This first appeal is directed against judgment/ order dated 9.2.1994 passed by Civil Judge, Lahore, whereby an award dated 7.6.1985 was made rule of the Court.
2. Precisely, facts relevant for disposal of this appeal are that respondent was a contractor of the appellant, who filed a petition under Section 20 of the Arbitration Act, 1940 and averred that it was given a contract by the appellant for construction of Trunk Severs and appurtenances in Sodiwal, Naunarian, Babu Sabu and Shera Kot; Lahore, vide contract/agreement No, WASA/S/303-A, dated 26.7.1979 for an amount of Rs, 1,22,02,693.80. The work was to be completed within a period of 600 days. According to clause D-30(a) of Part-D General Terms and Conditions, mobilization advance of Rs, 12,20,269.30 was paid to the respondent-contractor on 15.8.1979 against the bank guarantee.
Respondent started the assigned work, but in the course of work, first running bill was submitted by the respondent on 10.3.1980 for an amount of Rs, 10,29,232.13, whereupon an amount of Rs, 8,90,370.42 was paid and the remaining amount was withheld by the appellant without any just cause. Likewise, second bill was submitted on 27.8.1980 amounting to Rs, 8,16,035.37, wherefrom an amount of Rs, 7,69,306.74 was paid on 18.11.1980. Respondent also detailed in his petition that third running bill of Rs, 14,46,996.56 was unnecessarily delayed and its payment was not made until the sewer lines were tested and checked by the appellant. Respondent also pleaded that appellant had been creating unnecessary hurdles in the progress of the work and did not provide vacant sites for laying of sewer lines. According to it at the time of tender the spaces for sewer was lying unoccupied, but after start of work many houses and other constructions had been raised by the unauthorized occupants, which were to be removed by the appellant and inspite of the repeated requests, the needful was not done: For these reasons, the respondent claimed that construction work which was to be completed by 31.12.1981 had to suffer, the delay of which was only due to the appellant's conduct. Near completion of work, appellant unilaterally rescinded the contract which, according to the respondent was in breach of the agreement itself, as it could not be done, without hearing or notice to it. Respondent also prayed that dispute may be referred for arbitration in terms of agreement between the parties and appellant may be required to file the agreement in Court.
3. In response to the notice by the trial Court, appellant though admitted contract/agreement between the parties, yet it denied averments in the petition filed by the respondent regarding delayed payment in running bills and regarding handing over of vacant site for laying the sewer lines. In view of admitted nature of the agreement between the parties dated 26.7.1979, which provided arbitration clause in case of dispute vide Clause D-43 parties were required to submit names of the arbitrators. Thereafter, Mr. Mazhar Munir Ex-Secretary Communication, Government of the Punjab, was nominated as arbitrator by the appellant and respondent named Mr. Umar'
Hayat Chohan, Advocate and both of them were appointed as joint arbitrators by the trial Court vide its order dated 7.9.1981. Arbitrators after taking proceedings on 24.7.1987 submitted their award and thereafter the parties were required to file objections, if any, thereof, within 30 days. Appellant filed objections, inter alia, asserting that award is conjectural, based on insufficient material, beyond scope of reference and lacks reasoning in itself. Objections of the appellants were replied by the respondent, whereafter following issues were framed:--
1. Whether arbitrators have misconducted themselves during the proceedings? If so its effect? OPR.
2. Relief.
Parties produced their respective evidence and in result of its appraisal by the learned trial Judge, award was made rule of the Court through judgment/order dated 9.2.1994 whereby objections of the appellant were also dismissed.
4. Appellant aggrieved of the decision of the learned trial Judge dated 9.2.1994 making award rule of the Court, has come up in appeal before this Court for setting aside the said order.
5. Learned counsel for the appellant has attacked the order of the trial Court on multiple grounds, including that interest could not have been allowed to the respondent, as it was neither included in the reference nor was determined by the arbitrator. He also asserted that work was not completed by the respondent within the stipulated period, inspite of repeated notices by the appellant. He also complains that contractor did not join measurement work by the department and thus was not entitled to any amount, as claimed by it. Learned Counsel for the appellant further elaborates his arguments by saying that the arbitrators had no material for their decision as given in the award and thus then award is based on surmises. According to learned counsel for the appellant work was not completed at the site, but was so erroneously claimed by the respondent before the trial Court. It has also been complained by the learned counsel for the appellant that rent on account of shuttering, has not only been incorrectly calculated but being exorbitant, could not have been granted. He further adds that period of interest is also more than to the entitlement of the respondent under law.
