RAMACHANDRA REDDY AND CO. v. STATE OF ANDHRA PRADESH AND ORS

Citation: [2001] 2 S.C.R. 186

Court: Supreme Court of India

Bench: G.B. PATTANAIK, U.C. BANERJEE, BRIJESH KUMAR

Judgment text

RAMACHANDRA REDDY AND CO. v. STATE OF ANDHRA PRADESH AND ORS. FEBRUARY27, 2001 [G. B. PATTANAIK, U,C. BANERJEE, BRIJESH KUMAR, JJ. ] The ArbitraJion Act, 1940 : Section 16-Remission ofaward-PowerofCourt-Discretionary-Exercise of-When-Held, when there are omissions and defects in the award which cannot be modifiedorcon~cted-Appella! e Court---lnterference-When- Held, when discretion misused by Trial Court. Sections 16, SO and 33-Award-lnterference-Envr apparent on the face ofaward-Meaning of-Held, when basis ofaward erroneous Courts not to investigate beyond aivard of arbitrators and documents actually incorporaJed therein for purpose offinding out any alleged envr.

Contractor seeking higher rate for extra quantity ofwork-Agreement not providing for escalated rate either expressly or imp/i,dly---Competent Authority granting extension oftime but specifically intimating it will not make contractor eligible for extra claim-Whether contractor entitled to higher rate-Held, contractor not entitled to higher rate for additional excavation work-Arbitrator being creature of agreement, cannot pass award beyond tenns ofagreement. Appellant-Claimant was awarded excavation work under a contract p by respondent. Dispute arose between parties which was referred to panel of arbitrators which rejected claim item Nos. 1, 2 and 3 while allowing claim item nos. 4 and 5. Claim Item No. 1 relates to increase in quantity of hard rock abnormally and appellant claimed Rs. 93,76,000 for such extra excavation. Claimant filed objection in the Civil Court under Section 16 of the Arbitration Act, 1940 against award of arbitrators rejecting claim item Nos. 1, 2 and 3.

Trial Court set aside award in relation to claim item No. 1 and some others and remitted the same for reconsideration to panel of arbitrators. Against the judgment of Trial Court, respondent preferred appeal under Section 39 which was allowed by the High Court in so far as it related to remitting claim item no. l while upholding other directions of the Trial Court. Aggrieved by the judgment of High Court, claimant- RAMACHANDRA REDDY v. STATE 187 contractor has filed the present appeal. Appellant contended that High Court committed serious error in re(erring to clause 59 as well as letters dated 15. 7. 1980 and 19. 5.

1983 while refusing payment at higher rate for additional excavation work; that arbitrators committed error apparent on the face of award;·that payment at higher rate for additional excavation was implied in view of recommendations of Executive Engineer; and that contractor was entitled to he paid at higher rate for additional excavation in accordance with Clause 63 of· -t the agreement.

Respondent contended that the award did not contain any error apparent on the face of it; that contention regarding payment at higher rate for additional excavation under clause 63 of the agreement was raised for the first time and should not he allowed to be raised and alternatively, that Clause 63 has no application for additional excavation since it applies only to supplemental items and additional excavation is not a si;pplemental item; that claim for payment at higher rate for additional e: rate for any excra quantity of work executed by the contractor would at all arise only when the concract provides for such escalated rate either expressly or by implication as in the case of S. Harcharan Singh 1990(4) SCC 647, where the competent authority had agreed for the sm1e by conespondence.

But in the case in hand, when there is no such acceptance by the competent autholity, and there is no provision in the contract, permitting such escalated rate for the additional quantity of excavation made and in view of our rejecting the contention raised on the basis of clause 63, the conclusion is irresistible that the contractor will not be entitled to a higher rate for the additional excavation work and as such the High Court was fully justified in setting aside the direction of the trial judge, remitting the claim item No. 1for reconsideration and we se. e no infirmity with the seid direction of the High Court to be interfered with. We also find sufticient force in the submission of Mrs.

Amreswali, relying upon the letters of the competent autholity, specifically intirnating ihat the graut of extension uf ti1ne will not in any way make the contractor eligible for aay extra claim due to escalation in rates of labour and materials or due to any other reasons under any circumstances and the decision of this Court in Rarnalinga Reddy, [1999] 9 SCC 610 supports the aforesaid contention. In the aforesaid premises, we do not find any merits in this appeal, requiring our interference with the impugned jutlgmenl of the High Court. The appeal fails aud is dismissed but in the circumstances there will be no order as to costs. A. K. T. Appeal dismissed.