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High Court Of Calcutta
S. K. MUKHERJEE, SALIL KUMAR DATTA
UNION OF INDIA (UOI) - Appellant
Versus
M.L.DALMIYA AND CO.LTD. - Respondent
A. F. O. D. 249 Of 1973
Decided On : 09/21/1976
ARBITRATION - INTEREST - JURISDICTION OF ARBITRATOR - AWARD - VAGUENESS AND INDEFINITENESS - CORRECTION OF AWARD - SEVERABILITY.
Fact of the Case:
The respondent, M. L. Dalmiya and Co. Ltd. , an existing company under the Companies Act, 1956 was employed by the Union of India, the appellant before us, to construct the New Terminal Building at Dum Dum Air Port Phase 1 Superstructure in terms of contract No. 13/ee/63-64 entered into on May 14, 1963. The Company completed the work including additional works before August 14, 1970. In course of work various disputes and differences arose between the parties in respect of the said contract. The disputes between the parties were referred by the Chief Engineer (Eastern Zone) to the arbitration of M. S. Iyengar Superintending Engineer (Arbitration ). The arbitrator after hearing, examining and considering the statements of the parties and oral and documentary evidence, published his award on September 25, 1972 for which extension of time was duly obtained. The award was purported to be corrected by the Arbitrator in respect of certain alleged clerical mistakes on December, 1972.
Finding of the Court:
The court held that the arbitrator had the jurisdiction to award interest pendente lite if any payable to the contractor was an item of reference to the arbitrator who accordingly had the jurisdiction to award interest from the date of reference. The court also held that the award in respect of Item No. 88 is unsustainable. That, however, without more will not vitiate the award. The award, in respect of Item 88 is perfectly severable from the other part of the award. Accordingly though we are unable to sustain the award in respect of Item 88, it cannot be said that the entire award is thereby vitiated.
Issues: 1. Whether the arbitrator had the jurisdiction to award interest? 2. Whether the award was vague, indefinite, and merely executory and thus incapable of being given effect to? 3. Whether the corrections were made in the award by the arbitrator after its publication? 4. Whether the above are indications of non-application of mind which amounted to legal misconduct on the part of the arbitrator?
Ratio Decidendi: 1. The court held that the arbitrator had the jurisdiction to award interest pendente lite if any payable to the contractor was an item of reference to the arbitrator who accordingly had the jurisdiction to award interest from the date of reference. The court relied on the cases of Firm Madanlal Roshanlal v. Hukumchand Mills Ltd. , Union of India v. Bungo Steel Furniture Pvt. Ltd. , and State of Madhya Pradesh v. Saith and Skelton Pvt, Ltd. to support its decision. 2. The court held that the award was not vague, indefinite, and merely executory and thus incapable of being given effect to. The court found that the award was clear and unambiguous and that the parties had agreed to the procedure that was followed by the arbitrator. 3. The court held that the corrections were made in the award by the arbitrator after its publication were permissible. The court found that the corrections were in respect of patent errors and did not amount to any change of substance in the award. 4. The court held that the above were not indications of non-application of mind which amounted to legal misconduct on the part of the arbitrator.
Final Decision: The appeal succeeds in part and only to the extent indicated above. Save as aforesaid, the order and the decree under appeal are affirmed. The appellant will pay half the costs of the appeal.
( 1 ) THE respondent, M. L. Dalmiya and Co. Ltd. , an existing company under the Companies Act, 1956 hereinafter referred to as the Company, was employed by the Union of India, the appellant before us, to construct the New Terminal Building at Dum Dum Air Port Phase 1 Superstructure in terms of contract No. 13/ee/63-64 entered into on May 14, 1963. The Company completed the work including additional works before August 14, 1970. In course of work various disputes and differences arose between the parties in respect of the said contract. The disputes between the parties were referred by the Chief Engineer (Eastern Zone) to the arbitration of M. S. Iyengar Superintending Engineer (Arbitration ). The arbitrator after hearing, examining and considering the statements of the parties and oral and documentary evidence, published his award on September 25, 1972 for which extension of time was duly obtained. The award was purported to be corrected by the Arbitrator in respect of certain alleged clerical mistakes on December, 1972.
( 2 ) THE award was filed in this Court and the appellant filed an application for setting aside the said award or portion of it and or for the award to be declared null and void or for remitting the said award before the Arbitrator if necessary. This application, on hearing the parties, was rejected by Salil K. Roy Chow-dhury. J. by his judgment and order dated March 30, 1973 against which the present appeal has been filed by the Union of India.
( 3 ) CLAUSE 25 of the Contract provided as follows :--"except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instruction hereinbefore mentioned and as to the quality of workmanship or materials used on the work in any way arising out or relating to the contract, design, drawings, specifications, estimates, instructions orders or these conditions or otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Additional Chief Engineer, Central P. W. D. in charge of the work at the time of dispute if there be no Addl. Chief Engineer, the administrative head of the said Central P. W. D. at the time of such appointment. Subject as aforesaid, the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitrator proceeding under this Clause".
( 4 ) THE Arbitrator was appointed by the Chief Engineer (Eastern Zone) by the following letter--No. 8/cadi/9/7cw (A)Dated, the may, 1970. Subject : In the matter of Arbitration between M/s. M. L. Dalmiya and Co. Ltd. , Calcutta Contractor and the Union of India regarding the work of Construction of Terminal Building for International Traffic at Dum Dum Phase I (Agreement No. 13/ee/64-64 ). Whereas disputes have arisen between the abovenamed parties in respect of the above noted work; whereas disputes arising between the parties are required under Clause 25 of the agreement to be referred to the sole arbitration of the person to be appointed by the Additional Chief Engineer, CPWD and whereas the post of Additional Chief Engineer (Cal) has now been designated as Chief Engineer (E. Zone), therefore, in pursuance of the powers given to me under Clause 25 of the agreement I. B. Manecksha, Chief Engineer (EZ) CPWD, Calcutta, hereby appoint Shri M. S. Iyengar Superintending Engineer (Arbitration) Ministry of Health and Family Planning and Works, Housing and Urban Development (Deptt. of Works, Housing and Urban Dev.), New Delhi, as an arbitrator to decide and to make his award regarding the claims/disputes given by the contractor on his being asked to do so and also regarding the counterclaims of the Government against the co
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