Sadhu Singh and Company vs National Projects Construction Co.

Dev Darshan Sud, J.—This petition has been preferred by Defendant M/s National Projects Construction Corporation Ltd. (hereinafter referred to as the Objector) against the award made by Arbitrator Shri K.D. Thite on 30th October, 1996 allowing part of the claim instituted by M/s Sadhu Singh & Company (hereinafter referred to as the claimant).

Before turning to the grounds of challenge to the award, I must notice that objections against this award were instituted in the High Court of Delhi and registered as IA No. 2654/1997 and CS (OS) No. 27-A/1997, titled M/s Sadhu Singh & Co. v. M/s National Projects Construction Corporation. The objections were dismissed by Hon''ble Mr. Justice Pradeep Nandrajog, by a detailed judgment dated 18th December, 2006.

Being aggrieved by this judgment, the objector herein approached the same Court by filing FAO (OS) No. 67 of 2007, which appeal was again dismissed by a detailed order of the Court dated 19th April, 2007. This was challenged before the Supreme Court, which disposed of the appeal with a direction that since the High Court of Delhi lacked jurisdiction, the case would be tried by this Court. It was directed that:

...ORDER

Heard learned Counsel for the parties.

Leave granted.

After some arguments both Mr. A. Sharan, Additional Solocitor General representing the Appellant and Mr. Ashok Grover, Senior Counsel appearing for the Respondent, on instructions received from their respective clients, agreed that the appeal may be disposed of in the following term expressly consented to by both sides:

(i) The order dated 19 April, 2007 passed by a Division Bench of the Delhi High Court in FAO (OS) No. 67/2007 and the order dated 18 December, 2006 passed by a learned Single Judge of the Court in I.A. No. 2654/1997 and C.S.(OS) No. 27-A/1997 are set aside and it is directed that the proceedings in connection with the award dated 30 October,1996 made by Mr. K.B. Thite, retired Chief Engineer, Central Water Commission shall stand abated as not maintainable before the Delhi High Court.

(ii) The Registry of the Delhi High Court shall return the award dated 30 October, 1996 made by Mr. K.B. Thite, retired Chief Engineer, Central Water Commission and submitted by the Arbitrator before the court, to the Respondent within a fortnight from the receipt of a copy of this order.

(iii) It will be open to the Respondent to file the award for making it a rule of the court in the Himachal Pradesh High Court where it had earlier filed as C.S. No. 45/1989 under Sections 8 and 20 of the Indian Arbitration Act, 1940 within four weeks from the date it receives it from the Registry of the Delhi High Court. The Respondent shall initmate the date of filing of the award in the Himachal Pradesh High Court to the Appellant within one week of the filing of the award.

The parties may file before the Himachal Pradesh High Court copies of their respective pleadings already filed before the Delhi High Court as also any additional pleadings within six weeks from the date of the filing of the award in that Court.

5 Mr. Sharan undertakes that the Appellant shall not raise any objection before the Himachal Pradesh High Court on grounds of limitation. Having regard to the facts and circumstances of the case the delay in filing the award before the Himachal Pradesh High Court is condoned; the High Court shall consider the case of the parties on merits and pass final orders accordingly.

6 The Himachal Pradesh High Court is requested to dispose of the matter as early as possible and preferably not later than nine months from the date of the filing of the award before it.

7 The appeal stands disposed of in the above terms.

Now this Court is seized of the matter. Before considering the objections, I may note the undisputed facts. An agreement was executed on 18th August, 1986 between the objector and claimant at Delhi for execution of the work subject matter of the contract, in Himachal. Some disputes and differences arose between the parties, whereafter the claimant invoked the arbitration clause. The claimant had instituted a petition under Sections 8 and 20 of the Arbitration Act, 1940 (hereinafter referred to as the Act) before this Court for filing the arbitration agreement and appointment of an Arbitrator. During the course of the proceedings, it transpires that the Objector had already appointed the sole arbitrator and on 19.10.1989 this fact was brought to the notice of this Court and the petition was dismissed as infructuous. Late Hon''ble Justice Shri H.R. Khanna, Retired Judge of the Supreme Court, was appointed as the sole arbitrator. The proceedings continued before him for some time, when an objection was taken by the claimant that he had conducted the proceedings in Dalhousie and the claimants expressed their loss of confidence in the Hon''ble Judge, he immediately withdrew from the case. Thereafter the Objector appointed Mr. K.D. Thite, Retired Chief Engineer, Central Water Commission, as the sole arbitrator. It is undisputed that award was made on 30th October, 1996. It is after this, objections u/s 30 and 33 of the Act were instituted in the High Court of Delhi. After dismissal of the petition by the Hon''ble Single Judge of the Court, appeal was preferred before the Division Bench, where one of the questions was lack of territorial jurisdiction of the Delhi High Court to take cognizance of the case. The learned Court by a detailed order dismissed the appeal holding that there was a distinction between inherent lack of jurisdiction and lack of territorial jurisdiction and the case is not one which invited the bar of Section 31(4) of the Act as Section 21 of the CPC applied to the proceedings. The judgment and pleadings before the High Court of Delhi have been placed on record of the case by the claimant.

Adverting to the grounds urged in this petition, the first ground urged by learned Counsel appearing for the Objector herein is that the learned Arbitrator did not consider the provision of Section 69(2) of the Partnership Act. The precise submission is that it is an unregistered firm and therefore, the petition is not maintainable. This has been dealt with by the Arbitrator in detail. Two letters dated 30.10.1985 and 13.3.1986 have been placed on record of the arbitration case. The first letter is at page 122 of Volume 18 on the record of the arbitration and the second is at page 124 of the same Volume. By the first letter the Objector seeks to elicit information with respect to the registration of the firm. In reply thereto, the claimant by its communication No. SCC/86/106/2290 dated 13th March, 1986 stated in clear and unquivocal terms that photocopies of the registration of firm have been submitted to them after induction of 12th partner. I do not find any force in the submission which has been made on behalf of the objector. Documents acknowleding the changes made in the firm have been placed on record before the Registrar of firms and there has been no objection to the subsequent proceedings. In this view of the matter, I do not find any force in the submission and it has been rejected.

Jurisdiction

The second more serious objection which has been raised and which is fundamental to the entire dispute between the parties is with respect to the jurisdiction of the Arbitrator to entertain the claim. Learned Senior counsel refers to Clause 18.2, in particular, Sub-clauses (ii) and (iii), Clause 53, which is a finality clause and Clauses 23.6 ( c) and 15.1.

Adverting to Clause 53 of the Contract, Volume 4 it reads:

Clause 53: FINALITY CLAUSE It shall be accepted as an inseparable part of the contract that in matters regarding materials, workmanship, removal or improper work, interpretation of the contract drawings and contract specifications, mode of procedure and the carrying out of the work as stipulated in the clause Nos. 7,8,10, 13,17, 18, 21, 23, 24, 29, 32, 34, 37, 38, 40, 41 & 44, the decision of the Engineer-in-Charge, which shall be given in writing, shall be final and binding on the contractor.

