Dismissed

Barmeshwar Pandey v. State of Jharkhand And Ors.

Jharkhand HC18 Jan 2019Arb. Appeal/10/2003

Case brief

AI extract

What is this about?

This arbitration appeal challenged an order making an arbitrator's award the rule of the court. The appellant argued the award was not final due to lack of measurement and suffered misconduct. The High Court dismissed the appeal, finding the arbitrator considered all claims and directed final measurement due to factual preconditions, thus acting legally.

What did the court decide?

Instant appeal is accordingly dismissed; the award passed by the learned Arbitrator is made the rule of the Court.

Barmeshwar Pandey Vs State of Jharkhand And Ors. — Arbitration | Jharkhand HC (2019)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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Arbitration Appeal No. 10 of 2003

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Barmeshwar Pandey son of late Suryanarayan Pandey, permanent resident of village Mahiye, P.S. Sukhpura, P.O. Dattiwar Sheopur, District : Balia (Uttar-Pradesh) at present residing at Gopalpur, P.S. Ghatsila, District : East … … Singhbhum Petitioner/Appellant

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Versus

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The State of Bihar

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Chief Engineer, Subarnarekha (Icha Galudih complex) P.O. Adityapur, District West singhbhum (Now in the district of Saraikella—Kharswan).

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Administrator, Subornarekha Project, P.O. and P.S. Adityapur, District : West singhbhum (Now SaraikellaKharswan).

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Superintending Engineer, Kharkai Canal Division, Subarnarekha Multipurpose Project, P.O. and P.S. Adityapur, District : West singhbhum (Now saraikella Kharswan).

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Executive Engineer, Kharkai Canal Division, Subarnarekha Multipurpose Project, P.O. and P.S. Rajnagar, District : West singhbhum (now Saraikella-Kharswan).

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Engineer in Chief, Water Resources Division, Irrigation Department, Government of Bihar, Irrigation Bhawan, Patna. … … Opposite Party/ Respondents

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CORAM: HON’BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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--For the Appellant : Mr. Rahul Gupta, Advocate : Mr. Akshay Verma, Advocate For the Respondents : Mr. Binod Singh, S.C. (L & C) : Mr. Sarvendra Kumar, Ac to S.C. (L & C) ---

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27 /18.01.2019 Heard Mr. Rahul Gupta and Mr. Akshay Verma, counsels appearing on behalf of the appellant.

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2. Heard Mr. Binod Singh and Mr. Sarvendra Kumar, counsels appearing on behalf of the respondents.

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3. This appeal has been filed against the order dated 07.06.2002 and decree dated 07.06.2002 (decree signed on 13.06.2002) passed by Learned Subordinate Judge, I, Chaibasa in Miscellaneous Case No. 1 of 2002 (Arising out of Title Suit No. 5 of 1994) whereby the award submitted by learned

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Arbitrator has been made the rule of the Court under the provisions of Arbitration Act, 1940.

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4. The brief facts giving rise to the instant proceeding are as follows:-

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(a) The appellant is a civil contractor who undertakes construction works in the irrigation department of the State.

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(b)The appellant was awarded contract for construction on the terms and conditions of the agreement no. 13 of 1985 which was initially was Rs. 18,84,491.00 and subsequently increased to Rs. 20,72,739.20 , inclusive of extra item of works. Time for completion of work was 18 months from the date of commencement and the department extended the time up to three years. The work commenced in the month of June, 1986 and as per the agreement a sum of Rs. 37,700/- was deducted as security money which was refundable. No payment was made for any extra item of work. Only part payment was made out of the value of work done by the appellant. The specific case of the appellant was that the appellant started the work without receiving any advance from the department, but the work could not be completed within the stipulated timeframe of three years on account of paucity of fund and non-supply of materials which were to be supplied by the department as per the contract.

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5. Disputes arose between the parties and the appellant took steps for referring the matter for arbitration, but as no action was taken, the appellant filed a Title Suit No. 5 of 1994. Vide order dated 19.05.1998, Title Suit No. 5 of 1994 was disposed of and the dispute was referred to the learned Arbitrator. The sole Arbitrator submitted his award on 27.11.2001 before the learned court below and accordingly Miscellaneous Case No. 1 of 2002 was instituted and the main point for consideration before the Court in the said miscellaneous case was as to whether the award was fit to be made the rule of the Court.

