RAMAKRISHNA, J. ( 1 ) THIS appeal by the State of Karnataka through the Executive Engineer, UKP Dam, division No. 2, Alamatti Dam, is directed against the Judgment and decree dated 20-10-1989 passed in Arbitration Case No. 2 of 1988 by the learned Principal Civil Judge, Bijapur. ( 2 ) THE matter arises this way:respondent-1 is a Class-I contractor executing the civil work under the appellant and in the course of executing the work, he had entered into a local competitive bidding contract with the appellant on 12-11-1982 in No. 13 in respect of work of construction of Alamatti power Dam at Alamatti, Bijapur District. By virtue of Clause-53 of the said contract, the disputes between the parties arising out of the said contract are to be referred to the arbitrator and the parties are to abide by the decision of the Arbitrator certain disputes having arisen between the parties, the same were referred to Sri A. Sel- varaj, Chief Engineer, Government of Karnataka, as a sole Arbitrator. Thereafter, the arbitrator issued notices to the parties. The respondent presented an application claiming certain sum of money payable by the appellant for the work done under the contract. The appellant filed his counter. Both parties adduced oral as well as documentary evidence in support of their respective cases. The Arbitrator having heard the parties on both sides on various dates from 21-11-1987 to 24-1-1988 finally, passed an award and accordingly he informed the parties by a registered post on 24-1-1988. Later the respondent requested the Arbitrator on 9-2-1988 to file the award before the court for making it rule of the Court and also to take action under Section 17 of the Arbitration act to pass a decree thereon with future interest at 19% per annum from the date of decree till payment. The Court having issued notices to both parties and the Arbitrator, the Arbitrator appeared through Sri C. K. Dharwadkar, counsel and both the parties represented their respective cases. The appellant filed objections to the award taking several contentions. ( 3 ) HAVING regard to the nature of the disputes,material evidence produced and the arguments advanced, the learned Civil Judge raised the following points: (1) Whether the Arbitrator has misconducted himself in granting relief in respect of claims Nos. 1, 4, 7, 13 and 14? (2) Whether the claimant is entitled to the decree in terms of the award?
( 3 ) HAVING regard to the nature of the disputes,material evidence produced and the arguments advanced, the learned Civil Judge raised the following points: (1) Whether the Arbitrator has misconducted himself in granting relief in respect of claims Nos. 1, 4, 7, 13 and 14? (2) Whether the claimant is entitled to the decree in terms of the award? (3) What order? ( 4 ) AFTER discussing in detail the material evidence produced, the arguments advanced and the reasons furnished by the Arbitrator, the learned Civil Judge held that the conclusions reached by the Arbitrator in all the points are sustainable. Accordingly, agreeing with the conclusions reached by the Arbitrator, the petition filed by the Arbitrator came to be allowed and a decree was directed to be drawn in terms of the award passed by the Arbitrator. ( 5 ) AGGRIEVED by the Judgment and decree made by the learned Civil Judge, the State has presented this appeal with six grounds on which the conclusions reached by the Arbitrator on 'claims Nos. 1, 4, 7, 13 and 14 where simple interest at 15% per annum was awarded, are called in question. To reiterate, except the award on claims Nos. 1,4,7 and 13, the State did not challenge the award on the other claims. Therefore, sri Acharya argued only on the awards in the above claims. ( 6 ) THE learned Advocate General having taken us through the relevant documentary evidence and the award, in particular the discussion made on claims Nos. 1, 4, 7 and 13, argued that having regard to clauses 31 and 32 of the contract, it was not open to the Arbitrator to award at the rates quoted for the individual item for the variation in the work, after considering the rate analysis and that he had failed to take into account S. R. rate or tender rate whichever was higher, while reaching the conclusion. He also argued that the awarding of equitable rates under clauses 31 and 32 for the items of work executed where the variation was more than 30% could not be sustained. As regards the award under claim No. 7, the learned Advocate General contended that having regard to the background of the works assigned to the respondent and the conditions incorporated in the contract, the conclusion reached by the Arbitrator in para 20. 9 of his award could not be sustained.
