Ashim Kumar Banerjee, J.
The Judgment of the Court was delivered by:
1. Disputes arose between the parties on the working of a contract. The parties referred their disputes to the sole arbitration of the nominee of the respondent as per the arbitration clause contained in the agreement. Altogether hundred and two sittings were held. The Arbitrator thereafter published his award partly allowing the claim of the appellants. Being aggrieved by the said award the respondents filed an application for setting aside of the award, before the learned Single Judge. His Lordship rejected the contentions of the respondents to a substantial extent and refused to set aside the award save and except claim No. 3. The respondent accepted the judgment and order of the earned single Judge and paid the amounts covered under the award so upheld by the learned Single Judge. The judgment and order of his Lordship is reported in 2008 (3) CHC 799. The appellant/claimant filed this appeal against the part of the judgment and order of His Lordship disallowing the claim No. 3. Hence, we need not dilate on all the issues and we restrict ourselves to claim No. 3.
2. Claim No. 3 is a claim on account of extra cost over run on account of delay and/or suspension of work due to reasons attributable to the respondent for an amount of Rs. 13.06 lacs. The Arbitrator considered the said claim as would appear from the page 185 of the Paper Book. He ultimately allowed Rs. 6.5 lacs payable by the respondent to the appellant/claimant.
3. The relevant extract of His Lordships'' judgment and order is quoted below:
It is the challenge on account of serious irregularity as against the award on the third head of claim, that remains to be assessed. The petitioner has referred to the judgments reported at
The respondent resists the petitioner''s challenge to the third head of claim by referring to the arbitrators finding, under the first head, that it was the employer who was to blame for the delay in the execution of the contract. The respondent says that once the employer was found
responsible for the delay, in accordance with the principles embodied in section 70 of the Contract Act, the contractor was entitled to compensation and it is such compensation which has been recognised by the arbitrator and awarded in favour of the contractor under the third head of claim. Clause 65 of the general conditions according to the respondent, would not cover situations where delay was attributable solely to the employer. The instances mentioned in clause 65 are pointed out and it is submitted that the employer could not take advantage of its own wrong and take refuge under clause 65 to deny a claim on account of damages being claimed by the contractor for delay attributable to the employer. Clause 65 of the general conditions provides as follows:
''65. Should the amount of extra or additional work of any kind or other special circumstances including exceptional weather conditions, civil commotion, strikes or lock-outs which may occur be such as to delay the completion of work, the Contractor shall apply in writing to the Engineer for an extension of time for the completion of work within the days of such occurrence. The Engineer shall determine the period of such extension and grant extension of the period of contract and waive the application of the compensation under Clause 48 hereof if he thinks the request reasonable. No extra payment shall be made to the contractor on any account for such extension of period.''
It is an admitted-position that an extension was sought by the contractor following which the time for completion of the contract stood extended. It was open to the contractor not to seek extension upon holding the employer responsible for the delay and seek damages. The instances cited in clause 65 of the general conditions are illustrative and not exhaustive. Once the contractor sought and obtained an extension irrespective of the fact that such extension was on account of delay attributable solely to the employer, the contractor could not seek extra payment for the extended period in view of the clear bar under clause 65 unless the employer relaxed the condition on being persuaded by the contractor that the delay was solely on account of the employer.
The respondent urges that there are intelligible reason in support of the award made by the arbitrator under the third head of claim and the petitioner''s challenge is without basis. On the strength of the decision reported in
The clause is clear and unambiguous. It robs the contractor of any right to claim on "account of additional costs incurred during the period of extension. The arbitrator disregarded such clause in awarding in favour of the claimant in respect of the third head. The very basis of the claim under the third head was questionable, the arbitrator did not attempt to deal with the petitioner''s objection and it is irrelevant that the arbitrator made an unreasoned, wild assessment as to quantum, since such claim could, hot have been entertained at all. The award in favour of the respondent under the third head of claim in the sum of Rs. 6.5 lakh is set aside.
4. On a close reading of the paragraphs quoted (supra) we find that His Lordship relied on clause 65 of the General Conditions in case there was any extra costs or additional work of any kind or other special circumstances involving delay in completion of the work the contractor would be entitled to apply for extension of time and the respondent was empowered to grant extension waiving the application for compensation under clause 48 in case the respondent found such application reasonable. It was further provided that "no extra payment" would be made to the contractor "on any account" for such extension of period. The claimant in their statement of claim gave detailed justification for the claim No. 3 in paragraphs 12 and 13 thereof as would appear from page 52 to 54 of the Paper Book. On a bare reading of the said paragraphs it appears that the appellant accused the respondent for non-cooperation resulting delay in execution of the work. As a result they had to pay idle labour charges in addition to overhead and other miscellaneous cost amounting to Rs. 13.06 lacs. On perusal of clause 65 it would appear that even in case of delay the parties agreed that no extra payment would be made on that account. Once the parties excluded such item of payment specifically in the agreement the arbitrator who assumed jurisdiction by virtue of the said agreement was not entitled to go into such claim. His Lordship held, "Merely because the Arbitrator has found that the employer was responsible for the delay in completion of the work, would not imply that the last limb of clause 65 of the General Conditions went out of play altogether." His Lordship further observed, clause 65 encompasses delays on all counts, including delays attributable solely to the employer". We do not find any reason to join issue on that score. We rather accord our strong approval there for.
5. Mr. Ahin Chowdhury, learned Senior Counsel appearing for the appellant, however argued that once the arbitrator considered the claim and gave reasons while allowing such claim unless and until such finding was held to be perverse the learned Single Judge was not competent to substitute his own reasoning. On perusal of the counter-statement particularly paragraph 12 thereof appearing at pages 72-74 of the Paper Book we find that the respondent categorically took the plea that no extra cost could be paid to the respondent. The Arbitrator although passed a reasoned award overlooked such plea of the respondent while dealing with claim No. 3. The learned Judge considered clause 65 which was possibly overlooked by the Arbitrator. His Lordship found that by virtue of such clause claim No. 3 could not be entertained at all. Clause 65 clearly excludes any additional claim. Clause 65 was a part of the agreement by which the parties agreed to resolve their disputes if any through arbitration. Hence, the Arbitrator was bound by the terms of the contract which included exclusion of additional cost. Hence, the submission of Mr. Chowdhury on that count is not tenable.
6. The parties cited the following decisions:
(i)
(ii)
(iii)
(iv)
(v)
(vi) 1997 6 SCC 693 (B.V. Radhakrishna vs. Sponge Iron India Ltd.)
(vii) AIR 1999 9 SC 610 (Ch. Ramalinga Reddy vs. Superintending Engineer & Anr.)
(viii) 2001 6 SCC 241 (Ramachandra Reddy & Co. vs. State of A.P. & Ors.)
7. We are aware that merely because the Arbitrator did not assign any reason, it would not per se vitiate the arbitration and/or the award. We are also aware that mere insufficiency of reason cannot be a ground for setting aside of an award. The decision on that score cited by Mr. Chowdhury are well-settled principles of law. We, however, feel that when it goes to the root of the matter and questions the authority of the Arbitrator to deal with a particular issue such fundamental question has to be resolved in an application for setting aside of the award. The learned Single Judge rightly approached the problem and decided it accordingly. We do not have any scope of interference.
8. The appeal fails and is hereby dismissed. There be no order as to costs.
9. Urgent xerox certified copy would be given to the parties, if applied for.
