1940 is
directed against the judgment dated 15/1/2001 passed by the
Addl. District Judge No.2, Udaipur (''the trial court''), whereby, the
prayer made by the appellant to set aside the award dated
6/3/1995 has been rejected.
The appellant is a contractor experienced in civil engineering
with specialization in construction of Mine Haulage Roads. The
respondent, Rajasthan State Mines & Minerals Ltd. (''RSMML''), is a
Government of Rajasthan undertaking; the respondent RSMML
invited tenders for construction of mine haulage road including
cross drains, retaining walls, toe walls etc.; the appellant along
with other tenderers submitted its tender; the tenders were
opened on 30/6/1989; after negotiation, a Telex of Intent dated
28/10/1989 awarding the contract to the appellant was received
by the appellant on 3/11/1989 requiring the completion of
tendered work within a period of 12 months from the date of telex
i.e. 28/10/1989 and the gross value of the contract was
Rs.1,17,73,506/-.
On a dispute having arisen between the parties, one Mr.
V.C.Puri was appointed as sole arbitrator by the Managing Director
of RSMML on 15/11/1991. The appellant submitted his claim in
January, 1992, which was responded by the RSMML on 3/2/1992,
a rejoinder by the appellant was submitted on 4/5/1992. The
Arbitrator formulated 10 points for determination i.e. ''A'' to ''J'' and
by his award dated 6/3/1995 awarded a sum of Rs.1,48,000/-
and Rs.3,67,000/- towards claim ''B'' and ''H'', respectively, rest of
the claim was rejected.
The award was filed in the court under Section 14 of the Act
and the learned District Judge issued notices to the parties. The
appellant filed his objections under Sections 30 and 33 of the Act
seeking setting side of the award/modification of the same. By the
impugned judgment dated 15/1/2001, the application filed by the
appellant was rejected and the award was made rule of the court.
Feeling aggrieved, the present appeal has been filed by the
appellant.
Learned counsel for the appellant made submissions
questioning the legality and validity of the award as well as the
judgment of the trial court, the findings recorded by the Arbitrator
on various issues were contested. It was submitted that the main
issue relating to claim of the appellant pertain to controlled
blasting undertaken by him and the payment in terms of the
agreement for the said controlled blasting. It was submitted that
the Arbitrator in his award, though held in favour of the appellant
that it was entitled to the additional amount payable for controlled
blasting, on account of minutes of meeting dated 16/3/1990, the
said claim has been rejected. It was submitted that after the
minutes of meeting dated 16/3/1990 were recorded, a detailed
Letter of Intent dated 6/4/1990 was issued by the respondent
superseding all other correspondence and further in agreement
dated 6/4/1990 executed between the parties, there was no
reference to the minutes dated 16/3/1990 and, therefore, once
after the meeting dated 16/3/1990 when detailed Letter of Intent
has been issued and agreement entered into between the parties,
the same contain the final terms and conditions between the
parties and as such, the Arbitrator was not justified in relying on
the minutes of meeting dated 16/3/1990 and, therefore, the
conclusion arrived at by the Arbitrator and upheld by the trial
court deserve to be quashed and set aside.
With respect to claim ''B'' relating to land filling work beyond
the contract requirement done by the appellant, it was submitted
that the Arbitrator instead of claim of Rs.31,29,875/- has awarded
a sum of Rs.1,48,000/- only by relying on the contract document
of one M/s. R.K.Singhvi, which document was not part of the
record and, therefore, the findings/award of the Arbitrator in this
regard cannot be sustained.
Qua claim ''C'' pertaining to construction of approach roads
outside the contractual responsibility, it was submitted that the
Arbitrator was not justified in coming to the conclusion that the
construction of approach roads were part of the contract and with
reference to condition 17.4 and Special Conditions 3.3. and 3.4 it
was emphasized that the Arbitrator was not justified in denying
the amount towards construction of approach roads. Further, the
determination made by the trial court was also not justified.
Learned counsel made submissions pertaining to claim ''D'',
''E'', ''F'', ''G'' & ''I'' also questioning the denial of the claim by the
Arbitrator on several grounds. It was prayed that the award
impugned to the extent the same has rejected the claim of the
appellant deserves to be set aside and the judgment passed by
the trial court making the same rule of court also deserves to be
set aside.
