Objections to Arbitration Award Not Time-Barred; Refund and Compensation Claims Disallowed, Other Claims Upheld.

The court determined that the objections to the arbitration award were not barred by limitation, as the notice requirement was not met. The award was modified by disallowing the claims for refund of sales tax and compensation for losses due to work prolongation. All other claims and the interest awarded by the arbitrator were upheld. The costs of arbitration were also maintained. Consequently, the civil appeals were disposed of in accordance with these findings.

---

---

Issues Involved:
1. Limitation for filing objections to the arbitration award.
2. Validity and quantum of various claims made by the respondent.
3. Interest awarded by the arbitrator.
4. Costs of arbitration.

Summary:

1. Limitation for Filing Objections:
The primary issue was whether the objections to the arbitration award were barred by limitation u/s Article 119(b) of the Limitation Act. The court held that the period of limitation commences only upon notice of filing of the award in the court being given to the parties. In this case, the office report dated 18.02.2002 did not constitute such notice. Therefore, the objections filed on 11.04.2002 were not barred by limitation.

2. Validity and Quantum of Claims:
- Claim No. 1 (Payment of Final Bill): The arbitrator allowed a sum of Rs. 49,531/- for the final bill and Rs. 91,013.72 for extra items of work, based on entries in the measurement book.
- Claim No. 2 (Payment of P.O.L. Escalation) and Claim No. 3 (Compensation for Late Payment of Running Account Bill): These claims were not contested.
- Claim No. 4 (Payment of Labour Escalation): The arbitrator awarded Rs. 1,30,000/- considering both parties were responsible for the delay.
- Claim No. 5 (Refund of Sales Tax): The award of Rs. 35,050/- was set aside due to a clear error in applying the notification dated 19.02.1985.
- Claim No. 6 (Payment of Extra Items): The arbitrator awarded Rs. 1,25,000/- for watch and ward expenses, finding sufficient basis for the claim.
- Claim No. 7 (Payment of Material Escalation): The arbitrator allowed half of the claim, considering the secured advance and the rise in prices.
- Claim No. 8 (Keep Back Account): This claim was rejected.
- Claim No. 9 (Compensation for Loss Due to Prolongation of Work): The award of Rs. 6,00,000/- was deleted as there was no evidence to support the claim for loss of profits.

3. Interest Awarded by the Arbitrator:
The court found no reason to interfere with the interest awarded by the arbitrator, deeming it appropriate.

4. Costs of Arbitration:
The costs awarded by the arbitrator were upheld.

Conclusion:
The award was modified by disallowing the claims for refund of sales tax and compensation for losses due to prolongation of work. In all other respects, the award was upheld. The civil appeals were disposed of accordingly.

---