Raghbir Moudgill v. Punjab Water Supply and Sewerage, Division No. 1, Jalandhar
2013-02-14
K.KANNAN
body2013
DigiLaw.ai
JUDGMENT Mr. K.Kannan, J.: - The revision petition is against the dismissal of the execution petition filed by the claimant in enforcement of Arbitrator’s award. The award related to a contract undertaken by the claimant for laying a sewerage. The commencement of the work had been done on 16.02.1993 and the period for completion was one year. The value of the contract was Rs.105.5 lakhs which was later enhanced to Rs.134.10 lakhs after finalizing the works entrusted to the claimant/contractor. 2. Before the Arbitrator, there were as many as 13 claims and the Arbitrator in his award dated 09.01.2004 had adverted to each one of the claims and allowed for claim Nos.1, 3, 4, 6, 7 and 8. As regards the Claim No.10 which was purported to be for a breach of contract, although body of the award stated that it was completely rejected, the Arbitrator was allowing for an amount of Rs.33,428/- in the summary of paragraphs. The Claim No.14 was that the contractor was entitled to price escalation on account of the increase in price as per accepted conditions. The Arbitrator’s award stated as follows:- “Condition No.4 of the agreement will be enforced by the respondent.” 3. It appears that PWD itself was not satisfied with the award and had approached the Court with a plea for a correction of the award under Section 33 before the Arbitrator himself. It was rejected. It appears also that it also filed a petition for setting aside the award which was also dismissed. The award was put in execution in the manner in which it was drawn up. 4. In the execution petition filed by the decree holder, Clause No.7 relating to the amount claimed under the decree was stated as follows:- “As per award and clause 4 of the agreement between the decree holder and the JDs pertaining to breach of agreement and escalation.” It can be noticed that no particular amount had been specified as the amount due and payable to the decree holder. However, in the objection given by the judgment debtor, it was contended that the claimant/contractor was not entitled to assume that he was entitled to Rs.7,44,741/-. It was specifically contended that the said sum was not payable. 5. The Executing Court held that the Arbitrator himself had not determined any particular amount as the amount payable towards escalation.
However, in the objection given by the judgment debtor, it was contended that the claimant/contractor was not entitled to assume that he was entitled to Rs.7,44,741/-. It was specifically contended that the said sum was not payable. 5. The Executing Court held that the Arbitrator himself had not determined any particular amount as the amount payable towards escalation. I cannot find any error in the Executing Court for such an observation, for, an Executing Court does not adjudicate on what was the amount that remained to be adjudicated, unless there was a specified amount. It shall not be permissible for Executing Court to turn itself as an appellate authority over the Arbitrator or a Court of original institution for it to render adjudication on the amount that could be treated as the amount payable for escalation of prices. 6. In revision, the learned counsel for the petitioner made submissions to the effect that the original contract makes reference to a clause in the agreement accepting the tender offered by the contractor. That reads as follows:- “4. Escalation on labour and material & P.O.L. shall be allowed as per clause 10 of C.C. of CPWD specification.” 7. Since the clause refers to clause 10(c)(c) of CPWD specification, the specification of the clause would also become essential for us to reproduce:- “Clause 10CC If the prices of materials (not being materials supplied or services rendered at fixed prices by the department in accordance with clause 10 & 34 thereof) and/or wages of labour required for execution of the work increase, the contractor shall be compensated for such increase as per provisions detailed below and the amount of the contract shall accordingly be varied, subject to the condition that such compensation for escalation in prices shall be available only for the work done during the stipulated period of the contract including such period for which the contract is validly extended under the provisions of Clause 5 of the contract without any action under the clause 2 and also subject to the condition that no such compensation shall be payable for a work for which the stipulated period of completion is 6 months or less.
Such compensation for escalation in the prices of materials and labour, when due, shall be worked out based on the following provisions:- (i) The base date for working out such escalation shall be the last stipulated date of receipt of tender including extension, if any. (ii) The cost of work on which escalation will be payable shall be reckoned as 85% of the cost of work as per the bills, running or final, excluding any work for which payment is made at prevailing market rates. From this amount the value of materials supplied under Clause 10 of this contract or services rendered at fixed charges as per Clause 34 of this contract, and proposed to be recovered in the particular bill, shall be deducted before the amount of compensation for escalation is worked out. In the case of materials brought to site for which any secured advance is included in the bill the full value of such materials as assessed by the Engineer-in-Charge (and not the reduced amount for which secured advance has been paid) shall be added to the cost of work shown in the bill for operation of this clause. Similarly, when such materials are incorporated in the work and the secured advance is deducted from the bill, the full assessed value of the materials originally considered for operation of this clause should be deducted from the cost of the work shown in the bill, running or final. (iii) ............... (iv) ............... (v) The following principles shall be followed while working out the indices mentioned in para (iv) above. (a) The compensation for escalation shall be worked out at quarterly intervals and shall be with respect to the cost of work done as per bills paid during the three calendar months of the said quarter. The first such payment shall be made at the end of three months after the month (excluding) in which the tender was accepted and thereafter at three months’ interval. At the time of completion of the work, the last period for payment might become less than 3 months, depending on the actual date of completion. (b) ...............” 8. The counsel would argue that since the commencement of work was made on 16.02.1993 as per the agreement and although the period of completion of work was one year, the work was completed only on 25.12.1995.
(b) ...............” 8. The counsel would argue that since the commencement of work was made on 16.02.1993 as per the agreement and although the period of completion of work was one year, the work was completed only on 25.12.1995. For additional work which had been entrusted and delay in completion which was on account of the works entrusted by the department itself and not on account of any lapse on the part of the contractor, the contractor was entitled to claim escalation charges. If the petitioner was entitled to any escalation, there ought to have been an ascertained sum spelt out in the award itself. A mere finding that the contractor was entitled to the benefits of escalation, cannot obtain any enforceability. It has to be reiterated that the Executing Court could not have undertaken the task of ascertaining the amount which was payable to the contractor if the said amount was itself not determined by the arbitrator. By the very nature of the award, the clause relating to escalation could not have been put through in execution without stipulation of a definite sum of money. This Court also cannot render an adjudication of any amount as payable. If there is a decree in the award that makes impossible a realization of any amount, he has to take the award with the fallabilities that it contains, since the claimant himself had not challenged the award at any point of time. 9. I find no error in the dismissal of the execution petition by the court below. The revision is dismissed.