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2015 Supreme(SC) 799
SUPREME COURT OF INDIA
M. Y. EQBAL, ARUN MISHRA, JJ.
INDIAN RARE EARTHS LTD. – APPELLANT
VERSUS
UNIQUE BUILDERS LTD. – RESPONDENT
CIVIL APPEAL NO.3209 OF 2007
Decided on : 05.08.2015
IMPORTANT POINTS
Arbitrator is under no obligation to give reasons for his conclusions.
Power of the court to set aside the award is restricted.
Headnote:Arbitration and Conciliation Act, 1996 – Section 30 – Non-speaking award – Arbitrator is under no obligation to give reasons for his conclusions – An arbitrator having been selected by the parties, his adjudication is generally binding between the parties – Power of the court to set aside the award is restricted. (Para 9, 10)
AIR 1990 SC 1426; (1990) 4 SCC 647 – Relied upon
(1997) 4 SCC 121; (1999) 3 SCC 762; (1991) 4 SCC 93 – Distinguished
Facts of the case:
The appellant, a government company, entered into a works contract with the respondent-company for structural steel and cladding work for 4 bulk warehouses. The work was to be completed within 18 months from the date of the award of the work order i.e. 14.12.1979. The contract contained a provision for arbitration in case of dispute that may arise between the parties. Before the work was completed, a dispute arose and ultimately, the same was referred to the Arbitration.
The respondent-contractor made a claim of Rs.97,54,143.78 on different heads, but the Arbitrator passed an Award for Rs.19,55,368/-with pendente lite interest at the rate of 15% per annum from the date of institution of the suit till the date of the Award.
The Award was finally upheld by the High Court.
Finding of the Court:
There is no reason to interfere with the award.
Result: Appeal dismissed.
ORDER
The appellant has preferred this appeal by special leave against the impugned judgment and order dated 05.08.2005 passed by the High Court in ARBA No.2 of 2002 dismissing the appeal and civil revision filed by the parties against the order dated 29.04.2002 passed by the 1st Additional Civil Judge (Senior Division), Cuttack, in Misc. Case No.78 of 2000 dismissing the application filed by the present appellant under section 30 read with section 33 of the Arbitration Act, 1940 (for short the 'Act'), for setting aside the Award passed by the learned Arbitrator in Misc. Case No.671/93(117/83) dated 19.12.1996.
2. The facts of the case lie in narrow compass.
3. The appellant being a government company, entered into a works contract with the respondent-company for structural steel and cladding work for 4 bulk warehouses. The work was to be completed within 18 months from the date of the award of the work order i.e. 14.12.1979. A contract was signed between the parties wherein there was a provision for arbitration in case of dispute that may arise between the parties. From perusal of general conditions of the contract, we found that there was a clause to the effect that any increase in statutory levies such as taxes and duties and statutory increase in steel prices shall be paid by the appellant. Before the work was completed, a dispute arose and ultimately, the same was referred to the Arbitration.
4. The respondent-contractor made a claim of Rs.97,54,143.78 on different heads which have been noted by the High Court and the same is extracted hereinbelow:
“STATEMENT OF CLAIM OF M/S UNIQUE BUILDERS LIMITED AGAINST INDIAN RARE EARTHS LIMITED FOR CONSTRUCTION OF OSCOM/S-3 STRUCTURAL STEEL AND CLADDING WORK IN BULKWAREHOUSES, BEFORE THE HON'BLE ARBITRATOR JUSTICE B.K. RAY.
| 1 | Escalation as per annexure and the same submitted to M/s Dastur & Co. | Rs.22,13,368.38 |
| 2 | 40% of the overheads as per enclosed statement (Annexure-2) | Rs.2,00,672.48 |
| 3 | Encashment of bank guarantee (Letter at Annexure-3) | Rs.2,50,000.00 |
| 4 | Loss due to complete damage of workshop and store shed made of steel column, trusses with A.C. Sheet-1,200 sq.ft. @ Rs.200/- per sq. ft. | Rs.2,40,000.00 |
| 5 | Loss of Welding Machine, Drilling Machine, Jigs, Tools, Tackles, Electrodes, Store items (As per Annexure-5) | Rs.1,30,000.00 |
| 6 | Legal expenses for fighting the | Rs. 75,000.00 Rs.31,09,040.86 |
| 7 | Interest @ 18% from 11.8.82 to 31st December, 1992 (Annx.7) | Rs.58,13,991.42 |
| 8 | Loss for extra liability for payment of Income Tax by not availing of the adjustment of loss of Rs.16,62,223.00 upto previous eight years from the account year starting from Accounting year 82-83, i.e. 50% of the above loss of Rs.16,62,223 (Annx.8) | Rs.8,31,111.50 |
| Rs.97,54,143.78 |
5. Although the respondent made a claim of Rs.97,54,143.78/-but the Arbitrator after hearing the parties and considering all objections raised by the appellant, passed an Award for Rs.19,55,368/-with pendente lite interest at the rate of 15% per annum from the date of institution of the suit till the date of the Award. The said Award was challenged by the appellant before the 1st Additional Civil Judge (Senior Division), Cuttack on various grounds by filing an application under section 30 of the Act being Misc. Case No.78 of 2000, for setting aside the said Award. The 1st Additional Civil Judge (Senior Division), Cuttack, dismissed the said application. Aggrieved by the same, the appellant preferred an appeal before the High Court. The High Court after considering the case of the appellant and the respondent and referring to the claims made by the respondent, finally upheld the Award passed by the learned Arbitrator.
6. Mr. Vinoo Bhagat, learned counsel appearing for the appellant, assailed the said Award and the impugned order pass