As regards the award under claim No. 7, the learned Advocate General contended that having regard to the background of the works assigned to the respondent and the conditions incorporated in the contract, the conclusion reached by the Arbitrator in para 20. 9 of his award could not be sustained. He further contended that the Arbitrator was not right in awarding allowance of 10% for the wasted overheads and loss of profit under claims Nos. 1 and 4 as, according to him, the arbitrator ought to have seen that the works assigned in the schedule of the contract included items 1 and 2 coming under claims Nos. 1 and 4. The contractor having refused to execute that part of the work considering it as extra, the Court below ought to have ignored the value of powerhouse, anchor-block and tail-race excavation. He submitted that the Arbitrator was not right in allowing this claim and the learned Civil Judge could not have approved the said finding. ( 7 ) SRI Sundaraswamy, learned senior counsel appearing for the respondent/contractor, argued supporting the award under appeal. However, he maintained that the Arbitrator, having regard to clauses 31 and 32 and the material evidence on record, rightly fixed equitable rate under claim No. 13 for the works shown in Annexure-VI to the award. He submitted that the arguments advanced by the learned Advocate general with regard to the award under claims nos. 1,4 and 7 particularly items 1 and 2 arising under claims Nos. 1 and 4 which were not included in the schedule could not be sustained and there was no force In the submission made by him on these claims. According to him, the Arbitrator, who was a Senior Chief Engineer knowing the civil work by his experience and knowledge, having considered the material evidence on record, had come to the conclusion that the contractor had made out a case for reliefs sought for in these claims. The conclusion reached by the Arbitrator on all the claims is based upon sound principles of appreciation of evidence. This factum is also found in the order of the learned Civil Judge approving the view taken by the Arbitrator. ( 8 ) SRI Sundaraswamy placed reliance on the following decisions in support of his case:- i) JT 1990 (2) SC 186 - Hind Builders v union of India.
This factum is also found in the order of the learned Civil Judge approving the view taken by the Arbitrator. ( 8 ) SRI Sundaraswamy placed reliance on the following decisions in support of his case:- i) JT 1990 (2) SC 186 - Hind Builders v union of India. This is on the point that the awarding of pendente lite interest on the amount claimed is permissible under Section 34, C. P. C. ii) AIR 1967 SC 1030 - Firm Madanlal roshanlal Mahajan v Hukumchand mills Ltd. , Indore - On the same point. iii) AIR 1989 SC 1263 - Food Corporation of India v Joginderpal Mohinderpal. This decision is relied on to drive home the point that eventhough, while appreciating the evidence on record, some other plausible views are possible than that expressed by the arbitrator, the Court cannot sit in appeal over the views of the arbitrator by re-examining and reassessing the materials. iv) AIR 1989 SC 890 -M/s. Sudarsan Trading co. v The Government of Kerala. It is held therein that the Court not only cannot sit in Judgment over the views of the arbitrator by re-assessing the evidence on record and substitute its own views but also cannot interfere with the award even if the arbitrator has not given reasons for making the award. 8. Sri Acharya, learned Advocate General, however, placed reliance upon the decision of the Supreme Court in Dandasi Sahu v State of orissa, AIR 1990 SC 1128 , to drive home the point that the awarding of the disproportionately high amount and non-application of mind by the arbitrator, vitiate the award. ( 9 ) HAVING regard to the pleadings found in this appeal and the nature of the conclusion reached in respect of claims Nos. 1, 4, 7 and 13, the following points arise for our consideration in this appeal: (1) Whether the conclusions reached by the Arbitrator and affirmed by the learned Civil Judge on claims Nos. 1, 4, 7 and 13 are just and proper? (2) Do they call for our interference? (3) Whether the grounds taken in support of the appeal could be sustained as against the said conclusions? ( 10 ) OUR finding on point No. 1 is in the affirmative and on points 2 an 3 in the negative. ( 11 ) DEALING with claims Nos.
