Vikramajit Sen, J.
1. Although almost two score years have passed since the decision of Union of India Vs. Rallia Ram, , the following
observations of the Apex Court in this case have not been varied.
"An award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decided a dispute submitted to him is ordinarily not liable to be challenge on the ground that it is erroneous. In order to make arbitration effective and the awards enforceable, machinery is devised for lending the assistance of the ordinary Courts. The Court is also entrusted with power to modify or correct the award on the ground of imperfect form or clerical errors, or decision on questions not referred, which are severable from those referred. The Court has also power to remit the award when it has left some matters referred undetermined, or when the award is indefinite, or where the objection to the legality of the award is apparent on the face of the award. The Court may also set aside an award on the ground of corruption or misconduct of the arbitrator, or that a party has been guilty of fraudulent concealment or wilful deception. But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. But it is now firmly established that an award is bad on the ground of error of law on the face of it, when in the award itself or in a document actually incorporated in it, there is found some legal proposition which is the basis of the award and which is erroneous".
Acknowledging that the Arbitrator is the final judge of facts, the Apex Court in State of Orissa & Anr. Vs. Kalinga Construction Co. (P) Ltd., held that the High Court erred in considering the matter as a court of appeal and in reevaluating the evidence and that if further erred in recording a finding in reversal of the conclusions of the arbitrator.
2. In Hindustan Iron Co. Vs. K. Shashikant & Co., the Court held that the award of the Arbitrator ought not to be set aside of the reason that, in the opinion of the Court, the Arbitrator reached wrong conclusions or failed to appreciate the facts. That this was a well settled proposition of law was reiterated in the decision of the Apex Court in Coimbatore District Podu Thozillar Sangam Vs. Balasubramania Foundary & Ors., . It was opined that it is only an error of law and not a mistake of fact, committed by the arbitrator, which is justiciable in the application/objection before the Court. If there is no legal proposition either in the award or in any document annexed with the award which is errorneous and the alleged mistakes or alleged errors, are only mistakes of fact and if the award is made fairly, after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement, the award is not amenable to corrections of the Court. Similar views were again expressed in Indian Oil Corporation Ltd. Vs. Indian Carbon Ltd., ; Jawahar Lal Wadhwa & Anr. Vs. Haripada Chakroberty, ; Puri Construction Pvt. Ltd. Vs. Union of India, ; M/s. Sudarsan Trading Co. Vs. Government of Kerala & Anr., (1989) 2 SCC 30; Food Corporation of India Vs. Joginderpal Mohinderpal & Anr., where even a plausible view taken by the Arbitrator was held not to be open to Court interference. In Municipal Corporation of Delhi Vs. M/s. Jagan Nath Ashok Kumar & Anr., the Court held that if the reasons appear per se to be not unreasonable and irrational the Court ought not to reappreciate the evidence. In Hind Builders Vs. Union of India, the Court cautioned that where two views were possible it could not be predicated that there was an error apparent on the face of the award. In Bijendra Nath Srivastava Vs. Mayank Srivastava & Ors., the view was expressed that the reasonableness of reasons given by the arbitrator were not open to challenge and that the proper approach would be for the Court to support the award. Similarly, in Hindustan Construction Co. Ltd. Vs. Governor of Orissa & Ors., it was repeated that the Court cannot reappreciate the material on the record. In Trustees of the Port of Madras Vs. Engineering Constructions Corporation Ltd., the decision of a Division Bench of the High Court of Madras, which reversed the Award on a question of fact and not a question 'of law, was set aside by the Supreme Court. After considering its previous decisions, the Apex Court in B.V. Radha Krishna Vs. Sponge Iron India Ltd., held that the Court could not substitute its own view in place of that of the Arbitrator. In Army Welfare Housing Organisation Vs. Gautam Construction & Fisheries Ltd. the Court declined to vary an award for the reason that without reappreciating evidence it would not be possible to fault the quantum awarded towards anticipated expenses.
