Steel Authority Of India Limited And Another Vs M/s G. C. Kanungo Construction (P) Ltd., CTC

Orissa High Court 19 Apr 2022 ARBA No.40 Of 2014 (2022) 04 OHC CK 0100
Bench: Single Bench
Acts Referenced

Judgement Snapshot

Case Number

ARBA No.40 Of 2014

Hon'ble Bench

Arindam Sinha, J

Advocates

N.K.Sahu, M.Kanungo

Acts Referred
  • Arbitration and Conciliation Act, 1996 - Section 34

Judgement Text

Translate:

Arindam Sinha, J

1. Mr. Sahu, learned advocate appearing on behalf of appellants resumes his submissions in continuation of those made and recorded in order dated

29th March, 2022. He refers to paragraph 24 in the award, which deals with whether his client was entitled to recover cost of material and interest.

He submits, there was a cost and interest component, outstanding from respondent on account of supply of steel. The tribunal committed illegality in

rejecting the counter claim. On query from Court he submits, the supply was made on request of respondent and not as an obligation under the

contract.

2.  The then draws attention to clause (iii) under paragraph 30 in the award. He submits, there was award of Rs.2000/- per school, aggregating

Rs.1,00,000/- said to be payable due to use of potable water. Referring to clause 8 in the Letter of Intent dated 24th April, 2000 (Ext. R-10), he

demonstrates that, inter alia, water was to be arranged by the contractor at its cost.

3. Moving on to clause (iv) under the paragraph he submits, extra transportation cost including lifts and leads were awarded at Rs. 31,50,000/-. There

was clear mention under clause 4 in additional special conditions (Ext. R-10) that all leads, lifts, transportation was included in the scope of work.

4. With reference to clause (x) under the paragraph he submits, compensation could not have been awarded. There was arbitrary award of Rs.1000/-

for each completed school, i.e., 86 in number. The contract did not provide for payment of compensation and the arbitrator could not have awarded.

Furthermore, there was award of Rs.8,95,000/- also arbitrarily made at the rate of Rs.10,000/- per school for 60 schools taken out of the scope of

work, Rs.15,000/- for 13Â Â Â Â Â Â Â Â Â Â Â schools and Rs.20,000/- for 5 schools. He submits, claimant/respondent itself pleaded for

reducing scope of the work. Hence from total number of schools in original scope of work, some schools were taken out. Compensation for pilferage

or stealing or whatever could not have been awarded as not provided in the contract. The arbitrator travelled beyond four corners of the contract and

hence there should be interference.

5. He relies on several judgments of the Supreme Court.

i) MMTC Ltd. vs. M/S.Vedanta Ltd., reported in (2019) 4 SCC 163, paragraphs 10 to 12, wherein earlier judgments of the Court in Associate

Builders vs. BDA, ONGC Ltd. vs. Saw Pipes Ltd. etc. were referred for well settled law that Court does not sit in appeal over the arbitral award and

may interfere on merits on limited grounds provided under section 34, Arbitration and Conciliation Act, 1996.

ii) Maharashtra vs. Rashid Babu Bhai Mulani, reported in AIR 2006 SC 825, paragraph 14. The Supreme Court, in the paragraph, said regarding

postal dispatch under certificate of posting and the ease, with which such certificate can be procured by affixing ante dated seal with the connivance

of any employee of the post office, was a matter of concern. He reiterates, the tribunal relied on documents introduced by additional rejoinder. Those

were copies of letters allegedly sent to his client under certificate of posting.

iii) Steel Authority of India Ltd. Vs. J.C. Budharaja, reported in (1999) 8 SCC 122. He submits, this judgment was rendered in adjudication under

Arbitration Act, 1940 but the principle of law applies. The Court found that the award was passed in disregard of express terms of the contract and

therefore was arbitrary, capricious and without jurisdiction, as in the case here.

iv) Food Corporation Of India vs M/S.Chandu Construction, reported in (2007) 4 SCC 697, paragraphs 11 to 13. He submits, this judgment too was

rendered under the Act of 1940, on jurisdictional error committed by the arbitrator in travelling beyond four corners of the contract.

6. Mr. Sahu concludes his submission. Mr. Kanungo, learned senior advocate appearing on behalf of respondent will be heard on adjourned date.

7. List on 26th April, 2022.

………………………

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