This is the gist of the objectors'' case. The Non-objector refutes these submissions on the ground that the Objector has submitted to the jurisdiction of the Arbitrator, hence now cannot turn around and challenge the award.

Learned Senior counsel refers to the Constituion Bench decision of the Supreme Court in Waverly Jute Mills Co. Ltd. Vs. Raymon and Co. (India) Private Ltd., holding:

The point then for decision is whether there is in this case an agreement for reference to arbitration apart from clause 14 of the contract. It is not contended for the Appellants that there was any express agreement between the parties for referring the disputes under the contract dated September 7, 1955 to arbitrators. All that is said is that the Respondents filed statements before the arbitrators setting out their defence on the merits, and that must be construed as an independent agreement for arbitration and the decisions in National Fire and General Insurance Co. Ltd. Vs. Union of India (UOI) and Another, , and Pratabmull Rameshwar Vs. K.C. Sethia (1944), Ltd., are cited as authorities in support of this contention.

Now an agreement for arbitration is the very foundation on which the jurisdiction of the arbitrators to act rests and where that is not in existence, at the time when they enter on their duties, the proceedings must be held to be wholly without jurisdiction. And this defect is not cured by the appearance of the parties in those proceedings, even if that is without protest, because it is well settled that consent cannot confer jurisdiction. But in such a case there is nothing to prevent the parties from entering into a fresh agreement to refer the dispute to arbitration while it is pending adjudication before the arbitrators, and in that event the proceedings thereafter before them might be upheld as referable to that agreement & the award will not be open to attack as without jurisdiction. But it will make all the difference in the result whether the parties have entered into an arbitration agreement as defined in Section 2(a) of the Arbitration Act or have merely taken steps in the conduct of proceedings assumed or believed to be valid. In the former case the award will be valid; in the latter, a nullity. (at p.97-98)

(emphasis supplied)

Learned Senior counsel seeks support of his contention from the judgment of the Supreme Court in Vishwanath Sood Vs. Union of India (UOI) and Another, and more especially on the interpretation of the Clause with respect to the excepted matters where the Supreme Court held:

...We are therefore inclined to hold that the opening part of Clause 25 clearly excludes matters like those mentioned in Clause 2 in respect of which any dispute is left to be decided by a higher official of the Department. Our conclusion, therefore, is that the question of awarding compensation under Clause 2 is outside the purview of the arbitrator and that the compensation, determined under Clause 2 either by the Engineer-in-charge or on further reference by the Superintending Engineer will not be capable of being called in question before the arbitrator.(at p. 958)

Learned Senior counsel submits that jurisdiction being basic question for exercise of power of the Arbitrator, he cannot travel beyond the clause which confers jurisdiction on him. He places reliance on the judgment of the Supreme Court in Associated Engineering Co. Vs. Government of Andhra Pradesh and another, holding:

The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the fact of it.

An arbitrator who acts in manifest disregard of the contract acts without jurisdiction. His authority is derived from the contract and is governed by the Arbitration Act which embodies principles derived from a specialised branch of the law of agency (see Mustill and Boyd''s Commercial Arbitration, 2nd end., p.641). He commits misconduct if by his award he decides matters excluded by the agreement (see Halsbury''s Laws of England, Volume II, 4th end., para 622). A deliberate departure from contract amounts to not only manifest disregard to his authority or a misconduct on his part, but it may tantamount to a mala fide action. A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiates the award.

A dispute as to the jursidction of the arbitrator is not a dispute within the award, but one which has to be decided outside the award. An umpire or arbitrator cannot widen his jurisdiction by deciding a question not referred to him by the parties or by deciding a question otherwise than in accordance with the contract. He cannot say that he does not care what the contract says. He is bound by it. It must bear his decision. He cannot travel outside its bounds. If he exceeded his jurisdiction by so doing, his award would be liable to be set aside. As stated by Lord Parmoor, Attorney General for Manitoba v. Kelly (1922) 1 AC 268: (AC p.276)

It would be impossible to allow an umpire to arrogate to himself jurisdiction over a question which, on the true construction of the submission, was not referred to him. An umpire cannot widen the area of his jurisdiction by holding, contrary to the fact, that the matter which he affects to decide is within the submission of the parties.

Evidence of matters not appearing on the face of the award would be admissible to decide whether the arbitrator travelled outside the bounds of the contract and thus exceeded his jurisdiction. In order to see what the jurisdiction of the arbitrator is, it is open to the court to see what dispute was submitted to him. If that is not clear from the award, it is open to the court to have recourse to outside sources. The court can look at the affidavits and pleadings of parties; the court can look at the agreement itself. Bunge & Co. v. Dewar and Webb (1921) 8 LIL Rep. 436.

If the arbitrator commits an error in the construction of the contract, this is an error within his jurisdiction. But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. Such error going to his jurisdiction can be established by looking into material outside the award. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The dispute as to jurisidction is a matter which is outside the award or outside whatever may be said about it in the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The reationle of this rule is that the nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such jurisdictional error needs to be proved by evidence extrinsic to the award. (See Alopi Parshad and Sons Ltd. Vs. Union of India (UOI), Bunge & Co. v. Dewar & Webb (1921) 7 LIL Rep 436, Christopher Borwn Ltd. v. Genossenschaft Oesterreichischer (1954) 1 QB 8, Rex v. Fulham (1951) 2 QB 1, Falkingham v. Victorian Railways Commission 1900 AC 452...). (at pp. 103-104)

Learned Senior counsel fortifies his contention with the law as laid down in Rajasthan State Mines and Minerals Limited Vs. Eastern Engineering Enterprises and Another, In that case the Court held:

It is settled law that the arbitrator is the creature of the contract between the parties and hence if he ignores the specific terms of the contract, it would be a question of jurisdictional error which could be corrected by the court and for that limited purpose agreement is required to be considered....

From the resume of the aforesaid decisions, it can be stated that:

(a) It is not open to the court to speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion.

(b) It is not open to the court to admit to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award.

(c) If the arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the court cannot interfere.

(d) If no specific question of law is referred, the decision of the arbitrator on that question is not final, however, much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. In a case where a specific question of law touching upon the jurisdiction of the arbitrator was referred for the decision of the arbitrator by the parties, then the finding of the arbitrator on the said question between the parties may be binding.

(e) In a case of a non-speaking award, the jurisdiction of the court is limited. The award can be set aside if the arbitrator acts beyond his jurisdiction.

(f) To find out whether the arbitrator has travelled beyond his jurisdiction, it would be necessary to consider the agreement between the parties containing the arbitration clause. The arbitrator acting beyond his jurisdiction is a different ground from the error apparent on the face of the award.

(g) In order to determine whether the arbitrator has acted in excess of his jurisdiction what has to be seen is whether the claimant could raise a particular claim before the arbitrator. If there is a specific term in the contract or the law which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or there is a specific bar in the contract to the raising of the particular claim then the award passed by the arbitrator in respect thereof would be in excess of jurisdiction.

