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1996 Supreme(Ori) 160

ORISSA HIGH COURT
Pradipta Ray, J.
STATE OF ORISSA – APPELLANT
v.
BIRAT CHANDRA DAGARA – RESPONDENT
Misc. Appeal No. 466 of 1994
Decided on: October 1, 1996.

Advocates Appeared:
Addl. Govt. Advocate, for the Appellant.
Sh. R.K. Rath, Sh. B.R. Sarangi & Sh. B. Mohanty Advocates, for the Respondent.

The scope and jurisdiction of the court while considering an objection under Sections 30 and 33 of the Arbitration Act is very limited. The court cannot act as an appellate court and cannot reappreciate all the materials on the record to record a finding whether the award could have been made. The court can only interfere with the award if it is vitiated by any of the reasons specified in Sections 30 and 33 of the Arbitration Act.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - SCOPE OF JUDICIAL REVIEW - COURT CANNOT ACT AS APPELLATE COURT - AWARD NOT LIABLE TO BE SET ASIDE UNLESS VITIATED BY ANY OF THE REASONS SPECIFIED IN SECTIONS 30 AND 33 OF THE ARBITRATION ACT.

Fact of the Case:

The State of Orissa filed an appeal against the judgment and order of the court below dismissing its objection against the award passed by the Arbitration Tribunal in an arbitration case. The contractor had obtained the work of widening a portion of N.H.-42 but could not complete the work within the specified time schedule and abandoned the work in an incomplete state. The State rescinded the contract and levied compensation for the inability to execute the assigned work. The contractor referred the dispute to the Arbitration Tribunal, which found the State Government mainly responsible for the delay and awarded a sum of Rs. 3,09,689/- to the contractor.

Finding of the Court:

The court held that the scope and jurisdiction of the court while considering an objection under Sections 30 and 33 of the Arbitration Act is very limited. The court cannot act as an appellate court and cannot reappreciate all the materials on the record to record a finding whether the award could have been made. The court found that there was no material to show that the impugned award was vitiated by any of the reasons specified in Sections 30 and 33 of the Arbitration Act.

Issues: Whether the court can act as an appellate court while considering an objection under Sections 30 and 33 of the Arbitration Act.

Ratio Decidendi: The court held that the scope and jurisdiction of the court while considering an objection under Sections 30 and 33 of the Arbitration Act is very limited. The court cannot act as an appellate court and cannot reappreciate all the materials on the record to record a finding whether the award could have been made. The court can only interfere with the award if it is vitiated by any of the reasons specified in Sections 30 and 33 of the Arbitration Act.

Final Decision: The court dismissed the appeal and upheld the award of the Arbitration Tribunal.

JUDGMENT

Pradipta Ray, J. - This present appeal has been filed at the instance of State of Orissa against the judgment and order dismissing its objection against the award passed by the Arbitration Tribunal. Orissa in Arbitration Case No. 30-C of 1985.

2. The respondent contractor obtained the work of widening a portion of N.H.-42 on the basis of the agreement No. 104-F2-1980-81 at an agreed cost of Rs. 56,86,233/-. The contractor was to complete the work within 24 calendar months from the date of commencement of the work. The work commenced on March 25, 1981. Contractor could not progress with the work in accordance with the specified time schedule. He submitted revised programme for execution of the work, but he could not adhere even to the revised schedule. Ultimately contractor abandoned the work in an incomplete state after execution of work worth Rs. 13,30,741/-. Both sides have accused each other for being responsible for delay in execution of the work. As the respondent- contractor left the work incomplete, the contract was rescinded by the appellant after giving a show cause notice. Appellant-State also levied compensation for inability to execute the assigned work in accordance with the agreed time schedule.

3. The appellant-State of Orissa stated that from the very inception the contractor failed to show desired progress. In spite of reminders, he could not improve his performance and left the work incomplete. The balance work had to be retendered and State had to incur an extra expenditure of Rs. 10,73,000/- for completion of the work. A penalty of Rs. 10,73,000/- was imposed on the contractor. In spite of notice contractor did not attend final measurement. On the basis of the measurement recorded by the Department and after adjustment of penalty net value of the final bill worked out to be a negative amount of Rs. 236/-.

4. At the instance of the Respondent-Contractor the dispute was referred to the Arbitration Tribunal in accordance with the arbitration clause contained in the agreement. Respondent-contractor claimed that failure to make necessary land available, negligence to give lay out of the culverts at proper time, non-supply of required number of road rollers and unauthorised deductions from the running bills stood on the way of executing the work with required speed. Although the State Government increased minimum wage of the labourers, they refused to bear extra cost on account of such enhancement of wages. The contractor has claimed that as he could not be held responsible in any way or manner he was entitled to get the value of the work executed by him.

5. Before the Arbitration Tribunal the State Government placed the entire responsibility on the contractor and supported deductions from running bills, imposition of penalty and realisation of the extra expenditure the State had to incur because of failure on the part of the contractor-respondent to complete the work.

6. The basic dispute between the parties was who was responsible for the delay in execution of the work. Upon a consideration of the materials placed before it. Tribunal came to a finding that the State Government was mainly responsible for the delay. The Tribunal recorded that out of 84.28 acres of private land needed executing the work, only 27.18 acres were delivered by the claimant during the period from 19131 up to the time when the contractor abandoned work. For non-availability of land, the Contractor was not allowed to construct at least 7 numbers of culverts in accordance with the agreement. The Tribunal also found that unauthorised deductions from the running bills crippled the contractor financially. Tribunal also found that refusal to allow additional amount for increase in the wages in spite of specific stipulation in the agreement rendered execution (sic) uneconomic and forced the contractor to leave the work (sic) Tribunal held the State of Orissa responsible for the (sic) it disallowed withholding to running bills, impositi























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