Point of Law: It is well-settled that an award can only be set aside under Section 30 of the Act, which enjoins that an award of an arbitrator/umpire can be set aside, inter alia, if he has misconducted himself or the proceeding. Adjudicating upon a matter which is not the subject-matter of adjudication, is a legal misconduct for the arbitrator

JUDGMENT :

C. Praveen Kumar, J.

1. With the consent of both the counsel, the main C.M.A. is disposed.

2. Assailing the order in A.O.P.No.21 of 2001 on the file of the II Additional Senior Civil Judge, Visakhapatnam, dated 29.9.2012, the present C.M.A. is filed by the State of Andhra Pradesh under Section 39 of Arbitration Act, 1940.

3. The facts, which lead to filing of the appeal, are as under :

The 1st respondent, who is a class-1 civil contractor, being successful tenderer, entered into a contract with the Government of Andhra Pradesh under Agreement No.C.R.(L.S.) 83/87-88, dated 29.6.1987 for construction of the bridge across river Nagavali, with formation of approach road near Thotapalli regulator at K.M.104/10 of Kalingapatnam-Srikakulam-Parvathipuram road for a value of Rs.91,18,280/-. It is alleged that the land was handed over to the contractor on 15.7.1987 with a condition that the contractor has to complete the work within a period of eighteen months. But, however, on 29.8.1991 the 1st respondent abandoned the work and consequently the contract was terminated with effect from 2.11.1991. It is said that the contractor could do only work to an extent of Rs.25.19 lakhs as against the work of 77.89 lakhs. The events lead to filing of O.S.No.540 of 1991 by the respondent-contractor before the III Additional Subordinate Judge, Visakhapatnam under Section 20 of Arbitration Act, seeking a direction to the appellant herein to file the contract agreement before the Court to adjudicate upon the dispute by itself or by appointing an Arbitrator and to restrain the appellant herein from invoking bank guarantees pending adjudication. After contest, the court by its order dated 12.12.1997, allowed the suit and accordingly dispute was referred to an Arbitrator by name Sri P.V. Janardhan Rao, a retired Judicial Officer. This order appointing the Arbitrator was never challenged by the appellant herein, as such, the same has become final.

4. Pursuant thereto, the Arbitrator conducted the proceedings and passed an Award dated 30.1.2001 allowing claims to an extent of Rs.35,53,956/-as against the total value of Rs.87,87,000/-. It is to be noted here that even before the Arbitrator the main issue which was raised was with regard to his jurisdiction to adjudicate the dispute. Rightly so, the Arbitrator held that it is beyond his scope to adjudicate upon his own jurisdiction, more so, when the order of the civil Court has become final. Aggrieved by the Award of the Arbitrator the State preferred A.O.P. No.21 of 2001 before the II Additional Senior Civil Judge, Visakhapatnam, under Sections 30 and 33 of the Arbitration Act, 1940. Though various grounds came to be raised touching the merits of the matter, but, a reading of the order indicates that the appellant-Government confined the contest only to the jurisdiction of the Arbitrator on the ground that there is a bar, in view of G.O.Ms.No.430, dated 24.10.1983 and G.O.Ms.No.160, dated 1.6.1987. Considering the evidence available on record and having regard to the judgment of the Supreme Court in Kodandaram Redy Vs. State of A.P. 2011(1) SCC 197, the appeal was dismissed. Challenging the same, the present appeal came to be filed.

5. Learned Advocate General appearing for the State of Andhra Pradesh would submit that the Arbitrator while taking a decision on claim No.1, relating to escalation of charges due to variation of prices of materials, oils, labour etc., went beyond the original agreement period i.e., from 14.1.1989 to 31.10.1991 and awarded a sum of Rs.9,10,000/-, which is illegal, improper and incorrect. It is pleaded that foot note to schedule A1 Item No.7 at page No.91 of the agreement, by express term bars, any escalation of rates and as such any escalation made by the Arbitrator is beyond his jurisdiction. It is further pleaded that Arbitrator has awarded escalation in rates based u