(h) The award made by the arbitrator disregarding the terms of the reference or the arbitration agreement or the terms of the contract wuld be a jurisdictional error which requires ultimately to be decided by the court. He cannot award an amount which is ruled out or prohibited by the terms of the agreement. Because of a specific bar stipulated by the parties in the agreement, that claim could not be raised. Even if it is raised and referred to arbitration because of a wider arbitration clause such claim amount cannot be awarded as the agreement is binding between the parties and the arbitrator has to adjudicate as per the agreement. This aspect is absolutely made clear in Continental Construction Co. Ltd. Vs. State of Madhya Pradesh, by relying upon the following passage from Alopi Parshad and Sons Ltd. Vs. Union of India (UOI), which is to the following effect: (SCC p. 88, para 5)

There it was observed that a contract is not frustrated merely because the circumstances in which the contract was made, altered. The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The parties to an executory contrct are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. There is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous.

(i) The arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract. A deliberate departure or conscious disregard of the contract not only manifests the disregard of his authority or misconduct on his part but it may tantamount to mala fide action.

(j) The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and reasonable; the arbitrator is a tribunal selected by the parties to decide the disputes according to law. (pp. 300-310)

Learned Senior counsel submits that in State of Rajasthan Vs. Nav Bharat Construction Company, the Court was emphatic that a claim which cannot be allowed is required to be set aside. In particular he makes a reference to para 31 of this judgment and similarly in Ramnath International Construction Pvt. Ltd. Vs. Union of India (UOI) and Another, the Supreme Court was concerned with the interpretation of the Clause of the Contract subject matter of the litigation which debars a claim being made in terms of the Contract as entered into between two parties.After considering the submissions of the parties and on interpretation of the contract, the Court held that the arbitrator had misconducted himself in awarding compensation which was not otherwise governed as an arbitral clause in the contract.

In Food Corporation of India Vs. Chandu Construction and Another, the Court rules:

It is trite to say that the arbitrator being a creature of the agreement between the parties, he has to operate within the four corners of the agreement and if he ignores the specific terms of the contract, it would be a question of jurisdictional error on the face of the award, falling within the ambit of legal misconduct which could be corrected by the court. We may, however, hasten to add that if the arbitrator commits an error in the construction of contract, that is an error within his jurisdiction. But, it he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. (see Associated Engineering Co. Vs. Government of Andhra Pradesh and another, and Rajasthan State Mines and Minerals Limited Vs. Eastern Engineering Enterprises and Another,

In this context, a reference can usefully be made to the observations of this Court in Alopi Parshad and Sons Ltd. Vs. Union of India (UOI), wherein it was observed that the Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The Court went on to say that in India, in the codified law of contracts, there is nothing which justifies the view that a change of circumstances, "completely outside the contemplation of parties" at the time when the contract was entered into will justify a court, while holding the parties bound by the contract, in departing from the express terms thereof. Similarly, in The Naihati Jute Mills Ltd. Vs. Khyaliram Jagannath, this Court had observed that where there is an express term, the court cannot find, on construction of the contract, an implied term inconsistent with such express term.

In Continental Construction Co. Ltd. Vs. State of Madhya Pradesh, it was emphasised that not being a conciliator, an arbitrator cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. He is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law, and if he does not, he can be set right by the court provided his error appears on the face of the award.

In Bharat Coking Coal Ltd. Vs. Annapurna Construction, while inter alia, observing that the arbitrator cannot act arbitrarily, irrationally, capriciously or independent of the contract, it was observed, thus: (SCC p.p. 161-62, para 22)

There lies a clear distinction between an error within the jurisdiction and error in excess of jurisdiction. Thus, the rule of the arbitrator is to arbitrate within the terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled beyond the contract, he would be acting without jurisdiction, whereas it he has remained inside the parameters of the contract, his award cannot be questioned on the ground that it contains an error apparent on the face of the record.

Therefore, it needs little emphasis that an arbitrator derives his authority from the contract and if he acts in disregard of the contract, he acts without jurisdiction. A deliberate departure from contract amounts to not only manifest disregard of his authority or a misconduct on his part, but it may tantamount to a mala fide action (also see Associated Engineering Co. Vs. Government of Andhra Pradesh and another, (at p.p. 702-703)

In nutshell, the submission made by learned Senior counsel is that in case of an excepted matter, the arbitrator cannot proceed to assume jurisdiction and adjudicate on such a claim.

I may also notice the decision of the Supreme Court in General Manager Northern Railways and Another Vs. Sarvesh Chopra, where their Lordship had gone to the extent of holding that the Court is obliged to examine whether a difference which is sought to be referred to arbitration is one to which the arbitration agreement applies and it is not necessary that a departmental or an "in-house" remedy for settlement of claim must be provided by the contract. Merely in absence of such a provision, the claim does not cease to be an excepted matter.

Other judgments relied upon by the learned Counsel may also be noticed. In Food Corporation of India Vs. Sreekanth Transport, the Court held

"Excepted matters" obviously, as the parties agreed, do not require any further adjudication since the agreement itself provides a named adjudicator-concurrence to the same obviously is presumed by reason of the unequivocal acceptance of the terms of the contract by the parties and this is where the courts have been found out lacking in their jurisdiction to entertain an application for reference to arbitration as regard the disputes arising therefrom and it has been the consistent view that in the event of the claims arising within the ambit of excepted matters, the question of assumption of the court would not arise. The parties themselves have decided to have the same adjudicated by a particular officer in regard to these matters; what these exceptions are however are questions of fact and usually mentioned in the contract documents and form part of the agreement and as such there is no ambiguity in the matter of adjudication of these specialised matters and being termed in the agreement as the excepted matters. (at p. 493)

To retriate, learned Senior counsel submits that Clause 53 and the matters contained therein impart finality to the decision of the Engineer-in-Incharge and are outside the scope of arbitration. He submits that this clause admits of no other meaning save and except the one plainly incorporated/engrafted.

Learned Counsel appearing for the claimant places reliance upon the Bharat Sanchar Nigam Ltd. and Anr. v. Motorola India Pvt. Ltd. AIR 2009 SC 357. There, the Supreme Court was inter alia concerned with the question of an excepted matter. Considering the rival contentions of parties, the Court holds:

The pivotal questions that need to be decided in this appeal are:

i) Whether the levy of liquidated damages under Clause 16.2 of the tender document is an "excepted matter" in terms of Clause 20.1 of the said document so that the same cannot be referred to arbitration or looked into by the arbitrator.

ii) Whether Clause 62 of the special conditions of the tender document will prevail over Clause 16.2 of the general conditions of the contract....

Having heard the learned Counsel for the partis and after examining the judgment of the High Court and the other materials on record, we are of the view that this appeal must be dismissed. Clause 20 is the arbitration clause and provides that any question, dispute or difference arising under this agreement or in connection therewith would be referred to arbitration. To this, an exception is also provided which lays down that the matters, the decision to which is specifically provided under this agreement, would not be referred to arbitration. From a bare reading of Clause 16.2 of Section III of the tender document, it is clear that if the tenderer fails to deliver the goods and services on turnkey basis within the period prescribed, the purchaser shall be entitled to recover liquidated damages and the quantum of the liquidated damages assessed and levied by the purchaser shall be final and not challengeable by the supplier.

