Union of India (UOI) vs Pandit Construction Co. and Others

Mukul Mudgal, J.—With the consent of the learned Counsel for the parties, this appeal is taken up for hearing.

This appeal challenges the Judgment of the learned Single Judge dated 13th August 1996 by which the Claims No. 1, 4 and 16 in respect of which Union of India, the appellant herein, had filed the objections were rejected by the learned Single Judge. In respect of the Claim No. 1 findings recorded by the Arbitrator are as follows:

On consideration of documents filed and arguments advanced by parties and on perusal of R-9, I find that rebate condition was not fulfilled by respondents. The gross amount of various bills as shown in this exhibit does not show that work done was less than Rs. 25,000/- during intervening period which is also established by reference to Cement Register filed by respondents. The letters given by claimants (Exh.R-1 to R-8) are without any consideration. Even if these letters are considered, there are defaults in payment of RA bills in other months also. I, therefore, held that respondents were not entitled to avail this conditional rebate and claimants are entitled for refund of Rs. 78,426.62 say Rs. 78,426/0.

The learned Single Judge held that the appellant did not particularize the objections as to how the Arbitrator has gone wrong in the above findings. In view of that, the learned Single Judge dismissed the objection and in our view, rightly, as general pleas as to whether the award is wrong obviously cannot form the basis of setting aside the Arbitrator''s award. In respect of Claim No. 4 as against the sum of Rs. 1,05,000/- claimed by the respondent, the Arbitrator granted a sum of Rs. 45,000/-. The claim of the appellant was that there was no unlawful or unauthorized deduction and whatever deductions were, the same were in accordance with the terms and provisions of the contract. It was contended that the Arbitrator had misconducted himself in granting the claim of the respondent to the extent of Rs. 45,000/-. The Arbitrator''s findings in respect of the said claim No. 4 is as follows:

On perusal of documents filed and arguments advanced by parties, I find that no notice under Clause 14 has been placed on record by respondents. The completing certificate by E.E. has not been filed only it is pleaded that these defects were included in the said completion certificate. No such defects are mentioned in R-42 which is completion certificate signed S.E. No joint measurements for any defects are on record. On perusal of R-109, R-10 and Annex.C-4.A, I find that of one item quantity paid in 13th RA bill has been reduced in final bill. For some of the items reduction has been applied on entire quantity. R-44 relied by respondents is for seeking consent but no such consent was given by claimants. No loss was suffered by not removed and items are in use. Moreover items in R-44 are not supported by any notice under Clause 14 or any defects in completing certificate. Thus strictly speaking respondents were not entitled to make any reduction. However, considering the nature of defects and taking on overall view of the matter I hold that claimants are entitled for refund of at least Rs. 45,000/-.

The above finding clearly shows that valid reasons have been given by the Arbitrator in arriving at the finding of granting a sum of Rs. 45,000/-. These reasons are plausible and warrant no interference in view of the law laid down by the Hon''ble Supreme Court in the cases of Bharat Coking Coal Ltd. Vs. L.K. Ahuja, and State of U.P. Vs. Allied Constructions, . In both the cases, it was held that there are limitations upon the scope of interference in awards passed by an Arbitrator particularly, when the Arbitrator has applied his mind to the pleadings, the evidence adduced before him and the terms of the contract and in such a situation, the Hon''ble Supreme Court has held that even if two views are possible; the court ought not to reappraise the matter in an appeal. The court has also been held to be precluded from the reappraisal of the evidence. The only scope for interference prescribed by the Hon''ble Supreme Court in the Case of State of U.P. (supra) is that when the reasons are totally perverse or the judgment is based on a wrong proposition of law, and since no such plea has been advanced before us there is no merit in the challenge to the judgment of the learned Single Judge.

The learned Counsel for the respondent Shri Raman Kapoor has not been able to show us any authority that even if the award has been accepted and indeed an application made by the claimant/respondent for making it a Rule of the Court, even then the learned Single Judge has the power to grant interest on the awarded amount though not granted by the Arbitrator and not objected to by the claimant/Respondent. The arbitrator awarded pendent lite interest at 12% per annum against claims 4, 5, 7, 8 and 9 which comes to Rs. 46,000/-. However, the Arbitrator granted future interest on the total awarded amount minus the pendent lite interest (Rs. 4,16,938 - Rs. 46,000 = Rs. 3,70,938/-). The respondent did not file any objection against this award of the Arbitrator. Before the learned Single Judge during the course of arguments it was sought to be urged on behalf of the respondent that future interest should have been awarded on the entire amount of Rs. 4,16,938/- and not just Rs. 3,70,938/- as awarded by the Arbitrator. The learned Single Judge accepted this contention and awarded interest on the additional amount of Rs. 46,000/- as well.

In view of the peculiar facts of the present case, the learned Counsel for the respondent states that he does not wish to press for the interest on the pendentelite interest awarded against claims 4, 5, 7, 8 and 9. Consequently, the judgment of the learned Single Judge to the extent of granting interest on Rs. 46,000/- pendentelite awarded against claim 4, 5, 7, 8 and 9 is set aside and the appeal is allowed to this limited extent only and dismissed in respect of other reliefs. It will be open to the respondent to withdraw the amount deposited in this Court after adjustment of the portion of the appeal which has been allowed, upon making an appropriate application.

The appeal stands disposed of accordingly.