3. Shri P.N. Kumar, learned counsel for the Respondent/Objector broadly submitted that the Award was vitiated and liable to be set aside since the Arbitrator had travelled beyond the confines of the agreement/arbitration clause; and had ignored material evidence available before him and had returned contrary findings on the sundry claims. To buttress his submission, he relied on the decisions in V.G. George Vs. Indian Rare Earths Ltd., , Shanti Devi & Ors. Vs. DDA , M.L. Mahajan Vs. DDA, 1999 (2) RAJ 376, State of U.P. Vs. Allied Construction Engineers & Contractor, , DDA Vs. U. Kashyap, , Dulari Devi
Vs. Rajendra Prakash, . For the proposition that the Arbitrator cannot ignore the arbitration clause he relied on K.P. Poulose Vs. State of Kerala & Anr., , Indu Engineering & Textile Ltd. Vs. DDA, 1989 (2) Arb. Law Reporter for the proposition that an Award is vulnerable to being set aside if it is palpably clear that the Arbitrator has ignored material evidence/documents. Finally, for the proposition that an Award cannot contain contrary findings and yet withstand judicial scrutiny, he relied on V.G. George Vs. Indian Rare Earths Ltd., and Bombay Ammonia Pvt. Ltd. Vs. Union of India, AIR 1987 Delhi 148.
4. In this analysis, for the purposes of a decision in these proceedings, it would be appropriate to summarise that it is not the province of the court to alter the decision of the Arbitrator in the realm of factual conclusions. It would, however, be expected of the Court to interfere if it is obvious that the Arbitrator has travelled beyond the jurisdiction vested in him by the arbitration clause, inter alia, by pronouncing on excepted/exempted/excluded matters; or when the Arbitrator has ignored material evidence; or where his Award contains contrary or contradictory findings. The conclusions arrived at in the Award assailed in the present case fall to be tested against these principles.
5. The following claims were laid before the learned Arbitrator for adjudication and the amounts awarded by him are as follows :
1. Interest on
unpaid bills 33,79,431 Rejected
2. Interest on
for extra work 53,98,000 Rejected
3. Under utilised
Site and Head
Office 3,41,02,000 1,03,36,650
4. Losses for
plant. 27,00,000 Rejected
5. Loss due to
due date. 37,92,000 Rejected
6. Loss of
productivity 58,00,000 Rejected
of construction. 1,34,57,000 62,39,422
material. 11,70,000 Rejected
9. Steep rice in
cement cost 22,72,000 Rejected
10. Addl. cost of
Insurance etc. - Rejected
losses 70,00,000 Rejected
Contractors. 3,71,68,953 78,85,962
13. Extra and
items. 1,97,77,000 83,63,027
charges 5,00,000 Rejected
15. Interest @ 2% per
1.3.1994 18% per annum
16. Liquidated damages 48,30,000 Rejected
17. Eviction of
Labour Huts 40,00,000 4,75,200
18. Damages 3,25,00,000 Rejected
19. Interest @ 18%
per annum Allowed
20. Costs Rejected
Preliminary Objection not dealt with in Award.
Learned counsel for the Objector has submitted that the Preliminary Objections which urged the barring of the claim(s) had been raised, have not been considered by the Arbitrator. The clauses in the Contract relied upon by him in this context are the following :
Clause 20.0: Interest
No interest shall be payable on an money due to the contractor against earnest money, security deposit, interim or final bills or any other payments due under this contract.
Clause 55.0 : Possession of Site
The owner shall make available to the Contractor the Site or the respective work fronts to enable the contractor to commence and proceed with the execution of works in accordance with the agreed programme. If there is delay in making available any area of work, the owner shall on the recommendations of the Architect and the Consultant grant reasonable extension of time for the completion of work. The Contractor shall not be entitled to claim any compensation, whatsoever on this account.
The portion of the Site to be occupied by the Contractor shall be indicated by the Engineer at Site; The Contractor shall on no account be allowed to extend his operations beyond these areas.
Clause 57.0: Extension of Time
If the works are delayed by force majeure, suspension of work by the owner, serious loss or damage by fire, ordering of altered, additional or substituted work or other special circumstances other than through the default of the Contractor, as would fairly entitle the Contractor to an extension of time and which in the discretion of the owner is beyond the control of Architects and the Contractor, then upon the happening of any such even causing delay, the Contractor shall within 10 days of the happening of event give notice thereof in writing to the Engineer, stating the cause and the anticipated period of delay, then in any such event, Managing Director on the recommendations of the Architect and the consultant may give a fair and reasonable extension of time for the completion of work.
