Court sets aside arbitrator's awards for destroyed katcha bricks, coolies' wages, and interest. Contractor fails to prove contractual obligations.

The Court set aside the arbitrator's awards for claims related to destroyed katcha bricks, additional wages for coolies, and interest due to errors of law. The Court found that the contractor failed to prove contractual obligations for these claims, and the arbitrator's decisions were not supported by evidence or legal provisions. The appeals were dismissed, and the High Court's decision to uphold the dismissal of the claims was affirmed.

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Issues Involved:
1. Claim for the price of katcha bricks destroyed by rain.
2. Claim for additional wages paid to coolies due to non-supply of ration and cloth.
3. Claim for interest on the amount of money involved in the claim.

Detailed Analysis:

1. Claim for the Price of Katcha Bricks Destroyed by Rain:
The contractor claimed Rs. 75,900 for 88 lakhs of katcha bricks destroyed by rain, arguing that the delay in removing baked bricks by the C.P.W.D. caused the accumulation of katcha bricks, which were then destroyed by rain. The Union Government contended that the katcha bricks were not part of the contract and relied on additional clause 6, which stated, "The department will not entertain any claim for idle labour or for damage to unburnt bricks due to any cause whatsoever."

The arbitrator awarded Rs. 64,075 under this head, reasoning that clause 6 was not meant to absolve the department from carrying out their part of the contract. However, the Court found that the arbitrator erred in law, as clause 6 expressly relieved the Union Government of liability for such damage, and the contractor had a duty under section 73 of the Contract Act to minimize the loss. The Court held that the arbitrator's decision on this point was not final, as it was not a specific question of law referred to arbitration. The Court emphasized that the arbitrator's error was apparent on the face of the award, and thus, the award under this head was set aside.

2. Claim for Additional Wages Paid to Coolies Due to Non-Supply of Ration and Cloth:
The contractor claimed Rs. 51,495 for additional wages paid to coolies due to the non-supply of ration and cloth, arguing that there was a mutual understanding and promise by the department to supply ration. The arbitrator awarded Rs. 40,000 under this head, concluding that there was an implied contractual obligation for the C.P.W.D. to provide rations.

The Court found that the arbitrator's conclusion was based on mere contentions by the contractor and not on evidence or admissions. The Court held that the contract did not contain any clause about rations, and the contractor signed the contract without waiting for a reply to his request for rations. The Court emphasized that governments can only be bound by contracts entered into in a particular way and signed by the proper authority. The Court concluded that there was no contractual obligation for the C.P.W.D. to supply rations, and thus, the award under this head was set aside.

3. Claim for Interest on the Amount of Money Involved in the Claim:
The contractor claimed Rs. 27,665 as interest on the amount of money involved in the claim, arguing that the department should have settled the claims by January 1948. The arbitrator awarded interest at 6% for 16 months, amounting to Rs. 17,363.

The Court found that the arbitrator erred in awarding interest, as the conditions under the Interest Act, 1839, were not fulfilled. The Court held that there was no debt or sum certain payable at a certain time by virtue of a written contract, and there was no demand in writing stating that interest would be demanded from the date of the demand. The Court also noted that an arbitrator is not a "court" within the meaning of section 34 of the Civil Procedure Code, 1908, and thus, could not award interest. Therefore, the award of interest was set aside.

Civil Appeal No. 12 of 1954:
In this connected appeal, the issues were similar, involving claims for cloth and rations and interest. The arbitrator awarded Rs. 30,000 for the claim related to cloth and rations, based on a "moral and implied obligation," and Rs. 9,954 as interest.

The Court found the same errors of law as in Civil Appeal No. 260 of 1953. The award for cloth and rations was based on an incorrect inference of a contractual obligation, and the award of interest was not supported by the conditions required under the Interest Act, 1839. Thus, the awards under these heads were also set aside.

Conclusion:
The appeals were dismissed, and the awards under the contested heads were set aside due to errors of law apparent on the face of the awards. The High Court's dismissal of the claims was upheld.

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