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2001 Supreme(Raj) 650

Rajasthan High Court
Honble PRAKASH TATIA, J.
Union of India & Ors. - Appellant
Versus
M/s. Gouri Construction Company & Ors. - Respondents
S.B. Civil Misc. Appeal No. 141 of 1999
Decided On : May 30, 2001

Advocates Appeared:
Servashri, J.P. Joshi, Ravi Bhansali and Rajesh Panwar, for Appellants N.K. Khandelwal, for Respondent No.1

Headnote:Arbitration Act, 1940, Sec. 14, 17, 29, 30 and 33 – Jurisdiction of the Arbitrator to award amount beyond the terms and conditions of the Contract – Trial Court made it rule of the Court – Held – Specific agreement between the parties that the contractor will not raise any claim because of increase in cost of expenses on any ground whatsoever – By ignoring the terms and conditions, the Arbitrator travelled beyond his jurisdiction – Proceedings u/Sec.30 of the Act are not in the nature of appeal against the award – Trial Court committed serious error – Set aside the award. (Paras 35 to 37)

       The proceeding under Sec. 30 of the Arbitration Act, 1940 is not in the nature of appeal against the award and on this basis held that the claim regarding work of cutting of rock were wrongly granted by arbitrator, cannot be made subject matter of objection u/Sec. 30 of the Arbitration Act, 1940. It is true that the proceedings under Sec. 30 of the Arbitration Act, 1940 are not in the nature of appeal against the award. (Para 29)

Honble TATIA, J.–These two appeals are directed against the judgment and decree dated 23.11.1998 passed by the learned Additional District Judge No. 3, Jodhpur in Civil Misc. Cases No. 1-A/97 and 3-A/96. In Civil Misc. Case No. 1-A/97, an application was filed by the Union of India under Sections 30 and 33 of the Arbitration Act, 1940 and the appellant-Union of India submitted objections against the award dated 25.7.1996 and prayed that the award may be be set aside, whereas in case No. 3-A/96, the respondent No.1 submitted application under Sections 14, 17 and 29 of the Arbitration Act and prayed that the award passed by respondents No.2 and 3 be made rule of the court. Both the above miscellaneous cases were decide by the learned Additional District Judge No. 3, Jodhpur by common judgment and decree dated 23.11.1998. The appellant Union of India has challenged the above judgment and decree dated 23.11.1998 by filing two separate appeals involving the same point in controversy, therefore, both the appeals are being decided by this judgment.

(2). In these appeals, the learned counsel for respondent No. 1 raised preliminary objection with respect to the maintainability of the appeals on the ground that the present appeals have been filed under Section 37 of the Arbitration and Conciliation Act, 1996 whereas, admittedly, the proceedings before the arbitrator was under the old Act, i.e., Arbitration Act, 1940 and the rule of court was made by the court below due to the fact that proceedings were under the old Act. Therefore, in view of the objection of the learned counsel for respondent-No.1, the learned counsel for the appellants requested that the appeals may be treated as appeals under the old Act. Both the appeals have been filed within period of limitation and there is no bar in treating the appeals under the old Act, therefore, the appeals are treated as appeals under Section 39 of the Arbitration Act, 1940.

(3). The learned counsel for the respondent No.1 further raised objection that the appeals are not maintainable in view of the fact that award was passed on the basis of the consent of the parties for which the learned counsel for the respondent relies upon the facts mentioned in the award dated 25.7.1996 and submitted that at page No.2 of the award, while considering Item No.1, it is mentioned as under:

``This claim is for transporting debris of dismantled materials. During the hearing both the parties agreed that the quantity is 999 cubic meters. We have added 30% bulkage. Both the parties also agreed that the rate applicable would be as per SOR. We have considered a lead of around 6 kms as reasonable. Accordingly we are making the award.

(4). The learned counsel for respondents No.1 submitted that it is clearly mentioned that both the parties also agreed that the rates applicable would be as per SOR, therefore, this award is by the consent of the parties and hence the appellants cannot challenge this award.

(5). I am unable to accept submission made by the learned counsel for respondent No.1 because this admission, on the face, is that both the parties agreed that what should be the rate applicable. There was also agreement with respect to the quantity of the dismantled material which is 999 cubic meters but, it is no where admitted that simply because the quantity and rates applicable as per SOR, therefore, only the appellant may be held liable for the payment of the amount as claimed by respondent No.1. The claim amount was of Rs. 1,60,000/- as mentioned against Item No.1 in the award itself but the arbitrators, in their best wisdom, awarded Rs. 22,000/- only. This itself shows that there was no agreement with respect to the claim of the claimant respondent No.1 and, on the basis of this reasoning, the submission of the learned counsel for the respondent that award was passed by agreement is not factually correct. Hence, the objection is rejected.

(6). The learned counsel for the appellants challenged only two items. Cla















































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