IMPORTANT POINT
Award of amount by Arbitrator in excess of claim is not justified.

JUDGMENT :

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 03.11.2015 passed by the High Court of Punjab and Haryana at Chandigarh in FAO No. 4482 of 2011 (O&M), by which the High Court has dismissed the appeal preferred by the appellant herein under Section 37 of the Arbitration and Conciliation Act, 1996, the State of Haryana has preferred the present appeals.

2. At the outset it is required to be noted that while issuing notice in the present appeals, this Court has stayed the award exceeding Rs.1,03,50,263/- insofar as claim Nos.1 and 8 are concerned.

3. The facts leading to the present appeals in a nutshell are as under :-

3.1 That the appellant herein awarded the contract to respondent No.1 herein – contractor for strengthening, upgradation and maintenance of road from Palwal to Hasanpur, Haryana for a length of 31.17 kilometres on certain terms and conditions as per the contract entered into between the parties. The contract was for Rs.5,26,59,688/-. That as per the design calculation data, the specifications as prepared by the appellant department were meant for 3364 traffic intensity PCU (Passenger Car Unit)/day. The contract was up to 31.05.2010. That on 05.03.2005 due to the closing of the Palwal Aligarh Road on account of the construction of the railway bridge, the entire traffic was diverted from Palwal Aligarh Road to the present road. That due to this diversion of traffic from Palwal Aligarh Road, heavy traffic of 24418 PCUS per day was plying on the road as against the design of 3364 PCUS per day, which damaged the road. That according to the contractor – respondent No.1 herein, he was required to do heavy repair by incurring additional expenditure. Disputes arose between the parties. A legal notice was served upon the appellant making the claims. Disputes were not resolved and therefore respondent No.1 – contractor invoked the arbitration clause as per clauses 24 & 25 and approached the High Court for appointment of an arbitrator in exercise of power conferred under Section 11 (6) of the Arbitration and Conciliation Act, 1996.

3.2 Vide order dated 23.04.2007, the High Court appointed Shri R.S. Jindal, retired Chief Engineer, Delhi Development Authority as the sole Arbitrator to adjudicate upon all the disputes between the parties. That the contractor submitted various claims including claim Nos. 1 and 8. For the purpose of deciding the present appeals, claim Nos.1 and 8 are relevant. The sole Arbitrator awarded a total sum of Rs.1,51,95,400/- with respect to claim Nos.1 and 8.

4. Feeling aggrieved and dissatisfied with the award declared by the learned Arbitrator, the appellant preferred an application before the Court under Section 34 of the Arbitration and Conciliation Act, 1996, which came to be dismissed against which the appellant – State preferred an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 before the High Court. By the impugned judgment and order the High Court has dismissed the said appeal. Hence, the State of Haryana has preferred the present appeals.

5. Shri Shyam Divan, learned Senior Advocate has appeared on behalf of the State – appellant and Shri Ranjit Kumar, learned Senior Advocate has appeared on behalf of the respondent No.1 – contractor.

5.1 Shri Shyam Divan, learned Senior Advocate appearing on behalf of the appellant submitted that the appellant has already paid to respondent No.1 – contractor an amount of Rs.1,03,50,263/- pursuant to the interim order dated 26.08.2016 passed by this Court.

5.2 Shri Shyam Divan, learned Senior Advocate appearing on behalf of the appellant has submitted that the arbitral award is liable to be set aside on the following grounds:

(i) The award is in excess of claim;

(ii) The Arbitrator exceeded the scope of reference;

(iii) The Arbitrator has rewritten the contract with respect to the amount payable which was specified in the contract.

5.3 Now, so far as ground No.1 that the award is in excess of