(2) Do they call for our interference? (3) Whether the grounds taken in support of the appeal could be sustained as against the said conclusions? ( 10 ) OUR finding on point No. 1 is in the affirmative and on points 2 an 3 in the negative. ( 11 ) DEALING with claims Nos. 1 and 4, it isnecessary for us to look into the schedule disclosing the nature of work covered by. claim No. 1 particularly items 1 and 2. This question deals with the Arbitrator taking into consideration the agreement and passing an award in a sum of rs. 29,34,474/- towards net loss suffered due to excessive overheads on low turnover due to non- fulfilment of its obligation by the department. Indeed, the Arbitrator has discussed in detail taking into account the material evidence on record as to the excavation of the power house, anchor-block and tail-race channel which, according to him, came to be included in the tender as extra. The contention is that the Arbitrator and the learned Civil Judge erred in awarding 10% of the overheads without any evidence. This is the crux of the matter required to be considered and indeed considered by the Courts below. We presently discuss the nature of the evidence let in by both parties and acted upon by the Arbitrator who having considered the material evidence on record on this question reached the conclusion in favour of the claimant. The contention was that it was a misconduct on the part of the Arbitrator to have awarded 10% towards loss of overheads as to the excavation of the power house, anchor-block and tail-race channel. The total cost of these items of works coming to about Rs. 130 lakhs had been wrongly included by the Arbitrator for the purpose of considering the claim, is the contention. The learned Civil Judge has considered in detail the findings recorded by the Arbitrator in this behalf. In paragraph 13. 12 at page-47, the Arbitrator observed that the river diversion is a pre-requisite for the execution of excavation work of power house, tail-race channel and anchor-block and as the department had failed to perform this important obligation, the site was -. not available for the contractor to enable him to take up the work in accordance with the schedule.
12 at page-47, the Arbitrator observed that the river diversion is a pre-requisite for the execution of excavation work of power house, tail-race channel and anchor-block and as the department had failed to perform this important obligation, the site was -. not available for the contractor to enable him to take up the work in accordance with the schedule. In the instant case, it was pointed out that, according to the material evidence acceptable to the Arbitrator, the department failed to clear the site from the river flow and thereby the site was not made available and handed over to the contractor or claimant to enable him to proceed with the execution of the work. It is obligatory on the part of the department, according to the agreement, to make the site free from river water to enable the claimant to execute his part of work as per schedule. There is enough material which came to be considered by the Arbitrator and then he reached the conclusion that despite several requests by the claimant/respondent, the department was unable to discharge its obligation to make available the site and hand over clear possession of the same to the claimant so as to enable him to complete his work. In this behalf, Sri Sun-daraswamy brought to our notice Annexure-4 dated 14th December, 1984, a letter addressed by the claimant to the Executive Engineer, I. D. , u. K. P. Dam, Division No. 2, Alamatti. Para- graph-22 thereof reads:"we hereby humbly specifically refer to the points raised in para-2 of your letter No. 3721, dated 10th December, 1984. The admitted facts prove that because of the water having covered the D/s side of the power dam it was not possible to start any work during February, 1984 or at any time thereafter. Even as of date it is an admitted fact that the river flow is entering the working area from the D/s side. It is anticipated by your goodself that this position will change after the roadway is constructed and the flow direction changes. We assure you sir, that if the working area on the D/s side becomes free from the river flow and the back-waters, we will make arrangements to start the work. " ( 12 ) ANNEXURE-26 is a letter written by the Executive Engineer, I. D. , U. K. P. Dam, Division no. 2, Sitimani, to the respondent/claimant.
