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TMI Blog2008 (5) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... count of some delay which was attributable to Pawanhans, the work did not proceed as per schedule and the contractor accordingly informed Pawanhans by letters dated 15th February 1990, 23rd February 1990, 24th March 1990, 26th June 1990 and 6th July 1990 that the work was getting delayed as the requisite facilities for its completion had not been provided and highlighting several factors attributable to it had supervened which had led to the delay. The contractor also in the meanwhile vide letters dated 27th July 1990 and 6th August 1990 requested the respondent to release the outstanding bills against the work already completed and also requested for the "Virtual Completion Certificate" vide letter dated 25th August 1990. As some work on the compound wall still remained to be completed, the contractor agreed to take up this assignment subject to waiver of the discount of 8.2% which was to be given to Pawanhans till then and the completed works were duly handed over to Pawanhans on the 12th November 1990. The contractor had also submitted a bill dated 23rd June 1991 and it was conveyed to Pawanhans that it expected compensation on account of the variation in the terms of the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 996, one with respect to the contract for the compound wall and the second for the construction of the bridge awarding certain amounts to the contractor. Aggrieved by the awards, Pawanhans filed two separate petitions under sections 30 and 33 of the Arbitration Act, 1940 before the Bombay High Court for a direction that the awards be set aside. The learned Single Judge in his judgment and order dated 9th December 1998 held that clauses 18 and 34 of the contract when read together, provided for the payment of escalation charges as the work had not been completed within four months on account of the fault on the part of the respondent and that the said clauses did not prohibit such a payment, more particularly as time was the essence of the contract and as the contract was not on a fixed price, the prohibition of escalation was if at all to be read during the period of contract only. The learned Single Judge also repelled the arguments of the respondent that after having submitted the final bill on 25th October 1991, it was not open to the appellant herein to submit a second final bill on 2nd February 1993 by observing that the payment received on the 4th July 1993 as a consequence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the escalation are also liable to be set aside." 3. The Division Bench then examined the issues raised by the contractor as to whether that "No Due Certificate" had been given under duress and held that there was no evidence to show that the said certificate had been given under duress or coercion and as the certificate itself provided a clearance of no dues, the contractor could not now turn and say that any further payment was still due on account of the second final bill. The Division Bench accordingly allowed the appeal. The matter is before us in these circumstances. 4. Mr. Shyam Divan, the learned senior counsel for the contractor, has raised several arguments before us during the course of the hearing. He has first pointed out that the awards rendered by the arbitrator were non-speaking and in this view of the matter, the scope for judicial interference was extremely limited and interference with the findings of the Arbitrators was, therefore, not called for. He has also pleaded that clauses 18 and 34, as per their plain interpretation themselves visualized a claim for escalation where the delay had been caused by the opposite party and that in any case, the bar on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof has been affected as aforesaid: Then the Architect shall ascertain the amount of such loss and/or expense. Any amount from time to time so ascertained shall be added to the amount which would otherwise be stated as due in such certificate. 43 (2) The provisions of this condemn are without prejudice to any other rights and remedies which the contractor may possess. 18. It is specifically pointed out that the contractor shall not be entitled to any compensation whatsoever on account of: 1. Any delay in supply of any material. 2. Any increase in costs of any material. 3. Any subsequent increase in cost of any material due to increase in other charges like Railway, Steamer, freights or taxes and duties. 4. Any increase in labour costs." 7. We have examined the arguments raised by the learned counsel in the light of the aforesaid and other provisions. It is the admitted position that as per clause 38, the date of the commencement of the contract was 1st November. 1989 and the date stipulated for the completion of the work was 28th February 1990. It is also clear from sub-clause (7) of clause 1 of the General Conditions that time would be the essence of the contract. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a case where the arbitrator has refused cogent and material factors to be taken into consideration. The award cannot be said to be vitiated by non-reception of material or non- consideration of the relevant aspects of the matter. Appraisement of evidence by the arbitrator is ordinarily never a matter which the court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of the evidence. In the instant case, there was no evidence of violation of any principle of natural justice. The arbitrator in our opinion is the sole judge of the quality as well as quantity of evidence and it will not be for this Court to take upon itself the task of being a judge of the evidence before the arbitrator. It may be possible that on the same evidence the court might have arrived at a different conclusion than the one arrived at by the arbitrator but that by itself is no ground in our view for setting aside the award of an arbitrator." and further concluded: "After all an arbitrator as a judge in the words of Benjamin N. Cardozo, has to exercise a discretion informed by tradition, methodized by analogy, disciplined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was prevented by unforeseen circumstances from completing the work within the stipulated period of eleven month and that such delay could have been prevented had the State Government stepped in to maintain the law and order problem which had been created at the work site. It is also clear that the rubble and metal, which would have been available at the departmental quarry at Mannady, had to be obtained from quarries which were situated at double the distance, and even more, resulting in doubling of the transportation charges. Even the space for dumping of excess earth was not provided by the respondents which compelled the appellant to dump the excess earth at a place which was for away from the work site entailing extra costs for the same. In the aforesaid circumstances, the Arbitrator appears to have acted within his jurisdiction in allowing some of the claims on account of escalation of costs which was referable to the execution of the work during the extended period, In our judgment, the view taken by the High Court was on a rigid interpretation of the terms of contract and the Supplemental Agreement executed between the parties, which was not warranted by the turn of events ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by the Architect, a huge amount had been blocked arbitrarily over a long period of time and a request was made for its release. The letter dated 21st November 1991 is again a reminder to Pawanhans asking for payment and that in case there was a dispute, the matter be referred to the arbitrator and submitting that payment should be made atleast with respect to those dues which had been certified by the Architect. The letter dated 9th December 1991 from Pawanhans to the contractor shows that payment could be considered provided the contractor submitted a "No Claim Certificate". It appears that such certificate was indeed issued but with no result on which the contractor in his letter dated 26th December 1991 in reply to the letter dated 9th December 1991, once again submitted that the payments be released in so far as they had been certified by the Architects/Consultants and if there was a dispute regarding the other payments, they should be referred to an arbitrator and in desperation further adds: "However, if you want to hold us to economic duress by not paying what you wish to pay, without "No Claim Certificate", we shall treat it as "Duress" and issue you such a certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othing had been done and on the contrary on 8th June 1993 the claim for any payment was rejected by Pawanhans observing that as a "No Dues Certificate" had been submitted by the contractor, the question of any balance payment being due did not arise. It is at this stage that the contractor had invoked the clause for arbitration. We have reproduced the correspondence in extenso to show that the contractor was compelled to issue a "No Dues Certificate" and in this view of the matter, it could not be said that the contractor was bound by what he had written. It is also clear that there is voluminous correspondence over a span of almost 2 years between the submission of the first final bill on 3rd June 1991 and the second final bill dated 2nd February 1993 and as such the claim towards escalation or the plea of the submission of a "No Dues Certificate" under duress being an after thought is not acceptable. In M/s. Ambica Construction vs. Union of India (2006) 12 SCALE 149 it was observed as under: "A glance at the said clause will immediately indicate that a No Claim Certificate is required to be submitted by a contractor once the works are finally measured up. In the instant case the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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