Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(SC) 691

SUPREME COURT OF INDIA
J. CHELAMESWAR, ABHAY MANOHAR SAPRE, JJ.
M/s Harish Chandra & Company – Appellants
VERSUS
State of U.P. Thr. Superintending Engineer – Respondents
CIVIL APPEAL No.8829 OF 2016 (ARISING OUT OF SLP (C) No. 24443/2007)
WITH
M/s Harish Chandra & Company – Petitioners
VERSUS
State of U.P. Thr. Superintending Engineer – Respondents
SPECIAL LEAVE PETITION (C) No. 23950 of 2007
Decided On : 08-09-2016

Advocates Appeared:
For the Appellants :- Brij Bhusan, Advocate.
For the Respondents:- Chandra Prakash Pandey, Ardhendumauli Kumar Prasad, Anuvrat Sharma, Advocates.

IMPORTANT POINT
Under section 30 High Court cannot act as if sitting in appeal.

Headnote:(a) Arbitration Act, 1940 – Section 30 – An award can be set aside only on the grounds specified in sub-clause (a) (b) and (c) of Section 30 and none else – One of the two plausible views taken by the arbitrator, improper appreciation of evidence done by him in recording any finding etc. – Not the grounds on which any award, much less a reasoned award, can be set aside. (Para 31, 32)
       (2003) 7 SCC 396; (1989) 2 SCC 38; (1990) 1 SCC 433; (2010) 1 SCC 409 – Relied upon
       (1999) 1 SCC 63 – Referred
       (b) Arbitration Act, 1940 – Section 30 – High Court examining the case as if sitting in appeal – Not applying law laid down by Supreme Court committing jurisdictional error – Examining question of facts – Not permissible. (Para 37)
       Facts of the case:
       In the year 1979, the respondent (State) invited tender for doing "Earthwork in power channels on different routes of various distances and also construction of drainage crossing in Chhoti Lui falling in 6 stretches and divided in two sections called "serial 4" and "serial 6" in a scheme called - KHARA HYDEL SCHEME".
       The appellant submitted their tender for serial 4 and serial 6. The respondent accepted the appellant's tender. Accordingly, two agreements bearing nos. 5/SE/79-80 (for work of section 4) and 6/SE/79-80 (for work of section 6) were executed between the appellant and the respondent for execution of the work in question on 30.10.1979.
       The work, pursuant to these agreements, was to start from 01.12.1979 and had to be completed on or before 31.05.1982.
       Disputes of various nature arose between the parties in execution of both the agreements. The disputes were related to the completion of works, its nature, manner of its completion, non-payment and withholding of appellant's bills, deduction of amount from the bills etc.
       Some disputes were referred to the sole arbitrator.
       This appeal arises out of disputes, which relates to agreement No. 6/SE/79-80, i.e., (serial 6).
       On 27.11.1995, the arbitrator passed a reasoned award. Out of 6 claims, the arbitrator allowed appellant's 3 claims, i.e., claim Nos. 12, 13 and 17 and rejected the claims Nos. 14, 15 and 16. The arbitrator also rejected the counter claims of the respondent (State) in toto.
       The respondent filed objections under Section 30 of the Act 1940 against the award. The appellant contested the objections and prayed for passing a decree in term of the award. The civil Judge rejected the objections and passed a decree in term of the award along with simple interest payable at the rate of 18% p.a. on the awarded sum of Rs. 55,60,445/- from the date of decree till payment of amount.
       The respondent filed appeal being before the High Court. By impugned judgment the High Court allowed the appeal, set aside the order of the Trial Court and while allowing the objections filed by the State set aside the award.
       Finding of the Court:
       High Court committed a legal error.
       Result: Appeal allowed and SLP dismissed as withdrawn.

JUDGMENT

Abhay Manohar Sapre, J.

In Special Leave Petition (c) No. 24443 of 2007

Leave granted.

2. This appeal is filed against the final judgment and order dated 17.08.2007 of the High Court of Uttarakhand at Nainital in O.A. No. 1097 of 2001 whereby the High Court allowed the appeal filed by the respondent herein and set aside the judgment and order dated 30.05.1996 passed by the Civil Judge, Dehradun and, in consequence, allowed the objections of the State of U.P. filed under Section 30/33 of the Arbitration Act, 1940 (hereinafter referred to as "the Act 1940") against the award dated 27.11.1995 which, in turn, also resulted in its setting aside.

3. Facts of the case need mention, in brief, infra to appreciate the controversy involved in the appeal.

4. The appellant herein is a civil contractor whereas the respondent is the State of U.P. represented through Superintending Engineer Irrigation Construction Circle, Yamuna Colony, Dehradun.

5. In the year 1979, the respondent (State) invited tender being Number 6/1979-80 for doing "Earthwork in power channels on different routes of various distances and also construction of drainage crossing in Chhoti Lui falling in 6 stretches and divided in two sections called "serial 4" and "serial 6" in a scheme called - KHARA HYDEL SCHEME".

6. The appellant submitted their tender for serial 4 and serial 6. The respondent accepted the appellant's tender. Accordingly, two agreements bearing nos. 5/SE/79-80 and 6/SE/79-80 were executed between the appellant and the respondent for execution of the work in question on 30.10.1979.

7. So far as agreement No. 5/SE/79-80 is concerned, it was in relation to work of section bearing serial 4 whereas agreement No. 6/SE/79-80 was in relation to work of section bearing serial 6. The work, pursuant to these agreements, was to start from 01.12.1979 and had to be completed on or before 31.05.1982.

8. Disputes of various nature arose between the parties in execution of both the agreements. The disputes were related to the completion of works, its nature, manner of its completion, non-payment and withholding of appellant's bills, deduction of amount from the bills etc.. Since the disputes could not be settled amicably, the parties invoked the arbitration clause (1.47) contained in the agreements and approached the Civil Court for appointment of arbitrator and for making references to him for adjudication of the disputes which had arisen between them in relation to 2 agreements. The request was acceded to and accordingly some disputes were referred to the sole arbitrator.

9. So far as this appeal is concerned, it arises out of disputes, which relates to agreement No. 6/SE/79-80, i.e., (serial 6). So far as disputes relating to agreement No. 5/SE/79-80 i.e.(serial 4) and some disputes relating to agreement No. 6/SE/79-80 are concerned, they were also referred to the arbitrator for his decision. One reference, however, attained finality by the orders of this Court in State of U.P. v. Harish Chandra & Co., (1999) 1 SCC 63, whereas another reference is pending in this Court.

10. Consequent upon the reference made to the arbitrator insofar as the present appeal is concerned, the appellant (claimant) filed 6 claims (claim Nos. 12 to 17) before the sole arbitrator (Mr. Harish Chandra - retired Chief Engineer). The details of the 6 claims made by the appellant against the respondent (State) are as under: -

Claim No.	Claim	Amount
12.	Claim due on account of breaking of large pieces of hard rock in the filling done from 9.00 to 9.80 KM.	Rs. 1,05,00,000.00 along with interest @ 24% per annum from 31.5.86 to the date the amount is actually paid.
13.	Claims due as payment on account of non-payment after 30.9.85.	Rs. 11,62,650.00 along with interest at 24% per annum from 1.6.86 to the date the amount is actually paid.
14.	Payment due as clai

Click Here to Read the rest of this document

2016 Supreme(SC) 691

IMPORTANT POINTUnder section 30 High Court cannot act as if sitting in appeal.

Cases Referred (4)

IMPORTANT POINT
Under section 30 High Court cannot act as if sitting in appeal.