K N SATHYAPALAN Vs. STATE OF KERALA
LAWS(SC)-2006-11-143
SUPREME COURT OF INDIA (FROM: KERALA)
Decided on November 30,2006

K.N. SATHYAPALAN (DEAD) BY LRS Appellant
VERSUS
STATE OF KERALA Respondents





Cited Judgements :-

UNION OF INDIA REP , BY EXECUTIVE ENGINEER VS. SARASWATHI ENGINEERING CONSTRUCTIONS PVT LTD [LAWS(MAD)-2017-12-342] [REFERRED TO]
NANDSONS CONSTRUCTION COMPANY VS. STATE TOURISM DEVELOPMENT & ANOTHER [LAWS(MPH)-2013-7-364] [REFERRED]
CENTRAL MINE PLANNING & DESIGN INSTITUTE LTD. AND ORS. VS. ANUPAM RAI [LAWS(BOM)-2015-5-64] [REFERRED TO]
VIKAS VIHAR CO-OPERATIVE GROUP HOUSING SOCIETY LTD VS. BUDHIRAJA ELECTRICALS [LAWS(DLH)-2012-2-395] [REFERRED TO]
PUNJ LLOYD LIMITED VS. MINISTRY OF HEALTH & FAMILY WELFARE, GOVT OF INDIA [LAWS(DLH)-2018-4-305] [REFERRED TO]
IRCON INTERNATIONAL LIMITED VS. SATYA PRAKASH BUILDERS LIMITED [LAWS(DLH)-2017-4-196] [REFERRED TO]
BHARAT HEAVY ELECTRICALS LIMITED VS. VASAVI POWER SERVICES PVT. LTD [LAWS(DLH)-2022-1-261] [REFERRED TO]
M/S. CHENNAI PETROLEUM CORPORATION LIMITED 536, ANNA SALAI, TEYNAMPET, CHENNAI VS. M/S. HES INFRA PRIVATE LIMITED [LAWS(MAD)-2018-3-897] [REFERRED TO]
M/S. RITES LTD. VS. M/S. BHARDWAJ CONSTRUCTION COMPANY PVT. LTD. [LAWS(JHAR)-2020-3-45] [REFERRED TO]
STATE OF KERALA VS. GOPALAKRISHNA PILLAI [LAWS(KER)-2021-11-147] [REFERRED TO]
SOUTHERN RAILWAY, HEAD QUARTERS OFFICE, PARK TOWN, CHENNAI VS. SANTHOSH BABU, S/O LATE VELAYUDHAN [LAWS(KER)-2022-1-35] [REFERRED TO]
SAMAT BUILDERS PVT. LTD. VS. BOARD OF TRUSTEES OF PARADIP PORT, PARADIP PORT TRUST [LAWS(ORI)-2009-8-93] [REFERRED TO]
K.S. BABURAJ VS. UNION OF INDIA [LAWS(MAD)-2023-10-63] [REFERRED TO]
ASSAM STATE ELECTRICITY BOARD AND OTHERS VS. BUILDWORTH PVT LTD. [LAWS(SC)-2017-7-35] [REFERRED TO]
VIJAI CONSTRUCTIONS VS. STATE OF U.P. [LAWS(ALL)-2017-9-27] [REFERRED TO]
STATE OF WEST BENGAL VS. PAM DEVELOPMENTS PVT. LTD. [LAWS(CAL)-2016-11-42] [REFERRED TO]
UNION OF INDIA VS. BAHL BUILDERS (P) LTD [LAWS(DLH)-2008-8-395] [REFERRED]
UNION OF INDIA VS. SUKBRINDER SINGH ATWAL [LAWS(CAL)-2010-5-82] [REFERRED TO]
UNION OF INDIA VS. SURAJ INFRASTRUCTURES PVT LTD [LAWS(BOM)-2012-7-211] [REFERRED TO]
TATA PROJECTS LTD. VS. NTPC LIMITED [LAWS(DLH)-2021-12-259] [REFERRED TO]
CHENNAI - ENNORE PORT ROAD COMPANY LTD VS. COASTAL - SPL (JV) [LAWS(DLH)-2019-7-260] [REFERRED TO]
M/S. EXPRESS INFRASTRUCTURE PRIVATE LIMITED VS. M/S. B. L. KASHYAP AND SONS LIMITED [LAWS(MAD)-2020-1-473] [REFERRED TO]
JV ENGINEERING ASSOCIATE VS. GENERAL MANAGER, CORE [LAWS(MAD)-2020-2-105] [REFERRED TO]
THE UNION OF INDIA REP., BY THE GENERAL MANAGER, SOUTHERN RAILWAY, CHENNAI AND OTHERS VS. M/S. APPACHI GOUNDER AND SONS [LAWS(MAD)-2017-3-304] [REFERRED TO]
P. P. THOMAS VS. STATE OF TAMIL NADU [LAWS(MAD)-2022-7-350] [REFERRED TO]
HARE KRISHNA TALUKDAR VS. STATE OF ASSAM [LAWS(GAU)-2019-4-100] [REFERRED TO]
