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2015 Supreme(Ker) 343

IN THE HIGH COURT OF KERALA AT ERNAKULAM
T.R.RAMACHANDRAN NAIR & P.V.ASHA, JJ.
K.SODARAN, GOVT. CONTRACTOR, SREE KRISHNA NILAYAM – Appellant
Vs.
STATE OF KERALA, REP.BY SECRETARY AND ORS. – Respondent
Arb.Appeal No.2 OF 2012
Decided On : 20.05.2015

Advocates Appeared:
For the Appellant : SRI.SHEJI P.ABRAHAM, SRI.O.K.MURALEEDHARAN
For the Respondent: GOVERNMENT PLEADER SMT.ROSE MICHAEL

Headnote:

Arbitration Act, 1940 - Sections 17 & 30 - Arbitrator - arbitrarily, irrationally, capriciously - Liability of - Findings of - Held, Question will be whether reappraisal of evidence is possible and whether different conclusions can be arrived at ordinarily - Principles discussed above will show that unless there is a finding that the Arbitrator has acted arbitrarily, irrationally, capriciously or in conscious disregard of the contract, no interference is possible - Court cannot substitute its evaluation of facts

JUDGMENT :

Ramachandran Nair, J.

This appeal is filed by the appellant contractor aggrieved by the order passed by the Principal Sub Judge, Thiruvananthapuram in O.P. (A)No.170/1993. The appellant has mainly challenged the order passed by the learned Judge on various grounds.

2. The necessary facts for the disposal of the appeal are the following : The appellant had moved the Principal Sub Judge by filing O.P. under Section 17 of the Arbitration Act, 1940 for making the award as a rule of court. As per the award, the Arbitrator had considered claim for damages under three heads and the same stood allowed with interest at 18% per annum for the period from 12.11.1990 to the date of decree or date of payment whichever is earlier. A total amount of Rs. 4,55,743/- was awarded to the appellant by the Arbitrator. The court below considered the application filed by the appellant under Section 17 of the Act along with the application filed under Section 30 of the Act by the respondents to set aside the award and reduced the award amount to Rs. 1,75,000/- and the rate of interest also has been reduced to 9%.

3. We heard Sri.Sheji P.Abraham, the learned counsel for the appellant and the learned Government Pleader Smt.Rose Micheal.

4. Before going into the contentions of the parties, we will just advert to the disputes between the parties leading to the award passed by the Arbitrator. The appellant was successful in a competitive tender invited by the second respondent for construction of "K.I. and T.C.D.P. ( RB) for the formation of Elavakkodu Distributory from C.H.O to 1900 m including C.D.works". This was in relation to the Kallada Irrigation Project. The agreement is dated 30.6.1988. Certain disputes arose between the parties which were referred for arbitration and on mutual agreement, a retired Chief Engineer was appointed as the sole Arbitrator. Reference for arbitration was made as per Clauses 51 and 52 of the Local Competitive Bidding Specification (LCB) which forms part of the agreement. In the agreement between the parties, the time for completion given was five months and the work order was issued on 11.1.1989 to start the work and he had to complete it by 10/06/1989. The time had to be extended and the work was completed on 30.06.1990 viz; the extended period. The claims raised by the appellant are mainly three in number, namely 15(a), 15(b) and 15(c). Under 15(a), he claimed compensation for loss and damages sustained due to escalation for all works done. It was alleged that the execution of the work was dragged on beyond the original period of completion and during the said period the cost of construction materials increased, wages of labourers were enhanced and there was unpreceded increase in price index, industrial index, cost index and living index. Even though the Government had revised schedule of rates during 1986, 1988 and 1990, no corresponding increase was effected in the agreed rates. A total amount of Rs. 4,75,285/- was claimed as compensation under Claim No.15 (a).

5. Claim No.15(b) related to idling charges to the establishment. He had to incur payment by way of rent to building and to the skilled and unskilled workers, agent, supervisors etc. @ Rs. 2,000/- per day for 90 days. It was contended that there was delay in providing of unhindered possession of site. Similarly it was also contended that there were obstructions to the work by certain land owners alleging non- payment of value of land by the Government. Claim 15(c) related to the idling of establishment and machineries due to delay in supply of cement. According to the contractor he had incurred expenditure towards hire charges, capital out lay, interest, overhead expenses etc.

6. At the outset the learned counsel for the appellant submitted that in exercising the power under Section 30 of the Arbitration Act, 1940, the court cannot sit in appeal over the award as an appellate court. It is submitted that reasonableness of the reasons of the Arbitrator cannot































































































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