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Union of India (Uoi) Vs. Union Builders - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberAppeal No. 62 of 1983
Judge
Reported inAIR1985Cal337
ActsLimitation Act, 1963 - Sections 3(2) and 5 - Schedule - Article 119; ;Arbitration Act, 1940 - Sections 14(2) and 33; ;Calcutta High Court Original Side Rules, 1914 - Rules 3 and 7
AppellantUnion of India (Uoi)
RespondentUnion Builders
Appellant AdvocateP.K. Sen and ;Dipak Basu, Advs.
Respondent AdvocateDebi De and ;Sinha Roy, Advs.
DispositionAppeal allowed
Cases ReferredN. Chellappan v. Secy.
Excerpt:
- anil kumar sen, j. 1. this is an appeal which has lately been assigned to us after remand from the supreme court of india. union of india representing the railway administration is the appellant before us and the appeal is directed against an order dt. may 20, 1983, passed by a learned single judge of this court dismissing the appellant's application under section 30 read with section 33 arbitration act, which was registered as award case no. 200 of 1982. the application has been dismissed solely on the ground of limitation. in order to appreciate and decide the points at issue it would be necessary to refer to certain facts which may be set out briefly as follows :2. the respondent, union builders, entered into an agreement dt. dec. 29, 1965, with the south eastern railway administration.....
Judgment:

Anil Kumar Sen, J.

1. This is an appeal which has lately been assigned to us after remand from the Supreme Court of India. Union of India representing the railway administration is the appellant before us and the appeal is directed against an order dt. May 20, 1983, passed by a learned single Judge of this Court dismissing the appellant's application under Section 30 read with Section 33 Arbitration Act, which was registered as Award Case No. 200 of 1982. The application has been dismissed solely on the ground of limitation. In order to appreciate and decide the points at issue it would be necessary to refer to certain facts which may be set out briefly as follows :

2. The respondent, Union Builders, entered into an agreement dt. Dec. 29, 1965, with the South Eastern Railway administration for supply and loading of ballast at two stations, namely, Ghatsila and Dhalbhumgarh. The work under the contract was completed on June 30, 1969, but certain disputes and differences arose between the respondent (hereinafter referred to as the contractor) and the authorities of the South Eastern Railway with regard to certain claims put forward bythe contractor. Those claims were put forward in the contractor's letter dt. May 5, 1972, and those were set out in 12 items as follows :

1)Claim for refund of balance security deposit:Rs. 2,082.002)Claim on account of outstanding bills:Rs. 9,520.003)Claim for payment of excess quantity supplied:Rs. 63,000.004)Claim towards the cost for preparing stacking grounds:Rs. 25,000.005)Claim of payment for additional lead involved:Rs. 1,98,000.006)Claim for demurrage:Rs. 10,025.007)Claim of damages for loss due to stoppage of work:Rs. 1,20,000.008)Claim of damages for loss due to irregular supply of rakes:Rs. 4,80,000.009)Claim of payment for extra work done with regard to cleaning, levelling and dressing of stacking grounds

:Rs. 25,000.0010)Claim of damages for loss due to non-supply of rakes from July 1967 to September 1967

:Rs. 50,000.0011)Claim of damages for loss due to insufficient provision of stacking grounds:Rs. 25,000.0012)Interest

Rs. 10,07,627.00

3. Since the contract incorporated an arbitration clause the dispute so raised by the contractor by the letter, as aforesaid, was referred to arbitration by the joint arbitrators, Sri N. Gopalakraishna and Sri K. S. Guha.

4. When the arbitration proceeding was pending on August 10, 1976, the contractor put forward a claim of additional amounts on items 3, 4, 7 and 11 as above and the contractor further proposed to claim interest at 6% with effect from 1-7-69 to 31-8-74 assessed at Rs. 3,47,937/- and for further interest from 1-9-74 until the payment to be assessed by the arbitrators. The additional amounts claimed on items 3, 4, 7 and 11 were Rs. 8,250/-, Rs. 95,000/-, Rs. 5,000/- and Rs. 6,500/-respectively. The sum total of such additional amounts claimed together with the quantified interest of Rs. 3,47,937/- amounted to Rs. 4,62,687/-. Such additional claim was opposed on behalf of the railway administration and the railway administration insisted that the arbitration should stand limited to the reference already made and the arbitration did proceed accordingly.