Such extension shall be communicated to the Contractor by the Engineer in writing. The contractor shall not be entitled to claim any compensation or overrun charges whatsoever for any extension granted.
Clause 66.0" Claims
The Contractor shall send to the chief Special
Projects/consultant/Engineer/Architect once every month an account giving particulars, as full and detailed as possible of all claims for any additional payment to which the Contractor may consider himself entitled and of all extra or additional work ordered in writing and which he has executed during the preceding month.
No claim for payment for any extra work or expense will be considered which has not been included in such particulars. The owner may consider payment for any such work or expense, where admissible under the terms of the Contract, if the Contractor has at the earliest practicable opportunity notified the Employer in writing that he intends to make a claim for such work and expense and it is certified by the Consultant in consultation with the Architects that such payment was due.
Any claim which is not notified in two consecutive monthly statements for two consecutive months shall be deemed to have been waived and extinguished."
6. At first blush the argument appears to be of great substance since on a cursory reading of the Award it does appear that these Preliminary Objections had not been dealt with by the Arbitrator. However, Clause 20 deals with Interest and Claims 1 and 2 concern the claim under this head. The Arbitrator has fully appreciated the contention of the Objectors and in regard to both these claims a nil award has been made. Clause 20 has specifically been mentioned as a reason for rejecting the claim. The Preliminary Objection is, therefore, palpably misconceived. Since interest has been awarded under Claims 15 and 19, however, it would then have to be considered whether this was incongruent in view of the rejection of Claims 1 and 2. The former claim (15) is for interest to be awarded at the rate of 24 per cent per annum with effect from 1.3.1994 and what has been granted is at the rate of 18 per cent per annum with effect from 1.5.1994. Would this grant also have to succumb to the Objectors assault as contained in its Preliminary Objections? The answer appears to be is that the embargo in respect of the grant of interest did not cover the present claim as is evident also from the fact that this claim was not objected to in the Respondents reply before the Arbitrator. It was not resisted on the ground that it could not to be granted since the Objectors had themselves laid claims for receiving considerable monies under this head, in the context of their Counter Claims. On the sum awarded in favour of the Respondent, interest has indeed been granted. In this analysis, there is no substance in the Objector's submission that the Arbitrator had ignored the Preliminary Objection raised by it. Lawyers may well be accustomed to their Preliminary Objection being dealt with at the threshold of the Judgment/Award, but the settled legal position is that the Arbitrator has the untrammelled freedom to word and format his Award as he chooses. if on its reading it is not palpably evident that the contentions raised have escaped his attention or have been evaded by him, the Award cannot be set aside. The conclusion is that this aspect of the Preliminary Objection was not ignored by the Arbitrator. As has been very recently reiterated by the Supreme Court in Rajasthan State Mines & Minerals Ltd. Vs. Eastern Engineering Enterprises & Anr. "it is not open to the Court to probe the mental process by which the Arbitrator has reached his conclusion where it is not disclosed by the terms of the Award". Furthermore, when the Arbitrator has construed the contract the existence of an alternative construction/view would not justify the Court in substituting/replacing the view taken by the Arbitrator with the view favoured by the Court. The most recent Restatement of this principle can be found in the Supreme Court's decision in Himachal Pradesh State Electricity Board Vs. R.J. Shah & Company, 1999 (2) Arb. L.R. 316.
7. The Petitioner's claim under this head is on account of Under utilised overheads/site/Head Office. The contention is that keeping in perspective the 'crash programme of construction', men, material, equipment plant etc. had been laid out but insufficient work was made available due to various decisions being not given. The amount was quantified at Rs.3,41,02,000/ and the Arbitrator has awarded Rs.1,03,36,650/-. In reply, the Objectors stand is that there was no delay on their part, and that the Petitioner were "not well equipped to coincide with the tempo of the work and also did not honour the commitments made while entering into agreement." It was further contended before the Arbitrator that even if there was delay on the part of the Objectors, the agreement clearly mentioned that time may be extended and in this event the contractor was not entitled to claim any compensation or overrun charges whatsoever. These points have also been raised in the Objections, commencing from paragraph 13, a substantial extent of which assailed the manner and method of the Arbitrator's calculation/quantification. In the latter respect, It is well established that it is not the province of the Court to embark upon recalculation's since this would entail a substitution of the method employed by the Arbitrator with that of the Court. It is only on an error apparent on the face of the award, that too in the realm of law rather than fact, that judicial scrutiny is expected. Of course, arithmetical errors, palpably so, can be corrected, but in the present case learned counsel has not disclosed any. Infact a perusal of the Award shows that the Petitioner's claims were reduced by the Arbitrator in view of the grounds agitated by the Objectors.
