Order
1. Heard learned counsel for the parties. These appeals have been filed against the common impugned judgment and order dated 14-7-2003 of the Jharkhand High Court whereby the arbitration appeals filed by the State of Jharkhand have been partly allowed. Since these appeals arise out of the common impugned judgment and order, the same are being disposed of by this common order.
2. The facts in detail have been given in the impugned judgment and order of the High Court and hence we need not repeat the same here. The case relates to the Arbitration and Conciliation Act, 1996. It appears that there was a dispute between the parties to the contract and the matter was referred to an arbitrator, who gave three different awards since three contracts were involved in the dispute. The said awards are dated 30-9-2000. The said awards were made rule of the court by orders dated 8-1-2002 of the Sub-Judge, Hazaribagh. Against the said orders dated 8-1-2002 of the Sub-Judge, Hazaribagh, three appeals were filed before the High Court under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter for short referred to as “the Act”), which have been partly allowed by the common impugned judgment and order. Aggrieved against the said judgment, these appeals have been filed by special leave.
3. Shri Rakesh Dwivedi, learned Senior Counsel appearing for the appellant in all these appeals submitted that the High Court has based its judgment on the reasoning that the claims which were allowed by the arbitrator were barred by the contract Clause 1.21 The relevant sub-clauses thereof are as follows:
“1.21.1 Payments for any additional items of work shall be given by Clause 11 (eleven) of PWD Form F-2 of the contract.
1.21.2 No claim for idle labour, idle machinery, etc. on any account will be entertained.
1.21.3 No claim shall be entertained for business loss or any such loss.
1.21.4 No claim shall be entertained for delays in communicating decision drawing or specifications by the Department. The Department may however consider the grant of extension of time in completion of work. If there is any such genuine reason of it.
In case it is not possible for the Department to make the entire site available on the award of the work, the contractor will have to arrange his working programme accordingly. No claim whatsoever for not giving the site on gradually will be entertained, however, suitable extension of time may be given at the discretion of the Engineer-in-charge considering the merits of the case.”
4. The arbitration clause under the contract between the parties is Clause 1.22.2, which reads as under:
“1.22.2 In case any dispute or difference shall arise between the parties or either of them upon any question relating to the meaning of the specification, design, drawings and instruction or as to the quality of workmanship or materials used on the work or to any question, claim, rights or liabilities of the parties or any other thing whatsoever in any way arising out of or relating to the contract, designs, specifications, estimates, instruction or orders otherwise concerning the work or the execution, failure to execute the same, whether arising during the progress of work or after the completion or abandonment thereof or as to break of this contract, then either party shall forthwith give to the other notice of such dispute or differences and such dispute or differences shall be referred to the Superintending Engineer of the Circle under Clause 23 of F-2 agreement and his decision thereon shall be final, conclusive and binding on all parties. Such reference shall be a reference under the Arbitration Act, 1940.”
5. Shri Dwivedi submitted that the bar in Clause 1.21 is only a bar on the Department and not a bar on the arbitrator in respect of the matters mentioned therein. He further submitted that admittedly the Department was not possessed of the land in question nor had funds for the contract while the appellant was asked to work and it placed the machinery, labour, etc. on the spot which was lying idle and because of that reason he suffered heavy losses. On the facts of the case, he submitted that the bar under Clause 1.21 will not apply. In support of his contentions, learned counsel for the appellant has invited our attention to a decision of this Court in Port of Calcutta v. Engineers-De-Space-Age (1996) 1 SCC 516 in which it has been held that a similar clause prohibited the Department from entertaining a claim for interest but it did not prohibit the arbitrator from awarding the interest.
6. On the other hand, Mr Ashish Mohan, learned counsel appearing for the respondent State of Jharkhand invited our attention to the decision of this Court in Sayeed Ahmed & Co. v. State of U.P (2009) 12 SCC 26, JT (2009) 9 SC 429 in support of his submissions.
7. We have carefully perused the decision in Sayeed Ahmed & Co. (2009) 12 SCC 26, JT (2009) 9 SC 429 and we are of the opinion that the said decision is distinguishable because it relates to interest under the Arbitration and Conciliation Act, 1996 and was not in respect of a claim for the principal amount. So far as the claim of interest under the Arbitration and Conciliation Act, 1996 is concerned, Section 31(7) states that the parties can agree otherwise to the awarding of interest by the Arbitral Tribunal. Insofar as the case at hand is concerned, it relates to the claim of a principal amount and not to the claim of interest. Hence, the aforesaid decision in Sayeed Ahmed & Co. (2009) 12 SCC 26, JT (2009) 9 SC 429 is distinguishable.
8. It has been held by this Court in Ispat Engg. & Foundry Works v. SAIL (2001) 6 SCC 347 that the scope of interference by the court with a reasoned award is very limited.
9. For the reasons stated above, the common impugned judgment and order of the High Court is set aside and awards passed by the learned arbitrator are restored. The appeals are allowed. No order as to costs.