ASHIM KUMAR BANERJEE.J - (1.) THE subject matter of appeal would relate to an order passed by the learned Single Judge, declining to set aside and/or interfere with an award published under the old Arbitration Law being the Arbitration Act, 1940. His Lordship, by judgment and order dated March 28, 2012 appearing at page 299-307 of the paper book, upheld the award except the claim No. 2 that was found to be repeated in claim No. 4. In effect, the learned Judge affirmed the award to the extent of Rs.7,19,038/- covering claim Nos. 3 and 4 that was allowed by the Arbitrator. Bringing the facts in a narrow campus, we would find, the appellant/State entrusted a partnership farm M/S. S.N. Bhakat & Company to execute a work on behalf of the State represented by Public Works Department, (hereinafter referred to as P.W.D.), Kharagpur Division for construction of residential quarters for nongazetted staff for Eastern Frontier Rifles. The tender value was Rs.22,06,011/-. As per the contract, the work was scheduled to be completed within eighteen months from the date of the work-order. Since the work-order was issued on April 13, 1983, the work was supposed to be completed by October 30, 1984 whereas the work was completed on December 31, 1985 as stated by the claimants ' witness. However, records would depict, the work was completed on January 15, 1986. State accepted delayed handing over of possession. State from time to time extended the time-schedule as we find from the record. Contemporaneous correspondence would show, State duly paid seventh Running Account Bill (hereinafter referred to as R.A. Bill) that was paid on August 5, 1986. The claimants thereafter wrote to the authority to treat seventh R.A. Bill as the final bill and refund their security deposit that was withheld as per the contract. Claimants would contend, they were compelled to write such letter as State was unusually delaying the process in releasing the security. State would however, contend, such letter must be construed as an event of accord of satisfaction of the final payment that would give rise to the dispute. The claimants raised subsequent claims for escalation and idle labour charge because of delay in completing the construction. According to the claimants, delay was due to delayed handing over of site by the P.W.D. as also delay in supplying rawmaterials. Significant to note, supply of principal raw-materials being cement and steel was the responsibility of the State. There had been delay in supply as found out by the Arbitrator. According to the State, there could not have been any further claim either on escalation or idle labour charges or otherwise that would be apparent from the claimants ' letter dated November 11, 1986 wherein they had informed the P.W.D. that they had completed the work on January 15, 1986 and received final payment against seventh R.A. Bill that might be treated as final bill as there were no further work beyond the last measurement done on January 7, 1986. Once the claimants treated the seventh R.A. Bill as final and requested release of security deposit, there could not be any additional amount payable to them. Moreover, they did not reserve their right contemporaneously that would make the subsequent claim for the additional cost not sustainable. The claimants would contradict such stand of the State by referring to its letter dated February 27, 1987 appearing at page- 242 of the paper book that would also rely upon communication made by the Assistant Engineer, P.W.D. appearing at page 240 and 241 wherein State admitted delay in delivery of the raw-materials. The claimants also relied upon their letters dated August 25, 1986 and February 15, 1987 appearing at page 51-52 of the paper book wherein they reserved their right to claim for damage because of delayed work. The Arbitrator was a technical and non-legal person. Although the said Act of 1940 would not compel the Arbitrator to give a reasoned award unlike the new law being Act of 1996 the Arbitrator published a reasoned award as we find from page 135 and 186 of the paper book. We find, Arbitrator went deep into the matter and examined each and every claim minutely. The Arbitrator allowed claim No.1 in full being the refund of security deposit. The Arbitrator awarded Rs.38,300/- instead of Rs.75,000/- as claimed in claim No. 2 for idle labour charges. The claim No. 3 on account of compensation for delayed execution for Rs.5 lacs was allowed to the extent of Rs.4,71,834/-. The Arbitrator allowed claim No. 4 for Rs.1,58,400/- instead of Rs.1.92 lacs on account of compensation for prolonged establishment beyond the schedule time. The Arbitrator rejected claim Nos. 5 and 7 whereas allowed claim No. 6 to the extent for Rs.17,374/- and claim No. 8 for Rs.39,600/-. Claim Nos. 9 and 10 would relate to interest and cost respectively. The Arbitrator awarded 12% interest on the awarded sum and cost of Rs.1,07,750/-. The learned Single Judge set aside the award for Rs.38,300/- in respect of claim No. 2 on the ground that it was repetition of claim No. 4.