8. It was also urged that the Arbitrator had returned contradictory findings inasmuch as, having rejected Claim No.6, no damages could have been granted under Claim No.3, since these were intrinsically of the same character. It will be useful to reiterate that the present claim is for an amount of Rs.3,41,02,000/- on account of Under utilised overheads etc; Claim No.6 is for an amount of Rs.58,00,000/- on account of loss of productivity. While there is substance in the argument that these claims encroach and impinge on each other, there is not substance in the assault on the Award that if no amount was granted in the latter Claim, none could be awarded in the former. Having granted damages in Claim No.3, the Arbitrator declined to make a duplication thereof, by further granting damages under Claim No.6. It would have been a contradiction if amounts were granted under both heads.
9. learned counsel for the Objector relied upon Chapter IV of the Contract Act, 1872, dealing with the performance of contracts, particularly to Sections 51 to 55 thereof. The progression of the submission appears to be that the contract subsisting between the parties envisaged the conclusion of its performance by a particular date. If on that date the contract had not been performed, it came to an end, and the parties would be released from the performance of their respective obligations. If damages had been sustained by one of the parties as a consequence of the failure of the other to perform its obligations and responsibilities the former could claim damages from the latter. The sequence of relevant facts need to be set down. The Petitioner's letter dated 21.11.1992 is of significance as it, sets out the alleged reasons for the delay in the completion as follows:-
i) Delay in issue of drawings.
(ii) Delay in finalisation of the finishes (Internal and External) and the materials required for same.
(iii) Delay due to delayed receipts of drawing for mockup rooms and various revisions and changes effected by Interior Design Architects.
(iv) Non approval and sanction of extra/Deviated items.
(vi) Procedural delays and nonapproval of Variation orders we had also put on record specific holds not cleared in time that means by March/April '91. This specific bottlenecks reported then were:
i) Ground floor plans and details for all blocks.
ii) Plant room etc.
iii) Finishing Details.
iv) As far as A1 is concerned for about three months practically no work is being carried out due to non-availability of the interior designer's and the drawing for internal finishes.
v) Two of the elevations with sectional details of Block AI.
vi) Details, sections etc. of Site Development.
vii) Details of cable and other trenches.
viii) Co-ordinated drawings for various services.
ix) The major factors which are contributing to further extended delay are
(i) Non approval/Sanction of extra/Deviation items.
(ii) Co-ordinated drawings for various services duly approved by Architect.
10. Also in Block A3 for about 12 months work has remained suspended for want of approval of interior works.
Thereafter the Petitioner requested that the disputes be referred to arbitration, and details of claims were also enclosed/forwarded. A terse reply has been sent on 23.12.92 by HUDCO which requires to be reproduced.
Sub: Cluster A Hudco Guest Houses Andrews Ganj - Time Extension regarding.
Please refer to your letter No. SP/HUDCO/92/1210 dated 21.12.1992 vide which you have mentioned that the balance work may require the contract to be revalidated till end of June 1993. We feel that the time period for the completion for the balance work as proposed by you is too long and does not represent a keen desire from your side to complete the work expeditiously. While we are examining other issues, we are hereby granting a provisional extension of time upto 22.1.1993 without prejudice to HUDCO's rights under various terms and conditions of the contract as applicable and also relating to delay in implementation of the project, in order to keep the contractor alive. Meanwhile, you are requested to submit to NIDC a detailed revised programme for completion of balance work at the earliest.