5. On Sept. 22, 1977, the arbitrators made an award for a sum of Rs. 6,50,778/- for payment by the railway administration in full and final settlement of all the claims of the contractor and further directed that the said amount should be paid within two months failing wherein they directed payment of interest at 10% on the awarded amount until the date of payment. There is no dispute that a judgment was passed on the award and the railway administration paid not only the amount awarded, namely, Rs. 6,50,778/- but also a sum of Rs. 19,220.48 towards the interest and the contractor received the same in the year 1978 in full and final settlement of all claims forming the subject matter of reference including interest payable thereon.6. Having received last of the instalments of the said amount in June 1978, the contractor on July 27, 1978, put forward a fresh claim based on their letter dt. Aug. 10, 1976, referred to hereinbefore. The railway administration having refused to entertain such claim the contractor filed an application under Section 20 Arbitration Act, in this court on Nov. 27,1978. In this application under Section 20 thecontractor alleged in clear terms that he wanteda fresh arbitration with regard to the additionalclaims put forward by him in his letter dt.Aug. 10, 1976. Prayers set out in this applicationwere as follows : 'a) that the arbitration contained in the agreement dt. 28th April 1965, be filed;b) notice be issued on the respondent to show cause why the said agreement should not be filed;c) if the respondent fails to show cause or shows insufficient cause the aforesaid agreement be filed and the claims/disputes mentioned in the letter dt. 10th Aug. 1976, be referred to the arbitrator to be appointed in terms of the arbitration clause set out in para 3 herein;d) such further or other order or orders be made and directions given as this court may seem fit add proper;e) costs.'7. This application was disposed of on contest by the railway administration and a learned single Judge of this Court on Jan. 19,1979, made the following order :

'There will be an order in terms of prayer (a) of the petition. There will also be an orderdirecting the respondents to appoint an arbitrator in accordance with the arbitration agreement to decide the fresh disputes which are now sought to be raised by the petitioner/claimant.

I make it clear that those items to be referred now must be new items of claims and they will not be entitled to canvass or agitate any of the claims which are covered by the award dt. 22-9-78.'

8. It is unfortunate that in making the order this court did not consider or decide whether the additional claims put forward by the contractor in their letter dt. Aug. 10, 1976, did constitute fresh disputes nor did this court by the order specify the disputes and differences which should constitute the subject matter of arbitration in terms of the order made under Section 20. This uncertainty had led to a protected litigation following the said order.

9. Acting on the said order on May 4, 1979, the railway administration appointed an arbitrator and proposed to refer to him for arbitration the additional claim of the contractor in respect of item 3 and item 11 as specified in the contractor's letter dt. Aug. 10, 1976. The contractor objected. A lot of correspondence was entered into and ultimately on June 27, 1980, the contractor moved a fresh application in this court under Section 5 read with Section 8, Arbitration Act, which was registered as O.S. Matter No. 1321 of 1980. In this application, the contractor claimed that since the railway administration had failed to comply with the court's order dt. Jan. 19, 1979, and refer the entire claim put forward by them for arbitration the court should make the appointment of an arbitrator so that the contractor may refer their claim to such an arbitrator.

10. Pending this proceeding, it appears that the railway administration was advised to make a reference of the entire additional claim so put forward by the contractor to joint arbitrators reserving the administration's right to dispute the admissibility of such claims. That was done by the railway administration by their letter dt Dec. 20, 1980, which is to be found at page 34 of the paper book.

11. By this letter Sri S. Ananthanarayan and Sri A. Venugopalan were appointed the joint arbitrators and what was referred to themfor adjudication was exactly the additional claim of Rs. 4,62,687/- + interest as specified in the contractor's letter dt. Aug. 10, 1976. Such an appointment being made, the contractor's application under Section 5 read with Section 8 of the Arbitration Act was disposed of leaving it to the said arbitrators to proceed with the arbitration.

