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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Anoop Kumar Dhand, J.
Public Works Department Raj. – Appellant
Versus
M/s Bhawan Va Path Nirman – Respondent
S.B. Civil Miscellaneous Appeal No. 4663 of 2011
Decided On : 24-05-2022
Arbitration - Appeal - Section 37 of the Arbitration and Conciliation Act, 1996 - - 37 - 34 - 11 - 45
Fact of the Case:
The appellant appealed against the order of the Court of Additional District Judge No.3, Jaipur City, Jaipur, which upheld the award passed by the Sole Arbitrator. The appellant objected to the award, claiming that the term of completion of work was extended and Clause 45 of the agreement was deleted, thus the claimant-respondent was not entitled to the benefits.
Finding of the Court:
The Court found that the term of completion of work was extended by the Department and Clause 45 stood revoked automatically. The Court also noted that the Sole Arbitrator and the Court below had considered and decided the facts appropriately.
Issues: The issues involved the extension of the term of completion of work, the deletion of Clause 45 of the agreement, and the entitlement of the claimant-respondent to benefits.
Ratio Decidendi: The Court's decision was based on the interpretation of the contract, the conduct of the parties, and the scope of interference under Section 34 and 37 of the Arbitration and Conciliation Act, 1996.
Final Decision: The Court dismissed the appeal, stating that the scope of interference under Section 37 of the Act of 1996 is limited, as per the law laid down by the Hon'ble Supreme Court in relevant cases. The Court directed the release of the FDR to the claimant-respondent.
JUDGMENT
1. This appeal has been submitted by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') against the order dated 13.10.2009 passed by the Court of Additional District Judge No.3, Jaipur City, Jaipur (for short 'the Court below') in Case No.501/2009 whereby the objections filed by the appellant were dismissed and award dated 26.02.1998 passed by the Sole Arbitrator was upheld.
2. Earlier this appeal was dismissed in the absence of counsel for the appellant vide order dated 11.01.2012 on the ground of limitation as the appeal was barred by limitation and the application filed by the appellant under Section 5 of the Limitation Act was also dismissed.
3. Against the order dated 11.01.2012, the appellant submitted Civil Misc. Appeal No.2/2014 (SLP (civil) No.19790 of 2012) before the Hon'ble Supreme Court and the same was allowed vide order dated 02.01.2014 and the order dated 11.01.2012 passed by this Court was quashed and set aside and the matter was restored with a direction to decide the appeal expeditiously and preferably within three months.
4. It is noted that after remand of the matter, this case was listed before this Court on several occasions and on the request of counsel for the appellant, the matter was deferred for one reason or another.
5. Today, the arguments have been heard finally.
6. The facts, in brief, of the case are that the appellant issued Notice for Inviting Tender (for short 'NIT') for the purpose of work of (Renewal by type 'B') mix seal surfacing and providing hard shoulder in kilometer 61 to 68, 116 to 118, 129, 142 to 153 and 197-199, Jaipur Agra Road NH 11 (Job No.SE.II/Renewal/31/90- 91) agreement No.26 of 1990-91.
7. According to terms and conditions of the agreement, the scheduled date for commencement of the work was 01.09.1990 and the date of completion was 31.08.1991 and the total cost of work was Rs.19,39,227.10.
8. Thereafter, the respondents started the work but the same could not be completed within the stipulated time and the same was finally completed on 25.07.1992.
9. Counsel for the appellant submitted that a sympathetic view was taken by the Department, hence, the term of completion of work was extended vide letter dated 18.02.1993. Counsel further submitted that Clause 45 of the agreement was deleted, hence, the claimant-respondent is not entitled to get benefit of the same.
10. He submits that overlooking all these aspects, the Sole Arbitrator has passed the award on 26.02.1998 directing the appellant to pay a sum of Rs. 2,43,192/-, which was due and further direction was issued for payment of Rs.98,492/- towards the past interest w.e.f. 18.02.1993 to 18.05.1995 @ 18% per annum. Further, a direction was issued to pay interest pendente lite on Rs.2,43,192/- @ 18% per annum w.e.f. 19.05.1995 till the decree of payment, whichever is earlier.
11. Feeling aggrieved and dissatisfied by the award dated 26.02.1998, the Department submitted objections under Section 34 of the Act of 1996 before the Court below, but the same were rejected vide judgment dated 13.10.2009.
12. Counsel further submitted that the objections raised by the Department were not considered by the Court below. Hence, the impugned judgment dated 13.10.2009 passed by the Court below and the award passed by the Sole Arbitrator dated 26.02.1998 are liable to be quashed and set aside.
13. Per contra, learned counsel for the respondent opposed the arguments raised by counsel for the appellant and submitted that it is not in dispute that earlier Clause 45 was deleted with the consent of the parties, but subsequently the term of completion of work was extended by the Department and since the amount involved was above Rs.5 lacs and the term of completion of work was extended for more than one year, hence Clause 45 stood revoked automatically.
14. In support of his contentions, counsel for respondent has placed reliance on the judgment of this Court in the case of H
The main legal point established in the judgment is the limited scope of interference under Section 37 of the Arbitration and Conciliation Act, 1996, and the importance of interpreting the contract a....
A deleted contractual clause cannot be automatically revived upon extension of the contract; explicit agreement is required for revival.
The courts have a limited scope of interference under Section 34 and 37 of the Arbitration Act, and the Arbitral Tribunal's detailed consideration of evidence and claims is final.
The court upheld the Arbitral Tribunal's award on escalation claims, affirming the limited grounds for judicial interference under Section 34 of the Arbitration and Conciliation Act, 1996.
The appeal was allowed, reinstating the arbitrator's award which concluded that the termination of the contract was illegal due to failure in fulfilling mutual obligations concerning site availabilit....
The court affirmed that judicial intervention in arbitral awards is limited to grounds of public policy or patent illegality, emphasizing respect for the Arbitrator's findings.
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