1977 Supreme(AP) 265

Andhra Pradesh High Court
Judges : A.GANGADHARA RAO, A.V.KRISHNA RAO
State Of A.P. - Appellant
Versus
Pioneer Construction Co. - Respondent
Decided On : 09-01-77

An error of law apparent on the face of the award means that you can find in the award or the document actually incorporated thereto, as for instance, a note append by the arbitrator stating the reasons for his judgement, some legal proposition which is the basis of the award and which you can then say is erroneous.

Headnote:

ARBITRATION - AWARD - SETTING ASIDE - ERROR OF LAW - ERROR OF LAW APPARENT ON THE FACE OF THE AWARD - MEANING AND SCOPE - DISTINCTION BETWEEN CASES IN WHICH A QUESTION OF LAW IS SPECIALLY REFERRED AND THOSE IN WHICH A DECISION ON A QUESTION OF LAW IS INCIDENTALLY MATERIAL - WHEN AN ARBITRATOR COMMITS A MISTAKE EITHER IN LAW OR IN FACT IN DETERMINING THE MATTERS REFERRED TO HIM, BUT SUCH MISTAKE DOES NOT APPEAR ON THE FACE OF THE AWARD OR IN THE DOCUMENT APPENDED TO OR INCORPORATED IN IT SO AS TO FORM PART OF IT, THE AWARD WILL NEITHER BE REMITTED NOR SET ASIDE NOTWITHSTANDING THE MISTAKE - MERE REFERENCE TO THE CONTRACT IN THE AWARD IS NOT TO BE HELD AS INCORPORATING IT.

Fact of the Case:

The Pioneer Construction Company entered into an agreement with the Superintending Engineer, Nagarjunasagar Canals Circle, Jaggayyapet, for excavation of the balance of the earth work of Munagala deep cut from mile 72/4 to 74/4 of Nagarjunasagar Left Main Canal. The contract was terminated with effect from 30-7-72 under clause 61 of P. S. to A. P. D. S. S. The matter was referred to the Arbitrator under clause 73 of P. S to A. P. D. S. S. The Arbitrator gave his award on 30-4-1974. The respondent filed O. S. No. 122 of 1974 in the Court of the Subordinate Judge, Vijayawada under S. 14 (2) of the Arbitration Act for directing the Arbitrator, the 4th respondent, to file the award into Court. O. S. 117 of 1974 was filed by the Government, the Superintending Engineer and the Executive Engineer to set aside the award. Both the matters were heard by the Subordinate Judge, Vijayawada. The learned Subordinate Judge made the award a rule of the Court and passed the decree in terms of the award. He allowed O. S. No. 122 of 1974 filed by the respondent and dismissed O. S. 117 of 1974 filed by the Government.

Finding of the Court:

The court held that the contractor should be charged only Rs. 4. 95 per Kg. for the imported gelatine that was supplied to him, the contractor has to pay the hire charges obtaining on the date of his hiring the machinery, and the contractor is liable only for the quantum of work left over by him as compared with the quantities contemplated in the agreement.

Issues: 1. Whether the contractor is bound to pay for the gelatine at the rates mentioned in the receipts at least for the consignments covered by them? 2. Whether the contractor has to pay the revised hire charges for the machinery hired to him? 3. Whether the contractor should make good the difference between the actual cost incurred by the Government in getting the work completed if it is more than what he had to receive for the work already done by him?

Ratio Decidendi: 1. The agreement does not say that if the gelatine is imported and supplied to the respondent, he should pay at a higher rate. In his letter dated 29-6-1971 the respondent did not undertake that he would pay a higher rate for the imported gelatine. Exs. A-9 to A-13 clearly show that for the gelatine imported from Poland and Yugoslavia the respondent was charged only at the agreement rate of Rs. 4. 95 per Kg. 2. The contractor is prepared to pay the hire charges obtaining on the date when he had hired the machinery from the department. The learned Government Pleader has not placed before us any provision in the Departmental code or any other Government Order on the date when the defendant had hired the machinery that he would also undertake to pay the charges revised from time to time. It cannot be disputed that the department has a right to revise the hire charges. Equally, it cannot be disputed that the contractor has to pay the charges obtaining on the date of his hiring the machinery. But we are of the opinion that in the absence of a contract, the contractor is not liable to pay revised charges for the machinery already hired by him. 3. The Arbitrator has given reasons for awarding only the difference between the approximate quantities mentioned in the agreement and the work done by the contractor. The Arbitrator held that it would meet the ends of justice if the determination of the contract under CI. 61 of P. S. to A. P. D. S. S. is made applicable only for the quantum of work left over by the contractor as compared with the quantities contemplated in the agreement under the individual classification of soils in Schedule -A.

Final Decision: The court dismissed the appeals filed by the Government.