Payment claims under construction contractarbitral awards upheld or set aside depending on contractual basis and jurisdictional scope.

Dispute concerns multiple payment claims under construction contracts decided on arbitration awards. On the issue of land acquisition for stacking bricks the arbitrator's valuation was treated as a contractual finding and the award upheld. Recovery for additional wages paid to imported labour was set aside because the arbitrator imposed a moral/implied obligation beyond contractual liability, making the award illegal on its face. Compensation for kuchcha bricks destroyed by rain was sustained where the award was supported by findings. Damages for business loss due to non-removal of bricks were upheld despite limited reasoning. Claims for post-bill interest were set aside for lack of arbitratorial jurisdiction. Decrees modified accordingly.

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Issues Involved:

1. Claim No. 3: Payment for the purchase of additional land for stacking bricks.
2. Claim No. 4: Payment on account of additional wages paid to laborers.
3. Claim No. 8: Payment for the loss of kuchcha bricks destroyed by rain.
4. Claim No. 13: Payment for loss sustained due to non-removal of bricks.
5. Claim No. 17: Payment of interest on account of delay in settling dues.

Detailed Analysis:

Claim No. 3: Payment for the purchase of additional land for stacking bricks

The dispute involves a question arising out of or relating to the contract. The arbitrator considered the arguments and recorded the finding: "I hold that Rs. 200/- per bigha was a reasonable price, the claim of the contractor for Rs. 2000/- less Rs. 715/- (already paid) is therefore awarded." There is no error apparent on the face of the award, and the arbitrator did not assign any reason in support of his award. Therefore, the award cannot be interfered with. The contractor was compelled to acquire the land for stacking the bricks due to the non-removal of bricks by the appellant. The order of the learned Subordinate Judge is confirmed, and the award is upheld.

Claim No. 4: Payment on account of additional wages paid to laborers

On account of certain restrictions, local labor was not available, and the contractor had to import coolies and incur extra costs for procuring food. The arbitrator found that the Central Public Works Department accepted the responsibility for making available controlled rations for the coolies. However, the arbitrator himself found that the appellant was not contractually bound to compensate the contractor for any losses on this account. The arbitrator misdirected himself in law by holding that there was a moral and implied obligation on the part of the C.P.W.D. to provide necessary facilities. The arbitrator's jurisdiction was to fix contractual, not moral liability. The illegality is apparent on the face of the award, and it is set aside.

Claim No. 8: Payment for the loss of kuchcha bricks destroyed by rain

The contractor claimed compensation for 47 lacs of kuchcha bricks destroyed by rain due to a breakdown in the brick removal arrangements. The arbitrator awarded payment for 36 lacs of bricks at 8/8 per cent, i.e., Rs. 30,600/-. There is no illegality on the face of the award. The award in respect of this claim is good and is maintained.

Claim No. 13: Payment for loss sustained due to non-removal of bricks

The contractor claimed damages for the loss in his business due to the non-removal of bricks from the kiln area. The arbitrator found that the contractor was unable to manufacture and supply bricks to his customers because the approaches to land surrounding the kilns were jammed with stacks of Government bricks. The arbitrator awarded Rs. 15,000/- in compensation. The arbitrator fixed the liability without giving any reason in support of his view. Therefore, there is no error of law apparent on the face of the award, and it cannot be assailed.

Claim No. 17: Payment of interest on account of delay in settling dues

The arbitrator allowed interest from 31st March 1947 to 20th April 1949 at 6% per annum. The contractor did not include any claim for interest in his original bill submitted to the Chief Engineer. The claim was preferred before the arbitrator during the arbitration proceedings, and the Executive Engineer did not submit to the arbitrator's jurisdiction to decide this question. Therefore, the claim for interest was not one of the matters referred to arbitration. The arbitrator had no jurisdiction to entertain this claim, and the award in this respect is set aside.

Miscellaneous Appeal No. 253 of 1950:

This appeal arises out of a similar suit and was heard along with Miscellaneous Appeal No. 252 of 1950. The contractor claimed Rs. 4,76,138/12/- plus interest at 6% for 16 months, totaling Rs. 5,38,003/-. The arbitrator allowed Rs. 2,35,346/6/- under his award. The award was contested with respect to claims Nos. 2, 5, 8, and 17.

Claim No. 2: Payment for loss sustained due to closing of Kiln No. 3

The contractor claimed Rs. 8443/12/- for the loss due to closing of kiln No. 3. The arbitrator held that the Executive Engineer's letter was tantamount to an order to close the kiln, which was not justified. The arbitrator awarded Rs. 6400/-. The Executive Engineer's letter was not placed before the court, and the interpretation of the arbitrator was not shown to be wrong. Therefore, the award with respect to this claim is upheld.

Claim No. 5: Payment for 88 lacs of kuchcha bricks destroyed by rain

This claim is similar to claim No. 8 of Miscellaneous Appeal No. 252 of 1950. However, the award in this case cannot be supported because it is based on an erroneous interpretation of clause 6 (additional) of the agreement, which precludes the contractor from claiming any damage for idle labor or damage to unburnt bricks. The award is bad on the face of it and is set aside.

Claim No. 8: Payment on account of additional wages paid to laborers

This claim corresponds to claim No. 4 in Miscellaneous Appeal No. 252 of 1950, which was disallowed. For the same reasons, the award in respect of this claim is set aside.

Claim No. 17: Payment of interest on money blocked

This claim corresponds to claim No. 17 of Miscellaneous Appeal No. 252 of 1950, which was disallowed. For the same reasons, the award in respect of this claim is disallowed.

Conclusion:

The appeals are allowed in part. In appeal No. 252, the decree of the lower court is modified by excluding claims Nos. 4 and 17. In appeal No. 253, the decree of the lower court is modified by excluding claims Nos. 5, 8, and 17. The parties will bear their own costs in each case.

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