SANTOKH SINGH ARORA Vs. UNION OF INDIA

JUDGEMENT

(1.) THE appellant was an Army Contractor. He entered into three contracts for building construction work with the Army authorities at Dehradun vide Agreements Nos. CWE/ DDN/ 34 dated 3/12/1966, GE/DDN/31 dated 30/11/1967 and CWE/DDN/35 dated 15/12/1967. THEse agreements contained a provision for arbitration in clause 70 whereunder all disputes between the parties to the contract other than those or for which the decision of the Commander Works Engineer (C.W.E.) or any other person was by the contract expressed to be final and binding, were required to be referred to the sole arbitration of an engineer to be appointed by the authority mentioned in the tender documents. Certain disputes arose between the appellant and the army authorities in relation to the performance of these contracts and the said disputes were referred to the arbitration of Lt. Col. L. K. Raisinghani who was appointed as arbitrator by the Chief Engineer (Northern Zone), Lucknow on 18/12/1968. THE said arbitrator gave his awards in relation to those disputes on 21/07/1971. THE. appellant, not satisfied with the said award, moved applications under Sections 30 and 33 of the ARBITRATION AND CONCILIATION ACT, 1940 (hereinafter referred to as 'the Act') for setting aside the said awards. THE Additional Civil Judge, Dehradun, by his judgment dated 10/12/1973 set aside the awards made by the arbitrator. THE learned Judge however refused to supersede the reference. THEreafter, the Chief Engineer appointed Lt. Col. M. S. Gill as arbitrator but the said arbitrator expressed his inability to act as arbitrator and thereupon Lt. Col. S. K. Gill was appointed as arbitrator by the Chief Engineer. THE appellant filed applications under Sections 5, 8 and 12 of the Act in the Court of District Judge, Dehradun wherein he prayed for revocation of the authority of the arbitrator appointed by the Chief Engineer and for appointment of another arbitrator by the Court. THE said applications were dismissed by the District Judge, Dehradun by his order dated 22/12/1975. Aggrieved by the said order of the District Judge Dehradun, the appellant filed Civil Revisions Nos. 510, 501 and 511 of 1976 before the Allahabad High Court. THE said revisions were dismissed by a learned single Judge of the High Court by judgment dated 24/12/1982. THEse appeals have been filed by the appellant after obtaining special leave to appeal against the said judgment of the High Court.

(2.) IN its order dated November 23, 1983, this Court, after examining the provision in clause 70 of the General Conditions of the Contract and keeping in view the history of the litigation, expressed the opinion that it was now time to appoint an independent arbitrator who could as well have been appointed by the authority entitled to appoint the arbitrator in the dispute between the parties. By the said order, this Court, in the interest of justice without remitting the matter back to the authority having the right to appoint the arbitrator, with the consent of the parties appointed Shri Justice A. C. Gupta, a retired Judge of this Court, as arbitrator in this matter. Shri Justice A. C. Gupta made his awards dated 30/04/1987 whereby in respect of the outstanding claims of the appellant under all the three contracts, he awarded a total amount of Rs. 65,505 / -. The appellant was, however, not satisfied with the said award and he raised objection against the same on the ground that there was an error apparent on the face of the awards inasmuch as under clause 70 of the General Conditions of the Contract, the arbitrator is required to indicate his finding along with the sum awarded on each individual item of dispute. The said objection was accepted by this Court by order dated 6/10/1987 and the matter was remitted to the learned arbitrator with a direction to make fresh awards in each of the cases. By the said order, the respondents were directed to pay a sum of Rs. 65,505 / - which had been awarded by the learned arbitrator subject to adjustment. IN accordance with this direction the amount of Rs. 65,505.00-has been paid to the appellant on 28/10/1987. As Shri Justice A. C. Gupta was not prepared to act as an arbitrator any longer, this Court, by order dated 11/08/1988, referred the dispute to the arbitration of Shri Justice M. S. Gujral, retired Chief Justice of the Sikkim High Court who has made his award dated 18/08/1990 whereby, after adjusting the amount of Rs. 65,505 / -, which had already been paid to the appellant, a further amount of Rs. 75,245.00 has been awarded to the appellant. The appellant is not satisfied with the said award of the learned arbitrator, and he has filed objections against the same under Sections 30 and 33 of the Act.

(3.) THE appellant has submitted that in view of the arbitration clause contained in clause 70 of the General Conditions of the Contract, the learned arbitrator was required to indicate his findings on each individual item of dispute and that in making his award dated 18/08/1990, the learned arbitrator has not indicated his finding on the various items contained in the claim of the appellant. We have perused the consolidated statement of claims which was submitted by the appellant before the learned arbitrator. We find that apart from the claims which were earlier made by the appellant in relation to the three contracts and which had been referred to arbitration by the Chief Engineer, the appellant has incorporated in the statement of claims fresh items in respect of damages said to have been suffered by the appellant subsequent to the reference of the dispute to arbitration. In our opinion, the scope of the arbitration in these proceedings has to be confined to the disputes which were the subject matter of arbitration before the first arbitrator. It is not permissible for the appellant to raise new disputes in relation to damages claimed to have been sustained by him after the disputes have been referred to arbitration. THE said claims were rightly rejected by the learned arbitrator while making the award dated 18/08/1990. THE objections raised by the appellant with regard to the said claims cannot, therefore, be sustained and must be rejected..