2013 Supreme(Guj) 120

GUJARAT HIGH COURT
Hon’ble Mr. Chief Justice Bhaskar Bhattacharya & Hon’ble Mr. Justice J.B. Pardiwala
State of Gujarat
Versus
Vijay Mistry Construction & Rajkamal Builders Pvt. Ltd. & Anr.
First Appeal No. 3688 of 20121—Decided on 22/03/2013

Point in Issue :
Whether in the fact award made by Arbitral Tribunal is legal and maintainable.

Headnote:(a) Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Section 34 — Award in disputes arising out of work contract — Determination by Arbitral Tribunal — Jurisdiction — Challenge there to — Finding of — Contention that dispute having arisen out of work contract, matter should have been referred under the provisions of Gujarat Public Work Dispute Arbitration Tribunal Act, 1992 — Court referred the parties which provides that in case the decision of the steering committee is not acceptable to any of the parties the dispute should be referred to Arbitral Tribunal under the Act — Thus the parties having decided to come within the provisions of the Act, contention is not tenable and dismissed.

       Held :

       The first question that arises for determination in this appeal is whether the Arbitral Tribunal had jurisdiction to decide the disputes. It was sought to be argued that the disputes having arisen out of work contract, the matter should have been referred under the provisions of Gujarat Public Work Dispute Arbitration Tribunal Act, 1992. It appears from Clause 9.3 of the agreement between the parties that in case the decision of the steering committee is not acceptable to any of the parties, the dispute should be referred to the Arbitral Tribunal under the provisions of the Arbitration and conciliation Act, 1996 as amended from time to time and according to Clause 9.4, the place arbitration should be Ahmedabad. [Para 8]

       (b) Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Sections 34 & 37 — Tool collection — Loss caused due to unlawful act of Police Officer — Award in favour of respondent — Admissibility — Finding of — It has been well established from evidence on record that in view of illegal action on the part of State Police the toll collection was twice suspended resulting in loss of Rs. 2,27,846/- to respondent — Award of the said amount in favour of respondent as recorded by both arbitral Tribunal and the Court below is perfectly justified and no interference required.

       Held :

       It had been well established from the evidence on record that in view of illegal action on the part of the State police, the collection of toll was suspended and such fact has been proved by the FAX letter and other letters and in such circumstances, it was held that non-filing of any First Information Report before the police did not stand in the way of the respondent in claiming compensation for the loss. The Tribunal as well as the Appellate authority held that in the previous day to the incident, the collection of toll was Rs. 3,42,857/-, whereas on September 27, 2000 it was Rs. 1,15,011/- and on that basis, a sum of Rs. 2,27,846/- was allotted in favour of the respondent. Court find that the finding recorded by both the Arbitral Tribunal and the Court below were perfectly justified and there is no scope of any interference with such finding. [Para 9.1]

       Head Note :

       © Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Sections 34 & 37 — Levying of new taxes — Charged subsequent to award of contract — Claim for re-imbursement — Admissibility — Finding of.

       Held :

       The Arbitral Tribunal, on interpretation of the relevant provision of the taxing statute, came to the conclusion that the MAT was not a newly imposed tax but a modification of taxation scheme. According to it, the tax was not imposed on the fees collected from the road users of the project, but it is the tax payable by the respondent company on book profit. The MAT was in existence since April 1, 1998 and was amended from time to time under the Income Tax Act under Section 115 JA after April 1, 1997 up to April 1, 2001 and the total income of the assessee chargeable to tax for the relevant previous year should be deemed to be an amount equal to 30% of the book profit. The Tribunal, ultimately, held that on January 16, 1999, the date of commencement of work, or on November 18, 1998, the date of agreement, there was no liability under any law to pay Minimum Alternative Tax and the MAT became a liability for payment with effect from April 1, 2000. The Tribunal relied upon Clause 3.1.5(f) and held that for all practical purposes, it was a new tax in the sense that the same was not payable on the two crucial dates as mentioned above. According to the Tribunal, the Clauses of Concession Agreement have to be read as a whole and have to be given a purposeful meaning to the intention of the parties and as to how such Clauses could be understood by any person of normal prudence and consequently, held that the said amount has to be reimbursed. [Para 10.2]

       The First Appellate Authority below also took the same view taken by the Arbitral Tribunal.

        [Para 10.3]

       In Court opinion, the view taken by both the authorities below, on interpretation of the relevant provision, is quite reasonable and cannot be said to be an impossible view or a perverse one and within the narrow scope of Section 34 or Section 37 of the Act, there is no scope of interference with such finding. [Para 10.4]

       (d) Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Sections 34 & 37 — Loss of toll fee — On account of disturbance in Gujarat — Admissibility — Finding as to.

       Held :

       The Tribunal held that prolonged communal riot in the State of Gujarat had fallen within the category of Clause 4.2.2, viz, Indirect Indian Political Events and the event of riots falls under Clause 4.2.2(i). This event had occurred after completion of project construction and relief for which is provided under Clause 4.5 and 4.5.2. The Tribunal, ultimately, held that the claimant was entitled to relief under Clause 4.5.2 © due to riots. It may not be out of place to mention here that the Steering Group had also accepted this fact and only dispute was the period during which the toll collection was affected. The Tribunal below, on detailed analysis of evidence on record, by a well-reasoned order, arrived at the figure of Rs. 53,09,200/- Court find that the aforesaid finding is based on correct interpretation of the Concession Agreement and the Court of Appeal below rightly refused to interfere within the narrow scope of Section 34 of the Act, Court, thus, find no reason to interfere with such concurrent finding recorded by the Tribunal and the First Appellate Court. [Para 11.2]

       (e) Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Sections 34 & 37 — Loss of toll collection — And also loss of revenue — On account of imprecedented rainfall in Gujarat and Maharashtra in 2006 — Finding of Tribunal — Sustainability.

       Held :

       On the basis of materials placed before the Tribunal, it came to the conclusion that normal monsoon period and normal rain during the period is a known fact and that there was unprecedented rain during July 21, 2006 and August 31, 2006. The Tribunal recorded that neither of the parties disputed such fact. The only dispute was whether the unprecedented rain can be termed as force majeure event. The Tribunal below in this connection examined Clauses 4, 4.2.1 and 4.3 of the agreement and came to be conclusion that unprecedented rain is a force majeure event covered under Clause 4.2.1(i) viz. exceptionally adverse weather condition, as also under Clause 4, viz. any event of circumstances of nature analogous to the events stipulated in Clause 4.2.1 (i) to (iv). The Tribunal further held that unprecedented rain is also not included in the list of exclusion under Clause 4.3. [Para 12.1]

       Court find substance in the contention of Mr Thakore, the learned Senior Advocate appearing for the respondent, that the findings recorded by both the Tribunal and the Court below are quite reasonable on interpretation of the above Clauses of the Concession. [Para 12.2]

       (f) Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) — Sections 34 & 37 — Award — Appeal against for setting aside award — Dismissal of appeal — Propriety of — Finding of.

       Held :

       Court has already pointed out that in the case before us, both the Tribunal and the Court below have correctly applied the relevant provisions of the agreement and the findings are in tune with the aforesaid provisions. Court, therefore, find no reason to interfere with the concurrent findings based on correct interpretation of the relevant provisions of agreement. [Para 13.1]

       Law Laid Down :

       The Court while considering challenge to arbitral award does not sit in appeal over the findings and decision of the arbitrator.