STATE OF ORISSA Vs. DURGA CHARAN ROUTARAYA

JUDGEMENT

(1.) THIS appeal is at the instance of the State challenging the judgment and decree passed by the Civil Judge (Senior Division), Bhubaneswar in O.S. No. 98 of 1999 making the award of the Arbitration Tribunal a rule of the Court.

(2.) THE brief facts leading to this appeal are that the claimant, i.e., the sole respondent was entrusted with construction of Earth Dam to Kharkhai Irrigation Project up to R. L. 316.15, (Balance work) for a sum of Rs. 13,78,810/ for which agreement was entered into between the appellant and the claimant wherein it was stipulated that the claimant would commence the work on 1.1.9176 and complete the same by 31.7.1976. However, the work could not be completed in time due to various reasons. According to the respondent, delay is mainly due to change of design by the appellants resulting in financial loss to the claimant respondent and according to the respondent the appellant No. 2, the Executive Engineer, while making payment did not consider the extra expenditure incurred by the claimant on different counts, which gave rise to dispute and difference between the parties. The respondent served a notice on the appellants to settle the dispute and as the State failed to resolve the dispute or to refer the matter for arbitration as per the clause in the agreement, the respondent approached the Civil Court i.e. Subordinate Judge, Bhubaneswar, who referred the dispute to the Arbitration Tribunal for adjudication. The Tribunal ultimately passed its award for a sum of Rs. 1,23,774/ along with interest at the rate of 10% per annum on the principal awarded amount. The aforesaid amount was awarded mainly on claim item No. 4 made on account of price escalation after issue of work order. The Tribunal found that the Labour Employment and Housing Department by its notification dated 16.4.1976, which came into force from 1st May, 1976 made an up ward revision of minimum wages of unskilled labourer, which was computed to be 14% increase in the rate of labour. Taking labour component at Rs. 1,74,145.50 and the increase of 14% on such labour component, an extra amount of Rs. 24,380/ was awarded in favour of the respondent. In respect of claim item Nos. 5 and 6, which related to supply of morum and reimbursement of royalty charges deducted from the bills of the claimant, the Tribunal found that the respondent was entitled to the differential cost of supply of morum of 47,106 Cum. i.e., at the differential cost of earth and morram which was quantified at Rs. 78,667.00 and allowed the claim item No. 6 in full so far as reimbursement of cost of royalty, which comes to Rs. 20,727/ In total the Tribunal awarded Rs. 1,23,774/ which included Rs. 24,380/ in respect of claim item No. 4, Rs. 78,667/ for claim item No.5, and Rs. 20,727/ for claim item No. 6. That apart, an amount of Rs. 2,00293/ has been awarded towards interest on the awarded amount of Rs. 1,23,744/ . The total claim amount was quantified at Rs. 3,24,067/ which was directed t(c) be paid by the present appellants to the claimant within 120 days of receipt of the notice under Section 14(1) of the Arbitration Act and on failure to pay the said amount within 120 days, the appellants were made liable to pay further interest at the rate of 10% per annumon on the principal awarded amount of Rs. 1,23,774/

(3.) THE Civil Court ultimately found that in respect of item No. 4, as against the claim of respondent for a sum of Rs. 2,00,000 the Tribunal granted a sum of Rs. 24,380/ only which is on account of compulsory nature of statutory escalation on labour cost. The objection of the appellant to this on the ground that there is no provision under the agreement for any rice escalation was negatived by the Civil Court, taking note of the price escalation on account of compulsory nature of statutory escalation of labour cost, referring to fair wage clause, enshrined in clause 33 of the agreement. As regards objection to claim item Nos. 5 and 6, the finding of the Civil Court was that as there was no error apparent on face of the award and as the findings of the Tribunal were based on evidence, the same could not be interfered with. In addition to this the Civil Court observed that it could not sit as a Court of appeal and reassess the evidence.