We assure you sir, that if the working area on the D/s side becomes free from the river flow and the back-waters, we will make arrangements to start the work. " ( 12 ) ANNEXURE-26 is a letter written by the Executive Engineer, I. D. , U. K. P. Dam, Division no. 2, Sitimani, to the respondent/claimant. The operative portion of para-2 of it reads:"it is a fact that water is flowing in blocks 40 and 41 and this water has spread in the power-house tail-race channel. The training wall is under construction. " in the last part of the letter, the Executive engineer asked the claimant as follows: "you are requested to start excavation where there is no water that is on the downstream of Block 42 upto causeway portion. " ( 13 ) ANNEXURE-127 at page 263 of Book Vol.-Iis another document written by the Executive engineer (I. D.), UKP, Alamatti to the claimant. It reads: "no. CUK/ae. Office of the Chief 7/ark/ghr/85-86 engineer, (I. D.), Upper Krishna Project, alamatti. dated: 4-2-1986. To: shri G. Harischandra Reddy, engineering Contractor, 305, Srinivasa Towers, begumpet, Hyderabad-500 016. Sir, Sub:- Construction of Alamatti power dam across Krishna river from Ch. 1217 M to 1373. 00 M - Delay in completion -Proposal for continuation and completion at the contract work. Ref:- Your letter No. GHR/lcb/ard/86-9, dated 9-1-1986, addressed to the Executive Engineer, UKP Dam, Division No. 2, Alamatti and copy to this office. . . Your attention is drawn to clause 51 of the agreement stipulating grant of extension of time for the delay attributable to the Department in the performance of the Contract and Price adjustment Clause No. 33 of the Agreement to compensate for the works done during the extended period of Contract. However, your request for workable rate is being recommended to the Government. And your request for extension of tune is being granted. . . In the meanwhile, it is requested to keep the work in progress beyond 11-2-1986 and complete the same in all respects within the period being extended. . . Please acknowledge receipt of this letter. Yours faithfully, sd/- chief Engineer (I. D.), upper Krishna Project, Alamatti. " ( 14 ) IN the letter, Annexure-130 at page 278,the Executive Engineer has pointed out as to the work order and non-completion of the work within 39 months.
. . Please acknowledge receipt of this letter. Yours faithfully, sd/- chief Engineer (I. D.), upper Krishna Project, Alamatti. " ( 14 ) IN the letter, Annexure-130 at page 278,the Executive Engineer has pointed out as to the work order and non-completion of the work within 39 months. Again this is based upon the agreement entered into between the parties. In another letter dated 29-11-1985 (Annexure-29) addressed to the respondent by the Executive engineer, difficulty in taking up the work due to floods was disclosed and it was the cause for the delay in completing the work according to the schedule. These are the documents which came to be considered in detail by the Arbitrator. He recorded a clear finding that although, according to the schedule under the terms of the agreement, the work should have been completed within 39 months, the same could not be completed owing to non-diversion of river water and non-providing clear possession of the site so as to enable the respondent/claimant to complete the above items of work within the scheduled time. It is in this behalf that the Arbitrator discussed in detail the loss sustained by the respondent. He held that the respondent/claimant cannot be held responsible for non-execution of excavation work of the power-house, anchor- block and tail-race channel and that the request of the State Government to exclude the cost of this work was not tenable. In otherwords, a specific finding came to be recorded by the. Arbitrator in favour of the claimant that the loss sustained by the claimant was not on account of any error or failure on the part of the claimant but on account of the non-compliance with the obligation on the part of the department in not providing the clear possession of the site to the claimant so as to enable him to complete the work according to the schedule. The conclusion reached by the Arbitrator came to be reconsidered by the learned Civil Judge in paragraph- 8 (i) and (ii) of his order and he held that the view taken by the Arbitrator considering the , material evidence on record was just and proper and it did not call for his interference. The learned Advocate General was unable to convince us to take a different view from the one expressed by the learned Civil Judge. The reliefs granted in respect of claims Nos.
The learned Advocate General was unable to convince us to take a different view from the one expressed by the learned Civil Judge. The reliefs granted in respect of claims Nos. 1 and 4 are based upon the acceptable evidence and the same came to be affirmed by the learned Civil judge. We do not see any good ground to interfere with the said conclusion of the Courts below. ( 15 ) THE learned Advocate General was unableto convince us to take a different view merely because a different view was plausible based upon the set of facts available in the instant case, in view of the ruling of the Supreme Court in food Corporation of India's case, AIR 1989 SC 1263 . ( 16 ) WE will now consider the claim No. 7 dealing with admission of idle charges in respect of the machinery hypothecated with the presumption that the hypothecation of machineries prevented the contractor from moving the same for different work and even the department could not move them for any other work. With reference to the documentary evidence at Rule 44, dated 1-9-1986 and Rule 45, dated 4-9-1986, it was contended for the appellant that the Arbitrator had committed misconduct in allowing idle charges for the machinery hypothecated. The learned Arbitrator dealing with the said question in para 20. 9 of his award considered in detail documentary as well as oral evidence and observed as follows: "there is no material placed by the department to show that the claimant had any similar work where he could have diverted the machinery nor did he in fact shift. . . . . " having been convinced that the machinery under hypothecation was at site and it remained idle during the period from July, 1986 to 17-12-1986, the Arbitrator reached the conclusion that on their own showing the department admitted that the machinery could not be mobilised by the claimant. Another question that came to be considered by the Arbitrator was even after termination of the contract, the claimant did not have an opportunity to move the machinery and recover the cost because what was relevant for the purpose of consideration of this claim is whether the machinery were kept idle on the site until the claim was put forward by the claimant.