We are in full agreement with the findings of the High Court that there was a dispute as to whether the Respondent had at all acted in breach of any terms and conditions of the tender document.... The High Court has pointed out correctly that the authority of the purchaser (BSNL) to quantify the Liquidated Damages payable by the supplier Motorolla arises once it is found that the supplier is liable to pay the damages claimed. The decision contemplated under Clause 16.2 of the agreement is the decision regarding the quantification of the Liquidated Damages and not any decision regarding the fixing of the liability of the supplier. It is necessary as a condition precedent to find that there has been a delay on the part of the supplier in discharging his obligation for delivery under the agreement.... Quantification of liquidated damages may be an excepted matter as argued by the Appellant, under Clause 16.3, but for the levy of liquidated damages, there has to be a delay in a clear dispute as to the fact that whether there was any delay on the part of the Respondent. For this reason, it cannot be accepted that the appointment of the arbitrator by the High Court was unwarranted in this case. Even if the quantification was excepted as argued by the Appellant under Clause 16.2, this will only have effect when the dispute as to the delay is ascertained.

Clause 16.2 cannot be treated as an excepted matter because of the fact that it does not provide for any adjudicatory process for decision on a question, dispute or difference, which is the condition precedent to lead to the stage of quantification of damages....

The learned senior counsel for the Appellant relied on the decisions of this Court in and General Manager Northern Railways and Another Vs. Sarvesh Chopra, . These cases, we are afraid, will not be of any help to the Appellants being distinguishable on facts and having different contractual clauses. We may note that Clause 16.2 cannot be treated as an excepted matter. This is because admittedly, it does not, provide for any adjudicatory process for decision on a question, dispute or difference, which is the condition precedent to lead to the stage of quantification of damages nor is it a no claim or no liability clause.... Again in the case of Sarvesh Chopra, this Court had held that the claims covered by the no claims clause, i.e., where the contractor had given up the right to make a claim for breach on the part of the government was not arbitrable in terms of the arbitration clause contained therein and Clause 63 of the general conditions of the contract which provided for exclusion because no claim clause was excepted as such claims were simply not entertainable. In view of the discussions made hereinabove, we hold that the disputes raised by the Respondents are arbitrable and not excepted from scope of arbitration.

...We find that there is considerable merit in this argument. The true essence of any arbitration agreement is to arbitrate the matters in a cordial way in respect of issues where there is a dispute between the parties. To construe such limited words in clause 16.2 as being so all encompassing would destroy the very foundation of the bargain between the parties. The Appellant in the present case is acting in an unfair way by seeking to exclude, from arbitration, what it has agreed to arbitrate in the first place....

The provision under Clause 16.2 that quantification of the Liquidated Damages shall be final and cannot be challenged by the supplier Motorolla is clearly in restraint of legal proceedings u/s 28 of the Indian Contracts Act. So the provision to this effect has to be held bad.

(at p. 357,360-363)

Learned Counsel also seeks assistance of the decision in Madnani Construction Corporation (P) Ltd. Vs. Union of India (UOI) and Others, which is an another case dealing with excepted matters. The Court holds:

It is well settled that the arbitrator is the master of facts. When the arbitrator on the basis of record and materials which are placed before him by the Railways came to such specific findings and which have not been stigmatised as perverse by the High Court, the High Court in reaching its conclusions cannot ignore those findings. But it appears that in the instant case, the High Court has come to the aforesaid findings that the items mentioned above are excepted matters and non-arbitrable by completely ignoring the factual finding by the arbitrator and without holding that those findings are perverse.

It goes without saying that in order to deny the claims of the contractor as covered under excepted matters, the procedure prescribed for bringing those claims under excepted matters must be scrupulously followed. The clear finding of the arbitrator is that it has not been followed and the High Court has not expressed any disagreement on that. Therefore, the finding of the High Court that those items are non-arbitrable cannot be sustained.

In view of such consistent views taken by both the Constitution Bench judgments, in Secretary, Irrigation Department, Government of Orissa and others Vs. G.C. Roy, and Dhenkanal Minor Irrigation Division v. N.C. Budharaj (2001) 2 SCC 721, we are of the view that in the facts of this case, no interference is called for with the award passed by the arbitrator. The judgment of the High Court is, therefore, set aside and the award is upheld. The appeal is allowed.

(at p.p. 554-555, 561)

(emphasis supplied)

In a nutshell, the submission made by the learned Senior counsel is that since Clause 53 is a direct bar for invoking the arbitration clause and that the claimant''s claim fell squarely within this Clause as also the other Clauses of the Contract as incorporated therein, the award requires to be set aside as the Arbitrator has exceeded his jurisdiction. Learned Senior counsel also submits that the Constitution Bench of the Supreme Court in Waverly Jute Mills Co. Ltd. Vs. Raymon and Co. (India) Private Ltd., lays down the fundamental law applicable in arbitration cases and in these circumstances every subsequent decision is subject to the ratio descendi of this case. Learned Counsel relies upon the decision in Siddharam Satlingappa Mhetre Vs. State of Maharashtra and Others, to urge that Article 141 of the Constitution postulates/mandates that the decision of the Constitution Bench will be binding. In particular, he refers to the following:

The ratio of the judgment of the Constitution Bench in Shri Gurbaksh Singh Sibbia and Others Vs. State of Punjab, perhaps was not brought to the notice of Their Lordships who had decided the cases of Salauddin Abdulsamad Shaikh Vs. State of Maharashtra, , K.L. Verma Vs. State and Another, , Adri Dharan Das Vs. State of West Bengal, and Sunita Devi Vs. State of Bihar and Another,

The judgments and orders mentioned in paras 135 and 136 are clearly contrary to the law declared by the Constitution Bench of this Court in Sibbia''s case (supra)....

Now we deem it imperative to examine the issue of per incuriam raised by the learned Counsel for the parties. In Young v. Bristol Aeroplane Company Limited (1994) All ER 293 the House of Lords observed that Rs. Incuria'' literally means Rs. carelessness''. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The quotable in law'' is avoided and ignored if it is rendered, in ignoratium of a statute or other binding authority. The same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law....

This Court in Government of Andhra Pradesh and Another Vs. B. Satyanarayana Rao (Dead) by Lrs. and Others, observed as under:

The rule of per incuriam can be applied where a court omits to consider a binding precedent of the same court or the superior court rendered on the same issue or where a court omits to consider any statute while deciding that issue.

131 In a Constitution Bench judgment of this Court in Union of India (UOI) and Another Vs. Raghubir Singh (Dead) by Lrs. Etc., Chief Justice Pathak observed as under:

The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principle in the decisions of a court....

