State of J&K and Anr. vs Dev Datt Pandit

Shah, J.—Civil First appeal is filed under section 39 of the J&K Arbitration Act, 2002 (1945 A.D.) (for short hereinafter called 'the Act')

against the order passed by the learned single Judge of this Court on May 10,1986' decreeing by way of making the award rule of the Court in

favour of the respondent.

Appellants in the appeal are the State of J&K and Executive Engineer, Ravi Tawi Irrigation Complex, Lower Circle Division No 1 Kathua. On

an application filed under section 20 of the Act against the appellant Executive Engineer by the respondent praying for filing the arbitration

agreement in the Court on account of the disputes arising between the parties, the Court calling upon the appellants to file the agreement in the

Court in Arbitration Petition No. 72 of 1980 by order dated April 9,1982, appointed Shri N.N. Dogra, retired Chief Engineer as the Arbitrator

and made a reference for adjudication. The appointed arbitrator was conveyed with the order of the Court through the letter of Deputy Registrar

issued vide No. 2162 dated May 26,1982. It will not be out of place to reproduce the substance of the reference made by the learned Single

Judge of this Court, as the same will be convenient for the present appeal. The order states in the following words:

The disputes mentioned in the application u/s 20 of the Arbitration Act as well as the objections fifed thereto by the other side therefore, referred

to the aforesaid Arbitrator with a direction that he shall enter upon the reference and make his award within four months thereafter in accordance

with Jaw. The parties shall be at liberty to raise any further disputes before him provided it is not against the terms of the agreement The parties,

whoever shall be in possession of the original agreement, shall produce the same before the Arbitrator. Copy of the application, the objections filed

thereto and a copy of this order shall be provided to the Arbitrator.

(Emphasis supplied by us)

Pursuant to the said reference, the Arbitrator entered into the reference after notice to the respective parties and after due deliberations and

recording evidence of the parties submitted his award to this court under Communication No. 216 dated February 9,1983.

The Award received was registered as arbitration Award No. 35 of 1983 on February 12, 1983, which was laid before the court on February

21, 1983., The Court issued notices to the parties about the filing of the Award. On March 17,1983, appellant No. 1 the Executive Engineer filed

objections to the award by way of an application under sections 30 and 33 Of the Act, which is registration application No. 75 of 1983. No

objections were filed by the respondent against the award, however, he filed his objections to the application filed by appellant No. 2 under

sections 30 and 33 of the Act. The learned Judge on the pleadings regarding objections of the appellants to the award framed the following issues;

1/ Whether any fresh claims were entertained by the Arbitrator during the course of arbitration proceedings ? OPP

2/ In case issue No. 1 is proved in the affirmative whether any such claim was beyond the scope of reference made to the Arbitrator by the Court,

if so how? OPP

3/ Whether the award made by the Arbitrator was against the terms of the agreement ? If so, whether the same amounts to misconduct ? OPP.

4/ Whether the arbitrator committed misconduct legal or otherwise in making of the award ? If so, how? OPP.

The Court allowed the parties to lead evidence on the issues so framed.

The appellants in their evidence challenging the award examined Shri K.L. Gupta, Executive Engineer, Shri. Gajan Singh, Executive Engineer,

Shri Chander Udhey Singh, Assistant Engineer, Shri D.K. Nargotra Chief Engineer, Ravi Singh and Bodh Raj Sharma. whereas the respondent as

against the evidence adduced by the appellants besides examining himself examined Shri N.N. Dogra to counter act the claim put forward by the

appellants alleging misconduct against the arbitrator. The learned Single Judge on scrutiny of the evidence produced by the respective parties with

respect to the issues framed very ably discussing the entire case found no misconduct having been committed by the Arbitrator declared that the

award is validly made and rejecting the objections of the appellants made the award filed by the Arbitrator published by him duly signed dated

February 9, 1983, rule of the court and directed the decree to be drawn up in terms thereof.