GAMMON INDIA LIMITED VS. NATIONAL THERMAL POWER CORPORATION LIMITED [LAWS(DLH)-2012-9-41] [REFERRED TO]
BOMBAY CONTAINER TERMINALS PVT. LTD VS. CENTRAL WAREHOUSING CORPORATION [LAWS(DLH)-2012-9-323] [REFERRED TO]
AIRPORT AUTHORITY OF INDIA VS. B R ARORA & ASSOCIATES (P) LTD [LAWS(DLH)-2018-7-55] [REFERRED TO]
GAMMON INDIA LTD AND ANR. VS. DELHI DEVELOPMENT AUTHORITY AND OTHERS [LAWS(DLH)-2017-4-238] [REFERRED TO]
UNION OF INDIA VS. HAJI C M ABDUL KHADER [LAWS(KER)-2019-12-83] [REFERRED TO]
N.R. CONSTRUCTION PRIVATE LIMITED VS. STATE OF JHARKHAND [LAWS(JHAR)-2023-12-49] [REFERRED TO]
SATISH CHANDRA SHRIVASTAVA VS. STATE OF JHARKHAND [LAWS(JHAR)-2020-1-162] [REFERRED TO]
ASSOCIATED CONSTRUCTION VS. PAWANHANS HELICOPTERS PVT LTD [LAWS(SC)-2008-5-182] [REFERRED TO]
GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. VS. SIMPLEX INFRASTRUCTURE LIMITED [LAWS(GJH)-2017-6-199] [REFERRED TO]
JATAN BUILDERS VS. ARMY WELFARE HOUSING ORGANIATION [LAWS(DLH)-2009-5-11] [REFERRED TO]
GOVERNMENT OF J AND K VS. HINDUSTAN CONSTRUCTION COMPANY LTD. [LAWS(J&K)-2017-3-18] [REFERRED TO]
NATIONAL BUILDINGS CONSTRUCTION CORPORATION LTD. VS. HARJINDER SINGH NAMDHARI [LAWS(DLH)-2015-4-66] [REFERRED TO]
MOHAN LAL HARBANSLAL BHAYANA AND COMPANY VS. UOI [LAWS(DLH)-2012-3-498] [REFERRED TO]
BHANU CONSTRUCTION CO PVT LTD VS. NATIONAL THERMAL POWER CORP LTD [LAWS(DLH)-2011-2-224] [REFERRED TO]
MORADABAD DEVELOPMENT AUTHORITY THROUGH ITS SECRETARY VS. V R CONSTRUCTIONS AND ENGINEERING COMPANY THROUGH ITS PARTNER NASIM AKHTAR AND SALIM AKHTAR [LAWS(ALL)-2007-11-223] [REFERRED]
M/S. M AND M CONSTRUCTIONS VS. GOA TILLARI IRRIGATION DEVELOPMENT CORPORATION [LAWS(BOM)-2018-2-403] [REFERRED TO]
MAHANAGAR TELEPHONE NIGAM LTD VS. RALHAN CONSTRUCTION COMPANY [LAWS(DLH)-2023-1-97] [REFERRED TO]
STATE OF HIMACHAL PRADESH VS. ASHOK KUMAR THAKUR [LAWS(HPH)-2014-11-93] [REFERRED TO]
UNION OF INDIA VS. TIRTHA SINGH [LAWS(ORI)-2023-11-72] [REFERRED TO]
O P PATHROSE VS. STATE OF KERALA [LAWS(SC)-2010-3-19] [REFERRED TO]
NATIONAL BUILDINGS CONSTRUCTION CORP. (NBCC) LTD. VS. M/S NATAVARLAL M. PATEL [LAWS(ALL)-2017-3-206] [REFERRED TO]
KHEC TECHNOLOGIES (INDIA) PVT. LTD VS. CORPORATION OF CHENNAI [LAWS(MAD)-2022-9-34] [REFERRED TO]
B B M ENTERPRISES VS. NATIONAL HIGHWAYS AUTHORITY OF INDIA [LAWS(DLH)-2012-5-213] [REFERRED TO]
TARUN KANTI CHOUDHURY VS. STATE OF WEST BENGAL [LAWS(CAL)-2019-9-69] [REFERRED TO]
INDIAN FARMERS FERTILISER COOPERATIVE LTD VS. DUGGAL CONSTRUCTIONS (INDIA) LTD [LAWS(DLH)-2011-12-172] [REFERRED TO]
UNION OF INDIA VS. SATISH BUILDERS [LAWS(DLH)-2020-5-83] [REFERRED TO]
IRCON INTERNATIONAL LIMITED VS. C.R. SONS BUILDERS [LAWS(DLH)-2020-2-29] [REFERRED TO]
CENTRAL GOVERNMENT EMPLOYEES WELFARE HOUSING ORGANISTION VS. LABH CONSTRUCTION & INDUSTRIES LTD [LAWS(DLH)-2019-4-114] [REFERRED TO]
PAWAN HANS HELICOPTER LTD VS. MESSERS ASSOCIATED CONSTRUCTION [LAWS(BOM)-2007-6-25] [REFERRED TO]