12. On Feb. 27, 1981, the contractor lodged their claim in the fresh arbitration before the joint arbitrators and this claim is to be found at page 94 of the paper book. In this claim, the contractor made it clear that what was being put forward was not any new item of claim but only the additional amounts on items 3, 4, 7 and 11 of the claims adjudicated in the first arbitration. Referring to item 3 in this claim the contractor alleged that the total amount which is due to them for excess supply of ballast would be Rs. 63,750.00 loading charges at Rs. 6/- per 100 cft. amounting to Rs. 7,500, the sum total being Rs. 71,250.00. Deducting therefrom the sum of Rs. 63,000/- which was the subject matter of adjudication in the first arbitration the additional amount on that account was laid at Rs. 8,250/-. Similarly with regard to item 4 the contractor alleged that the costs incurred by them for preparing stacking grounds would amount to Rs. 1,20,000.00 so that deducting therefrom the sum of Rs. 25,000/- which was the subject matter of adjudication on this head in the first arbitration, the claim is now Rs. 95,000/-. Similarly, referring to item 7, the contractor alleged that the total damage suffered by nun is Rs. 1,25,000/- so that deducting therefrom the sum of Rs. 1,20,000/- which had already been adjudicated in the previous arbitration the additional claim is Rs. 5,000/-. Referring to item 11, it was similarly alleged by the contractor that the total damages suffered by him would amount to Rs. 31,5007- so that deducting therefrom a sum of Rs. 25,000/-which had already been the subject matter of adjudication in the first arbitration on this account the additional claim is Rs. 6,500/-.

13. Lastly, the contractor put forward a claim for interest. On this head, they enhanced their claim further than what they claimed in their letter dated August 10, 1976. We have indicated hereinbefore that in the said letter the contractor claimed interest at 6% on the amount of their claim then put forward from 1-7-69 to 31-8-74 and claimed a liquidatedamount of Rs. 3,47,937/- towards such interest and they further claimed interest from 1-9-74 till the date of payment to be assessed by the arbitrators.

14. In lodging the claim before the arbitrators, the contractors put forward their claim with regard to interest on the following terms : --

v.a)Payment of interest on Rs. 6,50,778.00 from 1-7-69 to 22-9-77 at 12%

--Rs. 6,69,307.08 b)Payment of interest on Rs. 1,14,750.00 from 1-7-69 to 9-2-81 at 12%

--Rs. 1,78,420.80vi.a)Payment of interest on the awarded sum from 10-2-81 to the date of making and publishing the award at l2%

--amount cannot be calculated b)Payment of interest on the awarded sum from the date of making and publishing the award to the actual date of payment at 12%--amount cannot be calculated now

15. An additional sum of Rs. 10,000/- was put forward in this claim towards the cost of the High Court proceedings under Section 20, Arbitration Act, and Section 5 read with Section 8 of the said Act.

16. The railway administration strongly controverted the claim so put forward in their counter statement filed on Sept. 25, 1981.

17. Strangely, however, before any effective steps for arbitration by the joint arbitrators could be taken, at the instance of the contractor and at their request made on Oct. 9, 1981, the umpire, appointed by the joint arbitrators, took over the arbitration proceedings and the umpire Sri P. V. Ratnam made an award on July 28, 1982, The umpire made an award of a sum of Rs. 7,00,235.18 in favour of the contractor and further directed payment of the said amount within two months with a further direction that in the event of non-payment within the said period, the railway administration was to pay interest at 10% onthe awarded amount from the date of publication of the award until the date of payment.

18. That award was filed in this court on Aug. 4, 1982, and the contractor by a letter of the said date informed the General Manager of the South Eastern Railway that such an award has been filed in court. On Aug. 18, 1982, a notice issued by this court under Section 14(2), Arbitration Act, was served upon the railway administration. On Sept. 2, 1982, the appellant filed an application for a certified copy of the award in this Court. The folios were notified on Sept. 10, 1982, and the same was filed in this court on September 14, 1982. The certified copy of the award was made ready for delivery on Sept. 21, 1982.

19. In the meantime, however, the appellant drew up their application under Section 30 read with Section 33, Arbitration Act, setting forth their ground of objection to the award. Sept. 17, 1982, having been declared to be a holiday for this court on account of Mahalaya, the said application was affirmed in this court on Sept 18, 1982, which was a Saturday. The said application could not be moved on Monday, Sept. 20, 1982, as according to the appellant on the death of the ex-Government Pleader of this Court there was a full court reference and the court was closed after the reference. The application accordingly was moved on September 21, 1982, and a notice of motion was taken out for setting aside the award. This application was dismissed as indicated hereinbefore by a learned single judge of this court by the order dt. May 20, 1983, solely on the ground of limitation and hence this appeal.

