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2002 Supreme(AP) 32

Andhra Pradesh High Court
State Of A.P. - Appellant
Versus
K.Sambasiva Raju - Respondent
Decided On : 01-04-02

Headnote:

Arbitration Act - Section 20 – Civil Procedure Code - Rule 2 - Order II – Convenience - panel of arbitrators - For undertaking construction of a Closed Channel to carry raw water from Krishna River to work site there was an agreement between plaintiff and defendants in which there is an arbitration clause for resolving disputes that may arise in connection with execution of said work which provides that in case of difference between the parties to contract either during the progress or after completion of work or breach of contract difference or dispute as to interpretation of contract such differences should be referred to arbitration as Department as per which in respect of claims – Held, Question for decision in this case is not whether fresh claim is barred by Rule 2 of Order II CPC but is whether the plaintiff, having made a claim for a certain amount as damages suffered by him can subsequently be permitted to say that he suffered higher amount of damage or loss and seek to refer that dispute to arbitration - In our considered opinion a party cannot be permitted to do so, because claim for damages would have been made only after individual suffered damage plaintiff did not make claim for damages on guess work - Therefore we hold that plaintiff cannot after appointment of an arbitrator enhance claims made earlier by him – Appeals allowed

C. Y. SOMAYAJULU, J.

( 1 ) THOUGH the appeals arise out of orders in two different suits, since they arise out of the same agreement they are being disposed of by a common judgment.

( 2 ) SINCE appellant and respondents in both the appeals are the same, for the sake of convenience, they would hereinafter be referred to as they are arrayed in the trial Court.

( 3 ) CM A No. 3 of 1990 arises out of the order dated 24-10-1989 in OS No. 1108 of 1988 on the file of the Court of the V Additional Judge, City Civil Court, Hyderabad filed under Section 20 of Arbitration Act referring the dispute to a single arbitrator and CMA No. 882 of 1992 arises out of the order dated 15-4-1992 in OS No. 837 of 1990 on the file of the same Court dismissing the suit filed under Section 20 of the Arbitration Act to make a reference of the further claims made by the plaintiff to the arbitrator appointed in OS No. 1180 of 1988.

( 4 ) FOR undertaking construction of a Closed Masonary Channel to carry raw water from Krishna River to the work site, there was an agreement between the plaintiff and defendants, in which there is an arbitration clause for resolving the disputes that may arise in connection with the execution of the said work, which provides that in case of difference between the parties to the contract, either during the progress or after completion of the work or breach of the contract, difference or dispute as to the interpretation of the contract, such differences should be referred to arbitration as per G. O. Ms. No. 876-T, Randb Department dated 31-7-1975/16010/ 1975, as per which in respect of claims up to Rs. 20,000. 00 in value, the Superintending Engineer of another Circle, and in respected claims above Rs. 20,000. 00 and up to Rs. One lakh, a panel of arbitrators consisting of (i) a Chief Engineer and (ii) Director of Accounts or Deputy Chief Accounts Officer and (iii) Superintending Engineer of another Circle, and in respect of claims for Rs. One Lakh and above, a panel of three arbitrators consisting of (i) a Chief Engineer, (ii) a representative of the Finance and Planning Department to be nominated and (iii) Director of Accounts or Deputy Chief Accounts Officer, have to arbitrate the dispute and where a panel of arbitrators is appointed, majority opinion is to prevail.

( 5 ) CONTENDING that in spite of his raising a dispute, defendants have not chosen to appoint a panel of arbitrators, plaintiff filed OS No. 1108 of 1988 aforesaid seeking appointment of a sole arbitrator. Defendants contested the suit on various grounds, including limitation and jurisdiction of the Court. No oral evidence was adduced by the parties. Exs. A1 to A9 were marked on behalf of the plaintiff. Defendants did not adduce any documentary evidence. By its order under appeal is CMA No. 3 of 1990, the trial Court while directing the defendants to file the original suit agreement dated 9-6-1983 into Court, appointed a retired High Court Judge as the sole arbitrator to adjudicate the disputes raised by the plaintiff. Questioning the appointment of a sole arbitrator, when the agreement provided appointment of a panel of arbitrators, defendants preferred CMA No. 3 of 1990.

( 6 ) DURING the pendency of OS No. 1108 of 1988 plaintiff issued a notice to the defendants making some additional claims and thereafter he filed OS No. 837 of 1990 under Section 20 of the arbitration Act to refer those claims also to the arbitrator. Defendants contested the suit alleging that the suit is barred under Rule 2 of the Order II CPC and that in any event there cannot be a second reference when the final bill was settled. No oral evidence was adduced by parties, but Exs. A1 to A6 were marked on behalf of the plaintiff and Exs. B1 to B20 were marked on behalf of the defendants. Holding that further claim is barred by Rule 2 of Order II CPC the trial Court dismissed the suit. Hence this appeal by the plaintiff.

( 7 ) THE two points that arise for consideration are:1. Whether a sole arb











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