In R. Thiruvirkolam Vs. Presiding Officer and another, a two Judge Bench of this Court observed that the question is whether it was bound to accept the decision rendered in Gujarat Steel Tubes Ltd. and Others Vs. Gujarat Steel Tubes Mazdoor Sabha and Others, which was not in conformity with the decision of a Constitution Bench in P.H. Kalyani Vs. Air France Calcutta, . J.S. Verma, J. speaking for the court observed as under:

With great respect, we must say that the above-quoted observations in Gujarat Steel at P. 215 are not in line with the decision in Kalyani which was binding or with D.C. Roy to which the learned Judge, Krishna Iyer, J. was a party. It also does not match with the underlying juristic principle discussed in Wade. For the reasons, we are bound to follow the Constitution Bench decision in Kalyani, which is the binding authority on the point.

A Constitution Bench of this Court in Central Board of Dawoodi Bohra Community and Another Vs. State of Maharashtra and Another, has observed that: (SCC p.682, para 12)

(1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or coequal strength.

In Subhash Chandra and Another Vs. Delhi Subordinate Services Selection Board and Others, this Court again reiterated the settled legal position that Benches of lesser strength are bound by the judgments of the Constitution Bench and any Bench of smaller strength taking contrary view is per incuriam. The Court in SCC para 110 observed as under; (SCC pp 503-05)

Should we consider S. Pushpa and Others Vs. Sivachanmugavelu and Others, to be an obiter following the said decision is the question which arises herein. We think we should. The decisions referred to hereinbefore clearly suggest that we are bound by a Constitution Bench decision. We have referred to two Constitution Bench decisions, namely, Marri Chandra Shekhar Rao Vs. Dean, Seth G.S. Medical College and Others, and E.V. Chinnaiah Vs. State of Andhra Pradesh and Others, Marri Chandra Shekhar Rao 46 had been followed by this Court in a large number of decisions including the three-Judge Bench decisions. S. Pushpa 45, therefore, could not have ignored either Marri Chandra Shekhar Rao 46 or other decisions following the same only on the basis of an administrative circular issued or otherwise and more so when the constitutional scheme as contained in Clause (1) of Articles 341 and 342 of the Constitution of India putting the State and Union Territory in the same bracket. Following Official Liquidator v. Dayanand 42, therefore we are of the opinion that the dicta in S. Pushpa 45 is an obiter and does not lay down any binding ratio.

(p.p.739-743)

There can be no doubt so far as this proposition is concerned. It is settled law that the decision of the Constitution Bench is binding unless it is varied or set aside by a Bench of equal or larger strength.

However, what requires to be noticed is as to whether the two later decisions namely Bharat Sanchar Nigam Ltd. and Anr. v. Motorola India Pvt. Ltd. AIR 2009 SC 357 and Madnani Construction Corporation (P) Ltd. Vs. Union of India (UOI) and Others, are at variance with what the Supreme Court says in Waverly Jute Mills Co. Ltd. Vs. Raymon and Co. (India) Private Ltd., or the other decisions relied upon by the learned Senior counsel. Before taking this exercise, I may also note that in Vishwanath Sood''s case, the Supreme Court had impliedly laid down that the principles of natural justice apply to excepted clause and that the officer, competent to adjudicate, did not possess plenary powers to decide against on a particular part. It is held:

...But it will be appreciated that in practice the amount of compensation will be initially levied by the Engineer-in-charge and the Superintending Engineer comes into the picture only as some sort of revisional or appellate authority to whom the contractor appeals for redress. As we see, it, Clause 2 contains a complete machinery for determination of the compensation which can be claimed by the Government on the ground of delay on the part of the contrator in completing the contract as per the time schedule agreed to between the parties. The decision of the Superintending Engineer, it seems to us, is in the nature of a considered decision which he has to arrive at after considering the various mitigating circumstances that may be pleaded by the contractor or his plea that he is not liable to pay compensation at all under the clause. In our opinion the question regarding the amount of compensation leviable under Clause 2 has to be decided only by the Superintending Engineer and no one else.

(at p. 957-958)

One other submission has been made by learned Counsel appearing for the claimant that even if Clause 53 is accepted to exclude the jurisdiction of the Arbitrator, then what requires to be adjudicated is as to whether any decision has been arrived at strictly in uniformity in terms of this Clause. Learned Counsel submits that there is nothing in writing which to show that the Engineer Incharge has acted in the manner as postulated and agreed to between the parties. He also submits that after Justice H.R. Khanna withdrew from the arbitration proceedings, the very appointment of the Arbitrator, whose award is now challenged by the Objector, constitutes a new agreement interse between the parties that the disputes require arbitration. Otherwise there was no need for appointment of second Arbitrator. He also submits that the case relates to the year 1989 and now after the lapse of 21 years, question of jurisdiction cannot be raised or urged at this stage.

Learned Senior counsel for the objector submits that the objections with respect to jurisdiction had been raised at the very first instance before the Arbitrator. In particular, he refers to the reply (Volume 7 of the file) wherein this plea was raised in no uncertain terms. The pleading is:

Assuming without admitting that the present reference is valid in law, the claims filed beyond the claims submitted for reference to arbitration are outside the proceedings of the present proceedings.

He also draws attention of this Court to para 12 of Volume 16 where the plea according to him has been taken in the following terms:

Assuming without admitting that the present reference is valid in law, the claims filed beyond the claims submitted for reference to arbitration are outside the purview of the present proceedings.

In rejoinder, the claimant has refuted this contention. At the outset, I may observe that the plea has been taken in very general terms.

Learned Counsel for the claimants then submits that even if the pleading is to be construed in a very liberal manner, the award itself shows that this plea was never urged before the Arbitrator. To fortify this submission, learned Counsel submits that if such contention had been raised, findings should and ought to have been given by the Arbitrator on this point as it was fundamental basic to the entire controversy between the parties. In fact, he raises the bar of issue abandonment/plea abandonment by the non-claimant. Learned Counsel for the claimant also seeks assistance from the orders of the Hon''ble Single Judge of the High Court of Delhi and its Division Bench as also of the Supreme Court to urge that if the question regarding inherent lack of jurisdiction was not raised had that been so, it would have taken note of by the Court. Adverting to the judgments of the Delhi High Court all I need say is that they would be of persuasive value on facts. Both the parties have been given an opportunity by the Supreme Court to submit their claim afresh. However, the point requiring consideration is whether the award itself indicates that the plea of jurisdiction has been abandoned by the claimants or not. The Objector submits that the question of inherent lack of jurisdiction can be raised at any point of time. He places reliance on the principles as laid down by the Supreme Court in Kiran Singh and Others Vs. Chaman Paswan and Others, & Hira Lal Patni v. Sri Kali Nath AIR 1962 SC 1999.

