- (1.) ARBITRATION Appeal No. 17 of 2007 has been filed on behalf of the Indian Builders (herein-after to be referred as 'contractor') against the judgment dated 19.04.2007 passed by the learned Sub- Judge-1, Jamshedpur in Misc. ARBITRATION Case No. 01 of 2007 whereby sub-claims so far as the claim no. 3 on account of under utilized overheads, claim no. 4 on account of loss due to under utilized tools, plants and machineries and claim no. 6 on account of loss of profit has been disallowed. ARBITRATION Appeal No. 24 of 2007 has been filed by the State of Jharkhand against the self same judgment contending inter-alia that the contractor was not entitled to the awarded amounts and the counter-claim has not been considered. As both the appeals arise out of the same judgment and Award, they were heard together and are being disposed of by this common judgment.
(2.) IT may be noted that in both these appeals only the aforesaid judgment passed by the learned Sub-Judge has been challenged by the parties and not the Award. Mr. Mittal, learned senior counsel appearing for the contractor in both the appeals, submitted that the learned Sub-Judge has wrongly disallowed the claims under the said heads on the ground that they were barred under clause 4.20.2 and 4.20.4. He further submitted that the judgment relied by the learned court below has been set aside by the Supreme Court in the case reported in [(2009) 16 SCC 705 (Bharat Drilling and Foundation Treatment Private Limited vs. State of Jharkhand & others)] in which the Supreme Court accepted that similar clauses were only bar for department and not for the Arbitrator. In other words, he submitted that such claims could at best be rejected by the department but when all the disputes were referred to the Arbitrator, the Arbitrator was justified to consider and pass Award on such claims. He further submitted that the Arbitrator has passed a detailed and reasoned Award after considering and dealing with each and every claim and counter-claim of the parties. Mr. Mittal further submitted that the said claims were not objected by the State before the Arbitrator and therefore, the court could not consider such issues not raised before the Arbitrator. In support of this submission, he relied on paragraph-23 of [(2011) 10 SCC 573 (MSK Projects India (JV) Limited vs. State of Rajasthan] in which it was inter-alia observed that the court fell in error considering the issue which was not taken by the State before the Tribunal during the arbitration proceeding. He lastly submitted that the scope of interference by the court in such matters is very very limited. In support of this submission, he relied on (2001) 6 SCC 347 (Ispat Engg & Foundry Works vs. SAIL. On the other hand, Mr. V.K. Prasad, learned counsel appearing for the State in both these appeals, submitted that the Arbitrator misconducted himself inasmuch as in spite of the order passed by this court in Civil Revision No. 298 of 2003, he did not refund the amount received by him towards arbitration fees to the parties. He further submitted that only because the Supreme Court has set aside the judgment of the High Court, the claims of the contractor cannot be automatically allowed. He further submitted that the counter-claim has not been properly considered by the learned Sub-Judge.
(3.) IT appears that against the claim no. 3 on account of under utilized overheads to the tune of Rs. 3,17,33,000/-, the Arbitrator awarded a sum of Rs. 44,40,000/-; against the claim no. 4 on account of loss due to under utilized tools, plants and machineries to the tune of Rs. 3,60,00,000/-, the Arbitrator allowed the claim of Rs. 1,68,00,000/-; against the claim no. 6 on account of loss of profit to the tune of Rs. 4,39,200/-, the Arbitrator allowed Rs. 4,00,000/-. The Arbitrator has given good reasons for allowing the said claims to the extent indicated above. Learned Sub-Judge disallowed these claims on the ground that they were barred under clauses 4.20.2 and 4.20.4 of the contract which reads as under: "4.20.2: No claim for idle labour, idle machinery, etc. on any account will be entertained........... 4.20.4: No claim shall be entertained for business loss or any such loss." Learned Sub Judge also relied on the judgment in the case of Bharat Drilling & Foundation Treatment (P) Ltd, which has been set aside by the Supreme Court. The Supreme Court accepted the submission that such clauses were only bar for the department and not bar on the Arbitrator in respect of the matters mentioned therein. It may be noted that the said clauses were similar to clause-1.21.2 and clause-1.21.3 in the said case before the Supreme Court [(2009) 16 SCC 705 (Bharat Drilling and Foundation Treatment Private Limited vs. State of Jharkhand & others)].;