(2.) ON the other claims, His Lordship observed, the Arbitrator in his wisdom dealt with the issue on the basis of the evidence led before him. The Arbitrator recorded reasons giving justification to the awarded sums although the law did not require justifying "every rupee under each head of claim ". The award could not be faulted. His Lordship upheld the award. Hence, this appeal by the State. Mr. Samrat Sen, learned counsel appearing for the State in his usual fairness restricted his challenge to claim Nos. 3 and 4 as also claim Nos. 9 and 10. Claim No. 3 would relate to escalation whereas claim No. 4 would relate to idle labour cost. Mr. Sen referred to the minutes of the arbitration dated August 11, 2006 and August 25, 2006 appearing at pages 71-73 to show, the seventh R.A. Bill was duly paid on August 5, 1986. The claimants subsequently requested to treat the same as the final bill and issued "No Claim Certificate " on August 25, 1986. Their first protest came through letter dated February 15, 1987 after about six months from the date of receipt of the final payments. Hence, there could be no case of duress that could be set as a shield to gain support to their additional claims. Mr . Sen further contended, the Arbitrator gave opportunity to the claimants to adduce evidence that the claimants declined as would appear from the minutes dated January 12, 2007 appearing at page- 92. State produced their witness and proved their defence before the Arbitrator. The contention of Mr. Sen if we could put down seriatim, it would be as follows: (I) There was inordinate delay to make protest deserving additional claim. (II) Final payment was duly received on August 5, 1986. Hence, there could by no compulsion upon the claimants to issue "No Claim Certificate ".(III) The claimants themselves contended, seventh R.A. Bill took all work into consideration and requested the State to consider the same as final payment having no further claim. Hence, additional claim was without any basis and not tenable. (IV) The Arbitrator should have considered all the correspondence instead of only two letters that would be non-application of mind. (V) Even in the statement of claim, no case of duress was made. No evidence was led on that score. The Arbitrator 's finding to the said extent would thus be without any basis. (VI) Assuming, the claimants were entitled to put forward their claim, avoiding "No Claim Certificate " they should have led oral evidence to prove the duress. Having denied to do so, they would not be entitled to put forward their claim. (VII) The Arbitrator himself treated the seventh R.A. Bill as final bill as would appear from page-178. Hence, there could not be any further claim to be awarded in the award.Mr. Sen relied on Section 55 of the Contract Act and contended, the law would not permit the claim to be put forward and awarded. On interest and cost, Mr. Sen would contend, in case this Court would not find favour with his argument on the "No Claim Certificate " denying the right of the claimants to make any additional claim and consider the claims on merit the awarded sum should carry interest at the reasonable rate and not at 12% per annum as directed by the Arbitrator and affirmed by the learned Single Judge. Similarly, reasonable amount should be awarded as cost. Mr. Sen cited the following decisions to support his contention: 1. Jiwani Engineering Works (P) Ltd. Vs. Union of India reported in All India Reporter 1981 Calcutta page-101. 2. Chairman and MD, NTPC Ltd. Vs. Reshmi Constructions, Builders and Contractors reported in 2004 Volume-II Supreme Court Cases page-663. 3. Thawardas Pherumal and Anr. Vs. Union of India reported in All India Reporter 1955 Supreme Court Volume-I page-468. 4. Jayesh Engineering Works Vs. New India Assurance Co. Ltd. reported in 2000 Volume-X Supreme Court Cases page-178.5. K.P. Poulose Vs. State of Kerala and Anr. reported in 1975 Volume-II Supreme Court Cases page-236. 6. Alva Aluminium Ltd., Bangkok Vs. Gabriel India Ltd. reported in 2011 Volume-I Supreme Court Cases page-167. (Alva Aluminium Ltd., Bangkok Vs. Gabriel India Ltd.) 7. State of Kerala and Anr. Vs. M.A. Mathai reported in 2007 Volume-X Supreme Court Cases page-195. 8. Union of India and Ors. Vs. Master Construction Company reported in 2011 Volume-XII Supreme Court Cases page-349. 9. National Insurance Company Ltd. Vs. Boghara Polyfab Pvt. Ltd. reported in 2009 Volume-I Supreme Court Cases page- 267. 10. Union of India Vs. Ajabul Biswas reported in 2008 Volume-I Calcutta High Court Notes page-16. 11. Batliboi and Company Ltd. Vs. Board of Trustees for the Port of Calcutta reported in 2010 Volume-VII R.A.J. Calcutta page-171. 12.Associated Engineering Co. Vs. Government of Andhra Pradesh and Anr. reported in 1991 Volume-IV Supreme Court Cases page-93.13. Oil and Natural Gas Corporation Vs. WIG Brothers Builders and Engineers Pvt. Ltd. reported in 2010 Volume-XIII Supreme Court Cases page-377.
(3.) FOOD Corporation of India Vs. Chandu Construction and Anr. reported in 2007 Volume-IV Supreme Court Cases page- 697.;