STATE OF KERALA Vs. ITHAPPIRI

JUDGEMENT

(1.) This appeal is from the judgment of the 1st Additional Subordinate Judge, Ernakulam dismissing the application filed by the appellants I.A. 3457/74 for setting aside an award passed in arbitration proceedings and passing a judgment in terms of the award.

(2.) The arbitration related to a written agreement dated 11th December 1971 between the Executive Engineer, Public Health Construction Division II, Cochin -- 2nd appellant -- and the respondent regarding the work of 'water supply and sewage scheme to the Cochin Development area, laying sewers in Ernakulam Hospital Zone sections V and VI. The 2nd appellant was acting on behalf of the 1st appellant -- State of Kerala. In the course of the work under the contract, certain disputes and differences arose between the parties. According to the terms of the arbitration clause in the contract, these disputes were referred to the arbitration of the Government Arbitrator for engineering works, who accepted the appointment on 14th December 1973 and entered upon the reference on the said date. The respondent -- claimant made his claim relating to 19 items which was duly enquired into by the arbitrator who published his final award on 29th May 1974. Some of the claims were rejected. In respect of claim No. 5 the arbitrator released the claimant from responsibility of executing any further work without any penalty whatsoever. As regards claim No. 7 the arbitrator directed the appellants to pay a sum of Rs. 8,500 to the respondent as against the claim of Rs. 32,500. As regards claim No. 9, in respect of which the respondent has claimed Rs. 37,500 the arbitrator awarded Rs. 13,500. In claim No. 1, the arbitrator observed that the appellants had agreed to pay for this extra item, but had requested for time to fix the eligible rate by competent authority. While observing that it was unfortunate that the rate has not been finalised yet, the arbitrator directed the appellants to fix the rate for this item within a month and communicate the same to the respondent. The parties were directed to bear their respective costs.

(3.) The main grounds raised before the lower court for setting aside the Award were (1) that the reference is premature in that while the agreement stipulates reference to the Superintending Engineer through the Executive Engineer and obtaining his decision before reference to the arbitrator, the respondent had not made any such reference and therefore the reference is premature. (2) secondly, while the contract was terminated by the Superintending Engineer at the risk of the respondent due to the default of the latter, the arbitrator in dealing with claim No. 5 had released the respondent from the responsibility of executing any further work without any penalty whatsoever and the proceedings of the Superintending Engineer terminating the work was quashed. According to the appellants the Award on the claim is illegal and void. (3) Claim Nos. 7 and 9 relate to certain measurements alleged to have been omitted and enhanced claims made on that basis. These have been partly allowed by the Arbitrator. It is the contention of the appellants that these measurements had been recorded in the measurement books which had been accepted by the contractor and the Award of these claims are, therefore, illegal and unsustainable. (4) The grounds for making the award by the arbitrator had not been made known to the appellants. The lower court dismissed these contentions. The court said that, "no misconduct involving moral turpitude like corruption or bribery is alleged against the arbitrator. No case of fraudulent concealment or wilful misleading also is suggested. When none of these circumstances are alleged or setup the powers of the court to interfere with the award passed by the arbitrator is very limited. The court is not sitting in appeal over the decision of the arbitrator, who is the final authority both on question of facts and law. In this case the award is passed by the Government Arbitrator, who is even now continuing in office without any charge having been levelled against him; and it is the Government that has chosen to object the award. There is absolutely no error apparent on the face of the Award."