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2008 (1) TMI 963
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....ct) by excavation in all kinds of soil (including stoney earth and gravel mixed with boulders), and depositing/disposing of the same, as directed. The maximum lift was 6m including initial lift of one metre. The order to commence work was issued on 23.9.1967. Parties also entered into three supplementary agreements in regard to the said contract No.30/F-2, on 2.8.1969, 7.3.1970 and 10.2.1972. [Note : OMC had also entered into other contracts with the contractor including contract dated 22.2.1968 (Contract No.2/F/2) for raising Chrome Ore by open excavation from the said mining area. We are not concerned with those contracts in these appeals]. 3. The main agreement enumerated two items of work in its schedule. The first, second, and third supplementary agreements enumerated respectively eight items, one item and four items in their respective schedules. The work was completed by the contractor on 15.6.1975. The final bill in respect of the work was prepared by OMC on 21.10.1976. It was revised in March-April 1977 by OMC. The final Bill It showed the total value of the work done (under several items in the schedule to main and three supplementary agreements) as Rs. 1,49,190,76.74.....
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.... Rs. 50,15,820 in regard to contract no.30.F2 were considered. Ultimately the Committee submitted a final report dated 7.12.1979 expressing the view that the contractor could be paid only a sum of Rs. 3,52,916/- in regard to his claims in respect of the two contracts. The contractor, thereafter, wrote a letter dated 29.2.1980 stating that he had come to know that the Committee had submitted its final report and requested for a copy of the report and for payments of the amounts due. OMC sent a reply dated 4.3.1980 stating that the claims were not accepted yet but however agreed to release a sum of Rs. 3.5 lakhs and released the said sum on that day. 6. The contractor sent a notice dated 4.6.1980 invoking the Arbitration Agreement (Clause 23) in respect of pending claims relating to Contract No. 30F-2 and two other contracts. He suggested a panel of names and requested OMC to appoint one of them as Arbitrator. Immediately, thereafter, the contractor filed Misc. Case No.306/80 in regard to the contract in the Court of the Sub-Judge, Bhubaneswar, under section 8(2) of Arbitration Act, 1940 ( Act for short) for appointment of an Arbitrator. The court allowed the said petition b....
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.... claims not made earlier Rs. 67,64,488 (Note : As per actual calculations, the total of the claims made by the appellant was Rs. 96,66,107 and the new claims were Rs. 68,33,979]. 8. The Arbitrator made a reasoned award dated 28.11.1986 holding that the appellant was entitled to a sum of Rs. 1,02,66,901.36 (which was more than the claim of Rs. 95,96,616) with interest at 12% per annum from 1.8.1977 till date of award, and future interest at the rate of 6% P.A. from the expiry of one month from the date of the award till date of decree. The award is in respect of 35 claims. Out of 35 claims, Items 1 to 16 related to the schedule items of work under the contract (main agreement and the supplementary agreement 1 to 3). Items 17 to 34 were in respect of work which did not form part of the contract schedule. Claim 35 related to escalation in cost of labour and material on account of delay in execution. 8.1) The details of the items 1 to 16, (that is description of work, total amount claimed, amount admitted, difference in dispute and amount awarded) are as under : Sl. No. Description of item Claim of Contractor Amount admitted by OMC Amount in dispute Award by Arb....
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.... Rs. 153,16,507.00 B. Total of Items 1 to 16 admitted by OMC Rs. 149,19,076/72 C. Total of claims admitted by Arbitrator Rs. 3,65,862/18 _______________ (B+C) Total Rs. 152,84,938/90 Amount shown as received by contractor towards Items 1 to 16 (as against Rs. 149,88,566/90 shown as received from OMC in the claim statement) Rs.1,20,01,695/90 BALANCE arrived at Arbitrator as due to contractor in respect of items 1 to 16 Rs.32,83,243.00 8.2) Claims of contractor at Sl. No. 17 to 34 related to items of work not covered in the schedule to the contract, for which claim was made on the basis of damages/quantum meruit. As against the total of Rs. 70,56,573/55 claimed in regard to these 18 items (Items 17 to 34), the Arbitrator awarded in all Rs. 52,56,847/36. The details of the claims made by the appellant and the amount awarded in respect of each of them are as under : S.No. Description of item Amount Claimed Amount Awarded 17. Extra Head Lead for 90 m 2810144.10 2450042.88 18. Removal of excavated materials from the edge of the quarry 54888.60 50858.60 19. Unmeasured quantity of....