CC to 1 DCP, HUDCO
2 SM, NIDC.
11. This letter is so vague and open-ended that it renders the sections of the Contract Act applicable in favour of the Petitioner were not rejected, explicitly or even tacitly while granting an extension of time. On a plain reading of the letter, the claims of both the Petitioner & HUDCO were left open and an extension of time simplicitor was granted. It is definitely possible to reasonable argue that HUDCO was to first provide the vacant site and building drawings etc. and only thereafter could the performance of the reciprocal promises on the part of the Petitioner commence. The Petitioner had clearly fastened fault of delay on HUDCO, rightly or wrongly, and demanded adjudication of its Claims. Had the extension of time been granted simultaneous with an explicit rejection of these demands, it could have been argued that having acted upon the extension of time, the Petitioner was precluded or estopped or foreclosed from continuing with its demands for damages. This is what Sections 53 and 54 of the contract Act postulate. Had HUDCO conveyed its stand that delay was due to acts of omission or commission ascribable solely to the Petitioner it ought not to have prevaricated the issue and should have said so in unequivocal and umambiguous terms. It should then have put an end to the contract and refereed its claims (along with those of the Petitioner) to arbitration it could thereupon have treated the obligations yet to be performed by the Petitioner as having been rendered void and awarded it to a third party. This is what Section 55 of the Contract Act envisages. It was, however, not open to HUDCO to vacillate as it has done, and then maintain that the Petitioner had burnt its bridges in respect of its claims by agreeing to go on with the performance of the contract. It is contrary to the sundry statutory provisions and is anathema to equity. The correspondence ex- changed between the parties was before the Arbitrator. A perusal there of discloses that the Petitioner was resolute in continuing with the contract only if the Respondent agreed to refer all its claims to Arbitration. The Claimants letters dated 14.8.1993, 24.11.1993 and 3.2.1994 are of relevance.
12. Having gone into the rival contentions the Arbitrator has found that HUDCO was responsible for the delay in the completion of the project for thirty months . He has calculated the compensation due through formulae which should not be interfered with by the Court even if it was of the opinion that a different percentage could have been adopted. None of these findings are perverse. The contention of learned counsel for HUDCO that the arbitrator ought to have deducted the amount of Rs.83,63,027/- awarded on account of extra items in claim 13 from the sum granted under the present claim, or declined Claim 13 in toto, is consider hereafter.
13. It has also been contended that the award under this Claim has been rendered despite there being no documentary evidence to support it. Howev- er, on a reading of the Award, the reasoning followed is lucid and perfectly plausible. Hence it would not be proper to set it aside on a conjecture that relevant and clinching evidence had not been recorded by the Petitioner. Shri P.N. Kumar, learned counsel for HUDCO had also pressed Clauses 55, 57 and 66 and submitted that the present claims were hit by the embargo contained therein, and therefore these disputes were not arbitrable. Reliance on the case of Rajasthan Mines & Minerals Ltd. (supra) does not advance his case since two views were certainly available, Firstly that the sundry clauses of the agreement prohibited or excluded the adjudication of these claims. Alternatively, that the sequence of letters exchanged and the supplementary Agreement thereafter executed shows that the demand/claims itemised in the Claimant's letter dated 3.2.1994 were correctly referred by the persona designata in his letter dated 31.3.1994, in accordance with the compact of the parties in the Agreement dated 22.3.1994. It is wholly inappropriate for the Court to substitute one plausable view with another.
14. Clause 57, in my opinion comes into operation where an extension of time has been granted in the absence of claims having been specified by Contractor. These are instances of the existence of the reciprocal promises contemplated in Sections 51 to 55 of the Contract Act. For example, in building contracts such as the present one, the first assumption is that a site would be made available by the owner to the Contractor; all reciprocal promises would call to be performed on this premise. Assuming that the site has not been made available to the Contractor, this Clause envisages time for the performance of the contract to be extended, but this decision cannot be unilateral in the sense that it can be taken to be effective even if opposed by the Contractor. It can alone be effective in those situations where the offer/request to extend time is made unconditionally by either of the parties, and is also unconditionally accepted by the other. It would be too onerous an interpretation to hold that the Clause empowers the owner to extend time in the backdrop of its own defaults and in spite of a demurer of the contractor. Certainly, it would operate to render non-arbitral any claims preferred after the unconditional acceptance of the extension. This clause cannot be construed in a manner which completely obliterates the other parties rights as recognized in Sections 51 to 54 of the contract Act. The Petitioner could 'legitimately decline the extension of time to perform its obligation under the Contract. It would then be arguable, on the strength of clause 57, that the owner/HUDCO stood protected and shielded from claims of damages on account of the failure to hand over the site. The rule of contra proferentem has been ubiquitously applied in all legal systems. A reading of Clause 57 must leave no manner of doubt that it applies even in the cafe of the resistence/demur of the opposite party. It must not allow unilateral availability. In the present case the Petitioner had repeatedly and indefatigably put HUDCO to notice that it had numerous claims for damages. It was at that stage that HUDCO should have rejected the claims and taken shelter under this Clause. If the petitioner had still continued with the contract the clause would have operated against the preferment of the claims . As regards Clause 57, it appears to contemplate situations of force majeure and extends insulation from claim of damages. As in the other instances, If HUDCO was to expect invulnerability against damages by resorting to the protection of Clause 66, it should have rejected the Claims on this ground, as soon as they were raised by the Petitioner. It would be most unfair and unconscionable to permit a retrospective reliance on this Clause. Having been notified of Claims it should have rejected them forthwith.
