STATE OF GUJARAT Vs. B M PATEL

JUDGEMENT

(1.) THESE appeals arise out of a common order passed by the learned Judge of the City Civil Court, Ahmedabad on 30.11.1988 passed in C.M.A. No.13/1988, 553/1987 and 884/1988. Such proceedings arose out of an award dated 27.8.1987.

(2.) BRIEF facts may be noted from First Appeal No.75/1990. 2.1 This appeal is filed by the State Government and the Executive Engineer, Ahmedabad Irrigation Department. Appellants and the respondents entered into a work contract dated 30.7.1984 for execution of work of part modernisation of Nani Fatewadi Canal. Item no.1 of the work entrusted to the contractors involved excavation. The agreement provided for payment of such work at the rate of Rs.4/- per cubic meter. The agreement also provided for escalation as may be agreed between the parties in case the quantity of such work specified in the agreement exceeded by a margin of more than 30%. Since admittedly the work of excavation specified in item no.1 exceeded by a margin beyond 30% over and above the originally agreed quantity, the contractors demanded the rate revision. Since the parties could not come to any settlement about such rate revision, in terms of arbitration clause contained in the contract, they resorted to the process of arbitration. 2.2 The Government therefore, issued a resolution dated 3.7.1986 appointing one Shri M.H. Vakharia, retired Chief Engineer, Irrigation Department, Government of Gujarat as a sole arbitrator to decide such disputes. We will advert to this resolution in detail at a later stage. The parties also entered into an arbitration agreement on 5.9.1986. Terms of this agreement also shall be seen minutely later on. The arbitrator vide his award dated 27.8.1987 provided for revised rate of Rs.13.50 per cubic meter of excavation inclusive of tender rate of Rs.4/- per cubic meter. He thus provided for extra rate for such work at Rs.9.50 per cubic meter on the final quantity of 42,228.51 cubic meters. He also provided for interest at the rate of 15% from the date of award till the date of payment or Court decree, whichever is earlier on the net amount of the award payable. In the award with respect to interest, he specified as under : ?C : Rate and amount awarded by me. I award a rate of Rs. 13/50 (Rupees Thirteen & paise fifty only) in place of tender rate of Rs. 4/cm. I also award an amount of Rs. 5,70,084.88 (Rupees Five Lakh Seventy Thousand Eighty Four Only) inclusive of amount payable at tender rate less price adjustment amount if any paid for tender item No. 1. I also award interest @15% (Fifteen Per Cent) from date of award till date of payment of Court Decree whichever is earlier on net amount of the award now payable.? 2.3 With respect to excavation, he observed as under : ?15 : Claimants originally filed a claim statement listing 12 claims. Of these claim items at serial no. 1A, 1B and 2 of the claim statement only fall within the scope of arbitration agreement. Hence, I have heard the parties only on these claims for purpose of adjudication of the dispute. I have not heard and decided other claim items at Serial no 3 to 12 inclusive of their sub items as they are not included in the arbitration reference or in parties' arbitration agreement and I make no award for the same. Rate of claim no. 1A is later on amended by the claimants on 13/3/1987 during arbitration proceedings to include cost of dewatering @ Rs. 3/67 per cm. in the claim. Finally, claimed rate is Rs. 25.67/cm for item no. 1A in place of first claimed rate of Rs. 22/cm. Description of claim no. 2 is later on amended and claim quantity is also reduced from 39,000 cm to 37,153 cm. Against original claim amount of Rs. 12,09,662.80 for claims 1A, 1B and 2, the claim amount as per latest amendments to rates and quantities comes to Rs. 10,40,709.43. This of course includes amount of Rs. 1,68,914.04 payable at original tender rate of Rs. 4/cm on final quantity of 42,228.51 cm. Net claim amount now comes to Rs. 8,71,795.39 (10,40,709.43-1,68,914.04). 16 : Claimants have given rate analysis of two extra item rates claimed by them for items 1A and 1B. Respondents have also given rate analysis for their revised rate for item 1 as a whole. 17 : I have inspected site of work and made my own assessment of real effective lead lift and impact of dewatering involved. I have also inspected the strata excavated and soils of excavation deposited. I think there is no tenable basis of claim no. 2 and hence I award nil amount against latest impliedly claim amount of Rs. 1,85,755/- (37,153x5). For items 1A and 1B taken together I award a rate of Rs. 13/50 (Rs. Thirteen and paise Fifty only) per cm inclusive of tender rate of Rs. 4 per cm. Extra rate payable will be Rs. 9/50 (Rupees nine and paise Fifty) per cm on final quantity of 42,228.51 cm. Since new rate is awarded on overall considerations for item no 1 no price adjustment will be payable on work done under item no 1 and if already paid, further amount payable be reduced to that extent. 18 : Para 1 of the arbitration GR wants the rate to be decided. I have accordingly decided the rate. Para 12 of the GR also speaks of the awarded amount and without final quantity extra item rate cannot be finally worked out as per Government formula. Further for even working out award amount final quantity is needed. Both parties have given final quantity of item no 1 as 42,228.51 cm which gives net awarded amount of Rs. 4,01,170.84 (42,228.51x9.50) less prices escalation payment made for the particular item.? 2.4 The Government as well as the contractors approached the Civil Court by filing separate applications. Prayer of the Government was that arbitral award be set aside. Prayer of the contractors was that the same be made rule of the Court. 2.5 Learned Judge in his impugned order provided that the award be made rule of the Court and directed that the present appellants shall pay the awarded principal amount to the contractor with interest at the rate of 10% from the date of decree till realisation. Application of the Government was dismissed. It is this order that the Government has challenged before this Court in this appeal.

(3.) ON the other hand learned counsel Shri Dayani appearing for the respondents submitted that the arbitrator committed no misconduct. This Court cannot examine the arbitral award as an appellate authority. In absence of any jurisdictional error, award of the arbitrator cannot be interfered with. Counsel submitted that arbitrator has given his interpretation to clauses 31 and 32 of the contract which is a plausible interpretation. Even if two views were possible, this Court would not interfere with the view of the arbitrator.