1. The respondent had entered into an agreement with the appellant for execution of the work of restoration of scoured bank of Balibandha and retired line to protect Naraj Weir, being Agreement No. 32 F-2 of 1976-77. The respondent did not complete the work within the extended time and did not fully execute the work according to the appellant. There were disputes between the parties.
2. According to the appellant, the respondent contractor wrote a letter dated 28-4-1977 in which the respondent stated that his total claim is Rs 37,106. According to the appellant, at the request of the respondent, he was paid Rs 38,396 and a sum of Rs 3710 was withheld.
3. Ultimately on account of the disputes between the parties, the respondent, by his letter dated 15-9-1977, requested the Chief Engineer of the appellant to appoint an arbitrator under clause 23 of the contract which was a clause for reference of disputes between the parties to arbitration. Clause 23 of the contract reads as under:
“Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings, and instructions hereinbefore mentioned and as to the quality of workmanship, or materials used on the work, or as to any other question, claim, right, matter, or thing whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates, instructions, orders, or these conditions, or otherwise concerning the work or the execution, or failure to execute the same, whether arising during the progress of the work, or after the completion or abandonment thereof shall be referred to the sole arbitration of a Superintending Engineer of the State Public Works Department unconnected with the work at any stage nominated by the concerned Additional Chief Engineer. If there be no such Superintending Engineer it should be referred to the sole arbitration of the Additional Chief Engineer concerned. There will be no objection to any such appointment that the arbitrator so appointed is a government servant. The award of the arbitrator so appointed shall be final, conclusive and binding on all parties to this contract.”
4. The clause is, therefore, wide enough to cover all disputes arising out of the said contract.
5. In the said letter of 15-9-1977 the respondent also mentioned that the cause for such disputes was patent as there was default in making final payment for the work done including payment for the extra work executed under the contract.
6. Pursuant to the said notice, the Chief Engineer, Irrigation, by his memorandum dated 19-9-1977 appointed one Mr S.N Sinha, Superintending Engineer, Baripada Irrigation Circle as an arbitrator to decide the disputes pertaining to the above work. Before the arbitrator so appointed, the respondent filed a statement of claims totalling nine in number and amounting to Rs 1,35,959. Thereafter, as the said arbitrator declined to act as an arbitrator, the Court of the Subordinate Judge, Cuttack by its order dated 5-11-1979, appointed retired Justice H. Mohapatra, as an arbitrator who was directed to enter upon the reference and submit report by 13-3-1980.
7. Before the new arbitrator so appointed, the respondent filed further claims. There were numbered as Claims 10-18. The claims were for an additional amount of Rs 4,05,584. Thus the total claim before the arbitrator was Rs 5,41,543.
8. By his impugned award, the arbitrator has granted to the respondent in respect of Claims 1-9 a sum of Rs 1,32,249 and in respect of Claims 10-17 a sum of Rs 95,952 together with interest and costs as set out in the said award. The award is a non-speaking award. The objections filed by the appellant to this award have been dismissed and the award has been made the rule of the court. Hence the present appeal.
9. Learned counsel for the appellant contends that since in his original letter dated 28-4-1977, the respondent contractor had only claimed a sum of Rs 37,106 the arbitrator was confined to the said claim of Rs 37,106 and the respondent was not entitled to raise additional claims before the arbitrator. However, the memorandum as well as the order of the Subordinate Judge do not confine the reference only to the said amount of Rs 37,106. We also do not have on record the said letter dated 28-4-1977. Hence, we do not propose to entertain this objection.
10. Learned counsel for the appellant also contended that once having raised nine claims before the first arbitrator, the respondent was not entitled to raise any additional claims before the second arbitrator since the second arbitrator was appointed to continue the arbitration which was pending before the first arbitrator. However, the claims which were subsequently raised pertain entirely to the construction work in question and are not outside the ambit of the arbitration clause. In the statement of claims initially filed before the first arbitrator, the respondent had expressly reserved his right to file additional claims. We do not, therefore, see any reason to hold that the respondent was not entitled to file further claims before the second arbitrator.
11. Learned counsel for the appellant relied upon a decision of this Court in Santokh Singh Arora v. Union of India (1992) 1 SCC 492. This Court in that case considered the scope of an arbitration on appointment of a new arbitrator by the Court. It held that the arbitration must be confined to disputes which were the subject-matter of arbitration before the first arbitrator. New disputes arising subsequent to the reference to arbitration could not be raised. The ratio of this decision, however, is not applicable to the present case since the subsequent claims pertain to disputes which were in existence at the time the arbitration clause was invoked and were within the scope of the arbitration clause and the reference.
12. Learned counsel for the appellant also submitted that the respondent has merely tried to take advantage of the appointment of a new arbitrator to increase his claims without there being any basis for such increase. They have also drawn our attention to the earlier conduct of the respondent. Initially the respondent's letter referred only to the claim of Rs 37,106. However, when the arbitrator was appointed, the claims filed before the arbitrator were to the tune of Rs 1,35,959. Similarly, when the second arbitrator was appointed, these claims were again increased by Rs 4,05,584. This, according to the appellant, showed a lack of bona fides in raising the claims. It was for the arbitrator to decide whether these claims raised by the respondent had any merit or not. In fact, although the subsequently filed claims were to the tune of an extra amount of Rs 4,05,584, the arbitrator has only awarded to the respondent a sum of Rs 95,952 in respect of those claims. It was for the arbitrator to examine the merits of the claims raised by the respondent and to give a suitable award. We cannot examine the merit or otherwise of all these claims.
13. We, therefore, do not see any reason to invalidate the said award. The appeal is, therefore, dismissed. There will, however, be no order as to costs.