15. In any event, the applicability of these Clauses had been completely emasculated, superseded and rendered nugatory by the execution of the Supplementary Agreement dated 23.5.1992. The operative part thereof reads as under:
"Now, therefore, both the contractors and the corporation agree to appoint shri C. Rama Rao, Ex. Director General, CPWD, for determining all the issues finally raised by the Contractor and the issues of the Corporation, if any, and all such issues arising out of disputes in the contract:-
1. Linked with delay and claims thereof due to delay.
2. Loss due to delay in payment of bills.
3. Steep increases in price of cement.
4. Extra/deviated item rates and payment.
5. Issue of applicability of liquidated.
The decision of Shri C. Rama Rao shall be final and binding on the parties hereto. The parties may mutually agree in writing to enlarge the period for giving the decision. consequently, clause 91 of the Agreement dated 23.5.1992, stands deleted through this Agreement. The expenses Shall be borne by the parties jointly qua the matter before shri C. Rama Rao.
2. All the provisions of the Agreement dated 23.05.1992, as amended above, will remain in full force and effect."
16. Most significantly, the persona designata, namely, Shri K.K. Bhatnagar, Chairman & Managing Director of HUDCO has referred all the claims raised by the Petitioner to the sole Arbitration of Shri C. Rama Rao. This is yet another indicator that all persons concerned with the disputes at the relevant time, it was clear that the previous agreement which contained the exclusion clauses now relied upon to extinguish the Petitioner's claim, had been superceded. Shri P.N. Kumar, learned counsel for HUDCO had vehemently argued that the only reason for the execution of the supplementary Agreement was because the parties had agreed to the appointment of a Sole Arbitrator, in place of the panel envisaged in the original arbitration clause (91). This submission was made in order to counter the argument of Shri F.S. Nariman that even if the Clauses 55, 57 and 66 were given an unfaltering effect, so as to exclude the claims preferred by the Petitioner before the sole Arbitrator, these Clauses had in fact been overridden by the first operative paragraph of the Supplementary Agreement which itemised in fine genre the disputes, specifically referred to Arbitrator. Shri Nariman He rightly contended that post execution of the supplementary Agreement, in so far as these Clauses of the previous agreement militated against it, the previous clauses had been rendered nugatory. The argument of Shri P.N. Kumar, learned counsel for HUDCO may have carried some substance had the five heads of claims been placed in the recital clauses and not in the habendum of a supplementary Agreement. Since this is not so, the first paragraph must be given its full and unfettered applicability.
17. In this analysis, these Clauses in the first agreement would not preclude the entertainment and grant of the Claims under the present head. Shri P.N. Kumar has relied on the decision in Govt. of Andhra Pradesh Vs. P.V. Subba Naidu, AIR 1990 NOC 90, but this does not support his contetion. In fact it supports the view apparently taken by the Arbitrator and shared by me since, if the first paragraph of the Supplementary Agreement is to be ignored, it would tantamount to rewriting the Agreement. On the above construction of the Supplementary Agreement, namely, that it did not merely rewrite the arbitration clause and inter alia substitute the appointing power of the persona designate, from a panel to a single arbitrator, the ratio of Union of India Vs. shri Nath Bihari, has no application to the present case. There is also no occasion of applying the ratio of the decision rendered in Rajasthan State Mines & Minerals Ltd. (supra) or Steel Authority of India Ltd. Vs. J.C. Budharaja, , since the arbitrator was empowered to construe the two Agreements in juxtaposition. His understanding thereof is certainly plausable and cannot be interfered with. The decision in R.M. Paul Vs. Union of India. 1989 Supp, (1) SCC 368 supports the view taken. since I am of the view that the Arbitrator has not travelled beyond the terms of agreement between the parties and/or the disputes referred to him for adjudication, the decision in State of J & K. Vs. Dev Dutt Pandit, , has no applicability.
