Amareswari, J.:— These three appeals arise out of a common order of the IInd Additional Judge, City Civil Court, Hyderabad dated 27-12-1983. The matter arises under arbitration proceedings.
2. O.S No. 1557 of 1982 is filed under Sections 14 and 17 of the Arbitration Act for making the award the rule of the Court and O.P No. 377 of 1983 is filed under Sections 30 and 33 of the Indian Arbitration Act for setting aside the award. The Executive Engineer, Roads and Buildings Department entered into an agreement with Shivraj Reddy (3rd defendant in O.S No. 1557 of 1982) on 14-7-1978 for formation including matalling and Block topping of inner ring road at Uppal junction. As disputes arose between the parties, the matter was referred to a panel of Arbitrator as per the terms of the agreement. The Contractor made as many as 7 claims. The Arbitrators allowed Claims 1(a) and 1(b) and rejected the other claims by their award dt. 13-9-1982 Ex. A-1. Thereafter, the Arbitrators filed O.S No. 1557 of 1982 for making the award the rule of the Court. The award is contested by the 1st and 2nd defendants.
3. The Contractor filed a written statement that the award should be made the rule of the Court. The trial Court, after considering the material on record made the award the rule of the Court and dismissed the O.P filed by the 1st and 2nd defendants to set aside the award.
4. Aggrieved thereby, the State preferred two appeals C.M.A Nos. 470 and 471 of 1984 and Contractor preferred one C.M.A No. 820 of 1984. The main contention of the appellant-Government is that the Arbitrators exceeded their jurisdiction in accepting claims 1(a) and 1(b) and the trial Court should have set aside the award to that extent.
5. In this case tenders were invited for the work in early 1977. Tenders were made by the 3rd defendant on 2-5-1977 and the final agreement was concluded on 14-10-1978. On 27-11-1978 the Department instead of handing over the entire site in one streich, only a portion was handed over to the Contractor with an assurance that the remaining portion will be handed over shortly. The remaining site was handed over in bits on 23-7-1980 and on 11-12-1981. That was more than 2 years from the stipulated date of completion on 26-11-1979. The Contractor made a claim under head 1(a) for the work done upto the period of agreed date of completion namely, 26-11-1979 for payment at the rates agreed to in Schedule ‘A’ and for quantities of work done beyond the agreed date of 26-11-1979 upto 31-12-1981 at the standard specification rates in force during the period of execution plus over all tender percentage amounting to Rs. 2,43,800/-. The Arbitrators accepted the claim of the Contractor in this regard and granted rates as originally agreed for the work done upto the period of originally agreed date of completion and for the work done thereafter at the standard specification rates in force during the period of execution of further work beyond the date of completion plus over all accepted percentage.
6. The main submission of Miss. V. Lakshmi Devi, the learned Counsel for the appellant is that Clause 59 of the Andhra Pradesh Detailed Standard Specification Rules prohibits payment of any amount over and above the contractual rate. In support of this contention, she relied upon a decision of the Division Bench of this Court in C.M.A No. 677 of 1981 and C.R.P No. 385 of 1982 dated 19-4-1982.
7. Section 59 of the Andhra Pradesh Detailed Standard Specifications is as follows:
“59 Delays and extension of time:—
No claim for compensation on account of delays or hindrances to the work from any cause whatever shall lie, except as hereinafter defined. Reasonable extension of time will be allowed by the Executive Engineer or by the Officer competent to sanction the extension for unavoidable delays; such as may result from causes which, in the opinion of the Executive Engineer, are undoubtedly beyond the control of the contractor. The Executive Engineer shall assess the period of delay or hindrance caused by any written instructions issued by him, at twenty five percent in excess of the actual working period so lost.”