STATE OF WEST BENGAL VS. PAM DEVELOPMENTS PRIVATE LIMITED [LAWS(CAL)-2017-9-187] [REFERRED TO]
STATE OF WEST BENGAL VS. PAM DEVELOPMENTS PVT. LTD. [LAWS(CAL)-2017-10-2] [REFERRED TO]
SAMAL BUILDERS PVT. LTD. VS. BOARD OF TRUSTEES OF PARADIP PORT, PARADIP PORT TRUST [LAWS(ORI)-2009-8-56] [REFERRED TO]
STATE OF MADHYA PRADESH VS. SHEETLA SAHAI [LAWS(SC)-2009-8-125] [REFERRED TO]
NATIONAL BUILDINGS CONSTRUCTION CORP. (NBCC) LTD. VS. M/S NATAVARLAL M. PATEL [LAWS(DLH)-2017-3-224] [REFERRED TO]
LIFT AND SHIFT INDIA PVT. LTD. VS. CENTRAL WAREHOUSING CORPORATION [LAWS(DLH)-2017-3-106] [REFERRED TO]
ASHOKA BUILDCON LIMITED AND ANR. VS. NATIONAL HIGHWAYS AUTHORITY OF INDIA AND ORS. [LAWS(DLH)-2017-3-26] [REFERRED TO]
AMBIKA CONSTRUCTION CO VS. UNION OF INDIA [LAWS(BOM)-2011-10-65] [REFERRED TO]
GOVT. OF NCT OF DELHI VS. GARG BUILDERS [LAWS(DLH)-2013-10-109] [REFERRED TO]
ASHOK KUMAR SINGH VS. STATE OF JHARKHAND [LAWS(JHAR)-2022-4-37] [REFERRED TO]
DYNA TECHNOLOGIES PVT. LTD. VS. CROMPTON GREAVES LTD. [LAWS(SC)-2019-12-75] [REFERRED TO]
HIMCON ENGINEERS (I) PVT LTD VS. GWALIOR DEVELOPMENT AUTHORITY & ANOTHER [LAWS(MPH)-2012-4-247] [REFERRED]
KIMTI LAL VOHRA VS. HARYANA STATE AND ORS. [LAWS(P&H)-2015-3-79] [REFERRED TO]


JUDGEMENT

- (1.)The appellant entered into an agreement with the State of Kerala on 10th October, 1985 whereunder he was entrusted with the construction work of the Chavara Distributory from Ch.7440M to 9440M and 10475M to 14767M. Disputes having arisen between the parties, the matter was referred to arbitration. The Superintending Engineer, Siruvani Project, Palghat, the designated Arbitrator in terms of the contract, was appointed as the sole Arbitrator. By his award, which was published on 2nd September, 1989, the Arbitrator awarded a total sum of Rs. 42, 21, 000/- with 12% interest per annum from the date of the award. Upon the passing of the award the appellant herein filed O.P. (Arb.) 40/89 in the court below under Section 17 of the Arbitration Act, 1940 for passing a decree in terms of the award. The State of Kerala filed a petition under Section 30 of the Act challenging the award and for setting aside the same.
(2.)The application filed by the State was dismissed and aggrieved thereby the State of Kerala preferred an appeal in the High Court of Kerala at Ernakulam, being MFA No. 980 of 1990 C.
(3.)The appellant herein raised claims under 12 different heads but the Arbitrator allowed only claims (a), (e), (g), (i) and (k). Although, in the memorandum of appeal, the entire award in favour of the appellant had been challenged, but the arguments were addressed only with regard to claims under heads (a), (g), (i) and (k). A preliminary objection was raised in the appeal that the Superintending Engineer, who had been appointed as the Arbitrator and had entered on the