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Jiwani Engineering Works (P.) Ltd. Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberSuit No. 206 of 1979
Judge
Reported inAIR1981Cal101
ActsArbitration Act, 1940 - Sections 20, 29, 30 and 33
AppellantJiwani Engineering Works (P.) Ltd.
RespondentUnion of India (Uoi)
Appellant AdvocateD.K. Sen and ;P.K. Sen, Advs.
Respondent AdvocateSanjay Bhattacharya, Adv.
DispositionApplication dismissed
Cases ReferredDamodar Valley Corpn. v. K. K. Kar
Excerpt:
- .....the award mainly on two grounds; firstly, that the respondent, the award holder, has executed a no claim certificate which is annexure 'a' to the petition and, therefore, he is not entitled to any claim in the reference as he has mentioned specifically in no unequivocal terms that there was no dispute or difference relating to the agreement contained in the arbitration clause in the arbitration agreement. he submitted that on the basis of the said no claim certificate the order of reference and the award become a nullity as the arbitrator has no jurisdiction to enter into the reference and as there was no difference or dispute between the parties arising out of the said contract. but i am afraid the same cannot be accepted as whether there was no claim certificate or not that itself is a.....
Judgment:
ORDER

Salil K. Roy Chowdhury, J.

1. This is an application for setting aside an award under Sections 30 and 33 of the Arbitration Act.

2. Pursuant to a contract for execution of earth work in formation, bridge work, building and other miscellaneous works, a tender was called by the Union of India represented by the South Eastern Railway, and the petitioner's tender was accepted on the 17th of April, 1964, and a formal con-tract was entered into being dated 21st may, 1964.

3. It appears that disputes arose in respect of the said contract and the same was referred to arbitration after the respondents made an application under Section 20 of the Arbitration Act before this Court being Matter No. 66 of 1976 dated 20th August, 1976. Thereafter it appears several extensions were obtained for making the award. The last extension was obtained up to 30th Nov., 1979. It also appears that the arbitrator entered upon the reference pursuant to the said order of reference dated 20th August, 1976, by their letter dated 13th Nov., 1976, and both the parties appeared before the arbitrator and filed their statement of claim and counter statement and, ultimately, the award was made on the 30th Nov., 1979, which was filed before this Court by the arbitrator by its letter dated 30th Nov., 1979, which was forwarded to this Court by the arbitrator by letter dated 30th Oct., 1979, and the same was filed on the 11th Dec., 1979, and the Court duly served notice on the parties for filing the arbitration agreement dated 12th Dec., 1979, and stated that the matter will appear in the list for judgment upon award on 29th Jan., 1980. The petitioner, Union of India, filed its objection for setting aside the award on 3rd March, 1980 and, thereafter, directions were given for filing affidavits and the matter is now being heard.

4. Mr. D. K. Sen with Mr. P. K. Sen appeared for the petitioner and challenged the award mainly on two grounds; firstly, that the respondent, the award holder, has executed a no claim certificate which is annexure 'A' to the petition and, therefore, he is not entitled to any claim in the reference as he has mentioned specifically in no unequivocal terms that there was no dispute or difference relating to the agreement contained in the arbitration clause in the arbitration agreement. He submitted that on the basis of the said no claim certificate the order of reference and the award become a nullity as the arbitrator has no jurisdiction to enter into the reference and as there was no difference or dispute between the parties arising out of the said contract. But I am afraid the same cannot be accepted as whether there was no claim certificate or not that itself is a dispute which was referred to arbitration and covered under the arbitration clause in the agreement as it is for the arbitrators to decide such question. The said point was taken by the Union of India in so many arbitrations which were couched in the same language and it is so well known and a notorious fact that unless a no claim certificate is issued by the contractor payment of the final bill will not be made. But that does not prevent the contractor from raising his claim before the arbitrator in terms of the arbitration clause for the value of his work or other claims within the scope of the agreement between the parties. The said question came up before this Court from time to time and in one of the unreported decisions of the appeal Court in Award Case No. 124 of 1978 (Union of India v. D. Bosc) of C. J. and S. C. Ghose, J. dated 15th Feb., 1980 (since reported in : AIR1981Cal95 ), the same contention of Mr. P. K. Sen, who is appearing before me, as to the no claim certificate, has been rejected and, therefore, in my view, there is no substance in the said contention. Mr. Sen thereafter referred to Clause 16 (2) of the Contract which disentitled the respondent award holder from any interest. But, in my view, that clause docs not prevent the arbitrator from granting pendente lite interest on the claim adjudicated by the arbitrators in the reference before them. In this case the arbitrator has awarded interest from, the date of entering upon the reference being 18th Nov., 1976, till the date of the publication of the award which, it is now well settled, that the arbitrator has power to grant pendente lite interest by a series of Supreme Court decisions starting from Tharwardas Pherumal v. Union of India reported in : [1955]2SCR48 , Union of India v. Bungo Steel Furniture, reported in : [1967]1SCR324 and State of Madhya Pradesh v. Smith & Skelton, reported in : [1972]3SCR233 . Mr. Sea referred to a decision of Sir Ashu-tosh Mukherjee in (1920) 32 Cal LJ 239: (AIR 1920 Cal 737) in J. W. Crewdson v. Ganeshdas Hari Bus, wherein it was held that Court has no jurisdiction to grant pendente lite interest on damages i. e., on unascertained sum or unliquidated damages but it was held in that decision that Court has power to grant pendente lite interest on ascertained sum and, therefore, the said decision is not really helping Mr. Sen in any way whatsoever. This is a claim of a contractor for the value of the work done under a contract and the award has ascertained the amount and granted interest pendente lite i. e., from the date of entering upon the reference till the award, which jurisdiction the arbitrator has and the said principle is now well settled by the series of Supreme Court decisions and various decisions of this Court. Those being the two grounds of attack on the award Mr. Sen on behalf of the petitioner Union of India submitted that the award should be set aside.

5. Mr. Sanjay Bhattacharya, appearing for the respondent, submitted drawing my attention to the unreported judgment of the Division Bench which I have referred to above and also other unreported judgments of mine that the same point, which is being raised by Mr. Sen on behalf of the petitioner, has been rejected by the Court on, a similar fact in similar type of contracts and the award has been upheld and, therefore, the application should be dismissed.

6. As I have already observed that the award does not show any error on the face of it and there is no ground made out for the same but only two grounds, as advanced by the petitioner, being the no claim certificate makes the reference bad and thereby rendering the order of reference under Section 20 a nullity and without jurisdiction cannot be accepted at this stage, firstly there is no question that by granting the no claim certificate the contractor bo-comes disentitled to refer any dispute which arises out of the contract to arbitration under the arbitration clause in the agreement between the parties. That has been un-animously held by this Court and also the unreported decision of the Division Bench and the Supreme Court decision in Damodar Valley Corpn. v. K. K. Kar in : [1974]2SCR240 . There are also other decisions of this Court and the Supreme Court where it has been held that the question of no claim certificate and validity of the same is itself a dispute which is within the scope of the arbitration clause and the arbitrator has jurisdiction to decide the same. Lastly, there is no bar for the arbitrator to grant interest pendente lite i. e., from the date of entering upon the reference till the award is made as the same question was specifically referred to the arbitrator. Therefore, on the decision of the Supreme Court, which I have referred above, it is now well settled that the arbitrator has jurisdiction to award pendente lite interest. Therefore both the counts fail and there is no error on the face of the award and the application must be dismissed.

7. Therefore, I am making the following order:

The application is dismissed with cost.


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