The appellants are aggrieved against the said decree making the award as a rule of a court and submits that from their evidence, they succeeded

in proving that the Arbitrator has not adjudged the claims in accordance with law and have not judicially determined the disputes as such the award

is vitiated by misconduct. It is also pointed oat that as per terms of the agreement the work, which was alloted to the respondent was only for a

sum of twelve lakhs rupees, in that too the ContractorRespondent left the work incomplete and unfinished which was later on completed by the

appellants, whereas the Arbitrator misconducted himself in proceedings by assessing the alleged loss and giving the total award of Rs. 20 lacs.

Which is not justiciable and could not thus be made a rule of the court. It is further pointed out that the award exceed the claim which was referred

to the Arbitrator by the court and is given beyond the scope of the agreement, which is not permissible under law. The learned Single Judge has

not appreciated the evidence of the appellants in this contest and no adequate findings have be n recorded on the objections raised regarding

misconduct. This has also been ignored that the Arbitrator derives his jurisdiction from the order of reference and the disputes referred thereto,

which cannot be enlarged. In the instant case, the Arbitrator has allowed the respondent to file such claim, which the respondent did not orginally

file before the court. The tape recorded conversation, which has been proved by playing the same before the learned Single Judge amply proves

the misconduct of the Arbitrator vitiating the award. It is, therefore, submitted that the award is liable to be set aside, which has been made a rule

of the court on the grounds of misconduct.

A preliminary objection was raised by the respondent at the time of admission as to the entertainability of the appeal and an objection regarding

the payment of court fee etc. was also made. After hearing the arguments of the parties at length on the preliminary objection, we dispose of the

same by our order dated February 17.1989, and the objection stand overruled holding the appeal to be competent under Section 39 (I) (vi) of the

Act and the appeal was, therefore, admitted as a First Appeal under the said order. The appeal on merits is vehemently opposed by the

respondent on all the grounds raised by the appellants.

Facts giving rise to these proceedings are that the Government invited tenders in early 1976 for earth work excavation. Minor drainage crossing,

over head crossings, road bridges and Cement concretelining Ravi Canal project. The Contractor/respondent herein was one of the tenderer for

the same and offered to execute the said works in accordance with the designs, drawing and specification to be completed within a period of 18

months The appellant Government accepted the tender of the Contractor/respondent vide Chief Engineer's letter No. 30311 dated May 6,1976 in

pursuance where of an agreement was entered into between the respondent and the Governor of the State of J&K for petitioner No. 1 and

executed the same on February 26, 1977. The various clauses of the agreement relevant for purposes of this case, we shall refer at the appropriate

stage. Respondent in accordance with the letter referred to herein above issued on may 6, 1976, started execution of the work alloted to him

under the contract for the construction of the part of Ravi Tawi Irrigation Complex including earthwork and construction of concrete structure, etc.

The agreement contained in paragraph 74 of the arbitration clause, which stipulates that in the event of any doubt, dispute, question of difference

whatsoever arising between the parties in relation to or in connection with the contract, the same shall be decided by an arbitration by a person

mutually agreed upon by the parties. Before the completion of the work so assigned with the agreement when some disputes arose regarding the

execution of the work and the payment not made to the respondent, he approached the Court by way of petition under section 20 of the Act. As

noted above, the court after registering the case issued notice to the appellants for filing the agreement and there upon vide its order dated April 9,

1982, with the consent of the parties appointed Shri. N.N. Dogra, retired Chief Engineer as an Arbitratior to adjudicate upon the disputes arising

between the parties in regard to contract in question.

