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1996 Supreme(AP) 737
Andhra Pradesh High Court
Judges : D.H.NASIR, P.VENKATRAMA REDDY
Superintending Engineer, Irrigation department, Nizamabad - Appellant
Versus
Progressive Engineering Co., Hyderabad - Respondent
Decided On : 08-09-96
Headnote:
Arbitration Act - Sections 30 and 33 - Arises out of judgment and decree in O. S suit was filed by respondent herein under Sections 14 and 17 of arbitration Act praying the Court to direct Arbitrators to file their award into Court and to make award rule of Court and also to award interest at 18% per annum from the date of decree - O. P. was dismissed by learned second Additional Judge City civil Court and suit was decreed passing a decree in terms of award and granting interest @ 12% per annum from date of decree till date of realization - Respondent-firm was awarded a contract to execute work of obstruction Removal in the Upstream of Bed Regulator of project from - Agreement in this behalf was entered on value of contract was lakhs equivalent to excess over estimated rates based on site was handed over co stipulated date for completion of work was months from date of handing over site - Contract work prolonged well beyond agreement period and it was ultimately cancelled by appellants on invoking Clause 61 of APDSS forming part of the Agreement - Held, Case Court would like to refer in brief to two earlier decisions rendered by us recently - In Company vs. Superintending Engineer court affirmed judgment of Civil Court setting aside the award allowing extra amount towards escalation in costs - In that case major part of claim related to work carried out within the agreement period - Thus nature of claim in present case differs substantially - That apart there is nothing in that case to indicate that State did not plead before arbitrators that Clause 59 was a bar to contractor claim - In Government of Andhra Pradesh after adverting to earlier cases in which Clause 59 was considered court indicated that cases involving prolongation of contract as a direct result of default or breach on the part of the Government were placed on a somewhat different footing – Appeal Dismissed.
( 1 ) THIS C. M. A. and C. R. P. arise out of a common judgment delivered by the second Additional Judge, City Civil Court, Hyderabad. The C. M. A. is filed under Section 39 of the Arbitration Act against the order in O. P. No. 4 of 1986. The said O. P, was filed by the State of Andhra Pradesh represented by superintending Engineer, Irrigation Circle-III, Nizamabad under Sections 30 and 33 of the Arbitration Act objecting to the Award passed and praying the court to set aside the award dated 27-9-1985.
( 2 ) THE C. R. P. arises out of the judgment and decree in O. S. No. 1242 of 1985. The suit was filed by the respondent herein under Sections 14 and 17 of the arbitration Act praying the Court to direct the Arbitrators (defendants 3 to 5) to file their award into Court and to make the award the rule of the Court and also to award interest at 18% per annum from the date of the decree.
( 3 ) THE O. P. was dismissed by the learned second Additional Judge, City civil Court and the suit was decreed passing a decree in terms of the award and granting interest @ 12% per annum from the date of the decree till the date of realisation.
( 4 ) THE relevant facts are these:- the fist respondent-firm was awarded a contract to execute the work of obstruction Removal in the Upstream of Bed Regulator of Nizamsagar project, from Ch. 29. 50 to Ch. 31. 00. Agreement in this behalf was entered on 8-3-1978. The value of the contract was Rs. 34. 89 lakhs equivalent to 23. 52% excess over the estimated rates based on the S. S. R. (Standard Schedule of Rates) of 1977-78. The site was handed over on 12-3-1978. The stipulated date for completion of the work was 12 months from the date of handing over the site. The contract work prolonged well beyond the agreement period and it was ultimately cancelled by the appellants on 13-4-1984 invoking Clause 61 of the APDSS forming part of the Agreement. By that time, according to the respondent, he did about 95% of the work in the area handed over to him which works out to Rs. 25 lakhs in terms of value as against the contract value of Rs. 35 lakhs, (vide para 6. 9 of the claim statement ). This, he claimed to have done during the short working periods available in the three seasons of 1978, 1979 and 1980. It is stated in the same para that the work was continued upto august, 1980. These averments in para 6. 9 have not been refuted by the appellants. By their letters dated 16-9-1980 (Annexure 2 to claim statement) and 19-9-1980, the contract or requested the Super intending Engineer and Chief engineer to close the contract and arrange for release of all amounts due to him, apart from compensating him for losses. The respondent also made a request to refer the matter for arbitration, if the Department was not agreeable.
( 5 ) AFTER a protracted correspondence, the disputes were referred to a panel of Arbitrators who were Government officials, as per the terms of the agreement. They are defendants 3 to 5 in the suit and respondents 3 to 5 in the O. P. The contractor claimed Rs. 24. 22 lakhs and also interest at 18% per annum from the date of submitting the claim statement to the date of actual payment. It preferred seven claims. The Arbitrators entered upon reference on 29-11-1984 and passed the impugned Award on 27-9-1985. Claim Nos. 1,2,4 and 5 were rejected. It may be stated that under claim No. 1 which is a major claim, the contractor sought for reimbursement of losses on account of idle machinery and equipment, loss of advances paid to labourers etc. , by reason of breach of contract on the part of the appellant. This claim was rejected. The claim for loss of profits and also the claims under Head b towards compensation for non-payment of the amounts claimed were also negatived.
( 6 ) THE claims that were accepted and allowed by the Arbitrators are as follows:- claim No. III (A ). . Rs. 3,33,300/- (towards extra expenditure incurred on account of escalation in rates for doing the wor
