Ravindra & Associates Vs. Union of India  INSC 1663 (21 October 2009)
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.
2726 OF 2004 Ravindra & Associates .... Appellant Versus Union of India
O R D E R
Heard learned counsel for the parties.
This appeal by special leave has been filed against the judgment
and order dated 15.1.2003 of the High Court of Kerala at Ernakulam whereby the
High Court has allowed the appeal filed by the respondent herein against the
order dated 9.10.1996 of the Principal Sub Judge, Kochi.
It appears that the appellant was awarded a contract for
construction of married accommodation for petty officers of the Navy at
Rameswaram, Kochi. The value of the work awarded was Rs. 5,44,47,087/-. The
work which commenced on 24.12.1990 had to be completed by 23.6.1993 and
admittedly it was completed by the said date.
Disputes arose between the parties and the parties invoked the
arbitration clause provided in the General Conditions of Contract. The
claimant-appellant made claims under 25 heads. The arbitrator awarded to the
claimant a 2 sum of Rs. 70,94,265/- and allowed simple interest at the rate of
18% from the date of accrual for cause of action till date of reference, from
the date of reference till date of award and from the date of award till the
date of decree or date of payment whichever is earlier. An application by the
appellant-claimant was filed before the Principal Sub Judge, Kochi to make the award
a Rule of the Court. The respondent-Union of India also filed an application
for setting aside the award of the arbitrator. The Sub-Judge allowed the
application of the appellant and made it a Rule of the Court, but awarded 12%
interest on the amount awarded from the date of decree till realization and
dismissed the application of the respondent-Union of India. Aggrieved against
the order dated 9.10.1996 of the Sub-Judge, Kochi the respondent herein
preferred an appeal before the High Court which has been allowed by the
impugned judgment and order. Hence, the present appeal.
In our opinion, the High Court wrongly interfered with the
arbitration award and practically acted as a Court of Appeal, which it could
not do (See : State of Rajasthan 3 Union of India & Anr. (2009) 6 SCC 414).
As regards the allegation that while in the contract mixture
provided for in the contract is M/15, but in fact, M/20 was used, it has been
held by the arbitrator that this was done at the insistence of the Department. The
arbitrator also held that the relevant drawing for M/15 mixture and the drawing
relied upon by the respondent did not find place in the list of drawings
forming part of the tender documents. Hence, in our opinion, the High Court has
wrongly interfered with the findings of the arbitrator as regards claim Nos. 1
As regards claim No. 10(b) relating to payment of over-time to
labour it has been contended by the learned counsel for the appellant that
there was a delay in supply of stores by the respondent and therefore the
labour had to be retained for a longer period of time than envisaged under the
contract and hence overtime charges had to be paid to the labour.
In this connection, the learned counsel appearing for the
respondent has relied upon the decision of this Court in the case of Ramnath
International Construction (P) 4 through the said decision. In our opinion that
decision has no application to the case at hand as in that case the contractor
sought and obtained extension of time for execution of the contract whereas in
the present case neither extension of time was sought for, nor in fact, granted
for completion of the contract. Hence, the aforesaid decision is clearly
distinguishable. Clause 11(c) of the General Conditions of Contract has no
application in this case at all.
As regards Claim No. 12 relating to difference in price of wood
frames for doors and windows, it is stated that no doubt the contract provided
for teak wood but it was changed to second class hard-wood at the insistence of
the Department. The High Court has in this regard relied upon the decision of
the Board of Officers who has made its assessment by relying upon Clause 62(G)
of the General Conditions of Contract which provided that the decision of the
Garrison Engineer would be final unless it was set aside in appeal. In the
present case, the price was not fixed by the Garrison Engineer at all.
Moreover, the Board of Officers had made an inquiry in the matter after three
years and the arbitrator, in our opinion, rightly held that such an inquiry was
of no consequence.
As regards Claims No. 20 and 23 relating to escalation in prices
of material, in our opinion, the arbitrator has given his findings of fact and
the High Court misread Clause 18 of the Special Conditions of Contract.
For the reasons given above, we are of the opinion that the High
Court has wrongly interfered with the arbitration award. Accordingly, the
appeal is allowed and the impugned judgment and order is set aside.
We may also point out that in para 12 of the judgment there
appears to be a typographical error inasmuch as the Principal Sub-Judge Kochi
has reduced the interest from 18% to 12% and not 10%, as wrongly recorded in
the impugned judgment. We make it clear that the appellant is entitled to
interest @ 12%, as awarded by the Principal Sub Judge, Kochi.
allowed. No order as to the costs.
.....................J. (MARKANDEY KATJU)
.....................J. (ASOK KUMAR GANGULY)