On the registration of the said Arbitration petition filed by the respondent by way of a separate application registered as C.M.P. No. 136 of

1980 got an order from the court on June 13, 1980, for appointment of the Commissioner to visit the site and record the measurements of the

work done by the respondentcontractor. For the said purpose, the Executive Engineer, R&D, was appointed as the Commissioner. It is not

material to state that on another application registered as CMP No. 176 of 1980, the named commissioner was changed, however, the

commissioner completed the measurements on the site and submitted his report as is apparent from the order passed in the said CMP No. 176 of

1980 on December 9, 1980. In the said CMP it was also directed that till the measurements are recorded, appellants herein will not execute any

fresh work. The report of the commissioner was also forwarded to the Arbitrator. The Arbitrator after getting extension of time from the court

published his award on February 9, 1983, and filed the same before the court. The agreement as was initially executed was on the basis of

measureable item rate contract and the rates of each item were quoted accordingly. According to the measurements as quoted the agreement was

for an amount of Rs, 12. 235 lacs. Time was the essence of the contract and the period for the completion of the work as initially granted in the

contract agreement was 10 months, since the respondent could not complete the, work during the stipulated period, he was allowed some more

time to complete the work. On his failure to complete the work within the extended period as well, the department was forced to partly terminate

the contract on January 12, 1980, and finally it was terminated on June 6, 1980, thereafter the rest of the work completed through the different

agencies.

The award by the Arbitrator was filed in the court as already mentioned hereinabove by publishing the same on February 9, 1983. The

appellants filed objections within the time prescribed after notice by the court of filing the award under Section 30 and 33 of the Arbitration Act

raising several objections and alleging therein that the respondent left the work incomplete and for the work done by him, the department paid him

a sum of Rs. 5,71,900/ which has been received by him out of which the department had to recover from him a sum of Rs. 66,050/ for various

outstandings against him. The award of the Arbitrator was attacked on the ground of legal misconduct with special reference to the effect that the

Arbitrator exceeded the reference and acted without jurisdiction and against the terms of the agreement to entertain fresh claims of the respondent

amounting to Rs. 63. 61 lacs as against the claims submitted in the court on which the reference was made was only on an amount of Rs. 39. 47

lacs. Misconduct of the Arbitrator is also alleged on the ground that ignoring the terms of contract, the Arbitrator granted under the award an

amount of Rs. 20. 08 lacs and as such acted beyond the scope of the agreement. The other objections raised relating to the receipt to stamp

papers by the Arbitrator from the respondent much earlier to the date of the award, it was also contended that the arbitrator worked under the

influence of the respondent and the grant of penal interest was also challenged. In nutshell, it was stated in the objections, that the arbitrator

awarded the amount more than claimed by the respondent and allowed certain amounts contrary to the provisions of the agreement.

Respondent in his objections to the application filed under sections 30 and 33 of the Act by the appellants refuted the allegations made in the

objections to the award and submitted that all the objections are misconceived on law and facts reiterating his claim, which is submitted before the

court under section 20 of the Act and that before the Arbitrator, it is contended that the award given by the Arbitrator is neither without jurisdiction

nor is based on any mistake apparent on the face of the record either factual or legal, the claims put forward by the respondent before the

Arbitrator were not fresh at all, but were only in the nature of supplement to the claims already put forward, which came to light after the

measurements done by the commissioner. The total claim submitted alongwith application under section 20 of the Act was no doubt to the tune of

Rs. 39.47 lacs, but that was only the summary of the claim and not the claims as such. The Court while appointing the Arbitrator left the file open

to raise any further disputes before him and as such the subsequent claims put forward were the disputes arising out of the agreement in question

and were rightly entertained by the Arbitrator in accordance with which the parties went to participate in proceeding before the Arbitrator and,

therefore, the appellants cannot raise at this appellate stage the objection regarding the further claim and the disputes raised after the measurements

were made by the commissioner before the Arbitrator, which were duly considered by him. The Arbitrator having given a nonspeaking award, it is

not open to challenge and as such the learned Single Judge has rightly upheld the award as there was no misconduct even proved on the face of the

award to set aside the same. From the pleadings as already noted above, the issues were framed and the objections to the award were ruled out

under the order passed by single Judge of this court giving rise to the present appeal by the appellants.

