SOUTH ESTERN COALFIELDS LTD Vs. NIRANJAN SARKAR CONTRACTORS

JUDGEMENT

(1.) This appeal is directed against the order dated 3- 12-2008 passed by the 1st Additional District Judge, Bilaspur in M.J.C. No. 28/08, whereby the application preferred by the applicant/appellant herein under Section 34 of the Arbitration and Conciliation Act, 1996 (henceforth 'the Act, 1996') has been re-jected.

(2.) Case of the applicant/appellant, as stated in the memo of appeal, is that a notice inviting tender was issued by the Chief En-gineer, Kurasia Colliery, Chirmiri for con-struction of 750 quarters for which the ten-der submitted by the respondent was ac-cepted and an agreement was entered into between the parties on 8-3-1991 and as per the agreement any dispute, if arises, shall be dealt with as per the terms of the agreement and the Act, 1996. The construction of the houses was completed on 20-5-1992 and the possession of the said houses was taken-up by the appellant in August, 1994 and 106 quarters in May, 1995. Royalty clearance certificate was submitted by the respondent on 17-10-1994 and final bill was prepared by the appellant in January, 1994 and was finally paid on 12-1-1995. At the time of fi-nal payment, the respondent had given a no claim certificate to the effect that the respon-dent has received the contracted sum of money to its full and final satisfaction. After receiving the final payment, the respondent served a notice to the appellant on 19-5-1995 claiming a huge amount of money from the appellant. Therefore, the dispute was referred by the CMD, SECL to Shri J. P. Thakur, Chief Engineer (Civil), but being left the issue in abeyance by the sole arbitrator, the matter was referred to the High Court of Chhattisgarh and in Civil Revision No. 48/ 2005 vide order dated 8-4-2005. Hon'ble Shri Justice K. L. Shrivastava was appointed as the sole arbitrator. The learned sole arbitra-tor awarded Rs. 3.86 Lakhs against the claim of Rs. 6.50 Lakhs towards 12 mm thick ce-ment plaster. An amount of Rs. 3 Lakhs has been awarded against escalation of cement prices and a sum of Rs. 2.50 Lakhs has been awarded against time Nos. 5 and 6 which were pertaining to use of 6 mm stone chips. In total, the learned sole arbitrator awarded Rs. 35.03 Lakhs along with interest at the rate of 15% till 29-5-2005 and, as awarded, if the said amount will be deposited within 100 days, the amount of interest to be given will be 12%. Being aggrieved by the said award, the appellant preferred an objection/ application under Section 34 of the Act, 1996 before the 1st Additional District Judge, Bilaspur on the ground that when the final payment has been received by the respon-dent upto its full and final satisfaction, there was no issue left to be decided by the arbi-trator. The learned 1st Additional District Judge, Bilaspur rejected objection/applica-tion of the appellant under Section 34 of the Act, 1996 holding that the award passed by the learned sole arbitrator is not in violation of the terms and conditions of the agreement entered into between the parties.

(3.) The non-applicant/respondent herein submitted in its reply before the Court be-low that the appellant has not been consis-tent with regard to its stand. Grounds taken by the appellant before the commencement of arbitration proceeding were given up be-fore the arbitrator. The grounds raised by the appellant before the 1st Additional District Judge have not been raised in appeal. On account of delay in settlement of final bill, market dues and other dues could not be cleared and this had adverse effect on the health of Shri Niranjan Sarkar, the principal partner of the firm/respondent. There was tremendous pressure on the respondent to clear pending dues, bank and market loans. The principal partner fell ill because of men-tal depression. As a result thereof, the respon-dent was compelled to sign final bill under coercion and duress with no claim certificate. It was further submitted that in order to get payment, the respondent was required to sign on dotted line. It was prayed that the appel-lant be called upon to tender proof of a single contractor to whom payment was made even after protest was made. The learned sole ar-bitrator was justified in holding that the claimant/respondent is entitled to press its all claims. Jurisdiction of the arbitrator is not stifled by any clause prohibiting award of interest.