Reliance was placed on Young Achievers vs. IMS Learning
Resources Pvt. Ltd . : (2007) 5 SCC 692, Rajasthan State Mines &
Minerals Ltd. vs. Eastern Engineering Enterprises & Anr . : (1999)
9 SCC 283, V.G.George vs. Indian Rare Earths Ltd. & Anr . :
(1999) 3 SCC 762 and D.C.M. Ltd. vs. Municipal Corporation of
Delhi & Anr . : (1997) 7 SCC 123.
At the outset, learned counsel appearing for the respondent
submitted that the appellant though has made submissions
pertaining to all the claims rejected by the Arbitrator, before the
trial court, objections were confined to three claims only i.e. claim
''A'', ''B'' & ''C'' and, therefore, now the appellant cannot be permitted
to raise objections pertaining to all other claims. Submissions
were made that though the agreement was entered into between
the parties on 6/4/1990, pursuant to the Letter of Intent, the
appellant had already commenced the work in November, 1989
and during the said period, on the issue pertaining to controlled
blasting having arisen, the minutes dated 16/3/1990 came into
existence dealing with the said aspect. It was submitted that the
conduct of the appellant in working under the said minutes dated
16/3/1990 by not claiming bill amount in running bills and raising
demand in final bill clearly creates estoppel against the appellant
and, therefore, the Arbitrator as well as the trial court were
justified in rejecting the claim.
Further submissions were made that the entire agreement
relied on by the appellant does not even deal with the aspect of
controlled blasting and it is only the minutes dated 16/3/1990
which deals with the aspect of controlled blasting and on that
count also the appellant cannot claim any amount as the minutes
dated 16/3/1990 have to be read as a whole and not in piecemeal.
With respect to claim ''B'', it was submitted that the Arbitrator
awarded the amount by relying on the material which came before
him during the course of arbitration including the contract of M/s.
R.K.Singhvi. Other than the said material, there was no material
available before the arbitrator to determine the claim made by the
appellant and, therefore, the arbitrator was justified in relying on
the said contract of M/s. R.K.Singhvi. It was further submitted
that the awarded amount under claim ''B'' is essentially a question
of fact which has been determined by the Arbitrator and upheld by
the trial court, which does not call for any interference.
With respect to claim ''C'' pertaining to construction of
approach road outside the alleged contractual responsibility, it was
submitted that the Clause 17.4 of general obligations as well as
Special Conditions 3.3. and 3.4 takes care of the said claim raised
by the appellant, which has been appropriately dealt with by the
Arbitrator and no interference in the said finding is called for.
Reliance was placed on Kanchan Udyog Limited vs. United
Spirits Ltd . : (2017) 8 SCC 237, Cauvery Coffee Traders,
Mangalore vs. Hornor Resources Co. Ltd . : (2011) 10 SCC 420,
Harish Chandra & Co. vs. State of U.P . : (2016) 9 SCC 478,
Union of India & Ors. vs. M/s. Onkar Nath Bhalla & Sons : AIR
2009 SC 3168.
I have considered the submissions made by learned counsel
for the parties and have perused the material available on record.
So far as the challenge laid by the appellant to all the claims,
which have been rejected by the Arbitrator i.e. claim ''A'' to ''J''
except claim ''H'' is concerned, a bare look at the judgment dated
15/1/2001 of the trial court reveals that in para 7 the trial court
has noticed the objections raised by the appellant and the said
objections pertain to claim ''A'', ''B'' & ''C'' only and the trial court has
dealt with only those objections and having rejected those
objections, made the award rule of court.
In the memo of appeal, grounds have been raised
questioning the validity of rejection of all the claims up to ground
''O'', thereafter, one page 39-A between para 39 and 40 has been
inserted raising a ground that the lower court erred in law in not
considering the objections raised in the objection petition of the
appellant and the lower court was under an obligation to consider as per law to deal with and decide all the claims in accordance
with the law as objections were raised in the objection petition qua
all the claims and, therefore, the order is required to be set aside.