The clear finding recorded by the Arbitrator was that there was ample evidence to show that the claimant was unable to move the machinery for more than one reason. Therefore, the Arbitrator held that the claimant was entitled for idle charges so far as the machineries hypothecated to the government are concerned. By a careful consideration of the material on record, we are of the opinion that the conclusion reached by the arbitrator on this point and affirmed by the learned Civil Judge was justified and we do not see any good ground to interfere with the said conclusion. ( 17 ) HERE again we place reliance upon the decision of the Supreme Court in the case of Mis. Sudarsan Trading Company, AIR 1989 SC 890 . ( 18 ) WE now consider the finding recordedby the Arbitrator on claim No. 13 which deals with payment under clauses 31 and 32 for variation in the quantities of various items of works. The Arbitrator having considered the evidence on record with reference to clause 31 of the agreement has rightly held that the claimant was entitled to equitable rates for the variation in the schedule quantities as approved by the Superintending engineer and in the absence of workable rates, S. R. rate or tender rate whichever was higher was adopted. Clause 31 of the contract provides for the rate of contract when there is variation in the quantities of work. Therefore, the reasoning given by the Arbitrator in holding as above cannot be said to be either wrong in applying clause 31 or untenable. The contention that the Arbitrator was in error in allowing rates on the higher side, cannot be accepted in view of the Arbitrator adopting equitable rates as approved by the Superintending Engineer or, in the absence of such rates, S. R. rate or tender rate. The quantum of benefit arose under this claim in favour of the claimant is not much. Therefore, the conclusion reached by the Arbitrator and affirmed by the learned Civil Judge does not call for our interference. Again we rely upon the ruling of the Supreme Court in Mis. Sudarsan trading Company's case cited above. ( 19 ) THE last question that requires to be considered is whether the interest awarded under claim No. 14 is just and proper.
Again we rely upon the ruling of the Supreme Court in Mis. Sudarsan trading Company's case cited above. ( 19 ) THE last question that requires to be considered is whether the interest awarded under claim No. 14 is just and proper. As has been disclosed during the course of the discussion made by the Arbitrator under this claim and that of the learned Civil Judge, Section 34 of the c. P. C. provides for awarding pendente lite interest or future interest. In paragraph 27. 2 at pages 118 and 119 of the award, the Arbitrator pointed out that there was an admission made by the department that under the amended section 29 of the Arbitration Act, the Arbitrator was competent to make such an award. By a perusal of the discussion made by the learned Civil Judge in paragraph-8 (vi) at pages 22 and 23 of his judgment, it is clear the Arbitrator was not right in awarding interest at 15% per annum from the date of reference i. e. , 11-8-1987 till the date of award i. e. , 24-1-1988. The learned Civil Judge was right in holding that, in view of the ruling of the Supreme Court reported in AIR 1988 SC 973, the claimant was entitled to interest at the rate awarded by the Arbitrator only from the date of award till the date of decree. Learned senior counsel Sri Sundaraswamy also has relied upon the ruling of the Supreme Court cited above. Sri acharya, learned Advocate General, could not persuade us to take a different view from the one expressed by the learned Civil Judge. We do not see any good ground to interfere with the said conclusion. ( 20 ) IN the result, this appeal fails and is dismissed with costs. Advocate's fee is Rs. 500/ -. Appeal dismissed. --- *** --- .