- (1.) THE petitioner challenges an award relating to a works contract by which the arbitrator has allowed the claim under several heads. THE petitioner does not assail the award made under the third head since the amount was admitted by the petitioner in course of the reference. THE matter is covered by the Arbitration Act, 1940.
(2.) THE first of the three grounds urged by the petitioner is that several heads of claim have been allowed by the arbitrator despite the respondent herein, by reason of the agreement between the parties, being precluded from claiming matters covered thereby. Secondly, the petitioner says that in the respondent having received payment after completion of the work 2 without any protest, there was complete accord and satisfaction which disentitled the respondent from making any further claim. Finally, the petitioner complains that even if the arbitrator found that there was some basis to the claim, there is no indication in the award as to how the arbitrator arrived at the figures in respect of the several heads of claim. THE petitioner refers to clauses 19 and 33 of the general conditions governing the contract: "19. THE contractor shall not be entitled to any compensation for any loss suffered by him on account of delays in commencing or exeucting the work, whatever the cause of delays may be, including delays arising out of modifications to the work entrusted to him or in any sub-contract connected therewith or delays in awarding contracts for other trades of the project or in commencement or completion of such works or in supply of materials from CTC Limited. as mentioned thereinafter or in obtaining water and power connections for construction purposes or for any other reason whatsoever and the Employer shall not be liable for any claim in respect thereof. THE Employer does not accept liability for any sum besides the tender amount, subject to such variations as are provided for herein." "33. THE decision, opinion, direction, Certificate (Except for payment) with respect to all or any of the matters under Clause 2(a), 2(b), 4, 7, 12, 19, 28 (a, b, c, d, f) hereof (which matters are herein referred to as the except matters) shall be final and conclusive and binding on the parties hereto and shall be without appeal. Any other decision, opinion, direction Certificate of valuation of the Chief Engineer or any refusal of the Chief Engineer to give any of the same, shall be subject to the right of Arbitration and review under Clause 35 hereof in the same way in all respect (including the provision as to opening the reference) as if it were a decision of the Chief Engineer." The petitioner says that by virtue of Clause 19 of the general conditions, the contractor was not entitled to make any claim "on account of delays....for any.....reason whatsoever..." The petitioner insists that Clause 19 of the general conditions debarred the contractor from making any claim on account of any delay. The related point that the petitioner makes is that since Clause 33 of the general conditions refers to Clause 19 as part of the excepted matters, in the sense there would be element of finality to such matters and they would not be adjudicated upon, the contractor could not have fashioned any claim on account of any delay or any consequential loss suffered by the contractor. The petitioner refers to Clause 34 of the general conditions that is the arbitration agreement between the parties where the excepted matters have been kept out of the purview of the arbitration. The petitioner suggests that whether or not the claim was on account of excepted matters, since the excepted matters were not arbitrable under the agreement between the parties, the arbitrator being a creature of the contract could not have exceeded his brief to adjudicate upon such matters. As to the accord and satisfaction, the petitioner says that the point was squarely taken as would be evident from paragraphs 47 to 50 of the award where the arbitrator referred to it. The petitioner asserts that the arbitrator did not make any conclusive pronouncement on such aspect of the matter before proceeding to consider the claim on merits. On the point of accord and satisfaction, the petitioner refers to the judgments reported at (1994) Supp. (3) SCC 126; (2009) 7 SCC 350; (2000) 8 SCC 1 and (2011) 10 SCC 420. In the first of the four cases referred to by the petitioner, the matter was considered at the Section 20 stage under the Arbitration Act, 1940. The Supreme Court found that the work in that case had been completed by December 30, 1980 and the further claim was rejected by August 12, 1981 after the petitioner had received full payment by May 19, 1981. The Supreme Court construed the documents executed by the contractor to imply that the contractor had accepted the final payment in full satisfaction of its claim and held, in such circumstances, that it could not make any further claim in respect of the matter. In the second of the cases, the Supreme Court found that full and final payment had been received by the claimant in the proceedings without any protest or reservation and such conduct disentitled the claimant in that matter from making any further claim. The other two cases also elucidate the legal principle in the matter of accord and satisfaction and restrict the grounds for a claimant to make a further claim after having apparently received payment in full and final satisfaction of its claim. The law appears to be that when a valid discharge is issued, it operates as an estoppel against the claimant from making any further claim.
(3.) THE engineering contract in this case related to the construction of a tram-shed at the Rajabazar Tram Depot in Calcutta. It appears from the records that the petitioner herein had engaged some other person to design the construction and the respondent was engaged only to execute the work. For reasons not necessary to be gone into at this stage, it appears that a part of the construction collapsed whereupon the work was kept suspended for a substantial period of time. THE work resumed, it was completed according to the specifications, some payments were received by the contractor and it lodged the claim for balance sum, including on account of cost overrun, escalation and the like which had been occasioned by reason of the suspension of the work for a considerable period of time. THE award considers the matter in great detail. THE petitioner says that the claim on account of extra costs towards idle labour under the first head, against which a sum of Rs.5.50 lakh has been awarded, was one of the matters that was covered by clause 19 of the general conditions and, as such, excepted under clause 33 of the conditions and, in any event, not arbitrable in terms of the arbitration agreement contained in clause 34 of the same set of conditions. It is the same argument which is made by the petitioner in respect of the claim under the second head for extra cost on account of idle labour and idle establishment expenses, against which a sum of Rs.2,46,240/- has been awarded. THE petitioner says that the claims under the fourth and fifth heads, on account of overstay and reduced profitability, were beyond the scope of the arbitrator's authority and the purview of the arbitration agreement. THE petitioner also questions the interest levied under the sixth and seventh heads. THE award in respect of the sixth head of claim allowed interest on the amount awarded under the first head of claim at the rate of 18% per annum from August 31, 1985 till December 21, 1990. THE interest granted under the seventh head of claim was also at the rate of 18% per annum but runs from November 1, 1989. The respondent has referred to the judgments reported at (2011) 5 SCC 758; (2002) 4 SCC 45 and (1989) 2 SCC 38. The respondent says that since the authority exercised by Court under Sections 30 and 33 of the Arbitration Act, 1940 is merely supervisory and not appellate, the Court is not called upon to make a detailed investigation into matters of evidence and what may or may not have weighed with the arbitrator in making the award. The respondent asserts that the Court would look for jurisdictional errors and matters of serious irregularities to interfere with an award rendered by a forum of consensus.;