CLAIM NO. 7
18. On account of restructured rates for work carried out after the stipulated dates of completion a claim of Rs. 134.57 lacs had been preferred before the Arbitrator. The arithmetical calculations, being 16 per cent till September 92 and 25 per cent thereafter was duly submitted by the Petitioner. A sum of Rs. 62,39,422/- has been awarded. Before the Arbitrator HUDCO had asserted that delay was occasioned for factors wholly ascribable to the Petitioner, but the Arbitrator has fastened fault for delay on HUDCO. This finding of finding is neither perverse nor arrived at without evidence. The written objections of HUDCO are not specific, and merely deny the Petitioner's averments. In arguments it was submitted that since the petitioner had been paid escalation nothing was due on account of restructured rates after stipulated dates of completion. The applicability of Clauses 57 and 66 have already been dealt with above. There is considerable strength in the contention of Shri P.N. Kumar, learned counsel for HUDCO that evidence could easily have been produced by the Petitioner as to the numerical extent of the work force employed, by production of cash flow charts etc. While it is beyond dispute that 400 huts had been constructed at the site (this figure has also been adopted by HUDCO in its Counter Claim which has been partially allowed) there is no foundation that the labour employed was 400 x 2 = 800, as has been computed by the Arbitrator, From the numerous letters on record a case can be made out that the labour employed was never 800, and was usually between 350 and 400. The Arbitrator as not indicated the basis for adopting the figure of 21.6 per cent. However, even if the Court is inclined to accept the correctness of the challenge to the Award made in this claim by adhering to the argument of the Respondent that an error of fact has been Committed by the Arbitrator in basing his computation on a labour force of 800, the catena of cases observing that factual errors are not open to Court correction, enjoin noninterference even with this claim. It is also well settled that the Court ought not to probe into the mind of the Arbitrator to understand his rationale. Reference is necessary and should be directed only to the decision rendered in the Rajasthan State Mines & Minerals Ltd. case (supra) where the Court recorded the following conclusion:
"(a) It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impelled arbitrator to arrive at his conclusion.
(b) It is nor open to the court to admit to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award.
(c) If the arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the Court cannot interfere."
CLAIM NO. 12.
19. The claim was for a sum of Rs. 3,71,68,953/- towards damages suffered by the associated/nominated contractors namely, M/s. Blue Star, M/s. Northern Sanitation and M/s. National Electricals; their claims were Rs. 1,69,91,750/-, Rs. 1,54,28,203/- and Rs. 47,49,000/- and what has been awarded is Rs. 34,45,364/-, Rs. 32,39,790/- and Rs. 13,00,808/- respective ly. This claim and the Award made pursuant to it has been assailed by HUDCO on the grounds that (a) there was no privity of contract between these subcontractors and HUDCO (b) that the award of "Rs. 79,85,962/- to be paid to the claimant by the Respondent to disburse the money to the Associated/nominated Contractors" was in the form of a declatory award which is barred by law. (c) that the Arbitrator returned an incorrect finding of fact that HUDCO was responsible and liable for the delay; (d) that the amount was a duplication of claims 3 and 7 (e) that details in support of the claim have not furnished and (f) that these claims would be excluded by operation of Clause 59.
20. The objection that there was no privity of contract with the three nominated sub contractors is manifestly incorrect. In the first place HUDCO has itself drawn attention to Clause 7 of the Agreement which clarifies that "consent (to appoint subcontractor) if given shall not relieve the contractor from any liability....." Admittedly, the subcontractors were chosen from among the nominees of HUDCO as envisaged by clause 21 viz. Instructions to Tenderers. Event the notice issued by the Petitioner to one of these nominated sub-contractors viz. Northern Sanitation was forwarded to HUDCO. I fail to appreciate how this letter would conclusively prove that there was any manner of admission that delay was not on account of HUDCO. Legal notices notify but do not establish fault, and the circumstances in which this communication was issued are not clear. The arbitrator was best placed to appreciate these rival contentions and he has returned a finding fastening fault on HUDCO for delay.
