H.R. Khanna, J. - (1.) THIS appeal filed by the State of Punjab and the Executive Engineer, Arrear Division, Patiala, is directed against the order of learned Subordinate Judge, 1st Class, Ambala, whereby he set aside the award of the arbitrators.
(2.) THE brief facts of this case are that Messrs, Chander Bhan Harbhajan Lal contractors, who are the Respondents in this appeal and are hereinafter referred to as the contractors, entered, into (a con -treat with the Punjab State through the Executive Engineer to supply bowlders for construction of Siswan super passage vide "work orders, dated 26th August, 1952 and 2nd November, 1954. Clause 5 of the work orders provided that any dispute arising between the parties should be referred to the arbitration of the Superintending Engineer of the Circle. This clause was subsequently substituted by an agreement between the parties according to which the dispute was to be referred to the Settlement Committee, Patiala, instead of the Superintending Engineer. The contractors made a claim for Rs. 33,019/2/ - against the State with respect to the work done under the contract. This claim was denied by the State of Punjab which in its turn made a claim for recovery of Rs. 18,691/ - against the above contractors. The matter was, accordingly, referred to the arbitration of the Settlement Committee. The Settlement Committee on 28th February, 1961, gave a conditional award for payment of Rs. 9,812/ - by the State of Punjab to the above -mentioned contractors. The claim with respect to this amount, it may be stated, was admitted by the Executive Engineer. So far as the claim made by the State of Punjab for the, recovery of Rs. 18,691/ - against the contractors was concerned, the arbitrators in their award observed as under: They have also claimed a recovery of Rs 18,691/ - on account of cost and carriage of boulders. It seems that the recovery was ordered by the Superintending Engineer in February, 1957, as he considered the record entries regarding 4057O eft. as suspicious. It now appears that the Chief Engineer made certain enquiries from the Superintending Engineer which he has now been able to -submit to the Chief Engineer. The matter being still sub judice, it will not be proper for us to order this recovery till the Chief Engineer has finally decided the matter. Since the representative of the department has already admitted the claim of the contractors for a certain amount, we make a conditional award in favour of the con -tractors for an amount of Rs. 9,812/ - only (Rs. Nine thousand eight hundred and twelve only) subject to the condition that in case the Chief Engineer upholds the recovery, the same will be adjusted against this amount. Since the contractors have got only a period of 90 days to make the award a rule of Court, the department is advised to obtain the final orders of the Chief Engineer in this case within the stipulated time. On 6th April, 1961, the contractors filed an application under Section 14(2) of the Arbitration Act in the Court of Subordinate Judge, Ambala, praying that the Settlement Committee be directed to file the award made by it in Court so that further proceedings might be taken by the con -tractors. The award 'was thereafter filed and on. 4th July, 1961, the contractors filed an application under Sections 15, 17, 30, and 33 of the Arbitration Act. It was prayed by the contractors that the award given by the arbitrators be modified and the condition regarding the adjustment of a, sum of Rs. 18,691/ - if found due by the Chief Engineer against the amount awarded by the arbitrators be wiped off. In the alternative, the prayer made by the contractors was that second part of the award relating to the observations regarding recovery of Rs. 18,691/ - be set aside. According to the con -tractors, the conditional award was imperfect in form and contained an obvious error inasmuch as the question, of the recovery of Rs. 18,691/ - had been left open to be decided by the Chief Engineer who was a stranger to the contract. The arbitrators were, accordingly, stated to have been guilty of misconduct.
(3.) THE above application of the contractors was resisted by the State of Punjab and the following issue was framed: Whether the award is liable to be set aside or modified as per objection para No. 7 of the application? The learned Subordinate Judge held that the arbitrators did not themselves decide the question 'about the recovery of Rs. 18,691/ - regarding which claim had been made by the State of Punjab but left it open for decision' by the Chief Engineer. According to the learned Subordinate Judge, the arbitrators could not do so and they were guilty of judicial misconduct inasmuch as they delegated their functions to the Chief Engineer. It was further observed that the portion of the award regarding claim for recovery made by the State could not be separated from the claim of the contractors. The award was, accordingly, set aside; as a whole.;