1. ' These are objections to the award dated 23-12-1978 given by the sole arbitrator Mr. G. Raymond (Exh. Official Assignee/Registrar of this Court).
2. ' The facts leading to the filing of the above objections are that the plaintiff had submitted his tender for re-conditioning, widening and carpetting of Karachi Hub Chowki Road, Mile 12/0 to 15/5 plus 360 on or about 21-9-1975 for a sum of Rs, 9 lacs on the basis of tender notice appearing in newspapers. The plaintiff's tender was accepted on 28-10-1975. It may be observed that there was a controversy before the learned arbitrator as to whether the estimated cost of the work was 9 lacs plus 70%, as mentioned in para. 10 of the tender document or was it Rs, 4,83,168. The learned arbitrator on the basis of the evidence found that the estimated cost of the tender was Rs, 4,83,168.
3. The work had commenced on 15-11-1975 which was to be completed within 5 months as per terms of the contract. It appears that on 29-10-1975 the plaintiff wrote a letter asking the defendants to furnish the design and.Drawings etc. As per clause 13 of the tender document. The above letter was followed by letters dated 29-12-1975, 12-1-1976, 30-1-1976 and 25-2-1976. However, the defendants for the first time on 10-4-1976 through a letter of even date came out with the plea that the work in question was a reconditioning and widening job and that the specification had already been provided in the Schedule B to the contract, meaning thereby that there was no need of any design and/or drawings, as per clause 13 of the contract. The plaintiff was paid first running bill dated 24- 2-1976 on 13-3-1976 a sum of Rs, 29,892. After that the plaintiff executed some further work for which he was not paid, and according to the defendants the value of the work was about Rs, 12,000, but before the work could have been completed the disputes arose between the parties. The plaintiff filed an application under section 20 of the Arbitration' Act which was registered as a suit (bearing Suit No, 249/77). The above application was allowed by this Court and the disputes between the parties were referred to Mr. G. Raymond as the sole arbitrator.
4. 2.-(i) The arbitrator entered upon the reference on 2-9-1978 and on 28-9-1978, the plaintiff filed a claim of Rs, 14,14,650 before the sole arbitrator, the detail of which is as follows:- {{TABLE}} Rs, Loss due to payment of wages to the labourers 6,69,495 payment for carrying earth 12,840 payment of staff salaries 16,000 Miscellaneous expenses 9,850 Total ... 7,21,485 {{TABLE}} Rs, Add contractor's profit at 15% 1,08,223 Add loss of gain on capital invested for two years and months at 26% 4,5'6,340 Claim of interest by way of damages to reputation and capability of goodwill of the plaintiff's firm including legal and arbitration expenses 1,28,602 Total ... Rs, 14,14,652 {{TABLE}}
(ii) The defendants filed a reply to the claim on 19-10-1978 refuting the plaintiff's claim. In para. 18 of the reply the defendants had averred that the contract price was Rs, 2,84,217 plus 70% above as per agreement, (Schedule B) total of which was Rs, 4,83,10.90.
(iii) Before the learned arbitrator the plaintiff filed an affidavit in proof of his claim along with certain documents. The defendant filed a counter affidavit, to which the plaintiff filed a rejoinder.
5. The deponents of the affidavit, counter-affidavit and rejoinder were cross-examined by the parties before the learned arbitrator which is on the record. After that after hearing the parties the learned arbitrator gave his award on 23-12-1978, whereby he has awarded a sum of Rs, 4,83,168.90 to the plaintiff.
6. 3.-(a) In support of the above objections Mr. Hyder Raza Naqvi, learned counsel for the defendants has urged the following grounds
(i) That there is an error apparent on the face of the award inasmuch as the learned arbitrator has erred in holding that clause 13 of the contract was applicable to the instant case.
(ii) That according to the finding of the learned arbitrator the plaintiff had failed to prove the quantum of damages and, therefore, he committed legal misconduct by awarding a sum of Rs, 4,83,168.90 which was not proved.
(iii) That the arbitrator awarded damages without having any evidence on record.
(iv) That arbitrator instead of deciding the disputes on the basis of legal obligations as per contract decided the disputes on other consideration namely, in the interest of justice.
(v) That the arbitrator has not awarded damages but has imposed a penalty.
(b) In support of the above first contention Mr. Naqvi has urged that as the work in question involved, was a work of widening and recarpetting of the existing road, there was no need of any design or drawings as was contemplated in clause 13 of the contract. It may be advantageous to reproduce clause 13 of the contract, which reads as follows :- "Clause 13. Works to be executed in accordance with specifications, drawings, orders, etc,-The contractor shall execute the whole and every part of the Work in the most substantial and workman-like manner, and both as regards materials and all other matters in strict accordance with the specifications lodged in the office of the Executive Engineer and initialled by the parties, the said specification being a part of the contract. The contractor shall also conform exactly, fully and faithfully to the designs, drawings and instructions in writing relating to the work signed by the Engineer-in-charge and lodged in his office and to which the contractor shall be entitled to have access at such office or on the site of work for the purpose of inspection during office hours and the contractor shall, if he so requires, be entitled at his own expense to make or cause to be made copies of the specifications, and of all such designs, drawings, and instructions as aforesaid."
