Pattanaik, J. - (1.) Claimants are the appellants against the judgment of the Andhra Pradesh High Court, arising out of an arbitration proceeding. The North work excavation of approach channel of Srisailam Project had been awarded to the claimants for different amounts indicated in the contract. The contract itself contained an arbitration clause. Dispute being raised on different items of claim, those disputes had been referred to a panel of arbitrators and the panel of arbitrators, ultimately passed an award whereunder claim Items 1, 2 and 3 stood rejected. So far as claim item No. 4 is concerned, the same was allowed in part. Claim Item No. 5 was claim of interest and the arbitrators allowed the interest @ 12 per cent per annum over the amount awarded. Claim Item No. 6 was the claim of cost and the arbitrators directed that each party will bear its own cost. Against the award of the arbitrators, rejecting claim item Nos. 1, 2 and 3, the claimants filed an objection in the Civil Court and sought for remittance under Section 16 on the ground that the arbitrators have left undetermined the claims of the claimants on item Nos. 1, 2 and 3 on an erroneous view of the relevant clauses of the agreement. Claimants also filed an application under Section 14 to make the award in relation to claim allowed by the arbitrators as a rule of Court. The State of Andhra Pradesh also filed a petition under Section 30 of the Arbitration Act to set aside that part of the award which allowed the claim of the contractor to the extent of Rs. 57,000/-. All these applications which were registered as O. S. No. 1094/86, O. P. 104/87 and O. P. 424/87 were disposed of by a common judgment of the learned Vth Additional Judge, City Civil Court, Hyderabad. The said learned Judge made the award in relation to claim item No. 4 a rule of Court. But he set aside the award in relation to claim item Nos. 1, 2, 3 and 5 and remitted the same for reconsideration to the panel of arbitrators. Against the aforesaid Judgment of the Additional Judge, City Civil Court, remitting the disputes/claims in relation to claim items 1, 2, 3 and 5 to the panel of arbitrators, the State of Andhra Pradesh preferred appeals under Section 39 of the Arbitration Act. The High Court by the impugned judgment set aside the order of the Additional Judge, so far it relates to remitting the claim Item No. 1 to the panel of arbitrators for reconsideration. So far as claim item Nos. 2 and 3 are concerned, the High Court upheld the direction of the Additional Judge, but, appointed a retired Chief Justice of the Court as arbitrator to arbitrate the claim items 2 and 3 and a part of claim item No. 5 relating to interest. In this appeal filed by the claimants, we are concerned only with claim item No. 1. The legality of the award in relation to claim items 2 and 3 are the subject matter of an appeal, which is pending in this Court.
(2.) Claim Item No. 1 relates to increase in quantity of hard rock abnormally and on this head, the claimants had claimed Rs. 93,76,990/-. The claimants' statement that was filed before the arbitrator, makes out a vague claim on this score without indicating the basis for the claim in question. In respect of the aforesaid quantity of extra excavation on hard rock, the State of Andhra Pradesh had made the payment in terms of Clause 25 of Schedule C of Section 2 of the agreement as per its letter dated 21st October, 1981. Notwithstanding the said payment, the claimants had made the extra claim on the ground that the quantity of excavation of hard rock being abnormally high and much beyond the anticipated quantity indicated in the agreement and even much in excess of the so-called 25 per cent of the work as per the GOMS No. 2289 dated 12-6-1968, the claimants are entitled to a separate rate for such extra excavation and the arbitrators failed to exercise their jurisdiction in not granting the claim and on the other hand, rejecting the same. The High Court in the impugned judgment however, referring to clause 59 of the agreement, which deals with delay and extension of time and in view of the letters of the Superintending Engineer dated 15th July, 1980 and 19th May, 1983, came to hold that the contractor-claimant will not be entitled to be paid at any higher rate for such additional excavation work and accordingly set aside the order of the learned trial Judge, remitting the claim item No. 1 for being re-disposed of by the arbitrator.
(3.) Mr. P. P. Rao, the learned senior counsel, appearing for the appellant, contended that the High Court committed serious error in referring to clause 59 as well as to the letter dated 15th July, 1980 and 19th May, 1983, in coming to the conclusion that the claimant-contractor will not be entitled to be paid at any higher rate for the extra amount of excavation made by him. Mr. Rao further submitted that under GOMS No. 2289 dated 12-6-1968, a deviation limit up to a maximum of 25 per cent being permissible, for any work in excess of that limit, the contractor is entitled to claim a higher rate and that being the position, the arbitrators had committed an error apparent on the award in refusing the claim and the High Court committed error in setting aside the order of remittance passed by the Additional Judge. In support of this contention, reliance was placed on the judgment of this Court in the case of S. Harcharan Singh vs. Union of India, (1990) 4 SCC 647. Mr. Rao also further urged that in view of the recommendations of the Executive Engineer notwithstanding the continued objection of the claimant, expressing inability to continue with the abnormal increase in the hard rock excavation, it must be held that the payment at a higher rate for the additional or excess quantity of excavation was implied and failure on the part of the arbitrator to consider the same, constitutes an error on the face of the award and as such the learned Additional Judge was justified in remitting the matter for reconsideration of the arbitrator. Mr. Rao lastly submitted that for this excess of excavation work, the contractor was entitled to be paid in accordance with Clause 63 of the agreement, which has not been noticed by the arbitrator and adjudged from that stand point, the High Court also committed error in setting aside the order of remittance made by the learned Additional Judge.;