The answer to these contentions must depend on what the position in law is when a Court entertains a suit or an appeal over which it has no jurisdiction, and what the effect of Section 11 of the Suits Valuation Act is on that position. It is a fundamental principle well established that a decree passed by a Court without jurisdiction is a nullity & that its invalidity could be set up whenever and whereever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was ''coram non judice'', and that its judgment and decree would be nullities. The question is what is the effect of Section 11 of the Suits Valuation Act on this position. (at p. 342)

In Heera Lal Patni''s case the Supreme Court reteriated the same principle holding that validity of the decree can be challenged in execution procedings on the ground that Court which passed the decree was lacking inherent jurisdiction. It held:

...In our opinion, there is no substance in this contention. There was no inherent lack of jurisdiction in the Bombay High Court where the suit was instituted by the Plaintiff-decree holder.... The validity of a decree can be challenged in execution proceedings only on the ground that the court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seizing of the case because the subject matter was wholly foreign to its jurisdiction or that the Defendant was dead at the time the suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to it. But in the instant case there was no such inherent lack of jurisdiction....(at p. 200)

Learned Counsel for the claimant/non-objector submits that the scope for interference u/s 30/33 of the Act is very limited. He relies upon the decision of the Supreme Court in Kwality Manufacturing Corporation Vs. Central Warehousing Corporation, holding:

At the outset, it should be noted that the scope of interference by courts in regard to arbitral awards is limited. A court considering an application u/s 30 or 33 of the Act, does not sit in appeal over the finginds and decision of the arbitrator. Nor can it reassess or reappreciate evidence or examine the sufficiency or otherwise of the evidence. The award of the arbitrator is final and the only grounds on which it can be challenged are those mentioned in Sections 30 and 33 of the Act. Therefore, on the contentions urged, the only question that arose for consideration before the High Court was, whether there was any error apparent on the face of the award and whether the arbitrator misconducted himself or the proceedings....

The Division Bench, on considertion of the evidence held that following findings recorded by the arbitrator were inconsistent with his conclusion that there were no major defects except that the mats were loosely woven and not strictly in accordance with the specifications and therefore, there should be only a cut in price by 15% instead of rejection....

We find that the approach of the Division Bench is contrary to well-settled principles relating to interference with arbitral awards under Sections 30 and 33 of the Act. The Division Bench has proceeded as if it was sitting in appeal over the award of the arbitrator and has reassessed the evidence....

(at pp. 146-148)

He also places reliance on the decision of the Supreme Court in Madnani Construction Corporation (P) Ltd. Vs. Union of India (UOI) and Others, holding:

It is well settled that the arbitrator is the master of facts. When the arbitrator on the basis of record and materials which are placed before him by the Railways came to such specific findings and which have not been stigmatised as perverse by the High Court, the High Court in reaching its conclusions cannot ignore those findings. But it appears that in the instant case, the High Court has come to the aforesaid finding that the items mentioed above are excepted matters and non-arbitrable by completely ignoring the factual finding by the arbitrator and without holding that those findings are perverse.

(at p. 554)

He submits that this is well settled law and does not require any implication of precedent. In Sumitomo Heavy Industries Limited Vs. Oil and Natural Gas Commission of India, the Court again reteriated the fact that jurisdiction of the Court is limited. The Cour held:

The Respondent had contended in their arbitration petition before the High Court that it was not permissible to refer to the pre-contractual negotiations and the documents arising therein. What the umpire has, however, done is to look into the context with a view to understand the text. As we have noted above, the umpire has looked into the evidence before him including that of the Respondent''s officer as to how MII had participated in the bid clarification meetings. He considered the submission of the Appellant as to how the sub-contract was also tax protected, which was their main plea. It is true that if there is an error apparent on the case of the award or where the umpire had exceeded his jurisdiction or travelled beyond the reference, the court can interfere. However, in view of what is noticed above it is not possible to say that the award suffers from any of the above defects so as to call for interference....

...As recently reiterated by this Court in Steel Authority of India Ltd. Vs. Gupta Brother Steel Tubes Ltd., if the conclusion of the arbitrator is based on a possible view of the matter, the court is not expected to interfere with the award. The High Court has erred in so interfering.

Can the findings and the award in the present case be described as perverse? This Court has already laid down as to which finding would be called perverse. It is a finding which is not only against the weight of evidence but altogether against the evidence. This Court has held in M/s. Triveni Rubber and Plastics Vs. Collector of Central Excise, Cochin, that a perverse finding is one which is based on no evidence or one that no reasonable person would have arrived at. Unless it is found that some relevant evidence has not been considered or that certain inadmissible material has been taken into consideration the finding cannot be said to be perverse. The legal position in this behalf has been recently reiterated in Arulvelu and Another Vs. State represented by the Public Prosecutor and Another,

In the present case, the findings and award of the umpire are rendered after considering the material on record and giving due weightage to all the terms of the contract. Calling the same to be perverse is highly unfair to the umpire. The umpire has considered the fact situation and placed a construction on the clauses of the agreement which according to him was the correct one. One may at the highest say that one would have preferred another construction of Clause 17.3 but that cannot make the award in any way perverse. Nor can one substitute one''s own view in such a situation in place of the one taken by the umpire, which would amount to sitting in appeal. As held by this Court in Kwality Manufacturing Corporation Vs. Central Warehousing Corporation, the Court while considering challenge to arbitral award does not sit in appeal over the findings and decision of the arbitrator, which is what the High Court has practically done in this matter. The umpire is legitimately entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the agreement. If he does so, the decision of the umpire has to be accepted as final and binding.( at p. 312-313)

It is in this background that the rival contentions of the parties have to be considered. Before proceeding with the case further, I must observe that the parties have been litigating since 1989 and now we are in 2011 when this Court is called upon to adjudge the legality of the award. The initial process started with the appointment of the Arbitrator by the Court. In proceedings for appointment of the arbitrator, an eminent jurist and distinguished Judge of the Supreme Court was appointed as Arbitrator who withdrew from the proceedings on ill founded apprehensions of the claimant, appointment of another arbitrator culminating the award, challenge to the legality and validity of the award before the Delhi High Court, appeal before the Division Bench, SLP before the Surpeme Court and now the proceedings before this Court. I cannot express myself better than what has been stated by the Supreme Court in Guru Nanak Foundation Vs. Rattan Singh and Sons, holding:

Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 (''Act'' for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows that law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unway. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Court been clothed with ''legalese'' of unforseeable complexity. This case amply demonstrates the same. (at p.2076)

Learned Counsel appearing for the objectors submits that the Arbitrator has misconducted and the proceedings as he travelled beyond the terms of the contract; in the guise of doing justice, he cannot make an award contrary to the intention expressed by the parties in the written contract. He places reliance on the judgment in State of Rajasthan Vs. Nav Bharat Construction Company, holding:

There can be no dispute to the well-established principle set out in these cases. However, these cases do not detract from the law laid down in Bharat Coking Coal Ltd. Case7 or Continental Construction Co. Ltd. case8. An Arbitrator cannot go beyond the terms of the contract between the parties. In the guise of doing justice he cannot award contract to the terms of the contract. It he does so, he will have misconducted himself. Of course if an interpretation of a term of the contract is involved then the interpretation of the arbitrator must be accepted unless it is one which could not be reasonably possible. However, where the term of the contract is clear and unambiguous the arbitrator cannot ignore it. (at p. 103)

The first objection taken on behalf of the objector is that the award requires to be set aside because the Arbitrator has travelled beyond his jurisdiction. He submits that the Arbitrator was in clear violation of the law laid down in Waverly Jute Mills Co. Ltd. ''s case (supra), where the S upreme Court in no uncertain terms laid down that the Arbitrator cannot exceed his jurisdiction which is conferred upon him by the contract interse between the parties. In case it is a excepted matter, the Arbitrator has no jurisdiction whatsoever to enter into reference and adjudicate on that aspect. Learned Counsel submits that the later two decisions i.e. Bharat Sanchar Nigam Ltd. and Madnani Corporation Croporation Private Limited did not notice the Constitution Bench in Waverly Jute Mill''s case which still holds the fields.

