228 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR-5707-2022(O&M)

Date of Decision: 12.11.2025 UNION OF INDIA ....Petitioner(s)

Versus M/S NARINDER ENTERPRISES THROUGH LRS OF NARINDER SOOD,PROPRIETOR .....Respondent(s)

CORAM: HON’BLE MR. JUSTICE JASGURPREET SINGH PURI Present: Mr. Shobit Phutela, Advocate and Ms. Shaurya Mehra, Advocate, for the petitioner.

Mr. Rohan Mittal, Advocate, for the respondent.

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JASGURPREET SINGH PURI , J. (Oral)

1. The present revision petition has been filed under Article 227 of the Constitution of India for quashing of order dated 27.09.2022 (Annexure P-8) passed by learned Additional District Judge, Patiala, whereby the appeal filed by the respondent was partly accepted and the award relating to grant of counter claim was set aside and remaining part of the award was made rule of the Court.

2. While giving the brief facts of the present case, learned counsel appearing on behalf of the petitioner-Union of India submitted that a dispute arose between the petitioner-Union of India and the respondent who was the contractor with whom the contract was entered into. He submitted that there was an arbitration clause in the aforesaid contract and the parties were governed by the Arbitration Act, 1940 (hereinafter referred to as 'the Act'). He submitted that since a dispute arose between the parties, the respondent- contractor filed an application under Section 20 of the Act before learned Sub Judge, First Class, Patiala for making a reference to an Arbitrator under Section 20 of the Act. He submitted that thereafter the aforesaid application which was filed by the respondent-contractor under Section 20 of the Act was allowed on 14.01.1994 vide Annexure A-1, by which the matter was referred to the Arbitrator in terms of Clause 70 of General Conditions of Contract He submitted that thereafter an award was passed by the learned Sole Arbitrator, which has also been annexed with the present petition as Annexure P-3 and thereafter, amendment to the final award was made which has also been annexed with the present petition as Annexure P-4. While referring to the aforesaid award, he submitted that the claim of the respondent-contractor was allowed to the tune of Rs. 3,46,314/-. However, since the petitioner-Union of India had also filed a counter claim before learned Arbitrator on the ground that the work was not completed by the respondent-contractor and Union of India had to resort to the risk and cost tender by which the work was completed by a third party contractor, therefore, they had spent some amount on the aforesaid risk and cost tender for another contractor regarding which they had incurred expenses and therefore, the counter claim of the petitioner was allowed to the extent of Rs. 4,75,000/-. He submitted that in this way, the net award after adjusting the claim and the counter claim came out to be Rs.1,28,686/-

3. He submitted that thereafter objections under Section 30 of the Act were filed by the respondent-contractor, which were dismissed by learned Civil Judge (Senior Division), Patiala vide Annexure P-6 on 13.05.2016 by passing a detailed order and referring to various judgments of the Hon'ble Supreme Court.

4. However, on an appeal being filed by the respondent-contractor before learned Additional District Judge, Patiala, the same was partly allowed vide Annexure P-8 on 27.09.2022, in which learned Appellate Court decided that so far as the counter claim which was filed by the petitioner-Union of India is concerned, the same could not have been adjudicated upon by the Arbitrator in view of the fact that the same was not a part of the terms of the reference which was made under Section 20 of the Act. He submitted that learned Additional District Judge while exercising the powers of the Appellate Court referred to a judgment of Hon'ble Supreme Court in Orissa Mining Corporation Ltd. vs. Prannath Vishwanath Rawlley, 1977(3) SCC 535, wherein it was held that when a reference is made under Sect