As already noticed hereinbefore, from the order passed by
the trial court it appears that only rejection of 03 claims was
questioned/pressed by the appellant, therefore, now it is not open
for the appellant to question the validity of the judgment of trial
court on account of having allegedly pressed the grounds
pertaining to all the rejected claims. Law in this regard is very
clear. Hon''ble Supreme Court in State of Maharashtra vs. Ramdas
Shrinivas Nayak & anr. : (1982) 2 SCC 463 has laid down as
under:-
"Statement of fact as to what transpired at the hearing, recorded in the judgment of the court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence. If a party thinks that the happenings in court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the judges, to call the attention of the very judges who have made the record to the fact that the statement made with regard to his conduct was a statement that had been made in error. That is the only way to have the record corrected. If no such step is taken, the matter must necessarily end there. Of course, a party may resile and an appellate court may permit him in rare and appropriate cases to resile from a concession on the ground that the concession as made on a wrong appreciation of the law and had led to gross injustice; but, he may not call in question the very fact of making the concession as recorded in the judgment."
In view of the above, the plea sought to be raised by the
appellant cannot be countenanced.
So far as the claims dealt with by the trial court are
concerned, it is not in dispute that the Letter of Intent dated
28/10/1989 was received by the appellant on 3/11/1989 and the
period of completion was to be reckoned from the date of Letter
of Intent i.e. 28/10/1989. In the claim petition, the appellant
inter alia indicated as under, which clearly reflects that the work
was commenced in November, 1989 itself and till March the
appellant had already completed the work exceeding Rs.50 Lakh
out of total contract for gross value of Rs.1,17,73,506/-:
"6. We displayed our diligence by mobilising our machines and men and actually commenced the work in Nov. 1989 without receiving promised Mobilisation advance from RSMML of Rs.11.77 Lakhs till 27 th Feb. 1990. We had thus started the work & continued for six months from funds drawn from our own resources. 7. Not a single Running Account Bill was paid to us till March 1990 by which time we had already carried out work exceeding Rs. 50 Lakhs. Thereafter every bill paid had to suffer enormous deduction based on whimsical & arbitrary interpretation of the contract provision by EIL/RSMML & we were pushed into acute financial straits. In short, our diligence Exploited by EIL/RSMML to cover their own weaknesses, inadequacies & lack of diligence."
The above submissions in the Statement of Claim clearly
establishes that the appellant had undertaken a large part of
the work by the time the agreement dated 6/4/1990 was
executed between the parties. In the meanwhile, the meeting
dated 16/3/1990 was held between the appellant, RSMML and
Engineers India Limited, wherein, the issue regarding the
controlled blasting was discussed and concluded, the minutes
were drawn whereby, the ''controlled blasting'' was defined, it was
indicated that when blasting is done only with sand bags, it will
be considered as un-controlled blasting and the rates will be paid
as per S.O.R Item No.3.1 (d) and it was also agreed that the
said terms would form part of the contract and would be
incorporated in the contract documents.
The appellant has not denied the existence of said minutes
and the fact that the said aspect was agreed to between the
parties. However, it was vehemently submitted that as the
detailed Letter of Intent dated 6/4/1990 did not make any
mention of the minutes dated 16/3/1990 and provided that "the
contract agreement supersedes all other correspondence
exchanged prior to issue of this detailed Letter of Intent" and
Clause ''C'' of the agreement dated 6/4/1990 duly executed
between the parties also did not make any mention of the
minutes dated 16/3/1990, though exhaustively indicated all
other documents executed between the parties, in terms of
Section 62 of the Contract Act, 1872, unless the contract was
altered, the minutes dated 16/3/1990 could not have been relied
on by the respondent and the Arbitrator.
As already noticed, the appellant had started working from
November, 1989 and had already undertaken large part of the
work and, thereafter, it agreed for defining the controlled
blasting and accepted that blasting done only with sand bags will
be considered as un-controlled blasting, therefore, only on
account of the fact that the formal agreement was entered into
between the parties on 16/4/1990, which did not make any
mention of the minutes dated 16/3/1990, by itself cannot be a
ground to come to a conclusion that the minutes dated
16/3/1990 were cautiously given a go-bye and/or the parties
agreed for treating the blasting done with sand bags also as
controlled blasting entitling the appellant to claim amount for
blasting done with sand bags as controlled blasting.