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....r. The objections to the said award filed by OMC were registered as Misc. Case No.5/1987. The said court, by common judgment dated 21.3.1998, overruled the objections and directed that the award of the arbitrator be made the rule of the court and a decree be drawn in terms of the award. 10. Feeling aggrieved, OMC filed Misc. Appeal No.296/1998, challenging the decision of the Civil Judge refusing to set aside the award, directing a decree in terms of the award. The contractor filed Misc. Appeal No.198/1998 and Civil Revision No.109/1998 claiming future interest from the date of decree as the judgment of the Civil Judge was silent on that aspect. The High Court heard and disposed of the said appeals and revision petition by common judgment 15.10.1999. It allowed Misc. Appeal No.296/1998 filed by OMC and dismissed M.A. No.198/1998 and C.R. No.109/1998 filed by the contractor. The High Court held : (i) The claim of the contractor was barred by limitation and therefore the award was liable to be set aside. (ii) The arbitrator acted beyond his jurisdiction in awarding huge amounts towards alleged extra work, even though there was nothing to indicate that conditions contemplated....
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....lous and fluid stage. The committee gave its report in December, 1979. In March, 1980 some portion out of the money said to have been found due by the committee was paid on ad hoc basis. Notice was given by the contractor on 14.6.80. So, the dispute as to final bill still continues. Till the final bill is prepared and accepted by the contractor, limitation would not accrue. When the matter went to court in 1980, it was not barred by limitation " 13. The High Court found that the work was completed on 15.6.1975, final measurement was taken on 16.6.1975 and the final bill was signed by the contractor under protest on 14.4.1977 and therefore held that the cause of action for the contractor to make a claim arose on 14.4.1977. According to the High Court, as the notice invoking arbitration was issued on 4.6.1980 and the petition under section 8(2) of the Act was filed thereafter, beyond three years from 14.4.1977, the entire claim was barred by limitation. The High Court further held that as the final bill was signed under protest by the contractor, it could be said that the cause of action arose on a date subsequent to the date of signing of the final bill. It further held that the ....
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....the person making the admission intended to refer to a subsisting liability as at the date of the statement. Stated generally, courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. In construing words used in the statements made in writing on which a plea of acknowledgement rests oral evidence has been expressly excluded but surrounding circumstances can always be considered. The effect of the words used in a particular document must inevitably depend upon the context in which the words are used and would always be conditioned by the tenor of the said document .. 15. It is now well settled that a writing to be an acknowledgement of liability must involve an admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. The admission need not be i....
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....which was not the subject matter of acknowledgement. What can be acknowledged is a present subsisting liability. An acknowledgment made with reference to a liability, cannot extend limitation for a time barred liability or a claim that was not made at the time of acknowledgment or some other liability relating to other transactions. Any admission of jural relationship in regard to the ascertained sum due or a pending claim, cannot be an acknowledgement for a new additional claim for damages. 16. We will now examine this case with reference to the said principles. In this case, the cause of action accrued on 14.4.1977 when the final bill was signed by the contractor. It is not in dispute that the final bill showed that a sum of Rs. 17,69,608.73 was payable to the contractor (after giving credit to the payments made and after withholding a sum of Rs. 7,45,953.83 as 5% security deposit). Towards the said sum of Rs. 17,69,608.73. Rs. 17 lacs was paid on 25.2.1976 and Rs. 70,000/- was paid on 6.8.1977. The contractor had made some claims and OMC wrote a letter dated 28.10.1978 in regard to the pending claims of the contractor. In regard to Kaliapani matters, OMC informed the contract....