In the above noted background, the learned counsel for both the parties were heard at length on the appeal. We were also taken through the

record of the Arbitrator including the evidence recorded by him and also the evidence recorded by the learned single Judge on the objections

against the award. The crucial point on which mostly the arguments have been advanced pertains to the fact whether the Arbitrator gave his award

in terms of the order of reference and in accordance with agreement entered into by the parties. Several authorities have also been cited before us

in support of the rival contentions. The learned Single Judge has taken into consideration the objections in the light of the evidence produced before

him and highlighted the order of reference by taking into consideration the words used ""the parties shall be at liberty to raise any further disputes

before him"" the further words of which mentions therein, in the following words before the completion of the sentence, ""provided it is not against

the terms of the agreement"" have not been taken into account. This mistake itself according to the learned counsel for the appellants indicates that

the terms of the reference have not been fully appreciated by the learned Judge. It is, therefore, vehemently argued that certain items, about which

the disputes have been raised and taken into consideration by the Arbitrator were beyond the terms of the agreement and ultimately the award

thereon having gone beyond the reference is liable"" to be set aside. This is such a mistake, which goes to the root of the jurisdiction of the

Arbitrator and falls within the ambit of the mistake apparent on the face of the award. In order to appreciate this argument resort shall have to be

made to following propositions of law :

A/ Whether the Court is empowered to consider the evidence and scope of arbitration when the award given by the Arbitrator is a nonspeaking

award ?

B/ Whether the Arbitrator was empowered to enlarge the scope of the reference by entertaining the disputes not raised before the Court and

which do not form part of the reference ?

C/ Whether the arbitrator exceeded his jurisdiction by admitting certain claims and giving award on the items against the terms of the agreement ?

D/ Whether on facts pleaded under sections 30 and 33 of the Act, the instant case is vitiated by error of law apparent on the face of the award ?

12/ Learned counsel for the appellants in order to attract the jurisdiction of the Court on the first proposition referred to certain clauses of the

agreement showing that it will be necessary to go into the evidence to examine the conduct of the Arbitrator in giving the award in the light of the

terms of agreement in its background when the award is a nonspeaking award. It is to be noted that though the award is nonspeaking, but the

Arbitrator based his findings by reference contained in the statement of facts receieved from both the parties as is apparent from the following

paragraph in the preamble of the award:

Whereas the said disputes and differences are contained in the statement of facts and the counter statements of facts received from both the

parties, as Will as additional documents produced and/or cited, and oral evidence before me during the hearings. The respondent examined fen

witnesses which were crossexamined by the counsel of the claimant. The claimant was examined by his counsel and cross examined by the counsel

of respondent during the course of proceedings.

It accompanies with another paragraph demonstrating that having heard and duly considered all arguments and evidence of the parties concerning

the said disputes and differences and having gone through all the materials, papers, documents and oral evidence, and having considered all the

matters submitted to me in connection with the aforesaid disputes and differences and concerning the matters referred to him in writing, he has

published his final Award. Then the award follows contained in paragraphs 1 to 23 dealing with item wise each of the claim and giving his findings

there on with a further direction of paying the interest to the claiment on the awarded amount @ 10% per annum from the date of application for

appointment of an arbitrator upto the date of payment. However the interest on the amount awarded against Claim No. 16 and 18 shall start and

will be computed from the date of the publication of the award. It is further directed in the award that in case the awarded amount is not paid

within three months of the award, the interest payable on the awarded amount shall be @ 18% per annum upto the date of realisation of the

amount by the claimant.

