Back
1989 Supreme(Ker) 59
Kerala High Court
V.SIVARAMAN NAIR,M.FATHIMA BEEVI
State of Kerala - Appellant
Versus
Joseph Anchilose - Respondent
Decided On : 02/10/1989
Govt. Pleader, M.C. John, for Appellant; M.P. Abraham, for Respondent.
The main legal point established in the judgment is that the Arbitrator must adhere to the terms of the contract and has no jurisdiction to over-step the limits set by the terms of the contract whereby Arbitration was provided for.
Headnote:
Arbitration Act - Construction Contract - S.39 - The court allowed the appeal under S.39 of the Arbitration Act, setting aside the order of the Subordinate Judge, Trivandrum allowing O.P. (Arb) No. 173 of 1982. The appeal arose from a petition filed under S.14(2) of the Act. The appellants had filed objections under Ss.16 and 32 of the Act to set aside or remit the award to the Arbitrator.
Fact of the Case:
The respondent had entered into a construction contract for the construction of a sea-wall. The contractor could not complete the work in time and applied for extension of time on various occasions. The work was completed, and the contractor received the final bill in full and final settlement of all claims. The contractor sought reference of the disputes and differences relating to the contract to the Government Arbitrator.
Finding of the Court:
The trial Court held that the award being non-speaking and the Arbitrator having stated that he made the award after duly weighing and considering the allegations and evidence and after hearing counsel, the Court should not examine the matter any further. The Court held that since the preliminary objections and explanations of the contractor were adverted to and rejected by the Arbitrator, no further enquiry into those aspects was called for, since the court has no appellate jurisdiction over awards of Arbitrators.
Issues: The appellants raised preliminary objections, including that the claimant had not moved the next superior officer of the second respondent before referring the disputes for arbitration, that final payment under the contract was received by the claimant in full and final settlement of all the claims under the agreement, and that the majority of the claims were or might and ought to have been referred by the claimant in the previous Arbitration Case No. 57 of 1979 and hence those claims were barred by constructive res judicata.
Ratio Decidendi: The Court held that the Arbitrator had committed errors of law in rejecting the preliminary objections raised by the appellants. The Court also held that the Arbitrator had exceeded his jurisdiction in awarding rates in excess of the agreed rates and in allowing claims which were or ought to have been raised in a previous arbitration case. The Court further held that the Arbitrator had no jurisdiction to over-step the limits set by the terms of the contract whereby Arbitration was provided for.
Final Decision: The Court allowed the appeal, setting aside the award of the arbitrator as well as the judgment and decree of the trial Court. The Court held that there was no arbitrable dispute after the contractor received payment on 12-5-1981 as per the final bill in full and final settlement of his claims, and therefore, there was no need nor any justification to remit the matter to the Arbitrator.
SIVARAMAN NAIR, J.:- This appeal under S.39 of the Arbitration Act (for short the Act) arises from an order of the Subordinate Judge, Trivandrum allowing O.P. (Arb) No. 173 of 1982. That was a petition filed under S.14(2) of the Act. The present appellants had filed objections under Ss.16 and 32 of the Act to set aside or remit. the award to the Arbitrator. Those objections were over-ruled. Hence this appeal.
2. The respondent had entered into a contract with the second respondent on 23-91975 for construction of balance work of 1000M of sea-wall south of 450M at the mouth of Moorat River in Iringal Village of Kozhikode District. The probable amount for the work was Rs. 12,11,445/-. The period of the contract was 18 months after the contractor commenced work. The site was handed over on 10-11-1975 on which date the work was be deemed to have commenced. It should have been completed by 9-5-1977. The work consisted of procuring and conveying granite stones of different specifications from designated quarries to the sea-shore, and dumping them to form the sea wall. It also involved construction of fascine matress foundation. The granite stones of different specifications had to be collected and each stone had to be numbered. They were to be dumped only after inspection. The construction was to proceed according to the specifications under the supervision of officers of the Irrigation Department.
3. The rates for labour and materials were specified in the contract. The quarry from which granite stones were to be transported to the work site was specified as Iringal quarry.
4. The contractor could not complete the work in time. He applied for extension of time on various occasions. Such extensions were granted as per terms of the supplementary agreement. Clause 2 of such agreement provided :
"The contractor shall carry out all further works as under the said agreement within the said extended period at the rates and in the manner agreed to therein subject to all the other conditions prescribed in the said agreement and shall not claim any enhanced rate for such items of work, on account of the extension of time either due to the increase in rate of labour or materials or on any other ground whatsoever".
Further extensions were granted under the same terms upto 31-3-1981. The work was completed on 30-4-1981. Contractor received the final bill in full and final settlement of all claims on 12-5-1981.
5. In the meantime, he had sought reference of the disputes and differences relating to the contract to the Government Arbitrator. He specified the disputes and differences in para 5 of the statement which he filed before the Arbitrator on 26-2-1981. He supplemented that statement by a statement of facts and claims dated 28-5-1981. In the former, he formulated the issues to be resolved in the Arbitration as items (a) to (h). Under item (a) he claimed 85% enhancement in view of the revision of schedule rates during 1976, 1978 and 1980; (b) Rs. 60 per M3 instead of Rs. 36 for providing facine matress foundation consisting of bush weed upto 5 cm dia; (c) expenses to inscribe numbers on each 200DM3 granite stone; (d) additional conveyance charges for procuring and conveying rubble from the quarry situated at a distance of 30 Km away from the site; (e) procuring and conveying of 45 DM3 stone from the distant quarry; (f) procuring and conveying of 20/40 DM3 stone from the distant quarry; (g) procuring conveying dumping and packing of 200 DM3 stone from the distant quarry; and, (h) idling wages to the labourers etc., whereby he sustained heavy loss due to introduction of new pattern of inspection procedure. He amplified his claims in para 9 of his statement dated 28-5-1981.
6. The claims were crystallised as items (a) to (s); They were :
(a) the amounts claimed were Rs. 38,138.75 towards enhanced rates; (b) Rs. 1,38,960/- as addition for providing fascine matress foundation; (c) Rs. 4,65,794/- due to escalation of rates; (d) Rs. 6,311.50 on the