20. The first point which naturally arises for our consideration is the point of limitation. In the judgment under appeal, the learned single Judge has not given any reason for arriving at the conclusion that the application is time barred. We are, however, told that no reason has been assigned because the learned Judge had given reasons in another case involving the same point, namely, in the case of State of West Bengal v. Mondal & Co., : AIR1984Cal14 . Relying on the decision of the Supreme Court in the case of Nilkantha v. Kashinath, : [1962]2SCR551 it was held by the learned single Judge that for the purpose of calculating limitation under Article 119 of thepresent Limitation Act, service of notice need not necessarily be one emanating from the court. Service of a notice even by a party about the filing of the award would be sufficient for the purpose of starting of the limitation to run. In that view, according to the learned single Judge, the appellant being served with a notice dt. Aug. 4, 1982, by the contractor intimating the filing of the award in court, the limitation for making an application for setting aside the award expired with the expiry of 30 days therefrom which so expired much before the day when the application was verified or actually moved. The aforesaid decision of the learned single Judge has since been overruled by a Division Bench of this court on appeal and the Bench decision is reported in : AIR1985Cal12 . The Division Bench considering all the earlier authorities on the point including the decision of the Supreme Court in the case of Nilkantha, held that the notice referred to in Article 119, Limitation Act, is a notice under Section 14(2), Arbitration Act, and such a notice may be formal, informal or constructive but it must emanate from the court. That was also the view of an earlier Division Bench of this court which was not cited before the learned single Judge but which was referred to and relied on by the Division Bench in overruling the decision of the learned single Judge. Such being the position, the reason which led the learned single Judge to hold the present application to be time barred is not sustainable.

21. But even so there are other difficulties for the appellant There is no dispute that the notice issued by the court under Section 14(2), Arbitration Act, was served on the appellant on August 18, 1982. The last day for making the application would, therefore, expire on Sept. 17, 1982. That day being a declared holiday for the court, the last date would fall on Sept. 18, 1982. That was a Saturday and on that day the application was duly verified by an affidavit sworn before the Commissioner. It being a Saturday the court was not closed but the Judges did not sit to entertain any such application which under the Rules was to be moved before the Judges taking such application. Monday following was Sept. 20, 1982. Unfortunately, that was an undeclared holiday. We say an undeclared holiday because of late an improper precedent is being developed by the members of the bar when on the death of a member of the Bar, they closetheir respective libraries and force the Judges to retire. That exactly what happened on Sept. 20, 1982, when on the death of ex-Government Pleader of this court there was a full court reference, the Judges were made to retire and the court virtually remained closed though it was not declared a holiday. The application was moved on the day following, that is, on Sept. 21, 1982.

22. According to Mr. Sen who is appearing on behalf of the appellant, the application having been moved on the first available date before the expiry of the period of limitation, in the circumstances set forth hereinbefore, it should be held that it was filed within time. Alternatively, relying upon Section 12(4), Limitation Act, it has been contended by Mr. Sen that when the appellant's application for copy of the award was made on Sept. 2, 1982, and such a copy had not yet been delivered on the day the application was moved, the time required for getting the copy should be excluded and when so deducted it must be held that the application had been filed well within the period of limitation. Lastly, it has been contended by Mr. Sen that by way of abundant caution there was a prayer for condonation of delay and in the facts and circumstances a good case for such condonation of delay having been made out, the appellant is entitled to such a relief.

