STATE OF GOA Vs. WESTERN BUILDERS

JUDGEMENT

(1.) THE appellant is the State and the respondents are the contractors of the State. THE respondents undertook the work for the execution of the Additional Conveying Main from Kurti to Ponda (Ch. O. OO to5.00 km) Phase-I. In pursuance to the arbitration clause contained in the contract between the parties, disputes which arose had been referred to the Arbitrator. THEre were several claims which were referred to the Arbitrator. Claim No.1 is the extra expenditure incurred during the work and Claim no. 15 is the damages for delay due to non-finalisation of the bill. Regarding other claims, we need make no reference because they are not relevant for the purpose of this case. Ultimately an Award has been passed by the Arbitrator on 15th May 1992. By this Award the Arbitrator has granted towards the claim Nos. 8, 10, 12, 13 and 14 an amount of Rs. 44,919. 40. he also awarded interest at 12% p. a. on the aforesaid amount on and since 12th February 1990. Indisputably the reference was entered into by the Arbitrator on 3rd April 1992. Awarding interest at the rate of 12% as mentioned above on and since 12th February 1990 on the amount of Rs. 44,919. 40 will go to show that the Arbitrator has awarded interest for the aforesaid amount both pre-arbitration and post arbitration periods. As regard the Claim Nos. 1 and 15, the Arbitrator has granted interest only from the date of Award till realisation of the amount. It is to be held, therefore, that the Arbitrator has refused to grant interest on these two items for either the period before the entering of the Arbitrator and the pendency of the arbitration. On the inclusion of items 1 and 15 the amount will come to Rs. 77,319. 40. THE respondents have then filed an application before the Court below as Civil Miscellaneous Application No.220/1992 under Section 15, 17 and 29 of the Arbitration Act. By the impugned Judgment dated 4th October 1995 the Court below has enhanced the rate of interest from 12% to 18% and also awarded interest for the entire amount of Rs. 74,919. 40 from an anterior date, namely, 13th November 1984. It is this judgment of the Court below which is under challenge in this appeal filed by the State.

(2.) THE learned counsel for the State Shri Bharne has contended that the whole judgment of the Court below has to be set aside on the ground that the Court below has no jurisdiction to enhance the interest rate to 18% and also grant interest with an anterior date which the Arbitrator refused to grant. We fully endorse the view of the learned Government Advocate appearing for the State that the Civil Court has only very limited jurisdiction as far as arbitration matters are concerned. What are the circumstances that can be interfered by a Civil Court in an arbitration award is only when the Arbitrator should misconduct himself by not taking into account the legal position or a legal position was misconstrued by the Arbitrator below in passing the Award. Only this limited area the Court can exercise its jurisdiction for setting aside the Award or remitting the Award or modifying the Award. THE learned counsel for the respondents Shri Thali submits that this application can come squarely under Section 15 which permits that the obvious error could be modified without amending the main Award. For better understanding of the argument of Shri Thali, we refer to Section 15 of the Arbitration Act which reads as follows : - " 15. Power of Court to modify award - THE Court may by order modify or correct an award - (a)where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred, or (b)where the award is imperfect in form, or contains any obvious error which can be amended without affecting such decision or (c)where the award contains a clerical mistake or an error arising from an accidental slip or omission. " According to the above Section an Award of the Arbitrator can be modified by the Court only where it appears to the Court that the Award has taken a matter which has not been referred to Arbitration but which can be separated from the other part of the Award without affecting the decision on the matter referred, secondly when the Award is in imperfect form or it contains an obvious error, it can be amended without affecting such decision and thirdly a clerical mistake can be corrected by the Court below. THE learned counsel for the respondents Shri Thali vehemently argued and tried to demonstrate that his case will come under Clause (b) of Section 15 of the Arbitration Act. He submits that the Arbitrator has recognised his right to get interest to the period prior to the entering of the reference, during the reference and the subsequent period after passing the Award. THE Arbitrator also recognised his right to claim interest but while granting the relief the Arbitrator has without any reason curtailed the relief which can be modified under Section 15 of the Arbitration Act. We don't find much substance in the argument of the learned counsel for the respondents. THE intention of the Arbitrator is very clear from the Award itself when the respondents have made its claim for interest at the rate of 18% which has been refused and awarded interest at 12%. It had also made a claim for interest for the period before 13th November 1984 but the Arbitrator restricted that claim from only 12th February 1990. This will clearly amplify the intention of the Arbitrator and the decision on that basis taken by the Arbitrator. if the Judgment of the Court is allowed to continue, then it is clearly a infraction of Section 15 (b) of the Arbitration Act. If the argument of the learned Counsel for the respondents is accepted then definitely it will result in a drastic change in the Arbitration Award which is normally impermissible for the Court below to do.