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IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.B.Suresh Kumar, C.S. Sudha, JJ.
M/s. B.E.Billimoria and Co. Ltd. - Petitioner
Versus
Union Of India Represented By The Chief Engineer, Navac And Ors. – Respondents
ARB.A NO. 21 OF 2012
Decided On : 12-11-2021
Arbitration and Conciliation Act, 199-Section 34- Award – Challenged – Arbitration Agreement - Tender process -Electrification works for execution at Ezhimala -Among the claims, the Arbitrator allowed a few and rejected the rest -whether there is any infirmity in the award of the Arbitrator insofar as it relates to Claim Nos.1, 2, 9 to 13 and 13A to 13E of the appellant which is liable to be corrected under Section 34 of the Act - Arbitrator may proceed with the arbitration, ex parte, if either party, in spite of a notice from the Arbitrator fails to take part in the proceedings-The Arbitrator may, from time to time with the consent of the parties, enlarge the time upto but not exceeding one year from the date of his entering on the reference, for making and publishing the award-The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute.
Finding of the Court:
There is nothing on record to indicate that the MES Regulations apply to the agreement in question. The award indicates that it has been specifically contended by the respondents before the Arbitrator that the MES Regulations do not apply to the subject agreement. In the light of the said contention, it was obligatory on the part of the appellant to show either by some general order binding on the respondents or by a specific provision in the agreement concerning the application of the MES Regulations. The appellant does not have a case that there was any general order making MES Regulations applicable to similar works or that there exists any provision in the agreement concerning the application of the MES Regulations. Instead, the appellant relies on the decision of this Court in M/s.Bharath Builders and Contractors to contend that this Court would be justified in applying MES Regulations for the subject work. Be that as it may, even if it applies to the subject work, according to us, it is only an enabling provision for the respondents to ensure that the rates quoted by a person for execution of work is viable and workable so that satisfactory execution of the same could be ensured. It does not confer any right on a person to claim a higher rate for a work on the premise that the rate quoted by him was freakish, in the sense not workable, after securing the work in a competitive bidding process. If the provision aforesaid is interpreted in that fashion, the same would defeat the very purpose of competitive bidding, inasmuch as after bagging a contract, the contractor would still be able to claim better rate for the work, which if he had quoted initially, he would not have been awarded the work.
Result: Appeal allowed
JUDGMENT :
P.B. Suresh Kumar, J.
This Arbitration Appeal is directed against the common order dated 06.01.2012 in O.P. (Arbitration) Nos.125 of 2008 and 178 of 2008 on the files of the Court of the District Judge, Ernakulam. The appellant is the petitioner in O.P. (Arbitration) No.125 of 2008 and the respondent in O.P. (Arbitration) No.178 of 2008.
2. The appellant is a works contractor. In furtherance to a tender process initiated by the second respondent on behalf of the first respondent, the Union of India, the appellant was awarded, among others, a few electrification works for execution at Ezhimala. Pursuant to the award, the appellant has entered into the agreement required in terms of the tender document with the respondents and executed the works. While drawing the final bills of the works, certain claims of the appellant were not accepted. The appellant has raised a demand for the same and sought a reference for arbitration, if the claims are disputed. The agreement provides for arbitration for resolution of disputes and consequently, the disputed claims were referred for arbitration. The arbitration clause in the agreement was to the effect that all disputes, other than those for which the decision of the Commander Works Engineer (CWE) or any other person is by the contract expressed to be final and binding, shall be referred to the sole arbitration of a serving officer. In the light of the aforesaid arbitration clause in the agreement, the disputed claims were referred to the sole arbitration of a serving officer.
3. Among the claims, the Arbitrator allowed a few and rejected the rest. O.P.(Arbitration) No.125 of 2008 was instituted by the appellant invoking Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) challenging the award insofar as it relates to the rejection of Claim Nos.1 and 2 and O.P. (Arbitration) No.178 of 2008 was instituted by the respondents invoking the same provision challenging the award, among others, insofar as it relates to Claim Nos.9 to 13, and 13A to 13E, which were allowed by the Arbitrator.
4. One of the works awarded to the appellant was the work of laying of cables of 300 Sq. Mm and another was the work of laying of cables of 95 Sq. Mm. According to the appellant, on a wrong assumption that the cables to be laid would be provided by the respondents free of cost, they had quoted only for the labour cost involved in the works viz, Rs.122/- per running meter for laying cables of 300 Sq. Mm and Rs.111/-per running meter for laying cables of 95 Sq. Mm. It is stated by the appellant that they had to procure the cables to be laid from the respondents at the rates fixed by the respondents. Claim No.1 was for the cost of 300 Sq. Mm cable and Claim No.2 was for the cost of 95 Sq. Mm cable procured by the appellant from the respondents. Claim Nos.9 to 13 and 13A to 13E, among the remaining claims, pertain to the excavation works undertaken by the appellant on the premise that the strata of the soil met with during the execution of the excavation works were not as specified in the tender document.
5. Before the Arbitrator, the respondents raised a preliminary objection as to the arbitrability of Claim Nos.9 to 13 and 13A to 13E. According to the respondents, the dispute in the said claims was with regard to the classification of the strata of the soil met with during the excavation works; that such disputes, in terms of Clause 3.1.10 of MES Standard Schedule of Rates (SSR) applicable to the contract, are required to be decided by the Garrison Engineer (GE) and that the same are therefore not arbitrable, for the arbitration clause in the agreement specifically excludes such disputes from its scope. The preliminary objection raised by the respondents as to the arbitrability of Claim Nos.9 to 13 and 13A to 13E was repelled by the Arbitrator, holding that the materials on record do not disclose that the GE has taken a decision with regard to the classification of the strata of the soil and t
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