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IN THE HIGH COURT AT CALCUTTA
KRISHNA RAO, J.
Digha Shankarpur Development Authority – Appellant
Versus
A.K. Enterprises – Respondent
AP 965 of 2013
Decided on : 13-07-2022
Arbitration Act, 1996 – Section 31 (3), 34 – Arbitration Proceedings – Claiming Compensation – Held, Hon’ble Supreme Court has categorically held that it is mandate under Section 31 (3) of Arbitration Act is to have reasoning which is intelligible and adequate, which can be appropriate cases be even implied by Courts from a fair reading of award and documents referred to there under if need be – Said provision does not require an elaborate judgment to be passed by Arbitrator having regard to speedy resolution of dispute, Ld. Sole Arbitrator while awarding award has categorically stated in each and every claim except Claim No. 2 – Ld. Sole Arbitrator has considered evidence lead by respondent and document relied by respondent but petitioner has not adduced any evidence to support their claim and as such this Court is of view that judgment relied by respondent is squarely applicable in instant case – Disposed of.
JUDGMENT :
Krishna Rao, J.
1. The Diga Shankarpur Development Authority published a tender notice dt. 21.03.2007 for Construction of Bituminus road with culvert from Orissa Border to Permanent Picnic Spot at New Digha, Purba Medinipur. Pursuant to the tender notice, the respondent had participated in the said tender process and the petitioner accepted the rated quoted by the respondent. On acceptance of the rate quoted by the respondent, an agreement was entered between the petitioner and the respondent with respect of execution of the work on 2nd March, 2007. The estimated cost of the said work was Rs. 64,54,792.00/-but the respondent was agreed to execute the work for an amount of Rs. 47,75,255/-which was 26.02% less than the estimated amount. As per the contract the respondent had to completed the work in all respect by 25th July, 2007.
2. The respondent had started the work for execution but in between the respondent had stopped the work for long time without any reasons and accordingly the petitioner had issued notice to the respondent on 28.09.2007 directing the respondent to complete the work before Puja.
3. A joint inspection was carried out and during the inspection it was noticed that the respondent had not executed the work as per the specification of the contract as the thickness of every layer was less than the proposed thickness and a notice was issued to the respondent on 7th December, 2007 by directing the respondent to execute the work as per the specification of the contract.
4. The work was completed on 26th February, 2008 but in a short span of time in the month of June, 2008 the road constructed by the respondent started getting damaged and on 25th July, 2008 a communication was made to the respondent for repair of the damage portion of the road.
5. The respondent had raised three bills including final bill and on receipt of the bills the petitioner has released an amount of Rs. 54,88961/-and the respondent had accepted the same.
6. The respondent had also claimed amount for execution of additional work, added expenses due to increase of prices of materials, labours and fuel etc. and compensation.
7. The petitioner has not considered for the extra claim and compensation raised by the respondent and accordingly the respondent invoked the provision for appointment of Arbitrator and accordingly an Arbitrator was appointed.
8. The petitioner has raised the following claim before the Ld. Sole Arbitrator:-
|
| LIST OF DISPUTES/CLAIMS |
|
| Sl. No. | Particulars | Amount |
| 1. | Compensation on account of prolongation of the job for reasons solely attributable to the employer. i) Towards on-site expenses incurred in the enlarged period. ii) Towards off-site expenses incurred in the enlarged period. |
Rs. 2,52,000/- Rs. 49,000/- |
| 2. | Compensation on account of depreciation of tools and plaints, other unconsumables, machinery deployed at the site of work and blocked upto 31.1.2008 without any corresponding monetary return. | Rs. 11,76,000/- |
| 3. | Compensation on account of additional cost of execution and/or added expenses in respect of works executed in spillover/enlarged period due to increment in price of materials, labour, fuel etc. in the market (except towards increment in price of bitumen and fuel which has been claimed separately in Sl. 10). | Rs. 8,91,000/- |
| 4. | Compensation on account of idle/barren labour, detained at the site of works due to suspension of the job from time to time, for various reasons attributable to the department. | Rs. 7,73,000/- |
| 5. | Compensation towards business loss for being retained longer in the contract in question for an additional period of 7 months without any corresponding monetary benefit and without being free to move elsewhere during the extended stay to earn profit which the claimant | |
The court emphasized the requirement for the arbitrator to assign reasons in support of the award and the limited scope of interference by the court in arbitration awards.
The court emphasized that arbitral awards should not be interfered with solely based on disagreements with findings, affirming the limited grounds for appeal under Section 34 of the Arbitration Act.
The court affirmed that arbitral awards challenging under Sections 34 and 37 are limited in scope, requiring clear evidence of illegality or perversion; otherwise, the Arbitrator's decision stands.
The court confirmed the validity of the Arbitrator's findings regarding excess work claims and the correct application of interest, highlighting that overlapping interest claims were erroneous.
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