TMI Blog2020 (2) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... de and based on the material if the adjudicating authority is satisfied that the actual work had been done and the contractor being entitled to the extra amount spent by him to carry out the work in an appropriate manner, it would not be just and proper to deny such claim only on the ground that it had not been indicated strictly in the manner as provided in the contract specially keeping in view the nature of work undertaken. To that limited extent a perusal of the Award passed by the learned Arbitrator would indicate that the learned Arbitrator had taken into consideration the letter dated 14.11.1986 wherein the identification of soil which was agreed to. The matter in a normal circumstance ought to have been remitted to the learned Arbitrator to redo the proceedings afresh in accordance with law. Such course ought to have been adopted by us as well. We had proceeded to examine the matter with regard to the validity of the claim keeping in view the time lapse and since the validity of the claim was to be taken note at the appropriate premium if not at the percentage of premium at 93.12% as determined by the learned Arbitrator - In view of our conclusion relating to the claim b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be referred to as the opposite party. 3. The proceedings in question arises relating to an Award passed under the Arbitration Act, 1940 ( Act 1940 for short). The claimant and the opposite party had entered into a contract agreement dated 05.02.1985 for construction of Sutlej Yamuna Link Canal (Punjab) and in that regard to carry out the earth work, drainage behind lining and cement concrete lining of Raech RD 71.50 to 72.50 kms. The estimated cost of the project was at ₹ 31 lakhs and the contract amount for the work was fixed at ₹ 59,86,732/. The work concerned was to be executed in eight months. 4. In respect of the said contract, the claimant contended that during execution, the scope of work was considerably increased on account of substantial increase of earth work, sloughing of banks, rebuilding of banks with self-draining material, various decisions by the department regarding rebuilding of banks and changes in the strata encountered during excavation due to incorrect geological data observations by the department prior to inviting tender. In that view, the claimant had raised a demand for the additional payment which was disputed by the opposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Appellate Court and the High Court were not justified in their conclusion to reject the Award passed by the learned Arbitrator. It is contended that the basis on which the Claim No.2 would arise for consideration will be the same basis for the Award of the amount under Claim Nos. 3 and 12. Even insofar as the Claim No.8 the additional amount will have to be calculated on that basis for the extra items used. In that background, it is contended that under Note 6 to the schedule of work which forms a part of the contract, it provides that extra or other items of work shall be paid at the rate worked out on the basis of relevant Punjab Common Schedule of Rates Basis Plus Sanctioned Premium at the time of tendering, which is to be worked out. In that light it is contended that the estimated cost of the present contract is at ₹ 31 lakhs while the contract amount has been worked out at ₹ 59,86,732/. The difference between the estimated cost and the contract amount is the sanctioned premium which corresponds to the overall premium of 93.12% on the work for the purpose of computing the rates of extra items/quantity or work done. Insofar as the remaining claims the said 93.12% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. In that view it is contended that the learned Arbitrator had not considered these aspects nor does the Award indicate his mind. On the other hand, the learned First Appellate Court and the High Court having taken note of these aspects has arrived at the conclusion which does not call for interference. With regard to the Claim No.8 relating to extra payment for DALDAL (SWAMPY Area) the First Appellate Court and the High Court has taken into consideration that the claim had not been made within the time provided and has accordingly rejected the claim. In that view it is contended that the order passed by the High Court does not call for interference. 8. In the light of the above, a perusal of the appeal papers would indicate that there is no serious dispute between the parties with regard to the contract entered into for construction, the work performed and certain additional work having been carried out by the claimant. The issue is however as to whether the learned Arbitrator had appropriately considered the matter in its correct perspective and in that light whether the Award of the amount at the premium of 93.12% would be justified and the manner of consideration b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Naraindas R. Israni vs. Union of India DRJ (1993) 25 to point out that in respect of an agreement containing a similar clause the learned Judge had held that the learned Arbitrator is not required to give detailed reasons like a Civil Court but what is expected of the Arbitrator is that he must give out the trend of his thought process and it is not necessary for the Arbitrator to give any arithmetic computation. 11. The learned advocate for the opposite party would however point out from the very decision in the case of Indian Oil Corporation Ltd. (supra) relied upon by the learned senior counsel for the claimant that this Court in the said decision has also held that where an authority makes an order in exercise of a quasijudicial function it must record its reasons in support of the order it makes. It was further observed that every quasijudicial order must be supported by reasons. It is therefore contended that the bar would raise higher for a judicial order which should indicate reasons for the conclusion. The learned advocate would further refer to the decision in the case of Raipur Development Authority Ors. vs. M/s Chokhamal Contractors Ors. (1989) 2 SCC 721 wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified. The quantum of the contract amount as against the estimated cost by itself could not have formed the basis to conclude the claim as made by the claimant towards premium of extra items, extra items for supply and laying of selfdraining materials and towards rehandling of earth work. In that regard the contention to the contrary put forth by the opposite party was that the tender form Page 15 of 26 provided for that aspect under Note 6, which reads as hereunder: Extra other items shall be paid for each such items of work at thorough rate worked out on the basis of relevant Punjab Common Schedule of Rates basis plus sanctioned premium (at the time of tendering), plus or minus percentage above or below worked out by the department by reference to department s estimated cost of tender. 13. The said provision would indicate that the rate as prescribed under the Punjab Common Schedule of Rates would be applicable. In that light it is noticed that the letter dated 05.01.1987 relied upon by the learned advocate for the opposite party which was addressed to the claimant indicates that the premium as agreed under the schedule is at 35.02%. The said contention had been urge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the contention urged by the opposite party regarding the premium rates to be worked out at 35.02%, we are of the opinion that instead of rejecting the entire claim as made by the claimants, premium for the extra items is to be determined at 35.02% and the claim based on the same is required to be awarded. To that extent, the calculation is to be made by the opposite party and the amount be paid to the claimant. The said calculation with the premium at 35.02% shall be made in respect of the extra items indicated under Claim Nos.2, 3 and 12. 17. Insofar as the Claim No.8, it relates to the work carried out on DALDAL land wherein the soil was marshy and extra construction material was required to complete the work. The learned Arbitrator through the impugned Award had taken note of the same and awarded the sum of ₹ 19,15,143/after indicting the amount for the said work on the same basis and deducting the agreed rate. Though the learned SubJudge had accepted the same for making it the Rule of Court , the learned First Appellate Judge on taking note of the claim had arrived at the conclusion that the learned Arbitrator was not justified in granting the claim. In that re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority is satisfied that the actual work had been done and the contractor being entitled to the extra amount spent by him to carry out the work in an appropriate manner, it would not be just and proper to deny such claim only on the ground that it had not been indicated strictly in the manner as provided in the contract specially keeping in view the nature of work undertaken. To that limited extent a perusal of the Award passed by the learned Arbitrator would indicate that the learned Arbitrator had taken into consideration the letter dated 14.11.1986 wherein the identification of soil which was agreed to. The letter dated 09.03.1987 submitting the test results identifying the strata encountered as DALDAL is referred therein. The work having been completed during the March, 1988 was also taken note. In that circumstance when the fact remains that the DALDAL land was situated in the area, work was carried out and extra material was used, the claim in our opinion cannot be rejected outright adopting a technical view of the matter. However, the claim for the extra item in that Page 22 of 26 regard for the work of 1,33,181.00/ Cum will have to be calculated with premi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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