13/ While considering proposition 'A' upholding the validity of a nonspeaking award based on number of authorities so far as the law prevailed, we

have no hesitation in holding that the Arbitrator being the judge of the choice of the parties a nonspeaking award cannot be interfered with by the

Court, we have to see in the light of the discussion herein above, whether the Award in the present case can be a nonspeaking award ? When

serious allegations of misconduct are made against the Arbitrator as to his impartiality and of extraneous considerations are made and the Award

travels beyond the scope of reference not covered by the terms of agreement. Courts are empowered to examine the material available on record

and determine the separable claims out of the Award. Support can be fround on this proposition 'B' above from the authority of their Lordships of

the Supreme Court reported in A.IR 1977 S.C. 2014 Orissa ""Mining Corporation"" Ltd. Appellant Vs. M/s Prannath Vishwa Nath Rawlley,

Respondent) wherein it has been held:

When an agreement if filed in court and order of reference is made then the claim as a result of the order of reference is limited to a particular relief

and the Arbitrator cannot enlarge the scope of the reference and entertain fresh claims without a further order of reference from the court.

From the perusal of the order of reference made on April 9, 1982. it is manifestly made clear that though the liberty was given to the parties to

raise any further disputes before the Arbitrator but they were qualified with the words

Provided it is not against the terms of the agreement."" Thus, if it is found that some of the claims awarded by the Arbitrator travel beyond the

terms of agreement, they can certainly be assailed in proposition 'B that the Arbitrator cannot enlarge the scope of the reference by entertaining the

disputes not raised before the court and do not form part of the reference, the court will be justified in setting aside that part of the award falling

within the ambit of mistake apparent on the face of the Award, specially when the same is separable.

Learned counsel for the appellant on the above proposition made specific reference to the Award of claim No. 13 in the Award amounting to

Rs. 7, 12,85000 (Rupees seven lacs twelve thousand eight hundred and fifty only) which tails outside the terms of agreement and thus beyond the

scope of reference. Admittedly on the date of application under section 20 there was nothing on record about the claim before the court based on

the measurement done by the commissioner or any claim upto the date of reference. The report of the commissioner was produced before the

court on December 1, 1980. The court vide order dated December 9, 1980, recorded about filing the report of the commissioner, declared CMP

No. 176/1980 and CMP No. 136 of 1980 as infructuous and disposed of both the petitions. In the order of reference there is no mention of this

report nor by that time it was made a part of the claim by the respondent/contractor. It is thus apparent that the report of the commissioner, and

the calculations made thereon were neither the part of the reference nor that claim referred to at item No. 13 of the award based on para 20 of the

statement of facts and claim form part of the agreement. This statement does not find place in the claim filed in the court alongwith the arbitration

petition either. It finds place only in the statement of facts and claims filed before the Arbitrator on August 14, 1982. It is pertinent to note that the

total sum shown in the summary of claim filed before the court initially amounted to Rs. 39, 47, 000/ (Rupees thirty nine lacs, forty seven thousand

only1. Whereas in the statement of facts and claim filed before the Arbitrator on August 14, 1982, goes to the extent of the amount of about Rs.

63,00, OOO/ (Sixty three lacs) such a claim in our opinion, cannot be said to be a part of reference and is not shown to have been based on any

terms of the agreement, The rates sanctioned and work agreed upon by the parties according to the agreement on spreading over of the work

done was calculated to the total sum of Rs. 12. 235 lacs. (Twelve lacs twenty three thousand five hundred). As against this the respondent

alongwith his claim before the Arbitrator on August 14, 1982, filed Annexure A, the 'Final Bill' amounting to Rs. 14, 32, 436. '62 out of which an

amount of Rs. 5,71,915.60 paise is shown to have been paid to the contractor/respondent on his running bill, leaving the balance of Rs. 8, 60,521.

02 paise (Eight lacs sixty thousand five hundred twenty one and paise two only) to be paid to the respondent/Contractor. It is thus clear that any

sum chimed g ting beyond the agreed amount and over and above the 'Final Bill' prepared on the basis of measurement of work done, does not

form part of the agreement and incompetable with the terms of the agreement. Such a type of dispute which is against the terms of the agreement

undoubtedly travels beyond the scope of reference and in violation of the clear and emphatic directions ""provided it is not against the terms of the

agreement,"" while making the reference by the court on April 9, 1982.

