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2010 Supreme(HP) 306
HIMACHAL PRADESH HIGH COURT
HON’BLE MR. JUSTICE KULDIP SINGH, J.
M/S RANJIT SINGH AND COMPANY
Petitioner
VERSUS
H.P.STATE ELECTRICITY BOARD
Respondent
Arbitration Case No. 22 of 2007
Decided on 22-02-2010.
For the Petitioner:Mr. J.S.Bhogal, Senior Advocate with Mr. Suneet Goel,
Advocate.
For the Respondent:Mr. Baldev Singh, Advocate.
The main legal point established in the judgment is the court's authority to set aside arbitral awards and the limited circumstances for intervention, emphasizing the supervisory role of courts in ensuring fairness.
Headnote:
Arbitration and Conciliation Act - Setting aside award - Recovery of pending bills, balance payment, payment against backfilling, payment against erection of towers, interest for delayed payment, damages/loss on account of delay in payment, cost of arbitration proceedings - Summary of claims and award - Limitation Act, 1963 - Application under Section 34 - Grounds for setting aside award - Public policy of India - Joint Measurement Certificates - Estoppel - Interest claim - Final bill - Appointment of Arbitrator - Limitation period - Setting aside award with liberty to go for fresh arbitration
Fact of the Case:
An agreement was executed between the parties for the 'Erection of 220 KV Transmission line from Sungra to Kunihar'. The petitioner completed the works in 1989 and raised the final bill in December 1989. The respondent made recoveries in the final bill paid in June 2004 and offered a partial payment to the petitioner, who refused to accept it as full and final discharge. The petitioner invoked arbitration clause in 2004 and the matter was referred to an Arbitrator. The Arbitrator framed sixteen issues and made various awards, which the petitioner sought to set aside under Section 34 of the Arbitration and Conciliation Act.
Finding of the Court:
The court found that the learned Arbitrator erred in holding the claims as time-barred and failed to consider the Joint Measurement Certificates. The court also held that the claims were not governed by Article 18 of the Limitation Act, and the application for arbitration was within the limitation period. The court set aside the impugned award with liberty for the petitioner to go for fresh arbitration.
Issues: The issues included whether the award was against the public policy of India and the relief sought by the parties.
Ratio Decidendi: The court held that the claims were not time-barred and the application for arbitration was within the limitation period. The court also emphasized the supervisory role of courts in reviewing arbitral awards and the limited circumstances for intervention.
Final Decision: The petition was allowed, and the impugned award was set aside with liberty for the petitioner to go for fresh arbitration.
Kuldip Singh, J.-The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘Act’) has been filed by claimant for setting aside award dated 30.3.2007.
2. The facts, in brief, as per petitioner are that an agreement was executed between the parties and the petitioner undertook the works relating to “Erection of 220 KV Transmission line from Sungra to Kunihar”. The petitioner duly executed the works and completed the same in the year 1989. The ‘final bill’ was also raised for the works in December 1989. The respondent vide letters dated 13.6.2003, 20.8.2003, 10.9.2003 and 30.9.2003 asked the petitioner to accept some amount as full and final payment, the petitioner refused to give full and final discharge as required by the respondent. The petitioner vide letter dated 12.2.2004 invoked arbitration clause of the agreement between the parties and sought reference. The matter was referred to Arbitrator by respondent vide letter dated 5.5.2004.
3. The respondent paid a sum of Rs. 4,92,468/- to petitioner on 20.6.2004 which was accepted by the petitioner under protest. The petitioner had put up claims before the Arbitrator which were opposed by the respondent by filing reply. The petitioner in the rejoinder re-asserted the claims and denied the defence of respondent.
4. On the pleadings of the parties, the Arbitrator has framed sixteen issues. The culled out summary of various claims as per award dated 30.3.2007 is as follows:-
“Claim No.1: Payment against pending bills as per Part-A of Annexure “A” (column 9) of the Statement of Claim – recovery of Rs.1,62,800.00 & recovery against TDS Rs. 1188.00.
a) The amount of Rs.1,62,800.00 which has been recovered by the claimant out of the respondent’s bill in June 2004 pertains to slip removal which does not form a part of the Contract. The claim is rejected.
(b) The amount of Rs.1188/- deducted by the respondent on account of TDS be paid by the respondent to the Income Tax Department, in favour of the claimant, alongwith interest and penalty if any for late payment.
The claim is partially upheld to this extent.
Claim No.2: Balance payment as per Part-B of Annexure “A” of statement of Claim – Rs.9,31,813.35.
An amount of Rs.6,72,913/- was payable by the respondent under the contract against this claim but the same, being time barred is not allowed under this award. Remaining amount of Slip Removal does not form a part of this Contract. The claim is rejected.
Claim No.3: Payment against bills for backfilling or retaining walls as per Part-C of Annexure “A” of statement of claim – Rs. 7,74,058.00
The amount of Rs. 25727/- was payable by the respondent against this claim but the same, being time barred, is not allowed under this award. The claim is rejected.
Claim No.4 : Payment against erection of Towers on account of difference in actual weight or erected towers and ceiling weight of towers quoted by suppliers (Bill No.EUM/1/98, dated 07.09.1998 Ref.Annexure “A” {Total (D) Column 9} Rs.17,843.38.
Rejected
Claim No.5: Interest @ 18% for delayed payment of Rs.4,92,468/- w.e.f. 30 days from submission of bills till date of payment (22.06.04) Rs.14,62,630.00
Dues which were paid by the respondent to the claimant had already become time barred in June 2004 and as such the interest for the late payment is not allowed. The claim is rejected.
Claim No.6: Interest @ 18% for delayed payment of Rs. 18,69,869/- w.e.f. 30 days from submission of bills till date of payment.
Rejected as not applicable following rejection of claims 1 to 4 above except for that on the amount of Rs.1188/-which shall be payable to the Income Tax Department in shape of penalty or otherwise as per rules of the said Department.
Claim No.7: Damages/Loss on account of delay in payment.
Rejected as not applicable for reasons similar to those mentioned against Claim No.6.
Claim No.8: Cost of arbitration proceedings.
Parties shall bear their respective costs. The Arbitrator has