There is no dispute with the proposition that the Constitution Bench decision binds all. However, on reading of these judgments, I do not find any conflict. I do not find that the later decisions in any manner are in direct conflict in the Waverly Jute Mill''s case. Both Bharat Sanchar Nigam Ltd. and Madnani Construction Corporation Pvt. Ltd. only elaborate that the exclusion is itself subject to certain conditions. Learned Counsel appearing for the claimants submits that in Puri Construction Pvt. Ltd. Vs. Union of India (UOI), the Court ruled:

Although Mr. Sibal relied upon various other parts of the records, we do not think it necessary to consider the merits of the claim in further detail, specially because no detailed reply was attempted on behalf of the Respondent. Besides, a court while examining the objections taken to an award filed by an arbitrator is not required to examine the correctness of the claim on merits. The scope is very limited and none of the points which can be entertained has been substantiated by the objector-Respondent....(at p. 782)

He also relies upon the decision in Food Corporation of India Vs. M/s. Veshno Rice Millers, to urge that

...We are of the opinion that the arbitrator had taken a view which is a plausible view. Beyond this, the court has nothing to examine. It is not necessary for a court to examine the merits of the award with reference to the materials produced before the arbitrator. The Court cannot sit in appeal over the views of the arbitrator by re-examining and re-assessing the materials. Sees the observations of this Court in Puri Construction Pvt. Ltd. Vs. Union of India (UOI), : Puri Construction Pvt. Ltd. Vs. Union of India (UOI),

(at p.1268)

I need not notice more precedent as it would only burden the principles of law applicable having been well settled and enunciated in decision after decision. But I must held that some kind of application of mind is required. This was also the decision of the Court in Vishawnath Sood''s case where the Court held that it was an implied condition that a party is given a chance of establishing his/its claims. In these circumstances, I cannot accept the proposition of law as urged by the objector in so wide terms as to exclude the authority of the arbitrator altogether. There is no dispute that an excepted mater can never form the subject matter of arbitration, but at the same time the rudimentary principle is that some application of mind by the adjudicator must be disclosed on the record.

19 On the ambit of jurisdiction of this Court, to intervene and interfere with the award made by the Arbitrator, there is a catena of decisions. I have already extracted from the judgments in Sumitomo Heavy Industries Limited, Puri Construction and Food Corporation of India (supra) holding that this Court cannot be converted into a Court of Appeal to examine each and every aspect of the award made by the Arbitrator. The conclusion on the point of law is that even in excepted matters, where the Clause itself provides for decision in writing, it must be manifest on the record. The jurisdiction of the Court is extremely limited for entertaining objections under Sections 30 and 33 of the Act and most important of all this Court cannot convert itself into a Court of Appeal to examine the legality of the award.

Adverting to the facts of the present case, I do not find basic compliance of Clause 53 which is urged as a shield against the award made. Learned Counsel then submits that each of the claims, which have been allowed, are beyond the jurisdiction of the Arbitrator and against the written contracts.

21 Adverting to the each of the claims I may preface by observing that the learned Arbitrator has dealt with each of the claims in detail in his award. To go through the entire evidence and to arrive at the conclusion on the evidence on record would be transgressing the jurisdiction vested in this Court to test the legal validity of the award under Sections 30 and 33 of the Arbitration Act. It is only in case of perverse or absurd conclusion(s) which may have been arrived at by the Arbitrator that this Court can interfere meticulously. The first Section deals with the claims requiring the Objector to provide access roads to the downstream portal area before the start of the work. Here the first claim was of Rs. 7,69,180/-. The learned Arbitrator after considering the material on record, awarded a sum of Rs. 1,17,485/-. Claims 2, 3 and 4 of this Section have been rejected by the Arbitrator.

Section 2 deals with various claims. The claim of Rs. 9,47,350/- being the first claim raised for losses due to accidents caused by careless and improper muking and unplanned working by the Objector. This claim has been rejected by the Arbitrator holding that the claim should have insured their labour etc. and it is not duty of the Objector to do so. Claim No. 2 deals with forced stopping of outlet hill slope portal works. For this an amount of Rs. 5,36,150/- has been claimed, but a sum of Rs. 2,13,729 has been allowed. In the third claim which is for losses due to washing away of departmental road to the outlet portal, a toral claim of Rs. 6,93,820/- has been made. The components are (a) loss due to under deployment of personnel w.e.f. 7.7.86 to 30.8.86, (b) cost of carriage of construction materials by head load 496 M.t., (c) Interest claimed upto 30.4.1989. But a sum of Rs. 66,000/- has been allowed.

Section 3 deals with the claim of losses etc. incurred by the Petitioner from Goli to Chowrah Bridge to diversion etc. The case is that due to constant blocking of the road, the claimant could not even evacuate injured or sick personnel. This Section has three claims. The First Claim deals with the cost of carriage which has been quantified at Rs. 57,118/-, claim No. 2 contains with cost of carriage of material by head load from Goli to Chowarh which had been quantified at Rs. 2,03,726/-. Both these claims have been disallowed by the Arbitrator. Claim No. 3 has also been rejected by the Arbitrator.

In Section 4 the claimants pleaded that the long and inordinate delay resulted in:

(i) Disruption of claimants schedule of working.

(ii) Idle or partial utilisation of maching machinery.

(iii) Idle or partial utilisation of different categories of personnel moblised by claimant in line with his working schedules.

(iv) Overall cost escalarations as a cumulative result of the above factors.

It was further submitted that the problems were further compounded by the department due to poor maintenance and repair arrangements etc. Four claims have been made in this Section. The first is quantified at Rs. 1,61,12,588/- as the loss due to delay, personnel/manpower etc. and interest. Interest @ 18% has been quantified at Rs. 65,78,512/-. The second claim relates to the machinery and working site. Loss at Rs. 65,65,008/- has been claimed which consists of rental charges of machinery, wages of labour and staff and rental charges of hired accommodation etc. Again the claim has two components. One is actual loss suffered which is quantified at Rs. 65,65,008/- and interest at Rs. 29,54,252/-. These claims have been denied by the Objector. These claims were rejected by the Arbitrator holding that the claimants did not take any steps to mitigate loss incurred and in these circumstances, they were not entitled to anything. Claim No. 3 has been quantified at Rs. 2,09,203/- for avoidable extra recoveries and interest at Rs. 1,50,627/-. The entire amount of Rs. 3,59,830/has also been disallowed.