15/ It is strongly urged by learned counsel for the respondent that the claim put forward in this regard in para 20 of the statement of facts and the

claims filed before Arbitrator on August 14, 1982, is quite within the terms of agreement and submitted that bilateral rights and obligations are

created under the agreement. On account of the commission of Fundamental Breach of the clear terms of agreement for nonsupply of drawings,

designs and specifications etc. the work was delayed due to the faults of the appellants creating rights in the respondent contractor to recover

damages irrespective of the fundamental clause, It is also pointed out that due to hostile attitude of the Engineer incharge the measurement was not

done in time and it was only with intervention of the court by getting the commissioner appointed that the measurement could be done, on the basis

of which the claim in para 20 referred above was put forward including the claim of excess consumption of cement and iron covered by items 13

and 14 of the Award being based on material placed before the Arbitrator. By referring to some authorities of the High Court and the Apex court

great emphasis is laid on the point that the Award being nonspeaking one the court cannot go into its appreciation like a court of appeal as the

Arbitrator is the judge of the choice of the parties, his findings cannot be challenged merely on assumption unless the error is shown to be apparent

on the face of the Award to bring it within the scope of section 30 or 33 of the Arbitration Act to set aside the Award. In view of the discussion

made in the preceding paragraph we need not to dwelt upon the scope of interference in a nonspeaking Award or the theory of 'fundamental

breach' and have upheld the validity of a nonspeaking Award. In the facts and circumstance of the case in hand we find that since the Award

covered by Stem No. 13 based on para 20 of the statement of facts and claim, is beyond the scope of reference being against the terms of the

agreement is without jurisdiction and as a necessary implication of the same Award of claim based on the said para covered by item No. 14

amounting to Rs. 95, 400. 00 (Ninety five thousand four hundred only) must also fall alongwith the same. The Arbitrator having failed to notice the

'final bill' prepared in terms of the Agreement and has concentrated in Awarding the amount in item No. 13 on the report of the commissioner

which is neither proved according to law nor form part of the reference the claim relied upon exceeds the jurisdiction of the Arbitrator which is

vitiated by error of law and falls within ambit of 'error apparent on the face of the Award : while dealing with a case under the Arbitration Act

based on the partnership agreement their Lordships of the Supreme Court in Jivarajbhai Ujamshi Sheth and others, Appellants Vs. Chintaman Rao

Balaji and others, Respondents, reported in AIR 1965 S.C. 214 laid down the principle as under:

(23) It is clear that the Arbitrator bas included in his valuation some amount he was incompetent, by virture of limits placed upon his authority by

the deed of reference, to include. This is not a case in which the arbitrator has committed a mere error of fact or law in reaching his conclusion on

the disputed question submitted for his adjudication. It is a case of assumption of jurisdiction not possessed by him, and that renders the award, to

the extent to which it is beyond jurisdiction, invalid.

It is then urged that the contractor was permitted to complete the work by extending the time by the end of March, 1979. Since the contractor

could not complete the work even in the reaches in which he has started the work and the canal had to be commissioned for the supply of water

for the Kharif Crops of 1980. The respondent contractor thereafter abandoned the work and his contract stood rescinded for the part of the work

in January 1980 and the agreement stood terminated finally on incomplete work by 19th of May 1980. We find that the work was taken up for

completion and supplemented by deploying departmental labour etc. with effect from 19th May 1980 onwards. The work done by the Contractor

was measured and the final bill prepared in accordance with paragraph 40 of the Agreement enclosed by the contractor with his statement of facts

and claim before the Arbitrator amounting to Rs. 14,32,436.62 paise out of which deducting the amount of Rs. 5,71,915.60 paise paid to the

Contractor leaves the balance of Rs. 8,60,521.02 paise only. Over and above this amount any measurement subsequently done by the

Commissioner cannot form part of the agreement and could not be allowed to be multiplied to an unlimited extent beyond the rates and work

prescribed in the agreement. Even the summary claims submitted before the Court for reference do not include the amount claimed under this

bead. The other heads of claim overlap the claim No. 20 on which item 13 is awarded. In consideration of the circumstances we have no doubt in

our mind to hold, that the arbitrator made these items of the award (No. 13) granting claim of Rs. 7,12,850.00 and (No. 14) granting Rs.

