MESSRS MOHAN LAL JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) The appellant and the respondent entered into a contract by which the appellant, a partnership firm, agreed to construct some buildings for the respondent. The contract was reduced into writing and signed by both the parties and was numbered as C.A. No. CECZ/RAN/10 of 71-72. During the execution of the contract, disputes between the parties with regard to the execution of the contract arose. In terms of clause 70 of the agreement, the disputes were referred to a sole Arbitrator. The Arbitrator gave his award by which he allowed some of the claims of the appellant and rejected some. The award was filed in court. The respondent filed objection to the award and that was registered as Title Suit No. 84 of 1977. The court below after hearing the parties set aside the award with regard to some of the claims and confirmed it with regard to others. The appellant contractor has challenged the validity of the judgment of the court below in this appeal.

(2.) There is no dispute with regard to the facts narrated above. Mr. Sinha learned counsel appearing on behalf of the appellant submitted that the court below had no jurisdiction to set aside part of the award and in doing so it acted like an appellate court. According to him, the claim was made on the allegation that there had been breach of contract by the respondent and the Arbitrator was entitled to allow the claims so made by the appellant. He also urged that even if the claim was said to have arisen out of the contract, since the Arbitrator was required to interpret the terms of the contract, it was a question of law and the court below could not have set aside part of the award on the ground that it differed with the conclusion arrived by the Arbitrator. Mr. Shambhu Prasad, learned counsel appearing for the respondent submitted that for the purpose of ascertaining whether the appellant was entitled to some of the claims, the Arbitrator was required to look into the contract and as there was no provision on the basis of which some of the claims of the appellant could have been allowed, the award of the Arbitrator in respect of those claims was beyond his jurisdiction. The court below, Mr. Prasad urged was, therefore, within its jurisdiction to there-fore with the award.

(3.) From the award, which is part of the Paper Book, we find that the appellant made a number of claims under different heads. It sub-divided its claim under each head. In this appeal we are concerned with claims covered by claim No. 1, that is, compensation for loss due to breach of contract by respondent and claim No 2 reimbursement of extra expenditure incurred due to increase in the wage of labour. Claim No. 1 was sub-divided into three heads and in this case we are concerned with item No. (i) and (iii) namely additional overhead expenditure and extra expenditure due to increase in cost of material during the extended period The court below set aside the award with regard to these claims and confirmed the award with regard to other claims. We may notice that the Arbitrator in his award did not give any reason for either allowing or disallowing either whole or in part the claims made by the appellant. We may also notice that the Arbitrator did not make the contract-document or any other paper part of the award.