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6. The appellant herein filed his petition under Sections 30 and 33 of Arbitration Act, 1940 before the learned court below for setting aside the award and raised various grounds of challenge.

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7. The learned Sub-ordinate Judge-I, Chaibasa after considering the submission of the parties, vide impugned order dated 07.06.2002, ordered that the award passed by the learned Arbitrator be made the rule of the Court and held that the learned Court did not find any illegality in the award. Accordingly, the petition filed by the appellant under Sections 30 and 33 of Arbitration Act, 1940 was dismissed.

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8. Counsel for the appellant, during the course of argument before this court, has confined the challenge to the award only to ground nos. (b), (c) and (d) mentioned in the petition filed before the learned court below , which are quoted as follows:-

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“(b) For that Award is neither a speaking award nor a final Award. The learned Arbitrator has given a direction to the defendants to take final measurement and make payment of the work done. The said observation of the learned Arbitrator goes to show that the learned Arbitrator has neither asked to produce the measurement book nor the defendants produced the measurement book. The learned Arbitrator could have passed Final Award after scrutinizing the measurement book. Thus the Award is liable to be set aside.

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(c) That the learned sole Arbitrator has not arrived at any conclusion about payment of security money, which has been deducted by the Department concerned on account bill of the plaintiff, thus the Award suffers from the said lacuna and is liable to be set aside.

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(d) For that the learned Arbitrator should not have turned down the interest claim by the plaintiff on

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un-paid bill on the ground that there is no provision of escalation under clause 59 of the Agreement. The plaintiff submits the bill, amount of the plaintiff remained blocked in general course of trade and he is liable for payment of interest as per provision of section 34 of the CPC and also under the Interest act. That the sole arbitrator should not have brushed aside the claim of interest, thus the Award is liable to be set aside for nonapplication of the mind of the learned Arbitrator.”

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9. Counsel appearing on behalf of the appellant while referring to the award has submitted that the learned Arbitrator while passing the award did not decide the case and finally passed the award by directing the department to take final measurement and make the payment for the work done by the appellant within three months and disposed of the arbitration award.

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10. Counsel for the appellant further submits that the learned Arbitrator had misconducted himself by not passing a final award and ultimately the matter was left to the department against whom the appellant was litigating.

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11. Counsel for the appellant has referred to a judgment passed by the Hon’ble Supreme court reported in (1975) 2 SCC 236 (K.P. POULOSE Vs. STATE OF KERALA AND ANOTHER) and has referred to para 6 of the said judgment to submit that the concept of misconduct under Section 30(a) of the Arbitration Act, 1940 does not have a connotation of moral lapse. It comprises legal misconduct which is complete if the Arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision.

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12. Counsel for the appellant further submits that the Arbitrator ought to have called for the measurement book for

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the purposes of ascertaining the amount of work done by the appellant. But instead of that, the Arbitrator referred the appellant to the respondents for the purposes of taking final measurement and to make payment.

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13. Accordingly, counsel for the appellant submits that this action on the part of the Arbitrator amounts to legal misconduct. He submits that these aspects of the matter has not been properly considered by the learned court below. Accordingly, the impugned order passed by the learned court below by which award is made the rule of the Court is perverse and is fit to be set aside.

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14. Counsel appearing on behalf of the respondents, on the other hand, submits that upon perusal of the award which has been passed by the learned Arbitrator, it is apparent that each and every item of the claim of the appellant has been taken care of and has been decided by passing a reasoned order referring to various clauses of the arbitration agreement. He has also referred to the award to submit that it has been recorded by the learned Arbitrator that the fund was available during the contract period and the material was also given to the contractor with time extension for completion of the work. The appellant had taken a plea that the work could not be completed due to rainy season, the disturbance due to murder of Nirmal Mehto, shortage of cement and fund etc. The respondents had informed the learned Arbitrator that it was not possible at that point of time to take measurement as there was water in the canal and that the measurement could be taken once the canal dries.