23. Mr. Dey appearing on behalf of the contractor respondent has strongly contested the points thus raised by Mr. Sen. Referring to the provisions of Rr. 3 and 7 of Chap. XX of the Original Side Rules, it has been contended by Mr. Dey that the appellant could have presented the application before the Registrar on Sept. 18, 1982, since the said Registrar was the proper officer within the meaning of Section 3(2)(c), Limitation Act. That not having been done, according to Mr. Dey, the subsequent events cannot be availed of by the appellant for the purpose of extending the period of limitation. It has also been contended by Mr. Dey that in any event Monday, Sept. 20, 1982, not being a declared holiday for the court, the appellant cannot exclude the said date under the provisions of Section 4, Limitation Act. So far as the time for taking out the certified copy of the award is concerned, according to Mr. Dey Section 12(4), Limitation Act, does not speak of any certified copy. In this case, according to Mr. Dey the appellant was served with a copy of the award and obviouslyit was so served by the Umpire. A copy of such an award was annexed to the application which was verified on Sept. 18,1982. Further, according to Mr. Dey, the appellant not having made out any case that such a copy is not a true and authentic copy of the award made by the Umpire, merely because the appellant had applied for a certified copy of such an award that time cannot be excluded.

24. We have carefully considered the rival contentions thus put forward before us.

25. It is no doubt true that Section 3(2)(c), Limitation Act, was incorporated in the present Limitation Act, to override the earlier view of this court expressed in the case of Sohanlal Nagarmal v. Manik Lal Seal, : AIR1954Cal352 , where it was held that filing of such an application before the Registrar for taking out a notice of motion does not constitute making of an application which can be made only when it reaches the court to be moved. But Section 3(2)(c), Limitation Act, does not take away the right of an applicant to present an application to the court directly if the rules of business so permit and in that event for calculating the limitation the applicant can well exclude the days when the courts are closed in the sense that the Judges do not sit to entertain such an application though office remains open. In our opinion, Chap. XX, Rr. 3 and 7 relied on by Mr. Dey do not lay down any mandatory rule that every application has to be presented before the Registrar. In our opinion the provisions of Chap. XX leave an option with the applicant either to move the application before the court directly or to file the same in the Registrar's office for taking out a notice of motion together with affidavit or affidavits of service and the affidavits in support thereof duly complying with the other requirements of the relevant Rule. Therefore, in our opinion, the mere fact that the appellant could have filed the application in the office of the Registrar after complying with the other requirements of R. 7, does not render the application time barred only because it was not so done. The applicant having the other option he could well wait for the next available date to move the application in court and that exactly was done in the present case. But here again, a difficult question arises as to whether, the Judges not being available for moving the application on Monday, Sept. 20, 1982, in the circumstancespointed out hereinbefore, that date should also be excluded. Mr. Dey may be right in pointing out that the said day was not formally declared to be a holiday. But in our view the applicant ought not to be made to suffer for absence of a proper court for reception of such an application and, therefore, the said day should as well be excluded. If Sept. 20, 1982, be excluded, it must be held that the application was presented well within time when it was moved before the court on Sept. 21, 1982. Even assuming for a moment that the appellant is not entitled to exclusion of Sept. 20, 1982, that not being a formally declared holiday for the court, the undisputed facts in our opinion make out a sufficient case for condonation of that day's delay under the provision of Section 5, Limitation Act, Therefore, even if we accept the contention of Mr. Dey and hold that Sept. 20, 1982, cannot be excluded for the purpose of calculating the period of limitation, we feel no hesitation in condoning that day's delay in exercise of our discretion under Section 5, Limitation Act.

26. On the view thus taken by us on the point of limitation, it is not necessary for us to go into and decide the other point raised by Mr. Sen and controverted by Mr. Dey, namely, the time taken for obtaining a certified copy of the award should be excluded under the provision of Section 12(4), Limitation Act.

27. Since the only point on which the application under Section 30 read with Section 33, Arbitration Act, has been dismissed by the learned single Judge is overruled by us for reasons given hereinbefore, the next question which arises for our consideration is as to whether we should remand the application back for reconsideration on its merits or we should do so ourselves in this appeal. Since in our opinion all the materials for the purpose of disposing of the application are on record, we should ourselves dispose of the application on its merits in order to shorten the litigation. On the merits, it is difficult for us to sustain the award passed by the Umpire.