8. In our view Section 59 has no application. It pertains to compensation. In the present case, we are concerned with the rates for the work done. The Contractor is not claiming any compensation for loss or damage or loss of profit which he would have made but for the delay committed by the department. What is asked for here is that beyond the contractual date he must be paid as per the standard specification rates as the site was not handed over in time due to the fault of the department itself. We do not think Section 59 has any application at all. The decision of the Division Bench referred to by the learned Government Pleader has no relevance in the present context. In this Division Bench case, the contractor having agreed for reduction of rates and executing the final agreement, demanded escalation of rates complaining that the department committed delays and defaults. The Government relied upon Clause 59 and Foot Note 7 of Schedule ‘A’ which prohibited payment of rates at the enhanced rates even during the extended period. The Division Bench negatived the claim of the Contractor on the ground that the Foot Note 7 is clear to the effect that the agreed role should prevail even during the extended period of the agreement. The Judgment of the Division Bench was more based on the specific prohibition contained in Foot Note 7 of Schedule ‘A’ of the agreement therein. There is no such clause in the present agreement. It is not a case of escalation of rates. Here the major portion of the site was handed over beyond the period of agreement during which period the cost of labour and other materials have gone up. Without the site it was impossible for the contractor to complete the work and what the Arbitrators have done is only to permit the contractor to claim the rates prevalent as per the S.S.Rs in force. In our view, it is not prohibited either under the APDSS Rules or by any clause in the agreement.
9. In Chellappan v. Kerala State Electricity Board (2) (1975) 1 SCC 289 : AIR 1975, Supreme Court, Page 230, it was held that the award can be set aside only when it is vitiated by an error of law apparent on the face of the record.
10. In Jeevarai Bai v. Chintamani Rao (3) AIR 1965, Supreme Court, page 214 it was held that the Courts cannot interfere with the decision of the Arbitrators on the ground that a different conclusion is possible. The adjudication by the Arbitrators must be considered as binding for he is a Tribunal selected by the parties.
11. As per the agreement, the work has to be completed within 12 months from the date of handing over the site. A portion of the site was handed over on 27-11-1978 and the remaining portion in bits on 23-7-1980 and 16-12-1981. After the lapse of more than 2 wars from the stipulated date of completion namely, 30-11-1979, extension of time was granted by the department upto September, 1982. This clearly shows that there was lapse on the part of the department in not handing over the site to the Contractor in full at a time, since, there is an increase in the cost of labour, material and machinery during the period beyond the agreement, the claimants are entitled to be paid at the standard schedule of rates in force. The award of the arbitrators is just and reasonable and it is not vitiated by any error of law apparent on the face of the record.
12. In the result, the appeals preferred by the State are dismissed with costs. In C.M.A No. 820 of 1984 preferred by the Contractor, it is contended that the decree is not in accordance with the award passed by the Arbitrators. We find substance in this contention. While the judgment said that the award is made the rule of the Court, the decree refers to only one relief viz., that the contractor should be paid at the standard schedule of rates in force from December, 1979 to June 1980; July 1980 to June 1981 and July 1981 to September 1982 plus the accepted over all tender percentage. The decree does not refer to Claim No. 1(a) which was allowed by the Arbitrators namely that for the work done upto the period of original agreed rate of completion, the Contractor is entitled at the rates agreed to in Schedule ‘A’ including the work done in excess of the quantities in Schedule ‘A’. Claim 1(b) which was also allowed by the Arbitrators says that the Contractor is entitled for payment at the S.S.Rs in force for the work done beyond the original agreed date of completion during the period of execution of further work plus over all accepted tender percentage. Hence the decree of the lower Court is modified in terms of the award to the following effect:—
(1) The defendants 1 and 2 shall pay the contractor-3rd defendant at the agreed rates in Schedule ‘A’ including the work done in excess of the quantities in Schedule ‘A’.
(2) The defendants 1 and 2 shall pay defendant No. 3 Contractor at the standard schedule of rates in force for the further work done beyond the originally stipulated date of completion i.e 30-11-1979 till the date of completion plus the accepted over all tender percentage; and
(3) The amounts deposited by the Department and withdrawn by the contractor shall be adjusted in the final payment.
13. C.M.A No. 820 of 1984 is allowed.
14. No costs.