Back
Andhra Pradesh High Court
Judges : K.A.SWAMI, V.BHASKARA RAO
State Of A.P. - Appellant
Versus
S.Shivraj Reddy - Respondent
Decided On : 02-03-88
ARBITRATION - AWARD - SETTING ASIDE - JURISDICTION OF ARBITRATORS - RATES FOR WORK DONE - DELAY IN HANDING OVER SITE - CLAIM FOR PAYMENT AT STANDARD SCHEDULE OF RATES - VALIDITY.
Fact of the Case:
A contractor entered into an agreement with the Executive Engineer, Roads and Buildings Department for the formation of an inner ring road. Disputes arose between the parties, and the matter was referred to a panel of Arbitrators. The Arbitrators allowed the contractor's claim for payment at the standard schedule of rates for work done beyond the agreed date of completion. The State Government challenged the award, arguing that the Arbitrators exceeded their jurisdiction in accepting the claim.
Finding of the Court:
The court held that the Arbitrators did not exceed their jurisdiction in accepting the contractor's claim. The court found that the State Government was responsible for the delay in handing over the site to the contractor, and that the contractor was entitled to be paid at the standard schedule of rates for the work done beyond the agreed date of completion.
Issues: Whether the Arbitrators exceeded their jurisdiction in accepting the contractor's claim for payment at the standard schedule of rates for work done beyond the agreed date of completion.
Ratio Decidendi: The court held that the Arbitrators did not exceed their jurisdiction because: * Section 59 of the Andhra Pradesh Detailed Standard Specifications, which prohibits payment of any amount over and above the contractual rate, does not apply to the case because the contractor is not claiming compensation for loss or damage, but rather for the rates for the work done. * The decision of the Division Bench in C.M.A. No. 677 of 1981 and C.R.P. No. 385 of 1982, which held that the contractor is not entitled to payment at the enhanced rates even during the extended period of the agreement, is not relevant because there is no such clause in the present agreement. * The contractor is entitled to be paid at the standard schedule of rates for the work done beyond the agreed date of completion because the State Government was responsible for the delay in handing over the site to the contractor.
Final Decision: The court dismissed the State Government's appeals and allowed the contractor's appeal. The court modified the decree of the lower court to reflect the terms of the award.
( 1 ) THESE three appeals arise out of a common order of the IInd Additional judge, City Civil Court, Hyderabad dated 27-12-1983. The matter arises under arbitration proceedings.
( 2 ) O S No. 1557 of 1982 is filed under Sections 14 and 17 of the Arbitration act for making the award the rule of the court and O P No. 377 of 1983 is filed under Sections 30 and 33 of the Indian arbitration Act for setting aside the award.
( 3 ) THE Executive Engineer, Roads and Buildings Department entered into an agreement with Shivraj Reddy (3rd defendant in O. S. No. 1557 of 1982) on 14-7-1978 for formation including matalling and Block topping of inner ring road at Uppal junction. As disputes arose between the parties, the matter was referred to a panel of Arbitrator as per the terms of the agreement. The Contractor made as many as 7 claims. The Arbitrators ahowed claims l (a) and l (b) and rejected the other claims by their award dt. 13-9-1982 ex. A-1. There after, the Arbitrators filed o. S. No. 1557 of 1982 for making the award the rule of the Court. The award is contested by the 1st and 2nd defendants.
( 4 ) THE Contractor filed a written statement that the award should be made the rule of the Court. The trial Court, after considering the material on record made the award the rule of the Court and dismissed the O. P. filed by the 1st and 2nd defendants to set aside the award.
( 5 ) AGGRIEVED thereby, the State preferred two appeals C. M. A. Nos. 470 and 471 of 1984 and Contractor preferred one C. m. A. No 820 of 1984. The main contention of the appellant Government is that the Arbitrators exceeded their jurisdiction in accepting claims 1 (a)and 1 (b) and the trial Court should have set aside the award to that extent.
( 6 ) IN this case tenders were invited for the work in early 1977. Tenders were made by the 3rd defendant on 2-5-1977 and the final agreement was concluded on 14-10-1978. On 27-11-1978 the Department instead of handing over the entire site in one streich, only a portion was handed over to (he Contractor with an assurance that the remaining portion will be handed over shortly. The remaining site was handed over in bits on 23-7-1980 and on 11-12-1981. That was more than 2 years from the stipulated date of completion on 26-11-1979. The Contractor made a claim under head Ha) for the work done upto the period of agreed date of completion namely, 26-11-1979 for payment at the rates agreed to in Schedule a and for quantities of work done beyond the agreed date of 26-11-1979 upto 31-12-1981 at the standard specification rates in force during the period of execution plus over all tender percentage amounting to Rs. 2,43,800/ -. The Arbitrators accepted the claim ot the Contractor in this regard and granted rates as originally agreed for the work done upto the period of originally agreed date of completion and for the work done thereafter at the, standard specification rates in force during the period of execution "of farther work beyond the date of completion plus over all accepted percentage.
( 7 ) THE main submission of Miss. V. Lakshmi Devi, the learned Counsel for the appellant is fhat Clause 59 of the andhra Pradesh Detailed Standard Specification rules prohibits payment of any amount over and above the contractual rate. In support of this contention, she relied upon a decision of the division Bench of this Court in C. M. A. No 677 of 1981 and C. R. P. No. 385 of 1982 dated 19-4-1982.
( 8 ) SECTION 59 of the Andhra Pradesh detailed Standard Specifications is as follows: "59 Delays and extension of time:- ,no claim for compensation on account of delays or hindrances to the work from any cause whatever shall lie, except as hereinafter defined. Reasonable extension of time will be allowed by the Executive Engineer or by the Officer competent to sanction the extension for unavoidable delays; such as may result from causes which, in the opinion of the Executive Engineer, are undoubtedly beyond the control of the cont
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