7. ' A perusal of the above clause shows that it envisages inter alia that the contract shall conform exactly, fully and faithfully to the designs and drawings and instructions in writing relating to the work signed by the engineer-in-charge and lodged in his office to which the contractor shall be entitled to have access. It cannot be urged that the learned arbitrator has misconstrued the above clause or that there is an error apparent on the face of the award. The question as to whether in fact there was any need of design or drawings was a question of fact which was within the competency of the arbitrator to decide. And, therefore, no exception can be taken to his finding that in fact clause 13 of the contract was attracted to the contract in question. Mr. Naqvi Advocate has referred to the case of Messrs Jafar Bros., Ltd. v. Islamic Republic of Pakistan (1), Wherein a Division Bench was pleased to hold that an erroneous view of law taken in an award would furnish a ground to the Court to interfere with an award. In the instant case as clause 13 envisaged design/drawings, it cannot be held that the arbitrator had taken an erroneous view apparent on the face of the award.
(Ai) Reverting to the second contention that the learned arbitrator himself having found that the plaintiff has failed to prove the quantum of damages, proceeded with in awarding a sum of Rs, 4,83,168.90, it may be observed that in support of the above contention Mr. Naqvi has invited my attention to the following portion of the award at page 17 :- "It may be argued that even under the above circumstances, it is incumbent on. The plaintiff to prove his damages, but again I fail to see why the amount of Rs, 4,83,168.90 cannot be treated as damages when there is nothing to show that the plaintiff would have been unable to complete the work under contract within the stipulated time and earned the above sum had the defendant complied with the provisions of clause 13 of the contract quoted above."
8. ' In my view the contention of the learned counsel that the above observation of the learned arbitrator is a finding of fact to the effect that the plaintiff was unable to prove the damages, is untenable. If the award is to be read as a whole, it will be clear that the learned arbitrator has held that there was a breach of the contract on the part of the defendants inasmuch as they had failed to discharge their obligation under the above-quoted clause 13 of the contract. The learned arbitrator after having found the above question of fact in favour of the plaintiff proceeded with the question of quantum of damages. The plaintiff has produced oral and documentary evidence. In support of his alleged claim of Rs, 14,14,652, namely, affidavit in proof, extract of the trial balance of the account, list of vouchers mentioned in Exh. A/27. According to the learned counsel for the plaintiff the vouchers mentioned in the list were produced before the learned arbitrator. But the learned counsel for the defendants does not admit this position as correct on the ground that the said vouchers are not on the record though he was not representing the defendant before the arbitrator. It may be observed that in para. 12 of the affidavit in proof it has been stated that the photostat copies of the relevant vouchers are annexed to the affidavit. The above para. Was replied to by the defendant in para. 12 of the counter affidavit,
(1) PLD 1978 Kar. 585 but there is no assertion to the effect that the photostat copies of vouchers were not enclosed.
(ii) It may be observed that the learned arbitrator instead of awarding the amount of damages on the basis of the amount claimed by the plaintiff has adopted a different basis for the purpose of assessing the amount of damages. The question which requires consideration is as to whether this Court while examining the award under section 30 of the Arbitration Act is competent to set aside the award on the ground that the learned arbitrator had adopted a wrong basis for assessing the amount of damages. This point has been dealt with in the case of Messrs Moosa Umer & Co. Ltd., Karachi v. Messrs Haji E. Dosso & Sons and another (1) and the case of Trading Corporation of Pakistan Ltd. v. Messrs Aslam Saeed & Co. And 3 others (2). In the former case a Division Bench (Muhammad Haleem and Muhammad Ali Said, JJ.) while dealing with the above point was pleased to hold that even if the arbitrator had not awarded damages upon the settled principles, still the award could not be challenged on the ground of legal misconduct. In the latter case a single Judge of this Court approved and quoted an extract from the case of Pakistan Builders Co. v.
9. Pakistan (3), wherein it was held that wrong basis of assessment of damages could not furnish a ground to attack an award. The above Division Bench ruling is binding on me and, therefore, I cannot set aside the award on the ground that the arbitrator had adopted a wrong basis for purposes of assessingA the quantum of damages. I may observe that I was not impressed by the learned arbitrator for assessing the quantum of damages and I was inclined to interfere with the award, but because of the legal proposition propounded inter alia in the aforesaid Division Bench's case, I refrain myself from doing so.
