DURGA CHARAN RAUTRAY Vs. STATE OF ORISSA

JUDGEMENT

(1.) The Appellant was entrusted with the construction of balance work of earth dam in connection with the Kharkhai Irrigation Project upto RL 316.50 on 31.12.1975. The estimated cost of the said balance work was Rs. 13,78,810/-. As per the contract agreement, the work was to commence on 1.1.1976 and was to be completed on or before 31.7.1976. For some reasons including change in design, the work could not be completed within the prescribed time. The Appellant eventually completed the assigned work in July, 1978. This delay in completion of work, according to the Appellant, resulted in financial loss to the Appellant. In addition to the aforesaid, the Appellant had some other grievances as well. Illustratively, the Appellant sought payment towards some additional work executed by him, and also, refund of royalty deducted on account of the supply of "morum". All these disputes were raised by the Appellant, with the concerned Respondent(s). The Respondent(s) chose not to entertain the claims raised by the Appellant. In fact, all communications addressed by the Appellant to the Respondents remained unanswered. The Appellant then sought reference of his claims for adjudication before an arbitrator. This request of the Appellant was also not heeded to. The Appellant thereafter obtained a Court order dated 15.5.1981, whereby the disputes raised by the Appellant were referred to an arbitral tribunal. The arbitral tribunal examined nine items of claim raised by the Appellant.

(2.) The award rendered by the arbitral tribunal dated 15.9.1998, adjudicated claim item Nos. 4, 5, 6 and 9, in favour of the Appellant. In so far as claim item No. 4 is concerned, the Appellant had demanded an additional amount of Rs. 2 lakhs on account of price escalation. This claim was based on the fact, that after the work was assigned to him, the State Government had revised minimum wages of labour, and increased the same by 16%. The Appellant, accordingly, claimed extra payment of 16% over the gross amount paid in the final bill. The arbitral tribunal held the Appellant entitled to Rs. 24,380/- towards price escalation. In claim item No. 5, the Appellant claimed Rs. 5,51,173/- towards cost of "morum" supplied, but for which no payment had been released. In this behalf, the Appellant claimed carriage of 47,106 cubic meters with 15 kilometers lead, at the rate of Rs. 21.35 per cubic meter. While adjudicating the instant claim, the arbitral tribunal found the Appellant entitled to the difference between the cost of supply of "morum", as against the cost of supply of "earth". In respect of claim item No. 5, the Appellant was held entitled to a sum of Rs. 78,667/-. In claim item No. 6, the Appellant demanded a refund of Rs. 20,727/- deducted towards royalty from his bills. The aforesaid royalty was allegedly charged on the "morum" supplied by the Appellant. The Appellant was held entitled to refund of the entire sum of Rs. 20,727/- deducted from his bills towards royalty. In so far as claim item No. 9 is concerned, the Appellant claimed interest at the rate of 18% per annum on the principal claim amount, from the due date till the date of final payment. The arbitral tribunal held the Appellant entitled to interest at the rate of 10% per annum on the principal awarded amount of Rs. 1,23,724/-, with effect from 19.8.1981 (i.e., the date with effect from which the Interest Act, 1978 came into force) till 5.4.1992. Calculated in the aforesaid terms, the arbitral tribunal awarded interest of Rs. 1,31,544/- to the Appellant.

(3.) Notice to make the arbitral award dated 15.9.1998 "rule of the court" was issued on 22.2.1999. In March, 1999, the Respondents were served with the said notice. On 21.12.1999, the Government Pleader entered appearance on behalf of the Respondents, and sought time to file objections. Objections on behalf of the Respondents were filed before the Civil Judge, Senior Division, Bhubaneswar on 6.3.2000. To contest the arbitral award dated 15.9.1998, the Respondents filed objections under Sections 30 and 33 of the Arbitration Act, 1940 by filing a "Miscellaneous Case". It would be relevant to mention that Section 30 aforesaid, postulates the grounds for setting aside an award, whereas, Section 33 lays down the course to be adopted for challenging, inter alia, the validity of an arbitral award.