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.... fresh claims aggregating to Rs. 67,64,488 made for the first time in the claims statement filed on 27.6.1986 were clearly barred by limitation. 18. The learned counsel for the appellant submitted that the limitation would begun to run from the date on which a difference arose between the parties, and in this case the difference arose only when OMC refused to comply with the notice dated 4.6.1980 seeking reference to arbitration. We are afraid, the contention is without merit. The appellant is obviously confusing the limitation for a petition under section 8(2) of the Arbitration Act, 1940 with the limitation for the claim itself. The limitation for a suit is calculated as on the date of filing of the suit. In the case of arbitration, limitation for the claim is to be calculated on the date on which the arbitration is deemed to have commenced. Section 37(3) of the Act provides that for the purpose of Limitation Act, an arbitration is deemed to have been commenced when one party to the arbitration agreement serves on the other party thereto, a notice requiring the appointment of an arbitrator. Such a notice having been served on 4.6.1980, it has to be seen whether the claims were....
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....regated to Rs. 50,15,820. The Appellant who is his LR cannot for the first time make a fresh claim before the Arbitrator, which was never made by N.C. Budhraja. The Appellant could only pursue the claim made by N.C. Budhraja, which were pending or subsisting when N.C. Budhraja issued the notice dated 4.6.1980 21. The arbitrator committed an error apparent on the face of the record and a legal misconduct in holding that the entire claim was within time. His assumption that if the application filed by the contractor in 1980 under section 8(2) of Arbitration Act for appointment of an Arbitrator was in time, all claims made in the claim statement filed before the Arbitrator appointed in such proceeding under section 8(2) are also in time, is patently erroneous and is an error apparent on the face of the record. The reasoning of the arbitrator that on account of the formation of the Committee by OMC to scrutinize the pending claims in pursuance of the OMC's letter dated 28.10.1978, and the payment of Rs. 3,50,000/- on 4.3.1980 in pursuance of the Committee giving its final report on 7.12.1979, every claim of the contract including new claims which were made for the first time in ....
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....trator has mechanically accepted the said altered stand contrary to the claim statement and proceeded to determine the amount payable by OMC, by taking the amount paid by OMC as Rs. 120,01,659.90 towards this contract, even though the claim statement showing that OMC had paid Rs. 149,88,566.90 remained unaltered. The claim statement was not amended to show that only Rs. 120,01,659.90 had been received from OMC in regard to the contract. When the claim made in the claim statement is after adjusting Rs. 149,88,566.90 paid by OMC towards the work, the arbitrator cannot proceed on the basis that only Rs. 120,01,659.90 was paid towards the work. As a result though the Arbitrator found that the amount payable towards claims at Items 1 to 16 was only Rs. 365,862.18, he awarded Rs. 32,83,243/- to the appellant, thereby increasing the liability of OMC by Rs. 29,86,871/-. By awarding more than what was claimed in the claim statement (by showing a lesser amount as having been paid by OMC though claim statement showed a higher amount), the Arbitrator clearly exceeded his jurisdiction. The Arbitrator thus committed a legal misconduct and the award to that extent is liable to be set aside. There....
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....y made in Arbitration, falling within jurisdiction. They are clearly severable from the other portions of the award. The particulars of the claims and corresponding awards are as follows: Item No. Description Item No. in letter dated 16.11.78 Contractor's claim originally made 16.11.78 Contractor's claim before Arbitrator Award by Arbitrator 7. Cutting and uprooting trees 20,869.32 11,352.00 Nil 17. Extra head lead for 90 M 7(a) 2,61,926.40 28,10,144.00 24,50,042.88 (261,926.40)* 18. Removal of excavated material from edge of quarry 3,43,360.58 54,888.60 50,858.60 19. Unmeasured quantity of excavation 8,44,360.00 8,48,372.64 6,64,720.00 20. Catch water drain 1,55,400.00 27,842.50 27,842.50 21. Removal of slipped earth from side slopes 3,42,960.00 1,43,646.00 Nil 26. Extra lift for excavated material dumped at quarry edge 7(e) 42,370.00 3,60,690.49 270,517.88 (42,370.00)* 27. Extra lift measured by surveyor 7(b) 1,25,642.00 13,96,128.67 10,47,096.50 (125,642.00)* 28. Idle labour (non supply of plans) 9(a) 1,45,575.00 1,45,575.00 Nil 29. Idle labour (for want of site) 9(c) 75,450.00 76,850.00 Nil 30. Idle labour (due to stoppage of work ....