M/S ASIAN TECHS LTD. versus UNION OF INDIA & OTHERS

Citation: [2009] 14 S.C.R. 182 · Decided: 07-09-2009 · Supreme Court of India · Bench: MARKANDEY KATJU · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009] 14 (ADDL.) S.C.R. 182 
A--
MIS ASIAN TECHS LTD. 
+ 
v. 
UNION OF INDIA & OTHERS 
(Civil Appeal No. 311-312 of 2003) 
B 
SEPTEMBER 7, 2009 
[MARKANDEY KAT JU AND ASOK 
KUMAR GANGULY, JJ.] 
..t. 
Arbitration: 
c 
Jurisdiction of arbitrator - Appellant-contractor entered · 
into works contract with respondents - Material alteration and 
addition in work done at the instance of respondents -
Consequent delay in execution of contract - Dispute over 
D claim raised by appellant - Arbitration clause in contract 
·--r 
invoked - Arbitrator passed non-speaking award in favour of 
appellant - Decree passed in terms of the award - Set aside 
by High Court on ground that the arbitrator travelled beyond 
the. terms of reference - Propriety of - Held: Not prQper -
E On facts, delay in execution of the contract was solely due to 
default of the respondents - Relevant clauses of the contract 
made it clear that the arbitrator was well within its jurisdiction 
-J. 
to decide the matter - Award of arbitrator restored - MES 
Regulations 1968 - Regulation 439. 
F 
Non-speaking arbitral award - Interference by Court, -
Scope of. 
Appellant-contractor entered into a works contract 
with the respondents. There was material alteration and 
G addition in the work done at the instance of the 
respondents and consequently the execution of the 
contract was delayed. Dispute arose over the claim raised 
-:r 
by the appellant. The matter was referred to arbitration in 
terms of arbitration clause in the contract. The Arbitrator 
H 
182 
ASIAN TECHS LTD. v. UNION OF INDIA & ORS. 
183 
passed a non-speaking award in favour of the appellant. 
A 
The Trial court dismissed the application filed for setting 
aside the award and passed decree in terms thereof. On 
appeal an~evision, the High Court set aside the award 
holding that under the finality clause under clauses 11 (C) 
and 62(G) of the contract, the decision of the Commander a 
Works Engineer (CWE) was final and binding and 
exempted from purview of the arbitration clause i.e. 
clause 70 of the contract and consequently the arbitrator 
had travelled beyond the terms of the reference. Hence 
the present appeals. 
c 
Allowing the appeals, the Court 
HELD: 1.1. In the present case, it is apparent that the 
delay in the execution of the contract was solely due to 
)-
the default of the respondents. The facts of the case show D 
the repeated defaults by the respondents due to which 
the contract could not be completed in time. The appellant 
was not ready to carry out the work beyond the 
contracted period otherwise than on separate work 
orders and the subsequent correspondence makes it E 
clear that it was on the specific assurance given by the 
respondent to the appellant to continue the work and that 
>--
the rates would be decided across the table that the 
appellant went ahead with the work. Hence it is now not 
open to the respondent to contend that no claim for 
F 
further amount can be made due to clause 11 (C) and that 
the arbitrator would have no jurisdiction to award the 
-< 
same. Clause 62(G) read with clause 7 of the contract 
makes it clear that the finality provided under clause 62(G) 
applies only to cases of 'deviation' and not in a case 
when there is a material alteration and addition in the work G 
, -+-
done, as is clear from the correspondence between the 
parties in the present case. [Paras 12, 13 and 14] (191-D; 
192-H; 193-A-C] 
1.2. Moreover, Regulation 439 of the MES 
H 
184 SUPREME COURT REPORTS [2009] 14 (AODL.) S.C.R. 
A Regulations 1968 fixes the pecuniary jurisdiction of the 
~ 
ewe at Rs.20,000/- only. It is evident that the CWe has 
no jurisdiction to decide the dispute where the valuation 
is above Rs;20,000/-, as in the present case. The finality 
of the decision of the ewe applies ~nly where the 
B dispute is not exceeding Rs.20,000/-. Hence, the arbitrator 
was within his jurisdiction to decide the matter in 
question. [Para 15] [193-E-F] 
1.3. Also,. in the case of non-speaking awards under 
C the Arbitration Act, 1940, the Court has very little scope 
of interference. [Para 16] [193-G] 
State Qf Rajasthan vs. Nav Bharat Construction Co .. 
(2006) 1 SCC 86, Rajpur Development Authority vs. 
Chokhamal Constructions (1989) 2 SCC 721; Arosan 
D Enterprises Ltd. vs. Union of India (1999) 9 SCC 449, /spat 
Engineering vs., Steel Authority of India (2001) 6 SCC 347; 
D.D. Sharma, vs. Union of India (2004) 5 SCC 325; National 
Insurance Company Ltd. vs. Bogh

Excerpt shown. Read the full judgment & AI analysis in Lexace.