SUPERINTENDING ENGINEER Vs. INTERNATIONAL CONSTRUCTIONS CO

JUDGEMENT

(1.) THE revision petition and the miscellaneous appeal filed by the Superintending Engineer and the Executive Engineer, Nagarjunasagar Left Canal Divisionarise out of the judgment in O.S.No. 153 of 1982 and O.P.No.411 of 1982 respectively on the file of the Addl. Chief Judge-cum-First Addl. Special Judge for SPE Cases, Hyderabad. O.S.No. 153 of 1982 was filed by the arbitrators under Section 14 of the Arbitration Act (hereinafter referred to as 'the Act') to record the award passed by them on 15-2-1982 and to make it a rule of the Court. O.P.No. 411 of 1982 was filed by the appellants herein under Sections 30 and 33 of the Act objecting to the award passed on various grounds. By the award, the panel of arbitrators awarded an amount of Rs.3,30,200/- in lumpsum with interest at 10% per annum payable from the date of the award. THE objections filed against the award were overruled by the trial Court and a decree was passed in terms of the award subject to the reduction in the rate of interest from 10% to 6% p.a.

(2.) A few relevant facts may be noted. Pursuant to the notification issued by the Government of Andhra Pradesh inviting tenders under international competitive bidding for the work relating to "Earth work excavation and forming embankment of 21st main branch canal of N.S. Left Canal from K.M. 54.00 to 55.00 including construction of masonry structures, the respondent's tender was accepted and an agreement was entered into an 7-12-1977. The value of the contract was Rs.71.15 lakhs. The work was to be completed within 24 months. However, the contract period was extended up to 16-11-1980. As the claim put forward by the respondent-contractor was not accepted by the department, the disputes were referred to a panel of arbitrators consisting of a retired High Court Judge (A.D.V. Reddy, J.), a Chief Engineer and a retired Secretary to the Government of Karnataka. The claim statement was filed on 11-8-1981. There were five claims which are set out below: Claim No, 1: Escalation of the agreement rates based on the increase in the cost of owner-supplied materials. The claim was laid for a sum of Rs.18.42 lakhs under this head. Claim No.2: Non-inclusion of storage charges while making payments towards escalated price of diesel oil. Rs.27,422/- was claimed. Claim No.3: Refund of the amount recovered by virtue of unilateral change in the agreement regarding consumption of diesel oil. Rs. 67,007/- has been claimed under this head. Claim No. 4: Payment on account of escalation of labour charges. The amount claimed was Rs. 6,394/-. Claim No. 4-A: Compensation and damages on account of prolongation of contract period by allowing 40% extra. Under this head a sum of Rs.6,99,016/- was claimed. Claim No.5: The respondent claimed payment of interest at 16% from 15-10-1980 to 15-9-1981 and the same was quantified at Rs. 2.94 lakhs.

(3.) THE validity and the legality of the award and the judgment of the lower Court confirming the award is under challenge before us. We would like to examine each claim separately in order to consider whether the claim falls within the scope of jurisdiction of the arbitrators and whether the arbitrators were competent to award any sum in acceptance of these claims wholly or partly. As already noticed, the award is a non-speaking, lumpsum award. THE limitations inherent in scanning such awards spelt out by a plethora of decided cases have to be necessarily kept in view. We should also bear in mind that an award is vulnerable to challenge only on the grounds mentioned in Sections 30 and 16 of Arbitration Act.