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15. Counsel for the respondents further submits that in such circumstances, the direction was issued by the learned Arbitrator to take final measurement and make the payment of the work done by the appellant. He submits that there was no material on record before the learned Arbitrator to come to a

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definite concluding as to the work which was claimed to have been done by the appellant. Moreover, it was never the case of the appellant that the measurement for the work done was already done and recorded in the measurement book. Accordingly, the learned arbitrator could have decided the entire arbitration proceeding against the appellant on the basis of materials available on record, but the learned Arbitrator had directed the respondents to take measurement and make payment.

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16. Counsel for the respondents submits that before the learned court below, all the grounds which were raised by the appellant were duly considered. Admittedly the work done by the appellant could not be measured due to rainy season and other grounds of the appellant was also taken into consideration. So far as the security deposited is concerned, it was specifically considered that the security deposited is refundable only after the final bill is passed and this aspect of the matter has been considered by the learned court below. The learned court below also rejected the claim of interest by considering the provisions of the agreement.

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17. Counsel for the respondents further submits that the learned court below does not sit in appeal against the order passed by the learned Arbitrator and all the objections which have been raised by the appellant before the learned court below have been considered by speaking and well-reasoned order, which do not call for any interference by this Court.

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18. After hearing the counsel for the parties and after considering the materials on record, this Court finds that the dispute between the parties was referred to Arbitrator vide order dated 19.05.1998 passed in Title Suit No. 5 of 1994 under the provision of Arbitration Act, 1940. The learned Arbitrator while passing the final award has considered each and every claim of the appellant by referring to various clauses of the

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agreement and rejected all the claims including refund of security money as well as the claim of interest by the appellant. Admittedly, the work could not be completed by the appellant. The learned Arbitrator further found that it was not possible to take the measurement of the work done by the appellant as there was water in the canal as indicated by the respondents.

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19. This court finds that there is no indication in the impugned award that the measurement was already recorded in the measurement book and it was never the case of the appellant that they had made any endeavor before the learned Arbitrator in this connection or made any request or file any petition for the purposes of production of the measurement from the respondents. It appears from the impugned award that there was no such material before the learned Arbitrator to come to a conclusion regarding the exact amount of work done by the appellant as admittedly the measurement was yet to be under taken. From the records, this Court finds that there is no material on record to suggest that the learned Arbitrator had committed any misconduct much less any legal misconduct in the proceedings before the said Arbitrator. Neither the award was inconsistent nor the learned Arbitrator had ignored any material document while passing the award. 20. In such circumstances, this Court finds that the learned Arbitrator was left with no option, but to pass an award directing the respondents to take a final measurement and make payment. Accordingly, this Court finds that there is no illegality in the award and the award passed by the learned Arbitrator does not suffer from any misconduct much less any legal misconduct on the part of the learned Arbitrator as alleged and submitted by the counsel appearing on behalf of the appellant by relying upon the decision passed by the Hon’ble Supreme Court reported in (1975) 2 SCC 236 (K.P. POULOSE Vs. STATE OF KERALA AND ANOTHER).

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21. This court finds that the learned court below has considered all the objections of the appellant and has rejected each one of them by a well-reasoned order including the claim regarding payment of security money as well as payment of interest. So far as the payment of security money is concerned, this Court finds that the learned lower court held that the question of adjustment or payment of security money arises only when final bill is prepared. So far as the payment of interest is concerned, this Court finds that the claim of interest by the appellant has been duly considered by the learned Arbitrator by referring various clauses of the agreement which has already been taken care of by the learned lower court to which this Court does find any perversity and any illegality.

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22. There is no dispute that the court while making the award passed by the learned arbitrator do not sit in appeal and are guided by the limited grounds mentioned under the provisions of Arbitration Act, 1940 itself.

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23. In view of the aforesaid facts and circumstances and after going through the impugned order passed by the learned lower court, this court finds that all the aforesaid aspects of the matter has been dealt with by the learned court by passing a wellreasoned and speaking order which does not call for any interference. Instant appeal is accordingly dismissed.

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(Anubha Rawat Choudhary, J.)

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Mukul

Barmeshwar Pandey v. State of Jharkhand And Ors.

Case brief

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Barmeshwar Pandey v. State of Jharkhand And Ors.

Case brief

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