6. Conversely, learned counsel for the respondent have not only supported the judgment of the trial Court but have also refuted the submissions of the appellant and urged that trial Court or the Court of r appeal cannot substitute its own viewpoint in place of the one taken by the arbitrator after due appraisal of evidence. They in support of their argument relied on the judgments reported in the cases of Messrs Waheed Brothers (Pakistan) Ltd. Lahore through Chief Executive vs. Messrs Izhar (Pvt.) Ltd, Lahore through Managing Director (2002 SCM R 366), Messrs Tribal Friends Co. vs. Province of Balochistan (2002 SCM R 1903) and S.G. Rayon Mills (Pvt.) Limited vs. Fida Hussain & Associates (2002 CLC 353). Learned counsel for the respondent have also contended that there is no misconduct on part of the arbitrators who provided full opportunity to the parties to substantiate their stances by production of evidence. Appellant itself did not produce evidence in support of the alleged misconduct of the arbitrators or the failure of the respondent to complete the work within the stipulated period.
7. I have anxiously considered the arguments of the learned counsel for the parties and have examined the record. Under law, opinion/decision given by an arbitrator cannot be substituted by the Civil Court or this Court in discharge of appellate jurisdiction unless and until some legal misconduct is shown to have been committed by the arbitrator. Learned counsel appearing on behalf of the respondent have rightly relied on two alighted judgments of the Honourable Supreme Court in the cases of Messrs Waheed Brothers (Pakistan) Ltd. and Messrs Tribal Friends Co. (supra), wherein it was mandated that role of the Court under Arbitration Act, 1940, is of supervisory nature and not that of the Appellate Court, as under Civil Procedure Code. Award can only be amended/modified/corrected when it falls within the scope of Section 15 of the Act. There is no evidence, worth the name showing that the arbitrators committed any legal misconduct yet in order to verify the record, I have examined the award as well as evidence recorded by both the arbitrators and the trial Court, whereby it is proved that a contract stood extended up to 31.12.1987 but work progress by the contractor was slow without any lawful justification. Respondent had proved its difficulties of laying pipelines of 42" only, but it could not do so with regard to lay of other pipes of the sizes of 18", 21", 24", 27", 30", 48" and 60". In this manner, respondent in a way committed default in performance of the contract, by his slow work and could not complete it, inspite of five extensions, in a year. Appellant's non-co-operation with the respondent is only proved on the file with regard to laying of pipelines according to drawing No, SG-01 touching pipelines of 42".
Conduct of Respondent No, 1 was not justifiable in stopping work on the other sites on account of non-cooperation of the appellant on one site. Respondents, besides other items, was entitled to Rs, 1Q79,911/- for work done, but he claimed an amount of Rs, 1,70,024.06 for Item No, 17 of its claim, on account of exculpation before the arbitrators, whereas appellant admitted its this claim to the tune of Rs, 98,010.79. Arbitrators have noted those lapses on part of the respondent who have also remarked regarding claim of the respondent to be exorbitant and in this manner granted claim, including loss incurred by it much less the original claim. Arbitrators did not consider to the advantage of the appellant, depreciation of currency, loss of investment or profit etc. according to principles laid down by the Honourable Supreme Court of Pakistan in the case of Karachi .Transport Corporation vs. Karachi Tameerat Limited (PLD 1992 SC 479). Respondent has also not appealed against the order granting lesser claim thus I find that in the circumstances of this case, trial Court has rightly passed the order making the award rule of the Court. Similarly, awarding of return/interest at the rate of 15% on only awarded amount to the contractor is absolutely justified.
According to alighted judgment of the Honourable Supreme Court of Pakistan in the case of TERNI S.P.A. vs. PECO (Pakistan Engineering Company) Ltd. (1992 SCM R 2238), while interpreting Section 1 of the Interest Act, 1839 and Sections 34 and 34-B of the Civil Procedure Code, 1908, it was held that interest can be claimed from the date when such debt or loan becomes payable, from the date specified and if no such date is mentioned in writing the claim of interest up to date of suit is recoverable. Grant or refusal of interest is a discretion vesting in Court exercisable on the basis of known principles for administration of justice. The discretion vesting in the trial Court has judiciously been invoked.
8. For what has been discussed above, I find that judgment of the trial Court is absolutely in consonance with the evidence on the file and no interference is called for in this appeal, as the respondent have already been given much less amount, to the one to which it was entitled under law. This appeal has no merit in it and is accordingly dismissed, with no order as to costs.