LAWS(KER)-1998-2-24

STATE OF KERALA Vs. N E ABRAHAM

Decided On February 05, 1998
STATE OF KERALA Appellant
V/S
N.E.ABRAHAM Respondents

JUDGEMENT

(1.) Challenge at the instance of State of Kerala and another in this appeal is against the judgment in O.P. (Arb) No. 17/85 before the Sub Court, Parur. The petition was filed under S.14 and 17 of the Indian Arbitration Act by the respondent herein praying for a decree in terms of the award passed by the Chief Engineer (Arbitration) in the matter of a dispute between the respondent herein and the appellants. The respondent was the contractor to whom was awarded the work, P.V.I.P. constructing high level canal from chainage 17015M to 17670M. The dispute related to the above mentioned work. The appellants filed objection challenging the award and prayed for setting aside the same. The court below accepted the award passed by the arbitrator and passed a decree in terms of the same. Interest at the rate of 12% p.a. was also awarded from the date of the decree till realisation of the amount. Aggrieved by the above, the State has come up in appeal.

(2.) The admitted case of both sides is that the respondent did not complete the work within the time originally granted. But while the appellants would contend that the delay was caused due to the laches on the part of the respondent / contractor, according to the respondent, the inaction on the part of the department at appropriate time was the reason for the delay. Claims 1 to 19 were put forward by the contractor before the arbitrator, of which the arbitrator granted relief in the award only in respect of 4 claims. As far as claim (a) is concerned, the decision was not fully in favour of the claimant The main contentions raised on behalf of the appellants before this Court are against the grant of claims (a) and (n). It was contended on behalf of the respondent that the court below was perfectly justified in granting decree in terms of the award and that the award being a non speaking award the court will not interfere with it unless mere is proved mis - conduct on the part of the arbitrator. It was absent in this case. Elaborate submissions were made on both sides regarding the circumstances under which court can interfere with a non speaking award passed by the arbitrator.

(3.) Heavy reliance was placed by learned Government Pleader on a Full Bench decision of this Court in State v. Jolly, 1992 (1) KLT 240 . It has been held therein that if the arbitrator acts in violation of the terms of the main contract between the parties, such action would be without jurisdiction. For the purpose of finding out whether the arbitrator has so acted, it is open to the Court to look outside the award, including affidavits, pleadings and terms of the contract. In the facts of the above case, there was delay in execution of the work by the contractor. Time was extended and for that purpose a supplemental agreement was executed between the parties in which the contractor agreed not to claim additional compensation and extra rates. In spite of the above the contractor raised a dispute claiming extra compensation and higher rates. Though the State took up the specific condition that as per the terms of the agreement the contractor is not entitled to claim any extra amount, the arbitrator without referring to such contention passed a non speaking award in favour of the contractor. This Court took the view that such action of the arbitrator would amount to misconduct coming under S.30 of the Arbitration Act, 1940. A decision of the Supreme Court in Associated Engineering Company v. Government of Andhra Pradesh & another. (1991) 4 SCC page 93, was referred to and relied on by this Court in the above mentioned decision. The Supreme Court considered the question whether there is mis - conduct of the arbitrator when he has granted higher rate as claimed by the contractor when there was no escalation provision in the contract. It was held that the deliberate departure from the terms of the contract would amount to mis - conduct on the part of the arbitrator.