28. According to Mr. Sen when the disputes were pending adjudication before the joint arbitrators and when neither the time for making the award had expired nor had the joint arbitrators failed to arrive at an agreed award, the Umpire could not have assumed jurisdiction to enter on the reference and make an award. In this case, the joint arbitratorswere appointed on Dec. 20, 1980, and the joint arbitrators appointed the Umpire on Feb. 9, 1981. On Feb. 9, 1981, the joint arbitrators calle upon the parties to lodge their claims. The contractor lodged his claim on Feb. 27, 1981. The appellant lodged the counter claim on Sept. 25, 1981. On Oct. 9, 1981, the contractor took the stand that since the time to make the award by the arbitrators had expired the matter should go to the Umpire and that was what was demanded of the Umpire in the contractor's letter dt. Oct. 9, 1981. In our opinion, Mr. Sen is right in pointing out that the contractor could not have assumed the date Feb. 9, 1981, as the date on which the joint arbitrators entered on the reference. Though our attention has been drawn by Mr. Dey to the minutes of the arbitrators where they had endorsed that on Feb. 9, 1981, they had entered on the reference, in our opinion that was a mistaken endorsement. What actually constitutes entering on reference had been judicially explained and the reference has been rightly made by Mr. Sen to a Full Bench decision of this court on the point in the case of Ram Nath Agarwala v. Goenka & Co., : AIR1973Cal253 . Though Mr. Sen may thus be right in contending that on the day the Umpire assumed jurisdiction on the letter of the contractor dated Oct. 9, 1981, he did it without jurisdiction for the simple reason that requirement of para 4 of Sch. I, Arbitration Act, had not been made out, yet unfortunately the appellant in our view conferred such jurisdiction upon the Umpire which otherwise he did not have by not only submitting to his jurisdiction but consenting to arbitration by him and by giving extension of time by mutual consent to the Umpire to complete the arbitration and make the award Having done so, the appellant cannot now challenge the jurisdiction of the Umpire. Reference may be made to the decision of the Supreme Court in the case of N. Chellappan v. Secy., Kerala State Electricity Board, : [1975]2SCR811 .

29. Though the above ground challenging the jurisdiction of the Umpire raised by Mr. Sen fails, the other ground raised by Mr. Sen has, in our view, much substance. There can be no dispute that the reference in the present case is a reference under Section 20 and must be limited to the order of reference by the court. We have quoted the order of reference hereinbefore. In spite of all ambiguity, onething is clear, namely, the fresh reference is limited to items which must be new items of claim not covered by the earlier adjudication. That being the specific restriction put by the order of reference, in our opinion the Umpire should not have assumed jurisdiction to arbitrate on any item which was earlier adjudicated. We have referred to the material terms of the earlier reference dt. April 23, 1974, hereinbefore. That was a reference in respect of 12 items of disputes. The 12th item was 'interest on claims.' Though the quantum of claim in respect of the other 11 items was quantified, the claim in respect of interest was not so quantified but was left to be adjudicated by the arbitrators. The arbitrators made a lump sum award and further directed that the ' said amount if not paid within 60 days would carry interest at 10% until realisation. There is no dispute that the awarded amount was fully paid to the contractor together with interest so awarded by the arbitrators. After having received such payment the contractor put forward fresh claim in respect of 6 items. Of these 6 items, 5th item is claim in respect of interest at 6% on various claims including claims adjudicated in the earlier arbitration from 1-7-69 to 31-8-74 amounting to Rs. 3,47,937.00. 6th item was also a claim of interest from 1-9-74 on the award to be made till the date of payment, the amount of the claim not being quantified. That was the claim put forward at the time when the application under Section 20, Arbitration Act, was filed. Before the arbitrators, the contractor in lodging their claim enhanced their claim on account of interest as follows:

'a) Payment of interest on Rs. 6,50,773/-(which was the awarded sum in the firstarbitration) from 1-7-69 to 22-9-77 at 12 1/2%amounting to : Rs. 6,69,307.08. b) Payment of interest on Rs. 1,14,750.00 (that is the fresh claims put forward) from 1-7-69 to 9-2-81 at 12 1/2% amounting to :

Rs. 1,78,420.30

c) Payment of interest on the awarded sumfrom 10-2-81 to the date of publishing theaward --

d) Payment of interest on the awarded sumfrom the date of publishing the award to thedate of actual payment --

Interest was claimed at 12 1/2% on the above two last accounts and the amount was left tobe calculated by the arbitrators. In our opinion, the claim of interest being the subject matter of adjudication in the earlier arbitration and the contractor having received the sum awarded on that account together with interest as awarded in the earlier arbitration proceeding they were not entitled to claim any interest on claims earlier adjudicated or on the earlier award because of specific reservation made by this Court in the order of reference under Section 20 as made in the present case. Though Mr. Dey appearing on behalf of the contractor strongly contended before us that the claim of interest was excluded from the earlier arbitration, we are unable to accept his contention in this regard. No doubt the contractor in his letter dt Aug. 10, 1976, wanted to quantify the interest earlier claimed and that was not allowed by the appellant but such refusal, in our opinion, does not constitute exclusion of the claim on the point of interest from the earlier arbitration. Such refusal only meant that the claim with regard to interest was left to be calculated entirely by the arbitrators in their own wisdom. It is rather strange that though the contractor himself had received interest at 10% on the awarded amount on the terms of the earlier award he repeats the same claim once more in the present reference and the Umpire too in making a lump sum award obviously goes beyond his jurisdiction to entertain and make an award on such a claim.

30. Even the other four items of claim which constituted the subject matter of adjudication by the Umpire are not new items. The claim put forward by the contractor and referred to hereinbefore makes it clear that those were also the items of claim before the earlier arbitrators, bearing Nos. 3, 4, 7 and 11 of the items of claim then put forward. What was being claimed in the second arbitration was nothing but additional amounts over those items. It is no doubt true that during the pendency of the earlier arbitration proceeding , the contractor wanted to put forward those claims for additional amount in their letter dt. Aug. 10, 1976, and that was not allowed since the arbitration was restricted to the quantum specified in the contractor's original claim dt. May 5, 1972. In our opinion, if the contractor had insisted upon their claim for additional amount on the aforesaid items then under adjudication they should have sought forintervention of the court on the refusal of the railway administration to allow those additional claims to go in for adjudication. That not having been done the contractor, in our opinion, cannot treat those additional claims to be new items of claims. The order of reference under Section 20 makes it clear that what would go for fresh adjudication was new items of claim and not additional amounts on old items of claim. In that view, in our opinion, the Umpire had no jurisdiction to entertain any of the claims so entertained by him in terms of reference made under Section 20, Arbitration Act, and hence it cannot but be held that the Umpire had no jurisdiction to entertain any of the claims adjudicated by him or make an award as made by him.

31. Before we part, we cannot but take note of an aspect which not only goes to show that the Umpire in making the award acted entirely beyond his jurisdiction but further that he is guilty of gross perversity. From the facts set out hereinbefore, it would appear that the contractor in their application under Section 20, Arbitration Act, wanted a fresh arbitration with regard to a claim amounting to Rs. 4,62,687/- together with interest that may be awarded on the awarded amount until the date of payment. That amount of Rs. 4,62,687 included the claim of Rs. 3,47,937.00 as interest on the previous award Reference under Section 20, Arbitration Act, having been made by the court in respect of such a claim, we fail to appreciate how the Umpire could entertain a claim of over Rs. 8,00,000/- in respect of interest alone and then make a lump sum award for a sum of Rs. 7,00,235.18. Obviously, therefore, the Umpire was allowing the contractor to add to and extend the claims that was referred to arbitration by the court under Section 20, Arbitration Act, forgetting all the time that he possesses no such jurisdiction.

32. For reasons aforesaid, we cannot but accept the contention of Mr. Sen that the award as made in the present case by the Umpire is materially beyond his jurisdiction and is otherwise perverse on the face of record Such an award is invalid in law because it does not conform to the submission in the present case on a reference under Section 20, Arbitration Act. The appellant's application under Section 30 read with Section 33, Arbitration Act, therefore, must succeed.

33. In the result, the appeal succeeds and is allowed. The order dt. May 20, 1983, passed by the learned single Judge in Award Case No. 200 of 1982 being set aside, we allow the appellant's application under Sections 30 and 33, Arbitration Act, and set aside the award passed by the Umpire on July 28, 1982. We further supersede the reference in exercise of our power under Section 19, Arbitration Act, since, in our opinion, the disputes are all covered by the previous arbitration and there is utter lack of bona fides on the part of the contractor to refer the disputes, as referred, to fresh arbitration.

34. There will be no order as to costs.

Sudhir Ranjan Roy, J.

35. I agree.


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