M T GEORGE Vs. KERALA STATE ELECTRICITY BOARD

JUDGEMENT

(1.) Appellant contractor challenges the order of the civil court in modifying an arbitral award. The appellant and the second respondent executed Agreement No. 17/8182 dated 3091981 for the contract work of casting 2000 Nos. of 8mm. long RCC poles using departmental steel moulds. The work has to be completed on 9121981. The Board has not supplied the moulds as agreed in the agreement and cement and steel rods were supplied only after a delay of 32 months. In these circumstances, the contractor was compelled to purchase his own moulds and supplemental agreement was also executed for casting 2000 Nos. of poles. Final bill was received under protest and the matter was referred for arbitration. Existence of arbitration clause is not disputed. The Arbitrator awarded Rs.33,298 towards damages of general increase at the rate of 25%; Rs. 91,907 towards rates for using own moulds and Rs.3,333 towards ground rent totalling to Rs. 1,28,538 with 12% interest from 1231987 till payment. The Contractor filed A. O. P. 11/89 for making the award as the rule of the Court and the Board filed A. O. P. 4/89 challenging the award.

(2.) The contention that the Arbitrator went beyond the terms of the contract was not accepted by the Court, but at the same time, recalculated the amount awarded by the tribunal on two issues. Because of the breach of contract by the Board and undue delay 25% general increase was granted. 25% increase was worked out by the Arbitrator as Rs.33,298. The Sub Court ordered that the arbitral tribunal should have deducted cost of 25% on the departmental materials when damages were calculated due to delay caused by the Board. In fact, Rs.33,298 was calculated by the Arbitrator only after deducting labour cost on the value of departmental materials. So that part was already taken care of by the Arbitral Tribunal. Second claim is regarding the value of materials. As per the contract, moulds have to be supplied by the Board. Even, the Board Engineer has submitted before the Arbitrator that the contractor was allowed to use moulds as the Board was not able to supply the moulds. The contractor has made arrangements for his own moulds and actual expenses incurred by the contractor was granted by the tribunal. According to the Court, as the Contractor made the moulds, the Contractor was relieved from the obligation to pay rent to the Electricity Board for the moulds and hence that part shall be deducted from the cost of construction of mould. But the construction cost is calculated without taking into account the rent payable. Hence there is no inherent defect in the award.

(3.) Both the parties agreed for arbitration. Board appointed the Chief Engineer (Distribution - North) as sole arbitrator. In the absence of the finding that the Arbitrator committed misconduct or has travelled beyond the jurisdiction or any of the specific grounds mentioned in the Arbitration Act, Court cannot sit in appeal and interfere in the finding. Under law, the Arbitrator is made the final Judge of the disputes between the parties. It cannot be challenged on the ground that the Arbitrator has reached a wrong conclusion or failed to appreciate a point unless it is shown that the award is perverse or erroneous on the face of the record. The correctness of the award cannot be looked into by reexamining or reassessing the materials as if the proceedings under S.14,16 or 30 as Court proceedings as an appeal proceedings [See The Upper Ganges Valley Electricity Supply Co. v. U. P. Electricity Board ( 1973 (1) SCC 254 )]. The grounds on which an award can be set aside are limited by Statute. Court can either set aside the award for the grounds under S.30, sustain the award or made it as rule of Court under S.14 or it can remit the award under S.16 or act on the principles of severality. But Court has no power to modify the amount or substitute its own decision in lieu of the Arbitrator's decision, especially for the limited reasons mentioned under S.15. S.15 reads as follows: