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Petitioner: Haji NOOR AHMED CONSTRUCTION CO., KARACHI VS Respondent: PROVINCE OF SINDH JUDGMENT
Court Name: Sindh High Court Judge(s): Amanullah Abbasi Title:Haji NOOR AHMED CONSTRUCTION CO., KARACHI vs PROVINCE OF SINDH
JUDGMENT
Reported As: 2000 YLR 1530 Result: Order accordingly Judgment JUDGMENT ' This matter was listed for hearing of objections of Award. The award of the Sole Arbitrator is as under:--- "In view of the findings recorded in the. Foregoing paragraphs, I hereby award and order as under:- -- (1) Direct the defendant No,2 to pay a total amount of Rs,1,502,239.02 (Rupees One Million five hundred two thousand two hundred thirty one paisa two only) to the plaintiff in satisfaction of his claims as accepted by me in the foregoing paragraphs. I leave question of rate of interest and duration for which it has to be paid by the defendants to the plaintiff, to the Hon'ble High Court of Sindh to decide. (2) Direct the defendants to pay Rs,45,000 (Rupees Forty-five thousand only) as costs, to the plaintiff. (3) The half share of arbitration fee and miscellaneous expenses of arbitration have been paid by the plaintiff but Rs,7,500 on account of balance of half share of arbitration fee and Rs,1,000 on account of half share in the miscellaneous expenses of arbitration proceedings are to be paid by the defendants to me. ' In conclusion I record that I had given full opportunity to theparties to file their pleadings, documents and also full opportunity to adduce their evidence, examine and cross-examine witnesses. I have applied my mind fully in giving decision on various claims and questions arising
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thereunder, and I have made every possible endeavour to make this Award just and proper in the circumstances of the case as adequately established upon the record of this arbitral tribunal." ' This award is, dated 26-6-1991. Objections to the award were filed by the defendant on 15-9-1991 It is mentioned in the objections that the award is neither a complete award nor it is an award in the eyes of law on the ground that the Arbitrator has not decided the dispute of interest and has left this matter to be decided by this Court which cannot act as a second arbitrator. The arbitrator had given award for the claims which plaintiff himself withdrew and abandoned through his application, dated 15-9-1990. The arbitrator had given award for claims which were neither permissilble under the contract nor admissible. The defendant had filed application under section 30 of the Arbitration Act bearing J.M. No,39 of 1991 in this Court whereby the defendants have challenged the award, dated 26-6-1991. The defendants have prayed that the award may not be considered and/or made rule of the Court till final disposal of the application under section 30 of the Arbitration Act in J.M. No,39 of 1991. ' It will be relevant to reproduce the order of this Court, dated 24-3-1992: "Learned counsel for the Government of Sindh. Mr. Umer Qureshi states that J.M. 39 of 1991 covers an application under section 30 of the Arbitration Act challenging the same award which has been filed in Court and has been converted into Suit No 771 of 1991. According to the learned counsel subsequent to the tiling of the award some objections have been preferred to the award as were taken at the time when the application under section 30 of the Arbitration Act was preferred. In such circumstances J.M. 39 of 1991 is not pressed subject to all just exception if and when they arise. It is dismissed as not pressed. ' Now Suit No,77 of 1991 alone would come up for consideration alongwith R&P submitted by the learned Arbitrator." 'Subsequently, on 15-4-1992 this Court passed the order as under: --- "In this situation the total award amount being Rs,15, 02,239.02, at relatively small amount remains in dispute in between the parties. It will therefore, be appropriate for Mr.Umer Qureshi to submit a statement dealing with such disputed portion of the award category-wise if necessary and indicate as to how the award is questionable as regards such amounts. Requisite statement would be submitted within a period of one week with advance copy of Mr. Bilal A. Khawaja who may then submit a reply within another one week's time with like copy to Mr. Umer Qureshi ' On 23-1-1994 arguments were heard and judgment was reserved. On 9-5-1994 the matter was returned to the concerned branch for fixing the same for re-hearing. Earlier to this on 27-4-1992 written arguments had been submitted on behalf of the defendant while the reply of the plaintiff to the arguments of the defendant was filed on 3-3-1993. On 31-10-1997 both the counsel stated that written arguments have already been filed and their arguments are the same, The judgment was, therefore, reserved. ' It will be advantageous to reproduce the contents of the written arguments submitted on behalf of the defendant and the contents of the reply to the written arguments submitted on behalf of the plaintiff which read as under: WRITTEN ARGUMENTS ON BEHALF OF DEFENDANT 1. That the defendants have agreed to make the payment to the plaintiff in accordance with the recommendation of the Consultant as per statement at Exh.P/38 prepared and submitted after joint inspection and measurement made jointly by the plaintiff, the Consultant and the representative of the defendant which comes to Rs,4,80,826.64. ' In addition to the above the defendants have also agreed to refund the amount of Security Deposit of plaintiff lying with the defendants which is Rs,1,06,696.00.
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' In view of the admissions of the defendants during the arbitration proceedings by the witness for defendant, this Hon'ble Court was pleased to direct the defendants to deposit the same with the Nazir of this Hon'ble Court for which the arrangements are being made by the defendants. 2. That during the Arbitration proceedings the plaintiff moved an application, dated 15-9-1990 (Annexure-'D') with the heading "Abandonment of certain claims" wherein the plaintiff had very clearly mentioned "the claimants hereby abandon the following claims as not pressed." In spite of this clear withdrawal the learned Arbitrator had allowed these claims, under the headings of "Catagory-V" at page 28 of the Award and made the same as part of the Award, the total amount of which Rs,4,07,125.64. ' This Hon'ble Court was pleased to disallow the aforesaid amount of Rs,4,07,125.64 and have deleted the same from Award, by consent of the parties and have passed the Order on 15-4-1992 in this regard. 3. That according to defendants, an amount of Rs,5,07,590.74 allowed in Award and the cost, amounting to Rs,45,000 allowed by the learned Arbitrator is unjustified, illegal and based on no evidence, which amounts to misconduct on the part of the learned Arbitrator. It is discussed item- wise, as under: (A) Claim No,26 at page 21 of the Award (page 41) concern to earth filling: ' The learned Arbitrator has allowed Rs,1,01,115.06 disbelieving the quantity approved by the Consultant:-- (a) Reliance has been placed on a letter, dated 15-7-1985, which letter has not been exhibited in the case and as such cannot be taken into consideration. (b) As per record, the letter, dated 15-7-1985 is the legal notice on behalf of the plaintiff which is at Exh.P/28. (c) Reliance has been placed on a letter, dated 26-6-1985 at Exh.P/26 but this letter concerned to the supply of measurement sheets alongwith the 8th Running Bill P/18 and has to do nothing with the earth filling quantity. The plaintiff supplied these measurement sheets whereafter the 8th Running Bill was scrutinized by the Consultant and forwarded to P.D. Who made the payments against the said bill received the same. (d) The plaintiff himself has mentioned the quantity of Earth Filling as 25945.62 cft. In his 8th Running Bill Exh.P/18 (page 315) and the payment of Rs,72,128.82 was paid in full to the plaintiff by the defendant, as claimed by the plaintiff, without reducing the quantity or the amount. ' Therefore, the claim of the plaintiff for 54130 cft. At this stage is illegal and uncalled for and the learned Arbitrator has accepted this claim blindly without going through the documents and evidence on the record. (e) The evidence of the plaintiff is reproduced below:- (i) "The balance unpaid amount of previous bill is included in the next bill." (ii) "Measurement of the work done was conducted by the Consultant's representative and the Contractor. Plaintiff used to prepare bill on the basis of measurement conducted by the Consultant's representative." (iii) "Contractor and the consultant used to sign the measurement book after measurement. In order to further elaborate, the witness said that total measurement of each item used to be taken by the Contractor for preparation of bills." (iv) "I see 8th Running Bill. This is marked as Exh.P/18. It is the same which was sent by the plaintiff to the Project Director and it is correct." (v) "I see 9th Running Bill. It is the same which was submitted by the plaintiff. It is marked as Exh.P/19. This bill bears the remark...." (f) In regard to this claim the remark of the Consultant is very correct and relevant which is at (page 4) Exh.P/38(5) at Serial No,35,
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' Therefore, the Award of Rs,1,01,115.06 against Claim No,26 at page 21 of the Award allowed by the learned Arbitrator is illegal, unjustified and based on no evidence as well as contrary to the evidence on record, hence liable to be disallowed and deleted from the Award. (B) Claim No,27 for Applying Floating Coat of Cement at page 22 of the Award (page 43) amounting to Rs, 1 ,13 ,394 .79: (a) I am reproducing the remarks of the Consultant, as under, made against this item at Serial No,36, page 5 at Exh.P/38(6). "A quantity of 83,412.97 sft was recorded at page .124 of M.B. No,1 and recommended for payment in 6th R.A. Bill, but as per instruction from P.D. Office that this item is not to be paid, the same was deleted by the Consultants in 7/9th R.A. Bill but while making payment, this item was again allowed. The entire measurement for this item have now been recorded which works to 90,202,04 sft. Final decision is to be taken in this respect. ' This remark has been completely ignored by the learned Arbitrator who have blindly relied upon the written arguments submitted on behalf of the plaintiff and have reproduced the same in his own words, which is misconduct on the part of learned Arbitrator. (b) The Exh. Nos. Of letters, dated 14-6-1982 and 12-12-1982 are wrong in the Award. According to the cross-examination of defendant, dated 15-10-1990 at page 5 (page 143) the Exh.Nos. Are required as D/71 and D/70, respectively. I am enclosing these letters for the reference of this Hon'ble Court and discussing the same, one by one, as under:--- (i) Letter, dated 14-6-1982, Exh.D/72 (Exh.D/71): ' In this letter the plaintiff has made request for the payment for the job of Floating Coat but has nowhere mentioned about its payment for each coating separately or claimed double payment. (ii) Letter, dated 12-12-1982, Exh.D/73 (Exh.D/70): ' In this letter the Consultant has recommended for the payment of job of Floating Coat and has sought the approval of P.D. So that the measurement could be entered in the measurement book. In this letter there is no mention about double payment. (c) The above correspondence were made when the P.D. Office has directed Consultant that this item is not to be paid, but after the letter, dated 12-12-1982, the P.D. Gave his approval, whereafter the Contractor included this item in his 7/9th R.A. Bill as per measurement jointly conducted by the Contractor (plaintiff) and the Consultant. (d) The plaintiff had claimed 83412.92 sft. @ Rs,29.10 amounting to Rs,24,273.67 in his 9th Running Bill, dated 8-8-1984 at Exh.P/19 (page 375 of R&P) and he has been paid in full as demanded and at the time of receiving the payment of the 9th R.A. Bill, the plaintiff put his remarks at Exh.P/19 (page 395 of R&P) in Urdu in these words:-- (sic) (e) The rate is not disputed as well as the quantity is not disputed. The only dispute is that the plaintiff is making the quantity double and claiming double amount for doing double coating. The work is only to apply Floating Coat but nowhere the plaintiff either mentioned in his letter Exh.D/72 (D/71) or in his 9th R.A. Bill Exh.P/19. If it was so then why the plaintiff did not claim as such in his 9th R.A. Bill. (f) The learned Arbitrator has blindly relied upon the arguments submitted on behalf of the plaintiff and accepted as claimed by the plaintiff, without going through the contents of letters as Exh.D/72 and Exh.D/73, without going through the contents of 9th R.A. Bill Exh.P/19 and without giving any legal importance to the remarks of the plaintiff on the said 9th R.A. Bill written in Urdu as stated above. (g) However, at the time of joint inspection and measurement conducted by the parties during the .Pendency of his proceedings, the final measurement was recorded as 90,202,04 sft. The payment for 83,412,97 sft. Has already been made to the plaintiff in the 9th R.A. Bill and now the payment for the balance quantity i,e,, 6,789,07 sft. Rs,29.10 per cent. By the consultant and included in Exh.P/38.
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' Therefore, the Award of Rs,1,11,418.60 as against claim No,27 is illegal, unjust and based on no evidence and has been awarded without going through record and should be deleted. (C) Claim No,33, Relating to Cartage, amounting to Rs,3,31,211,59 allowed by the learned Arbitrator, which is illegal, uncalled for, unjustified and based on no evidence: (a) The rates of all the items in the contract are with material i,e,, "Providing and laying" and in these circumstances the distance for bringing material is immaterial because the providing material was the. Responsibility of the Contractor as per contract. (b) Please see the Claim No,33 at page 33 of File No,3 of R&P. The claim is vague and without any supporting documents as proof. The learned Arbitrator has blindly allowed this claim as claimed by the Contractor without any justification. (c) The learned Arbitrator has failed to go through the Running Bills from 1st which was submitted on 25-2-1981 (Exh.P/8) till the 9th, which was submitted on 8-8-1984 (Exh.P/19), and note that the Contractor has nowhere claimed any Cartage which goes to proof that no Cartage, as per contract is payable as the Contractor was responsible to provide material at his own cost, as the same is included in the premium quoted by the plaintiff. (d) The learned Arbitrator has failed to note that the Running Bills were submitted after the completion of works done till the submission of that Bill and the plaintiff had submitted 9 Running Bills during the period of more than 3 years and the plaintiff had nowhere claimed any Cartage knowing it very well that they are not payable it is including the cost/rate. (e) The learned Arbitrator has also failed to see the record of evidence of plaintiff before allowing this claim. The plaintiff had, during his cross-examination, categorically stated that "It is correct to suggest that the plaintiff had signed the Bills unconditionally in respect of rates and measurement". (f) The learned Arbitrator has completely failed to go through the record and find out that the plaintiff had never claimed Cartage and even in his legal notice, dated 2-4-1985 (Exh.P/24) (page 435 of Files Nos.6 and 7 of R&P). (g) Though the schedule of 1976 is not applicable in this case, as the work was to be carried out as per Public Works Department, Head Books, yet as per clause (5) of the Introduction elaborated in the Schedule of 1976 does not allow any Cartage when the job is given with material. The said clause is reproduced below:--- "No lead whether small or long of carriage of material for item for which finished rates of items are applicable is to be paid separately. However, such provision will be made in the estimates for carriage of material of standard specifications from a pre-determined nearest source." (h) It is further submitted that in most of the cases 116% over and above the rates approved have been paid to the Contractor which covers all such expenses and as such no separate cartage is payable. ' Therefore, the Award in regard to cartage is illegal, unjustified and based on no evidence, hence to be set aside. (D) Cost of Rs,45,000 granted by the learned Arbitrator, is illegal and unjustified: (a) It is submitted that whenever cost is imposed on a party it is imposed as penalty when it is proved that such party has violated the contract or acted in a manner which has resulted other party any loss or any legal injury. (b) In the instant case it has been proved that no injury or loss has been caused by the defendant, on the following grounds:-- (i) That there was no bill pending with the defendants as unpaid. Therefore, it cannot be alleged that the payment was withheld by the defendant who has resulted in litigation. (ii) That the plaintiff has given in writing his approval in regard to rates and measurements saying that they are 100% correct, on 9th R.A. Bill at Exh.P/19 and as such the imposition of cost is illegal.
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(iii) It is an admitted fact on record that there were defects in the construction work and the job was not finally completed as per clause (7) of the Contract. Therefore, the plaintiff did not submit it his final bill. But during the pendency of this Arbitration proceeding, the plaintiff approached higher Police Officials and managed to get joint final inspection and measurement of the job, done by the plaintiff, whereafter the plaintiff submitted his 10th Final Bill at Exh.P/40 as mentioned at page 6 of the Award. ' It is quite clear that when the statement of claim was filed before the learned Arbitrator by the plaintiff, there was nothing to pay to the plaintiff by the defendants as such this cost is illegal and unjustified. (iv) In fact the learned Arbitrator, under the circumstances, could have imposed the penalty of cost upon the plaintiff but not upon defendant. ' It is, therefore, prayed that this Hon'ble Court may be pleased to set aside the Award over and above Rs,4,80,826.64 which amount has been recommended by the Consultant after the inspection and measurement jointly concluded by the plaintiff and the Consultant." REPLY ON BEHALF OF THE PLAINTIFF TO THE ARGUMENTS OF THE DEFENDANTS ' The following is respectfully submitted by the plaintiff in reply to the written arguments filed by the defendant: CLAIM NO.26: ' The entire thrust of the defendant's objections to the award of Rs,101,115.06 against Claim No,26 of the plaintiff is that the learned Sole Arbitrator has relied upon certain documents and has appreciated evidence in a certain manner. Reliance has also been placed on the technical rules of procedure and evidence. It is submitted that: (a) the learned Sole Arbitrator has given his detailed reasoning in support of his finding against the said claim; (b) the learned Sole Arbitrator has discussed/appreciated the evidence before which is part of the proceedings of the arbitration; (c) it is trite law that hearing of the objections under section 30 to an award is not by way of proceedings in a civil appeal. This Hon'ble Supreme Court will be pleased to confine the scope of its inquiry to the precisely prescribed parameters of the said provision of law. More particularly this Hon'ble Court will not reappreciate the evidence nor substitute its own, finding or conclusion for the finding or conclusion of the arbitrator; (d) the defendant's reliance upon a quantity in a running bill as final quantity is misconceived and misplaced. The payments and quantities in running bills on engineering projects are never conclusive or final. Therefore, the submissions that the plaintiff cannot be allowed any quantity in excess of the quantity claimed in some running bill during the period of execution of work is, with respect, untenable and contrary to the basic principles of sound engineering practice; (e) as regards the remarks of the Consultant, the same Consultant had required the plaintiff to prove his case for further quantities and the plaintiff had provided the requisite documentary evidence to that effect whereupon the Consultant did not accept or reject this evidence. The learned Sole Arbitrator has been pleased to find this documentary evidence credible and has based his finding thereon. ' In view of the above, the finding of the learned Sole Arbitrator against Claim No,26 (mis-typed as claim No,2 at page 21 of the Award in the submissions of the defendant) is well-reasoned based on evidence and, thus, may very graciously be sustained by this Hon'ble Court. CLAIM NO.27: ' The objections raised by the defendants to the award of this claim by the learned Sole Arbitrator are: (i) that the learned Sole Arbitrator has not followed the view of the Consultant;
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(ii) that the learned Sole Arbitrator has not discussed each and every bit of evidence before him on the claim; (iii) that the position contained in a running bill of the plaintiff ought to have been treated as his final position; (iv) that the learned Sole Arbitrator while appreciating evidence has given more importance to one piece of evidence and less to the other; and (v) that the plaintiff having once claimed a quantity in a running bill was not entitled to claim a different claim subsequently. ' It is most respectfully submitted that the so-called objections of the defendant to the finding of the learned Sole Arbitrator against this claim are, once again, untenable in law and contrary to the scope and effect of the provision of law whereunder these are being made viz. Section 30 of the Arbitration Act, 1940. The point-wise reply to the above objections is as under:--- (a) The Sole Arbitrator is at liberty to adopt, modify, amend or reject the view of the Consultant. He is to decide the dispute according to law and evidence before him. There is nothing in law or in the arbitration clause between the parties to suggest that the Arbitrator cannot or should not go behind the finding of the Consultant. Even the defendant has admitted that the earlier recommendations of the Consultant were unfair since upon joint inspection subsequent to the commencement of the arbitration proceedings as substantial an amount of Rs,4.80 lacs was found to have earlier been unreasonably withheld. The learned Sole Arbitrator had the power in law to differ with the view of the Consultant on any issue and he has done so in this case for reasons which he has clearly and unambiguously given. (b) The Arbitrator is not obliged to discuss each and every piece of documentary and oral evidence before him. In the instant case this would have meant an award running into several hundred pages. Even otherwise this is not the law. The award must show an honest and diligent application of mind by the Arbitrator to the disputes before him and the evidence led by the parties. That done, it is no party of his duties while writing the award to discuss each and every piece of evidence and give his reasons why he has believed this disbelieved that. This cannot but lead to absurdity. (c) On engineering projects, the facility of running payment is afforded to facilitate diligent execution of work and the bills submitted for such running payments are invariably and understandably treated as provisional. Nothing in these running bills is or can be treated as conclusive or final. That is possible only upon completion of work. It is, therefore, perfectly open and available to both the parties to change, alter, modify and even abandon an earlier running bill position in a subsequent running bill or in the final bill. Even in this case, the defendant has been changing his position on various issues with each running bill. How can the same be, therefore, refused to the plaintiff. (d) Appreciation of evidence is the sole and exclusive domain of the learned Sole Arbitrator. He is the sole judge of facts. There is no known provision of law or principle laid down in any judgment of a superior Court to the effect that while appreciating evidence, the arbitrator must give more importance of plaintiff's evidence or the defendant's evidence or that he must appreciate evidence in a particular wary. The only test in this regard can be whether there has been an honest, unbiased and reasonable application of mind of the arbitrator to the respective cases of the parties before him. Moreover, the appreciation of evidence of an arbitrator cannot, with respect, be the subject-matter of any proceedings by a Court of law under section 30 proceedings. (e) The reply to this objection is contained at (c) above. ' It will, therefore, be appreciated that the defendant is seeking to raise matters and issues in these proceedings which could have more appropriately been raised in a regular civil appeal under the
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Civil Procedure Code. That no being the case,…
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