21. I am also unable to appreciate the contention that the Award should be set aside for the reason that it is a "declatory award". On its perusal it clearly is not so and as and when payments are made these would have to disbursed to the subcontractors. It could be understandable if there was an apprehension that the awarded damages would not be received by these parties/sub-contractors. Remedial protection could have been passed impressed by the court if asked for. This is obviously not the grievance of HUDCO. The controversy centring on who caused delay, is a finding of fact, is not manifestly perverse or incorrect, and is not open to reversal by the Court. It has already been cogitated upon above. As regards the submission of duplication, it will be appropriate to mention that against claims made under Heads 3, 7 and the present the sum awarded are appreciably lower. The Arbitrator must be presumed to have kept all these in perspective while dealing with them individually. Further, this is not a case where no evidence was furnished by each of the nominated subcontractors. I have been taken through the numerous letters filed by each one of them and it is not possible to maintain that the Award is not based on any evidence. The applicability of clause 59 need not be dwelt upon again. Hence the objections under this head are rejected.
CLAIM NO. 13.
22. As indicated above, against a claim for Rs. 1,97,77,000/- on account of Extra/Substituted items the Arbitrator has awarded a sum of Rs. 83,63,027/-. He had mentioned that as per the detailed statement annexed with the Award, the total value of goods/items under this head were Rs. 1,49,60,161/- out of which only Rs. 65,97,134/- had been paid, and hence the balance sum was awarded. A perusal of the Objections filed by the Respondent discloses that no challenge has been made to this finding. By means of I. A.9966/98 this fact had been underscored by the Petitioner and it was consequently prayed that this part of the Award be severed from the other, and immediately granted. Despite this specific assault on this Claim,. in its Reply the Respondent has merely perfunctorily stated that the application is not maintainable since it has been prayed that the entire award has been challenged. Had there been a particular assailment of the Award on claim 13, an elucidation thereof ought to have been made in the pleadings, which even on my perusal of the objections and the Rejoinder filed by the Respondents is absent. In para 9 of the Rejoinder, what is stated is that this paragraph is "wrong, baseless and is denied. The Peti- tioner cannot have any pick and choose policy. The Award as a whole deserves to be set aside. "From an analysis of the precedents cited before me it is clear that the factual findings of the Arbitrator should not be interfered with. The legal assault is to the effect that he has travelled beyond his jurisdiction while taking into account extra items in awarding overheads. The grievance of the Respondent appears to be that the Arbitrator has allowed an increase at the rate of 21.6 per cent over the prices fixed on or before 24.6.1992, and that this increase was arbitrary and without any justification. These objections do not raise any issue relating to an error of law apparent on the face of the award. The factum of extra items having been carried out by the Petitioner has not been challenged in the objections or the Reply to I.A. 9966/98, or in the oral or written arguments. The Award is predicated on a joint signed statement. I find no reason to interfere in the Award in respect of Claim No. 13.
CLAIM NO. 15
23. Both parties have claimed pendente lite interest on the Claims and the Counter Claims. Both have been granted interest at the rate of 18 per cent. No objection had been taken to this grant in the present application. An oral submission was made by Shri P.N. Kumar, learned counsel for HUDCO that since no interest was awarded under Claims 1 and 2, none ought to have been granted even under this Head is misconceived and contradictory even to the case of HUDCO itself.
No other objection in. the Award was raised before me.
In this analysis the objections are misconceived, untenable in law and are dismissed.
S.No. 2110-A of 1996
24. The objections filed against the Award have been dismissed. I have already found that there is no reason to remit or to modify the Award. There are also no grounds for reconsidering or setting aside the Award. I pronounce judgment according to the Award. Accordingly the Award is made Rule of the Court. In the circumstances of the case there shall be no order as to costs.
I.A. 9966 of 1998
As the Award has been made Rule of the Court this application has become infructuous. It is dismissed as such.