The Arbitrator while dealing with the said aspect of the
matter, though came to the conclusion that blasting carried out
even with the aid of sand bags was controlled in nature, in view
of the minutes dated 16/3/1990 rejected the claim.
Hon''ble Supreme Court in the case of Kanchan Udyog
(supra) while dealing with the aspect of novation of a contract
relying on its earlier judgment held that the same could take
place sub silentio and that waiver could also be deduced from
acquiescence.
Further in the case of Cauvery Coffee Traders (supra), it
was laid down that unless the allegation of misrepresentation,
fraud or coercion are made, it is not open to either of the parties
to raise the claim.
So far as the reliance placed by counsel for the appellant
on the judgment in case of Young Achievers (supra) is
concerned, the said judgment pertain to the survival of
arbitration clause once the contract containing the arbitration
clause is superseded by fresh contract, which aspect has no
application to the facts of the present case as the issue raised in
the present case pertains to conduct of the appellant in
accepting a particular interpretation/condition and having
worked under it without raising any objection.
In view of the above discussion, the plea sought to be
raised by the appellant relying on the fact that final Letter of
Intent and agreement dated 6/4/1990, which was executed
almost after six months from the date of commencement of
work, did not include the minutes dated 16/3/1990, which were
drawn during the progress of the work settling the terms
pertaining to controlled/un-controlled blasting, has no substance
and the same is, therefore, rejected.
So far as the ground pertaining to claim ''B'' for the land
filling work done by the appellant beyond the contract
requirement is concerned, the Arbitrator relying on the contract
document of M/s. R.K.Singhvi awarded a sum of Rs.1,48,000/-
to the appellant. The appellant in his claim had claimed a sum of
Rs.31,29,875/- towards the said claim, however, no basis
whatsoever was disclosed in the said claim by the appellant.
Learned counsel for the appellant also fairly conceded that there
was no material available on record to substantiate the said
claim of Rs.31,29,875/-.
So far as the contract of M/s. R.K.Singhvi is concerned,
which has been relied on by the Arbitrator, though the source of
the said contract is not available on record, the same factually
forms part of the record of Arbitrator which he had submitted to
the District Court and has been perused by this Court.
In these circumstances and on account of the fact that
respondents have not questioned the award of sum of
Rs.1,48,000/- to the appellant, the claim sought to be raised by
the appellant without any substantiation available on record also
cannot be countenanced and the objections in this regard have
no substance.
Insofar as the claim ''C'' pertaining to construction of
approach roads is concerned, the Arbitrator relying on clause
17.4 of General Conditions of Contract came to the conclusion that the construction of approach road being part of the contract
rejected the claim. Clause 17.4 of the General Conditions of
Contract provides as under:-
"17.4 Wherever it is mentioned in the specifications that the Contractor shall perform certain work provide certain facilities, it is understood that the contract shall do so at his cost."
Further, it was indicated in Clause 3.2 and 3.3 of the
Special Conditions of Contract as under:-
"3.2 The present scope for mine haulage road includes only construction of embankment/formation width, construction of the drainage system and stability of the cut and fill slopes with toe wall and retaining wall and benching etc. 3.3 The contractor shall acquaint himself with the access to the site, availability of local facilities such as transport facilities, material and labour and shall provide suitable allowance in his quotation."
Once the General Conditions require the appellant to
acquaint himself with the access to the site, availability of local
facilities and it was required of the appellant to provide for
suitable allowance in his quotation in this regard, the claim
sought to be made pertaining to construction of approach road,
cannot form part of the excess work and the same shall be
deemed to be part of the contract as the appellant was required
to visit the site before participating in the tender process and if
the requirement was that of construction of approach road for
reaching the site, the said work cannot be said to be outside the
scope of work and was bound to be included by the appellant in
the tender quotation and, therefore, the claim made in this
regard cannot be sustained.
So far as the judgments cited by the learned counsel for
the appellant in the case of Rajasthan State Mines & Minerals
(supra) and V.G.George (supra) are concerned, none of the
principles laid down therein have any application to the facts of
the present case, the judgments as such have no application.
In view of the above discussion, there is no substance in
the appeal and the same is, therefore, dismissed.
37 No order as to costs.