State of Tripura vs Ketaki Ranjan Deb

By this appeal, under section 37 of the Arbitration and Conciliation Act, 1996, the appellant challenged the order dated 4.4.2002, passed by learned District Judge, North Tripura, Kailashahar in T.S.(Arbitration) 01 of 2001.

Heard learned counsel, Mr. P. Dutta for the appellant and learned counsel, Mr. K. Indu for the respondent.

Pursuant to a Notice Inviting Tender by the Executive Engineer, Kumarghat Division, Government of Tripura, for the work "Construction/Improvement of road from PecharthalFatikroyHalahali Chebri (94 km)/Portion from PecharthalFatikroy (15.66 km)/GrI/ Portion from 0 km to 9 km in Tripura under NEC programme/Job No.TP/COM/27 I/Portion from 3 km to 5 km /S.H. Formation", the respondentcontractor participated in the tender process, and Work Order No.F.10(178)/EE/KD/835362 dated 31.8.1987 was issued in favour of the respondentcontractor for execution of the work within 12 months reckoning from 15th day after the date of issue of the Work Order. An agreement was also signed between the appellant, i.e., the Executive Engineer, Kumarghat Division and the respondentcontractor stipulating therein the terms and conditions of the execution of work. Dispute and difference cropped up on the issue of some extra item of works such as clearing of jungle and making of trace path, etc., and the respondentcontractor in due course applied for referring the dispute to the Arbitrator as per the terms of agreement. Accordingly, by an order dated 25.9.1998, EngineerinChief (PWD) referred the dispute, in terms of the agreement, to the Sole Arbitrator for settlement of the dispute and accordingly the reference was registered on 6.10.1998 vide No. ARB/KKS/98( 16)713335 before the sole arbitrator. Notices were issued to the respective parties by the sole arbitrator and accordingly, the respondentcontractor appeared and submitted his claim statement referring therein the schedule of disputes. The appellant even after receipt of the notice as well as reminders did not turn up and, therefore, Arbitrator after elapse of substantial period of time decided the disputes ex parte formulating six issues based on the claim statement and awarded the claim accordingly. The issues and the award made by the Arbitrator, reads as follows :

"Arbitrator is to decide Award

Issue No.(i). Whether the The claim has been established. I

claimant is entitled an amount award an amount of Rs. 1,13,190.30 of Rs.1,13,190.30 for execution (Rupees one lakh thirteen thousand of extra item of work of earth and one hundred ninety and thirty cutting and jungle cutting? " paise) only in favour of the. claimantcontractor to be paid by the respondent.

�Arbitrator is to decide

Issue No.(i) Whether the claimant is entitled an amount of Rs.1,13,190.30 for execution of extra item of work of earth cutting and jungle cutting?

Issue No.(ii) Whether the claimant is entitled an amount of Rs. 2,80,000 what he sustained losses due to maintenance of idle labourers and for making advance for engagement of labourers?

Issue No. (iii) Whether the claimant is entitled an amount of Rs. 88,517.84 for executing the work of removal of landslide as explained in the prayer?

Issue No. (iv) Whether the claimant is entitled to get back an amount of Rs. 50,000 which has been kept withheld by the respondent without any rhyme and reason?

Issue No.(v) Whether the claimant is entitled to get back his earnest and security money which is now lying with the respondent?

Issue No. (vi) Whether the claimant is entitled interest the rate 18% per annum for all the amounts mentioned under dispute nos.1to 5?

Issue No.(vii) Whether the cllaimsnt is entitled cost and incidental there to for an amount of Rs.5,000?

Award

The claim has been established. I

award an amount of Rs.1,13,190.30 (Rupees and one hundred ninety and thirty paise) only in favour of the claimant contractor to be paid by the respondent.

The claim has been established. I award an amount of Rs. 75,000(Rupees seventy five thousand) only in favour of the claimant contractor to be paid by the respondent.

The claim has been established. I award an amount of Rs. 88,517(Rupees eighty eight thousand) only in favour of the claimant contractor to be paid by the respondent.

The claim has been established. I award an amount of Rs. 50,000 (Rupees fifty thousand) only in favour the claimant contractor to be paid by the respondent.

The claim has been established. I award full refund of security deposit in favour of the claimant contractor to be paid by the respondent.

The claim has been established. I award simple interest @ 10% (at the rate of ten per cent per annum w.e.f. 07.09.1993. till the date of decree which ever is earlier.

The claim has been established. I award an amount of RS. 5,000 (Rupees five thousand) only in favour of the claimant contractor to be paid by the respondent.

The appellant being aggrieved and dissatisfied with the award, filed an application under section 34 of the Arbitration and Conciliation Act before the District Judge, North Tripura, Kailashahar for setting aside the arbitral award which was registered as case No. TS 01(Arb.) of 2001, before the learned District Judge, and, after hearing both side, the learned District Judge by impugned order dated 4.4.2002, dismissed the petition filed under section 34 of the Act and having been aggrieved, the appellant now preferred the present appeal challenging the judgment/order passed by the learned District Judge.