Similarly claim No. 4 for Rs. 3,20,901/-, which includes loss suffered and amount spent for operators, mechanics, petrolium, diesel oil and lubricants etc., is also rejected.

In Section 5 Claims are in terms of Clause 3.9.1. and 3.9.2. where the first claim is made for a sum of Rs. 9,14,788/- out of which Rs. 7,06,341 is the interest component. A claim of only Rs. 4,70,800/- has been allowed by the Arbitrator. Claim No. 2 in this Section has been rejected.

Section 6 has seven claims. The first claim relates to shifting of labour sheds etc., which is rejected. The first claim is rejected. The second claim states that due to failure to provide the land, claimant was forced to hire land at Bathri and Goli and an amount of Rs. 17248/- was claimed. But only Rs. 5250/- were allowed. The fourth claim for Rs. 1,60,800/- is again rejected. Claim No. 5 made for Rs. 2,00,750/- has been allowed only to the extent of Rs. 1,19,500/-.

Section 7 deals with the loss on account of nontaking over of acrow gantry and other materials. Here again a sum of Rs. 18000/- has been allowed.

29 Section 8 deals with erratic power supply and frequent breakdowns and an amount of Rs. 7,03,472/- has been claimed, which has been rejected. Section 8 seems to be the flash point between the parties. Here again the Arbitrator has rejected a number of claims made by the claimants herein. The claimants have claimed an amount of Rs. 3,14,75,497.81 Ps, out of which a sum of Rs. 78,20,955.16 Ps. has been allowed.

30 The learned Arbitrator proceeds in an elaborate manner to discuss each and every claim on the evidence on record. In these circumstances, it is not appropriate to reappreciate the evidence over and over again. I also note that the award is not one where the Arbitrator has mindlessly proceeded to consider the claims of the parties while making the award. In fact, to summaries what the Arbitrator has awarded is:

Claim

Amount

Claimed (Rs.)

Amount

Awarded

SECTION-1

Claim No. 1-

Claim No. 2-

Claim No. 3-

Claim No. 4-

4,99,468

1,44,727

8,89,010

8,97,490

1,17,485

Nil

Nil

Nil

SECTION-II

Claim No. 1-

Claim No. 2-

Claim No. 3-

4,56,927

3,41,497

4,66,434

Nil

2,13,719

66,000

SECTION-III

Claim No. 1-

Claim No. 2-

Claim No. 3-

34,352

1,24,606

3,61,171

Nil

Nil

Nil

SECTION-IV

Claim No. 1-

Claim No. 2-

Claim No. 3-

Claim No. 4-

95,34,076

65,65,008

2,09,203

2,14,650

Nil

Nil

Nil

Nil

SECTION-V

Claim No. 1-

Claim No. 2-

9,41,788

10,00,000

4,70,800

Nil

SECTION-VI

Claim No. 1-

Claim No. 2-

Claim No. 3-

Claim No. 4-

Claim No. 5-

9,67,010

11,200

17,500

1,60,800

2,00,750

Nil

5,250

Nil

Nil

1,19,500

SECTION

91,402

18,000

SECTION

7,03,472

Nil

SECTION

3,14,75,497.81

Total

I to IX

78,20,955.16

88,31,709.16

SECTION-X

...

Total

25,000.00

88,56,209.16

Out of 24 claims made only seven claims have been allowed. This itself indicates that the Arbitrator has applied his mind.

The perusal of the claim allowed/rejected by the Arbitrator would show that it is not an award where there is non-application of mind. He has considered each and every claim on the evidence on record.

Adverting to the question of the excepted matters as claimed by the objectors under Clause 18.2, all that I need say is that this matter was never urged before the Arbitrator and that the Arbitrator has clearly noted that at no point of time the objectors determined the rates for the substituted items and for the quantities of works executed beyond deviation limit prescribed. If the Engineer-in-Charge determined the derived rates and the contractor was questioning the same, the question of an excepted matter being coming for adjudication would have arisen for adjudication. I note that in terms of Clause 53, there is no decision given in writing.

Learned Counsel appearing for the claimants urges that the High Court of Delhi has gone into detail of each and every objection raised by the objector and that present objections are nothing but a copy and reiteration of all that has already been said before that Court. Learned Counsel then urges that before the Division Bench of that Court only the question of territorial jurisdiction was raised, and it was also the point for determination before the Supreme Court and therefore, the findings arrived at by the High Court of Delhi would be final between the parties. I cannot accept the proposition in such wide terms as urged. Though the decision of the Division Bench shows that only territorial jurisidiction was urged and no other point on merits was submitted for decision, yet the order of the Supreme Court leaves all points to be determined afresh.

In these circumstances, the judgment will have persuasive value but cannot be used as a shield against the objectors, who have been given a fresh chance to urge all the objections before this Court. The question of lack of inherent jurisdiction as held by me can be raised at any stage of the proceedings. In these circumstances, I cannot accept the submissions made on behalf of the Respondents-claimants in such wide terms.

Dealing with Section IX of the Contract the Arbitrator was required to ascertain the extent of work done as per the schedule of quantities specified under the contract, extra and additional items executed, deviation limits exceeded and recoveries to be effected on account of material supplied by NPCC or by NHPC to the account of NPCC. NPCC has raised counter claims towards the adjustments and rate at which recoveries had to be effected, while dealing with finalization of the final bill. The Arbitrator has dealt with the counter claims which adjustment infact was claimed by NPCC. The Arbitrator also determined the final quantities of works executed in relation to the statement of reconciliation filed during the course of arbitration proceedings by NPCC on 14.1.1992. The Arbitrator has accepted the reconciliation statement filed by NPCC as admissions made with respect to the extent of work executed. He notes that in respect of extra and substituted works as also the works in respect whereof deviation limit was crossed, in the statement dated 14.1.1992, NPCC had not priced the same. In fact in para 13.1 of the award, the Arbitrator has come to the conclusion that in respect of deviated items, NHPC had paid to NPCC different rates than the scheduled rates, considering deviation limit to be 30%. Since the terms and conditions of the contract between NPCC and NHPC were applicable to the contract between NPCC and the contractor, NPCC was liable to pay to the contractor for the quantities executed in excess of the 30% of the deviation limits. He determined and quantified this amount at Rs. 77,10,856.17 Ps. and applying 30% deviation limited and the contractor was held entitled for extra payment and quantified only Rs. 23,47,146.05 Ps. as representing the additional amount for excess work and awarded Rs. 53,63,710.72 Ps. It would be futile for me to continue and analyse each and every claim meticulously since this was in the jurisdiction of the learned Arbitrator. It is not a function of this Court to go into minute details of every claim. I cannot but have to turn to the judgment of the Hon''ble Single Judge of the High Court of Delhi, who summed up the entire submissions on behalf of the objector aptly by saying that dealing with each and every item would be filling up reams of paper and writing that which is not within the domain of this Court. In this view of the matter, I do not find any merit in this petition which is instituted by the objectors. This petition is, therefore, dismissed.