TMI Blog1989 (10) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... contractor entered into a contract with the respondents on April 22, 1978 in connection with the construction of an embankment across Musaliyar Padom between Chaniage 2573.5 M to 2827 M of E.B. Main canal of Kallada Irrigation Project. The work was required to be completed by 30th March, 1980 i.e. two years from the date of selection notice which was dated 30th March, 1978. As the appellant failed to complete the work as per the terms of the contract, the respondents sent a notice dated April 26, 1980 to the appellant cancelling the contract at his risk and cost. On July 2, 1980 the appellant filed a claim being arbitration case No. 132 of 1980 before the named Arbitrator i.e. the Chief Engineer (Arbitration), Vellayambalam, Trivandrum claiming enhancement of rates in respect of the earth work involved in the contract, interest on delayed payments and costs. The second respondent, the Superintending Engineer, K.I.P. Circle, Karnataka filed a defence statement stating inter alia in para 2(1) that the time of completion of the work was fixed as 24 months from the date of handing over site to the contractor and he could have anticipated all such variations before quoting rates. As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (as per original and supplemental agreement) for all items of work carried out by the appellant except on items covered by Award No. 132 of 1980 dated 22.1.1981. Claim Nos. 3 and 5 were rejected. As regards claim No. 4 an increase of 20 per cent in the agreed rates for these items was allowed. Claim No. 11 regarding interest was disallowed. It was also stated in the award inter alia that the claimant shall be entitled to the refund of the security amount as well as refund of the retention amounts, the claimant shall be entitled to his final bill in terms of the Award, the counter claim for recovery of costs of rearrangement of work and also the counter claims filed by the respondent dated April 8, 1981 were declined. The appellant filed O.P. (Arb) No. 296 of 1981 for making the second award a rule of the court. A statement of defence was filed by the respondents wherein,it has been stated inter alia in para 6 that: The claims made in this petition under paras 6(ii), (iii), (iv), (v), (vi) (vii) and (viii) are barred by resjudicata and constructive resjudicata. No work was done by the claimant after termination of the contract on June 24, 1980. The claim petition in Arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the counter claims had rendered the prior award liable to be set aside for misconduct of the Arbitrator and the proceedings. It has been urged by the learned counsel that the counter claim has been fully considered in the second award made by the Arbitrator and as such the first award cannot be set aside on the ground of non consideration of a counter claim and it cannot be treated as misconduct of the Arbitrator/and the proceedings for no nconsideration of the counter claim in the first award. It has been further contended in this connection that the finding of the High Court to the effect that the subsequent award passed by the Arbitrator dealing with the counter claims did not have the effect of mitigating the misconduct of the Arbitrator or of condoning the error on the face of the award, is also not sustainable in as such as the counter claim filed by the respondents was duly considered by the Arbitrator in the second award made by him. It has also been submitted by the learned counsel for the appellant that the principles of resjudicata and constructive resjudicata are not applicable to the award made in Arbitration case No. 291 of 1981 in as much as the disputes that wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Code of Civil Procedure shall apply to arbitration proceedings, the principles of resjudicata or of constructive resjudicata will apply to arbitration proceeding. The appellant contractor having not raised all his claims in his first claim petition made to the Arbitrator for decision and award having been made thereon, the second claim petition before the Arbitrator making certain other claims in Arbitration Case No. 276 of 1980 is barred by the principles of constructive resjudicata in as much as on the termination of the contract by order dated April 26, 1980 the contractor could have raised all his disputes arising out of the contract at that time, but the appellant chose to take only some of the issues arising from the said breach of contract before the Arbitrator. The second claim petition raising some issues before the Arbitrator is therefore, hit by the principles of constructive resjudicata and the High Court rightly allowed the appeal setting aside the award made in Arbitration Case No. 276 of 1980. It has also been submitted that the provisions of Order 2, Rule 2 of the Code of Civil Procedure apply to the arbitration case and the appellant having not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant. Undoubtedly, this award made by the Arbitrator is not sustainable in law and the Arbitrator has misconducted himself and in the proceedings by making such an award. It is the duty of the Arbitrator while considering the claims of the appellant to consider also the counter claims made on behalf of the respondents and to make the award after considering both the claims and counter claims. This has not been done and the Arbitrator did not at all consider the counter claims of the respondents in making the award. As such the first award dated January 22, 1981 made by the Arbitrator in Arbitration Case No. 132 of 1980 is wholly illegal and unwarranted and the High Court was right in holding that the Arbitrator misconducted himself and the proceedings in making such an award and in setting aside the same and directing the Arbitrator to dispose of the reference in accordance with law considering the claim of the contractor and the counter claim of the respondents. The order allowing the application for review by the Trial Court is also bad in as much as there was no mistake or error apparent on the face of the order dated August 18, 1981 made in O.P.(Arb.) No. 81 of 1981 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Arbitrator by the appellant. This having not been done the second claim petition before the Arbitrator raising the remaining disputes is clearly barred. With regard to the submission as to the applicability of the principles of resjudicata as provided in Section 11 of the Code of Civil Procedure to arbitration case, it is to be noted that Section 41. of the Arbitration case provides that the provisions of the Code of Civil Procedure will apply to the Arbitration proceedings. The provisions of resjudicata are based on the principles that there shall be no multiplicity of proceedings and there shall be finality of proceedings. This is applicable to the arbitration proceedings as well. It is convenient to refer to the decision in Daryao and Ors. v. The State of U.P. Ors., [1962] 1 SCR 574 at 58283 wherein it has been held that the principles of resjudicata will apply even to proceedings under Article 32 and 226 of the Constitution of India. It has been observed that: Now, the rule of resjudicata as indicated in s. 11 of the Code of Civil Procedure has no doubt some technical aspects, for instance the rule of constructive resjudicata may be said to be technical; but the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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