(d) Reverting to the third contention that there was no evidence on the record to prove damages and that the instant case is a case of no evidence, it may be observed that the defendants have not raised any such plea in their objections to the award and, therefore, they cannot be permitted to urge this point. Even otherwise the instant case cannot be termed as a case of no evidence as there was some oral and documentary evidence on the record of the arbitration proceedings. It is a well-settled principle of law that insufficiency of evidence or the fact that this Court would have taken a different view on the basis of the evidence on the record of the arbitration proceedings would not warrant an interference with an award by the Court. In this regard the learned counsel for the plaintiff has referred to the case of the Province of West Pakistan v. Gammons Pakistan Ltd., Karachi (4), in which a Division Bench of this Court (Dorab Patel and M. A. Rashid, JJ.) was pleased to hold that erroneous finding based on appreciation of evidence on the question of fact does not come within the mischief of section 30 of the Arbitration Act. On the other hand Mr. Naqvi the learned counsel for the defendants has relied upon the case of Government of Pakistan Ministry of Industries v. National Agencies, Karachi (5) and the case of Messrs Ansari Enterprises, Karachi v.
10. Trading Corporation of Pakistan (6). In the former case it was held by me that a Court of law is competent to interfere with an award if it is a case of no evidence, and that the disputed questions of facts can be decided on the basis oft some evidence and not on assumptions.
11. (1)PLD 1971 Kar. 899 12) PLD 1973 Kar, 65
(3) PLD 1961 Kar. 365 (4) PLD 1976 Kar. 458 . (5) PLD 1978 Kar. 827 (6) PLD 1980 Kar. 226 ' It was also held in the aforesaid case that the Court would not interfere with a finding of fact given in an award on the ground of insufficiency of evidence or on the ground that the Court would have taken a different view on the basis of the same evidence. Since in the instant case, there was some evidence on the record of the arbitrator, the above Karachi case is distinguishable. As a matter of fact it supports the plaintiff's case to some extent.
12. ' Reverting to the second case, it may be observed that a Single Judge was pleased to hold that damages cannot be awarded without having some evidence. In my view the above ruling is also distinguishable for the aforesaid reason already given hereinabove.
(e) Referring to Mr. Naqvi's contention that the arbitrator instead of deciding the disputes on the basis of legal obligations has given his award on some other consideration, namely, "in the interest of justice". Reliance was placed on the case of Messrs Rachna Traders v. Government of Pakistan (1) wherein it was held that an arbitrator is to decide according to law and not on the basis that he feels just and equitable. In my view the above contention is devoid of any force inasmuch as the learned arbitrator has found as a question of fact that the defendants had committed breach of the contract and, therefore, it cannot be urged that the arbitrator has given his award on the basis of "in the interest of Justice". The aforesaid cited case has no application to the instant case.
(f) Reverting to Mr. Naqvi's contention that in fact the arbitrator has imposed a penalty on the defendants instead of awarding damages against them, it may be observed that the learned counsel for the defendants has invited my attention to para. 9 of the award at page 17, wherein the learned arbitrator has observed that, "as the defendants have deliberately failed to abide by the terms of clause 13 of the contract, there is no reason in the interest of justice why they should not be penalized for having to pay Rs, 4,83,168.90 to the plaintiff". Mr. Naqvi learned counsel for the defendants has urged that the use of the words "penalize" itself indicates that the learned arbitrator in fact has imposed a penalty and has not awarded damages. In my view the inference sought to be drawn from the above-quoted observation is not justified. The above observation is to be read with the c other parts of the award. The learned arbitrator after having held that the defendants have committed breach of clause 13 of the contract was to award damages and, therefore, mere use of the word "penalize" would not convert damages into a penalty.
13. 4, For the foregoing reasons the objections to the award are liable to be dismissed but before parting with the discussion I may observe that though the defendants have not raised any plea to the effect that the learned arbitrator was not competent to grant interest on the amount of damages awarded by him nor it was urged at the Bar. But since there is an error apparent on the face of the award this Court can modify the award to that extent. In the case of A. Z. Company v.
14. Messrs S. Mulabux Muhamma Bashir (2), in the case of Messrs Moosa Umer & Co. Ltd. v. Haji E. Dosa D & Sons and another, mentioned hereinabove, and in the case of Messr Pakistan Builders, Karachi v. Pakistan, inter alia it was held that an arbitrator has no power to grant interest on damages. In the instant as the learned arbitrator has awarded 6% interest per annum on the amoun of damages from the date of the award till payment..
(1) PLD 1975 Ka). 89 (2) PLD 1965 SC 505 ' I, accordingly modify the award to the extent of granting of interest, but dismiss the objections to the award and make the award rule of the Court with the above modification and also grant 6% interest from today till payment under section 29 of the Arbitration Act. However, in the circumstances of the case there will be no order as to costs.