reference, had been suspended from service for gross mal-practice, and the Government had informed all concerned that the Arbitrator was not to continue with the reference. The Arbitrator retired on superannuation while he was under suspension and the award was made after his retirement. According to the State of Kerala, in the circumstances, the award passed by the Arbitrator was without jurisdiction. The aforesaid objection being preliminary in nature, the same was taken up first for consideration and it was held by the High Court that such an objection was without any merit. The Arbitrator, who was working as Superintending Engineer was placed under suspension on 31st May, 1989. As per an agreement between the parties on 14th February, 1989, the time for making and publishing the award was extended upto 14th June, 1989. Even after the Arbitrator was suspended from service, both sides had agreed on 14th June, 1989 to extend the time further for making and publishing the award upto 14th October, 1989. The Arbitrator retired from service while under suspension on 30th June, 1989. In the light of the said facts, the High Court agreed that the court below could not revoke the authority of the Arbitrator, which could only be done under Section 5 of the Arbitration Act, 1940, with the leave of the Court. Accordingly, the preliminary objection raised on behalf of the State of Kerala that the Arbitrator had no authority to continue with the arbitration after his suspension or retirement, was rejected by the High Court. Claim (a) of the appellant herein involved the claimant's entitlement to get compensation for interruption of work by anti-social elements and failure of the Department in removing such miscreants from the sites which caused the claimant heavy financial losses by way of idle men and machinery, plant and equipment. The claim made under the aforesaid head was for a sum of Rs.11, 40, 000/-. The Arbitrator was satisfied that there was interruption of work by anti-social elements and that the State had failed to remove such obstruction from the site. Accordingly, the Arbitrator awarded a sum of Rs. 7, 30, 000/- under this claim. Claim (g) was confined to the question as to whether the claimant was entitled to compensation for the losses suffered by him on account of price escalation of materials that had taken place during the extended period of completion when such extension of time was necessitated by departmental failure, although there was no provision for escalation of costs in the contract. Under the said clause the appellant claimed an amount of Rs.39, 90, 198/- but was awarded a sum of Rs.11, 70, 000/- over and above the amount as per the rates in the agreement for the work done after the original period of contract till 9th February, 1987.


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