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H. K. Sema, G. P. Mathur & R. V. Raveendran
J.C. Budhraja - PETITIONER
Versus
Chairman, Orissa Mining CorporationLtd. & Anr. - RESPONDENT
Appeal (civil) 1971-1973 of 2000
Decide On : 18/01/2008
Code of Civil Procedure, 1908 – Order 22 Rule 3 – Arbitration Act, 1940 – Sections 20, 18, 8, 19, 37 – Limitation Act, 1908 – Removal of over-burden at Kaliapani –Appellant is stated to be legal heir and successor in interest of N.C. Budhraja – M/s. Orissa Mining Corporation Ltd. (for short OMC or respondent) entered into an agreement for removal of over-burden at Kaliapani (Cuttack District) by excavation in all kinds of soil (including stoney earth and gravel mixed with boulders), and depositing/disposing of the same, as directed. – Maximum lift was 6m including initial lift of one metre. – Order to commence work was issued – Parties also entered into three supplementary agreements in regard to the said contract for raising Chrome Ore by open excavation from the said mining area. – Held, Award of the arbitrator in respect of time barred claim of Rs.67,64,488 is an error apparent on the face of the award. – Award of amounts in excess of claim clearly amount to exceeding the jurisdiction. – All these, that is awarding amount towards time barred part of the claim of Rs.67,64,488, and awarding amounts of Rs.29,86,871, Rs.670,285 and escalation in cost at a rate more than what is claimed, are all legal misconducts and the award in regard to those amounts are null and void. – There is however some overlapping of the aforesaid amounts. – Only the amounts awarded by the Arbitrator against those claims can be considered as award validly made in Arbitration, falling within jurisdiction. – They are clearly severable from the other portions of the award. – Particulars of the claims and corresponding awards are as follows: Item No. Description Item No. in letter Contractors claim originally made Contractors claim before Arbitrator Award by Arbitrator – Appeals Partly Allowed
Key Points: - The judgment discusses whether claims were barred by limitation and how acknowledgments in writing extended or did not extend limitation (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) . - It analyzes grounds for setting aside an arbitral award: exceeding jurisdiction, legal misconduct, and lack of reasoned support, with emphasis on separability of valid portions (!) (!) (!) (!) (!) (!) . - It identifies that only the portions of the award related to claims not barred by limitation and existing/pending as of 1978-1980 are severable and keepable, while time-barred portions must be set aside (!) (!) . - It concludes that the arbitrator’s award can be upheld to the extent it covers non-barred, valid claims, and the rest (time-barred or beyond jurisdiction) is void or reducible (!) (!) (!) (!) . - The High Court and Supreme Court ultimately decree a partial restoration of the award, with specific amounts for claims 1–16, 17–34, and 35, and interest provisions from date of award onward (!) (!) (!) (!) .
JUDGMENT:
RAVEENDRAN, J. -- These appeals are filed against the common judgment dated 15.10.1999 passed by the High Court of Orissa in Misc. Appeal No.296/1998 filed by the respondents and Misc. Appeal No.198/1998 and Civil Revision No.109/1998 filed by the appellant.
2. The appellant is stated to be legal heir and successor in interest of N.C. Budhraja (hereinafter referred to as the contractor). M/s. Orissa Mining Corporation Ltd. (for short OMC or respondent) entered into an agreement dated 16.9.1967 (Agreement No.30/F-2) for removal of over-burden at Kaliapani (Cuttack District) by excavation in all kinds of soil (including stoney earth and gravel mixed with boulders), and depositing/disposing of the same, as directed. The maximum lift was 6m including initial lift of one metre. The order to commence work was issued on 23.9.1967. Parties also entered into three supplementary agreements in regard to the said contract No.30/F-2, on 2.8.1969, 7.3.1970 and 10.2.1972. [Note : OMC had also entered into other contracts with the contractor including contract dated 22.2.1968 (Contract No.2/F/2) for raising Chrome Ore by open excavation from the said mining area. We are not concerned with those contracts in these appeals].
3. The main agreement enumerated two items of work in its schedule. The first, second, and third supplementary agreements enumerated respectively eight items, one item and four items in their respective schedules. The work was completed by the contractor on 15.6.1975. The final bill in respect of the work was prepared by OMC on 21.10.1976. It was revised in March-April 1977 by OMC. The final Bill It showed the total value of the work done (under several items in the schedule to main and three supplementary agreements) as Rs.1,49,190,76.74. The contractor countersigned the said bill on 14.4.1977 under protest, but, however, certified and confirmed that the measurements shown therein were correct.
4. According to the contractor, having regard to the zig-zag route by which the over burden had to be carried, the actual lead was much longer and actual lift was much higher than what were stipulated in the agreement. He contended that the amounts shown as due for the work done was as per contract rates which was for removing overburden to the extent of lift and lead provided in the contract schedules; and at several places, he had to cut and remove the over-burden beyond the extent of lift and lead provided in the contract, and he should be paid for such extra leads and lifts. He claimed to have executed certain additional works not provided in the contract schedules, on the directions of OMC. He therefore represented that the matter may be examined and enquired into for determination of proper amounts due. In view of the several representations made by the contractor in respect of the contract no.30/F-2 as also other contracts, OMC sent the following letter dated 28.10.1978 to the contractor :-
“Re : Settlement of pending claims.
You had called on Chairman, OMC, recently and apprised him of the dues receivable by you in respect of certain long pending matters such as mine benches work and raising at Kaliapani Quarry-I. In the matter of Kaliapani it has been decided to constitute a committee which will go separately into your claims and other facts, in which connection you are requested to give all possible help and assistance, so that your dues, if any, will be ascertainable.
In regard to other pending matters, you had indicated yourself that you will give the details of claims and payment received by you. This may be given within a day or two so as to enable OMC to settle up the above at the earliest.
5. The contractor sent a reply dated 16.11.1978 enclosing therewith a statement quantifying his claims relating to contract no. 30F-2 (subject matter of these appeals) as also another contrac
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