(per K.G. Shankar)

This common order disposes of the appeal as well as the revision. The Superintending Engineer and Executive Engineer of the Nagarjuna Sagar Right Canal are appellants 1 and 2. In the revision, the State is the first petitioner represented by the Superintending Engineer of the Nagarjuna Sagar Right Canal. The second petitioner in the revision is the second appellant in the appeal. The two respondents in the appeal and the revision are identical. The second respondent is the Hon’ble Arbitrator who is merely a proforma party. The parties shall be referred to as the SE, the EE (Superintending Engineer, Executive Engineer), the Contractor and the Hon’ble Arbitrator for convenience.

2. The SE and the EE challenge the common judgment and decrees in O.S.No.108 of 1996 and O.S.No.110 of 1996 on the file of the Additional Senior Civil Judge, Narsaraopet. Through this judgment, the learned Additional Senior Civil Judge, Narsaraopet made the award passed by the Hon’ble Arbitrator on 02.03.1995 under the Arbitration Act, 1940, the Rule of the Court. Aggrieved by the judgment in O.S.No.110 of 1996, the SE and the EE laid the appeal. Aggrieved by the judgment in O.S.No.108 of 1996, they laid the revision. However, it is a common judgment with common reasoning by the trial Court.

3. This appeal and revision were earlier disposed of by a Division Bench through a common order dated 01.11.2004. The claim of the first respondent before the Hon’ble Arbitrator was Rs.35,29,535/-. Relying upon State of A.P. v. Obulureddy (2001 (10) SCC 30), the Division Bench of this Court held that the dispute was not arbitrable, as the dispute was for over Rs.50,000/- and accordingly set aside the judgments in O.S.Nos.108 of 1996 and 110 of 1996 on the file of the Additional Senior Civil Judge, Narsaraopet.

4. The first respondent herein preferred SLP Nos.5721 of 2005 and 5722 of 2005 from the judgments in the appeal and the revision herein. The Supreme Court granted leave and ultimately allowed the two cases as Civil Appeal Nos.1087 of 2008 and 1088 of 2008 through a common judgment dated 07.02.2008 holding that the appellants herein waived their rights to file objection to the award. A clarification thereafter was sought by the first respondent through I.A.Nos.1 and 2 of 2009 in the two appeals. The Supreme Court clarified through orders dated 10.08.2009 that the common judgment of the High Court in the appeal and the revision stood set aside through the common judgment of the Supreme Court dated 07.02.2008 and that the appeal and the revision shall be disposed of afresh by the High Court expeditiously. Thus, the appeal and the revision came up before us for our consideration.

5. The facts leading to the filing of the appeal and the revision may briefly be stated at this stage.

The facts are:

(a) The first respondent is a contractor. He laid a tender for “lining the bed and sides of Nagarjuna Sagar Right Main Canal from Kilometer 23.13 to Kilometer 23.41”. The estimated value of the work was Rs.12.41 lakhs. The bid of the contractor was accepted. The agreement between the SE and the SE and the contractor concluded on 18.04.1986 for a sum of Rs.11.22 lakhs. The contract is required to be completed during the periods of the closure of the canal in 1986 and 1987. The contractor, claiming that he executed the works entrusted to him, requested for the settlement of the claims. He also issued a notice on 02.04.1991 to the SE to settle his claim.

(b) Disputes arose between the SE and the EE on the one side and the contractor on the other side regarding the work conducted by the Contractor. The work indeed could not be completed in 1987 as contemplated by the agreement as the canal could be closed by 31.03.1988 only. The contractor claimed that he suffered losses in the execution of the works.

(c) The contractor consequently invoked the arbitration clause and filed O.P.No.167 of 1991 on the file of the Principal Senior Civil Judge, Narsaraopet