UNION OF INDIA Vs. CEMENTONE

JUDGEMENT

(1.) The above appeal has been filed by the Union of India represented by the General Manager, Eastern Railway against the judgment and order of the learned Single Judge of this Court dated 10th February 2011 by which the learned Trial Judge has been pleased to virtually refuse to set aside the award dated 27th September 2006 passed by the learned Arbitrator. The short fact leading to preferring this appeal is as follows:

(2.) Before the learned Arbitrator the respondent made claim on various head and accounts. The said claim was not only contested by the Railways but counterclaim was also made. The learned Arbitrator after hearing the parties awarded in favour of the respondent a sum of Rs. 4,38,078.00 as against claim heads (a), (c) and (e), a sum of Rs. 4,10,040.00 as against claim head (b), a sum of Rs. 2,60, 900.00 as against claim head (f) and a sum of Rs. 41, 631.00 as against claim head (g) the rest of the claim was rejected by the learned Arbitrator. The learned Arbitrator thus awarded an aggregate sum of Rs. 12, 30,672.00 in addition thereto interest was awarded at the rate of 12 per cent per annum on the said sum of Rs. 12,30,672.00 cost was also awarded. The counter-claim made by the Railways respondent, was rejected. The learned Trial Judge in the said application after hearing has been pleased to modify the award deleting the claim as against claim head (c) of Rs.78,092.00 and also deleting the award of interest for the period from 20th October 2003 till 26th September 2006. The learned Trial Judge, however, awarded interest at the rate of 12 per cent per annum for the post-award-period. The interest during pendency of the arbitration proceedings was not accepted by the learned Trial Judge, though the learned Arbitrator granted the same.

(3.) Mr. Mintu Goswami, learned Advocate appearing for the appellant submits that the learned Trial Judge has erred in law while accepting the award of the learned Arbitrator in respect of the claims under the heading (a), (b) and (c) as the same are not allowable under the terms of the agreement because of absolute bar. Thus the learned Trial Judge failed to detect patently legal error of the learned Arbitrator as he has gone beyond the terms of the agreement. In this connection he has to refer Section 23(3) of the Arbitration and Conciliation Act, 1996 and also the decisions of the Supreme Court Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd., 2003 5 SCC 705 and Rashtriya Chemicals & Fertilizers Ltd. v. M/s. Chowgule Brothers, 2010 AIR(SC) 3543 He has drawn our attention to Clause (6) of the General Condition of Contract, whereby it has been specifically mentioned that the contractor will not be entitled to any compensation for delayed execution of works. He has also referred to Clauses 17 (1) and 17(3) of the General Condition of Contract to submit that both the learned Trial Judge and the learned Arbitrator have misapplied the aforesaid clauses as the same does not permit the contractor to claim compensation for damages. On the other hand clause 17(3) envisages delay by the Railway on various counts and that is why it has been specifically provided therein that the contractor is entitled to claim compensation for damages. The learned Arbitrator is not competent to award damages when the relevant Clause 17 is clear and unambiguous and does not apparently show any vagueness the said clause cannot be interpreted to enable something which is not provided therein. In this connection he has referred to following decisions of the Hon'ble Supreme Court.