Supreme Court modifies compensation rate, upholds interest award, rejects other claims for lack of evidence or contractual prohibitions.

The Supreme Court partially allowed the appeals, restoring the award for Claim No. 1 regarding compensation for extra lead of stone and metal, modifying the rate to Rs. 13.75 per cubic meter. The Court also upheld the interest award at 12% per annum. However, the Court rejected other claims for non-supply of food grains, reimbursement of short supply of cement, and compensation for accumulated materials, citing lack of evidence or contractual prohibitions. The Respondents were directed to calculate and pay the awarded amounts within two months.

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Issues Involved:
1. Claim No. 1 - Extra lead of 4 kms/6 kms-stone and metal.
2. Claim No. 3 - Non-supply of food grains as per the conditions of the agreement.
3. Claim No. 4 - Reimbursement of short supply of cement.
4. Claim No. 7 - Claim on account of stock of materials accumulated by the contractor for work in the project.
5. Claim No. 9 - Interest of 18% per annum under the Interest Act.

Detailed Analysis of the Judgment:

Claim No. 1 - Extra Lead of 4 kms/6 kms-Stone and Metal
The Appellant claimed compensation for extra lead due to quarrying from a site further than specified. The arbitrator awarded Rs. 15 per cubic meter, rejecting the Respondent's argument that the Appellant chose the distant quarry voluntarily. The sub-Court agreed on entitlement but reduced the rate to Rs. 3.23 per cubic meter, citing lack of supporting material for Rs. 15. The High Court found the claim barred under Clause 59, which prohibits compensation for delays. The Supreme Court held that the claim for extra lead is not associated with delay and should be compensated at Rs. 13.75 per cubic meter as per the Executive Engineer’s letter, thus modifying the sub-Court’s decision under Article 142.

Claim No. 3 - Non-Supply of Food Grains
The Appellant claimed compensation for non-supply of food grains, which he had to procure from the open market at higher prices. The arbitrator awarded compensation, finding that food grains were available but not supplied. The sub-Court and High Court set aside the award, noting no evidence of availability or extra wages paid. The Supreme Court observed that the contract allowed compensation for short supply but found no evidence of non-supply or the Appellant purchasing food grains. The claim was rejected due to lack of evidence and potential violation of Clause 59.

Claim No. 4 - Reimbursement of Short Supply of Cement
The Appellant claimed reimbursement for cement procured from outside due to short supply by the Respondent. The arbitrator awarded compensation based on the issue rate of Rs. 416 per metric tonne. The sub-Court set aside the award, citing lack of evidence for external purchase and contractual provisions requiring ledger maintenance and permission for external procurement. The High Court upheld this view. The Supreme Court agreed, noting the absence of ledger entries, vouchers, or bills, and found that the claim could not be sustained under Section 30 of the Arbitration Act.

Claim No. 7 - Stock of Materials Accumulated by the Contractor
The Appellant claimed compensation for materials accumulated but not used due to alleged assurances of further work. The arbitrator awarded compensation, but the sub-Court and High Court rejected the claim, noting no evidence of such assurances and the contractual prohibition on compensation for delays. The Supreme Court upheld the rejection, emphasizing that the Appellant had not used the materials for the project.

Claim No. 9 - Interest of 18% Per Annum
The arbitrator awarded interest at 12% per annum from the date of the claim petition. The sub-Court set aside the interest for the period from the commencement of arbitration to the award date, citing lack of arbitrator’s power. However, the Supreme Court restored the interest, referencing the judgment in Assam State Electricity Board v. Buildworth (P) Ltd., which allows arbitrators to grant pendente lite interest unless explicitly prohibited by the contract.

Conclusion:
The Supreme Court partially allowed the appeals, restoring the award for Claim No. 1 as modified by the sub-Court and the interest as awarded by the arbitrator, while rejecting the other claims due to lack of evidence or contractual prohibitions. The Respondents were directed to calculate and pay the amount within two months of the judgment.

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