Learned counsel, Mr. Dutta appearing for the appellant has submitted that the appellant could not file the counter statement immediately after receipt of the notice before the sole arbitrator and assigning reason they have filed the counter statement, before the arbitral proceeding was finally taken up for disposal, but the learned Arbitrator did not entertain the written statement of the appellant and decided the reference ex parte causing serious prejudice to the appellant. The point was raised before the District Judge, but District Judge also arbitrarily decided the point against the appellant. The reference should be sent back to the Arbitrator, submits Mr. Dutta, for fair ends of justice as otherwise, public money willbe simply misused if the award is upheld.

Learned counsel, Mr. Indu has submitted that enough time was given to the appellant for submitting their counterstatement but they neither submitted counterstatement nor participated in the hearing before the Arbitrator and, therefore, the arbitrator had no other option but to hear it ex parte.

On going through the award made by the arbitrator as well as the records it appears, the reference was made to the arbitrator on 25.9.1998 and the claimantrespondent filed claim statement on 24.11.1998. The appellant received notice but failed to submit any counterstatement. The arbitrator passed the order of ex parte hearing on 19.2.2000. The observation made by the arbitrator regarding nonsubmission of the counter statement reads, thus :

"The respondent did not submit any counterstatement of fact even after repeated reminders. The respondent did not attend or got represented.

The abnormal action of the respondent was reported to the EngineerinChief (PWD) vide No. 2(KS)WR/99 dated 11.8.1999 under whom the respondent works. But the situation did not improve.

The respondent was provided with sufficient time from October 1998 to February 2000 for submission of counterstatement of fact. Giving due consideration to the noncooperating attitude of the respondent the case was heard ex parte on 19.2.2000, in the line of decision communicated vide No.98(16)/ARB/KKS dated 11.1.2000.

In response to aforesaid letter respondent did not even take the pain to inform the Arbitrator about their inability to attend on 19.2.2000. This situation had compelled the arbitrator to go for ex parte action.

However, one letter dated 1.2.2000 reached the Office of the arbitrator on 28.2.2000 by post. But by this time the hearing had been completed ex parte. Subsequently another letter No. 10(506)/EE/KS/Shedow/41748 dated 20.4.2000, the counterstatement of fact was forwarded to Sri. Kataki Ranjan Deb and copy endorsed to the Arbitrator without enclosure."

The above observation of the arbitrator makes it abundantly clear that the appellant was negligent and guilty of inaction and there was nothing wrong done by the arbitrator in fixing the dispute for ex parte decision on such factual aspect, this court in an appeal under section 37 of the Act, is not required to enter and decide afresh after 15 years of the reference of dispute. I find no merit at all on this point to interfere in the order, passed by the learned District Judge.

The next point raised by learned counsel, Mr. Dutta for the appellant, is that the contractor was supposed to execute the work in terms of the agreement. There was no question of any extra item of work to be executed by the contractor outside the purview of the agreement. It was clearly stipulated in the special condition Nos.2, 4 and 7 that the extra work if any, for making the roads/paths for execution of the work should be done by the contractor for which the contractor cannot claim any extra charges. He has also submitted that the slips were to be removed by the contractor at his own cost and so, the issues which have been decided by the arbitrator in favour of the contractor were altogether contrary to the agreement and, therefore, the learned District Judge was supposed to interfere in the award and remand it to the Arbitrator for fresh decision.

Learned counsel, Mr. Indu, on the other hand, submitted that extra works are normal phenomena of each and every works. The contractor for effective execution of the work, under the work order, had to undertake those extra works as stipulated in the reference of dispute, considering which the EngineerinChief referred the dispute to the arbitrator. So the appellant cannot take the stand that no such extra work was executed by the contractor or that contractor cannot travel beyond the agreement.

Whether extra works as claimed by the contractor was executed or not, as a matter of fact, which the contractor claimed and raised the dispute, but not controverted by the appellant by filing any counterstatement and evidence thereof. Under such circumstances, where the reference was decided ex parte and the appellantExecutive Engineer failed to present the counterstatement of facts before the arbitrator with supporting evidence, I find no justification at all to enter into those factual aspects which has already been decided by the arbitrator and affirmed by the District Judge while disposing application under section 34 of the Act.

Arbitration is an alternative dispute resolution mechanism arising out of an agreement between the parties to the dispute and where the Arbitrator resolved the dispute after hearing both sides, the court of law will interfere only on limited ground as stipulated in section 34 of the Arbitration and Conciliation Act. While the factual aspects once decided by the arbitrator, court of law under section 34 or in an appeal section 37 is not ordinarily required to enter into the factual aspects and reappreciate the matter. Every dispute must have a logical end. While the arbitrator has already made an award considering the materials placed before it, in course of hearing/inquiry, I find no justification at all to reopen the matter after 15 years.

The appeal, therefore, stands dismissed with cost of Rs.2,000.

The appellant is directed to satisfy the award immediately in terms of law.