1973 Supreme(Ker) 26
Judges : V.P.GOPALAN NAMBIYAR,N.D.P.NAMBOODIRIPAD
STATE OF KERALA - Appellant
Versus
K.P.POULOSE - Respondent
Case No : A. S. No. 357 of 1972
Decided On : 01/29/1973
Advocates Appeared :
Government Pleader; For Appellants V. K. K. Menon; C. J. Balakrishnan; M. P. Abraham; U. K. Ramakrishnan; For Respondent
The court has the power to extend the time for making the award under S.28(1) of the Indian Arbitration Act 1940. Participation in proceedings beyond the stipulated time may preclude a party from objecting to the award on the ground of being passed beyond time. An error apparent on the face of the record or misconduct of the Arbitrator may be grounds for setting aside an award under S.30 of the Act.
Headnote:
Arbitration - Disputes between State of Kerala and contractor - Indian Arbitration Act 1940 - S.33 - R.3 of First Schedule - Extension of time for making award - Misconduct of Arbitrator - Error apparent on the face of the record - Extra item of work - Scope of reference to Arbitrator - Participation in proceedings beyond time - Estoppel, waiver, acquiescence - Grounds for setting aside an award under S.30 of the Act
Fact of the Case:
Disputes arose between the State of Kerala and a contractor, leading to arbitration as per the Arbitration Clause 34 of the tender notification. The contractor filed an application under S.33 of the Indian Arbitration Act 1940 to set aside the award on various grounds, including that the award was passed beyond the stipulated four months and that the Arbitrator was guilty of misconduct.
Finding of the Court:
The court extended the time for making the award and held that the contractor was precluded from objecting to the award on the ground that it was passed beyond time. The court also found that there was no error apparent on the face of the record and that the contractor was barred from attacking the award as beyond time due to estoppel, waiver, and acquiescence.
Issues: Extension of time for making the award, misconduct of Arbitrator, error apparent on the face of the record, participation in proceedings beyond time, estoppel, waiver, acquiescence
Ratio Decidendi: The court has the power to extend the time for making the award under S.28(1) of the Act. Participation in proceedings beyond the stipulated time may preclude a party from objecting to the award on the ground of being passed beyond time. An error apparent on the face of the record or misconduct of the Arbitrator may be grounds for setting aside an award under S.30 of the Act.
Final Decision: The court allowed the appeal, set aside the decision of the lower court, and directed that the Respondent's application to set aside the award be dismissed. The court also observed that the contractor was not entitled to extra payment for jetting as an extra item of work as per the terms of the tender notification.
1. Certain disputes arising between the State or Kerala and the 1st respondent, a contractor, were referred on 26-10-68 for arbitration of the Chief Engineer in accordance with the Arbitration Clause-Clause 34-of the tender notification Ext. P21. The Arbitrator issued notice dated 3-1-69 to the petitioner to appear before him. The petitioner filed his written statement on 22-2-69. The first hearing was on 4-6-69. and the second, on 17-6-69. The award was passed on 11-9-69. At the instance of the petitioner the award was filed in court and the court ordered notice of filing the award to the petitioner on 4-4-70. In response to the notice, the petitioner filed an application under S.33 of the Indian Arbitration Act 1940 (referred to hereinafter as the Act) to set aside the award on various grounds. The court below set aside the award on two of the grounds alleged, and rejected the rest. The two grounds which found favour with the court below were: first that the award was passed beyond the period of four months provided in R.3 of the First Schedule to the Act, and second that the Arbitrator was guilty of misconduct in so far as the award disclosed an error apparent on the face of the record as the Arbitrator had not adverted to, or considered, two documents, Exts. P11 and P16, Against this decision the State has preferred this appeal.
2. The respondent was the successful tenderer for the construction of three zonal R.C.C. over head Reservoirs, two in Mattancherry and one in Cochin, in connection with the Ernakulam-Mattancherry Water Supply Scheme. The tender notification (Ext. P21) contained Clause.34, which was the arbitration clause, which specified for a reference in cases of dispute to the Chief Engineer. It is unnecessary to extract the clause. Clause.13 of the notification reads:
"The contractor shall be bound to carry out all extra items not included in the schedule, but found necessary during the actual execution of the work and these extra items will be paid for at rates based on the departmental data rates, for such items plus or minus the proportionate difference between the P.A.C. as per the accepted tender and estimate amount as per the current schedule. The tender difference shall be calculated less value of the departmental materials to be supplied,"
In Schedule A3 to the notification, under the heading: "SITE", it was stated that the soil at the site for Reservoir No.1 and Reservoir No. 2 is loose-clay, and for Reservoir No. 3, sandy. Clause No. 11 stated that intending tenderers are expected to inspect and study carefully the conditions at site. Condition No. 18 required the successful tenderer to execute an agreement on stamp paper before commencing work. By report No. 22 of the Kerala Engineering Research Institute, Peechi, Soil Mechanics and Foundation Division, dated 14-9-65, (Ex. P19), it was reported that the sub-soil at the three places chosen as sites for the reservoirs up to 16, showed that the top soil was sand, the middle layer clay, and the bottom layer, silty sand or sand. It was stated that the clay found at the three places was of a highly compressible nature and hence pile foundation was preferable; and that as the top strata at three places was sandy, jetting had to be resorted to for driving the piles through this strata. It was the respondent's claim that whereas the work tendered for was to be executed by 'pile driving', it was actually done by 'jetting' having regard to the nature and condition of the soil at the sites, and that this was an extra item of work, for which he was entitled to extra remuneration in accordance with the terms of Clause.13 of the tender notification. The State took the view that 'jetting' was not an extra item of work but only a revised or improved technical method of executing the work tendered and contracted for, and therefore the contractor was not entitled to any extra remuneration. The Arbitrator by his award Ext. P10 decided this against the responden