95,400.00 based on claim No. 20 of the subsequent statement of facts and claim, exceeded his jurisdiction which is against the terms of the

agreement and thus invalid in view of the reference. The items No. 13 and 14 of the Award being independent of the entire award are separable,

there can be no legal impediment in deleting the two items based on claim No. 20 from the Award. The appeal to this extent, in our opinion,

deserves to be allowed to disallow the claims of Rs. 7,12, 850.00 and Rs. 95,400.00 totalling to Rs. 8,08,250.00 (Eight lacs, eight thousand two

hundered and fifty only) and the Award to that extent is set aside Propositions 'B' and 'C' are, therefore, answered in the affirmative in favour of the

appellant accordingly to the extent indicated.

It is also argued on behalf of the appellants by playing the tape record statement of the Arbirator that he was interested in giving the Award in

favour of the respondent and, therefore, misconducted himself in giving the Award. On assessment of the statement we find that the statement

refers to the post Award conduct having no bearing on the award as a whole. Likewise contention of learned Advocate General regarding grant of

the claim of idle labour in our opinion is not prohibited by paragraph 69 (f) of the agreement in the heading (claims not Entertainable') as pointed

out. This clause refers to idle employees on any account whatsoever'. This word employee cannot be stretched to the extent of including labour

engaged by the contractor as for the labour an independent paragraph 34 is incarporated in the agreement in the heading of 'LABOUR' where in

the words labour and employees are used in different context. We, therefore, find force on this account in the argument of Mr. T.S. Thakur,

learned counsel for the respondent, and reject the arguments advanced by learned counsel for the appellants. In consequence whereof the words

labour and employees are used in different context. We, therefore, find force on this account in the argument of Mr. T.S. Thakur, learned counsel

for the respondent, and reject the arguments advanced by learned counsel for the appellants. In consequence whereof the Award of the arbitrator

with regard to all other items of claims except items (13) and (14) as held above, is hereby confirmed. The proposition 'D' is thus answered

accordingly.

18/ This brings us to the crossobjections filed by the respondent against the grant of interest by the learned counsel for the respondent, which is

strongly opposed by learned Advocate General. We have examined the order passed by learned Single Judge while making the Award the Rule of

the Court and passed the decree awarding interest in terms of section 29 of the J&K Arbitration Act, 2002 (1945 A.D.). The learned Judge has

discussed the scope and ambit of the powers of the Arbitrator vizaviz section 34 of the Civil Procedure Code and has rightly exercised discretion

judicially in deleting the penal interest awarded by the Arbitrator l and reducing the 10% interest to 6% per annum from the date of the Award, till

amount is realised. We do not find any legal infirmity in the order and decree, so as to allow the cross objections which are, therefore, dismissed.

19/ On the totallity of the circumstances mentioned hereinabove, the appeal partly succeeds and in terms of section 15 clause (a) of the J&K

Arbitration Act items (13) and (14) of the Award being separable claims which held as against the terms of reference and without jurisdiction are

hereby deleted from the Award which is setaside to that extent. The rest of the Award with modification in grant of interest as awarded by the

learned single Judge in the decree impugned is here by maintained and confirmed. The judgment and decree passed by the learned Single Judge

stands modified accordingly deleting the claim of Rs. 8,08,250.00 (Rupees eight lacs, eight thousand two bundled and fifty only).

20/ Parties under the circumstances are left to bear their own costs. Decree be drawn up accordingly. This also disposes of ail connected CMPS.