{"id":42093,"date":"2001-02-27T00:00:00","date_gmt":"2001-02-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ramachandra-reddy-co-vs-state-of-a-p-ors-on-27-february-2001"},"modified":"2018-11-07T19:23:59","modified_gmt":"2018-11-07T13:53:59","slug":"ramachandra-reddy-co-vs-state-of-a-p-ors-on-27-february-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ramachandra-reddy-co-vs-state-of-a-p-ors-on-27-february-2001","title":{"rendered":"Ramachandra Reddy &amp; Co vs State Of A.P. &amp; Ors on 27 February, 2001"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Ramachandra Reddy &amp; Co vs State Of A.P. &amp; Ors on 27 February, 2001<\/div>\n<div class=\"doc_author\">Author: Pattanaik<\/div>\n<div class=\"doc_bench\">Bench: U.C.Banerjee, Brijesh Kumar, G.B.Pattanaik<\/div>\n<pre>           CASE NO.:\nAppeal (civil) 9405  of  1995.\n\n\n\nPETITIONER:\nRAMACHANDRA REDDY &amp; CO.\n\n\tVs.\n\nRESPONDENT:\nSTATE OF A.P.  &amp; ORS.\n\nDATE OF JUDGMENT:\t27\/02\/2001\n\nBENCH:\nU.C.Banerjee, Brijesh Kumar, G.B.Pattanaik\n\n\n\n\nJUDGMENT:\n<\/pre>\n<p>PATTANAIK,J.\n<\/p>\n<p>L&#8230;..I&#8230;&#8230;&#8230;T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T&#8230;&#8230;.T..J<\/p>\n<p>      Claimants\t are the appellants against the judgment  of<br \/>\nthe Andhra Pradesh High Court, arising out of an arbitration<br \/>\nproceeding.   The North work excavation of approach  channel<br \/>\nof  Srisailam Project had been awarded to the claimants\t for<br \/>\ndifferent  amounts indicated in the contract.  The  contract<br \/>\nitself\tcontained  an  arbitration  clause.   Dispute  being<br \/>\nraised\ton different items of claim, those disputes had been<br \/>\nreferred  to  a\t panel\tof  arbitrators\t and  the  panel  of<br \/>\narbitrators,  ultimately  passed an award where-under  claim<br \/>\nItems  1, 2 and 3 stood rejected.  So far as claim item\t No.<br \/>\n4  is  concerned, the same was allowed in part.\t Claim\tItem<br \/>\nNo.  5 was claim of interest and the arbitrators allowed the<br \/>\ninterest  @  12 per cent per annum over the amount  awarded.<br \/>\nClaim  Item No.\t 6 was the claim of cost and the arbitrators<br \/>\ndirected  that\teach party will bear its own cost.   Against<br \/>\nthe  award of the arbitrators, rejecting claim item Nos.  1,<br \/>\n2 and 3, the claimants filed an objection in the Civil Court<br \/>\nand  sought  for remittance under Section 16 on\t the  ground<br \/>\nthat  the  arbitrators have left undetermined the claims  of<br \/>\nthe  claimants on item No.1, 2 and 3 on an erroneous view of<br \/>\nthe relevant clauses of the agreement.\tClaimants also filed<br \/>\nan  application\t under\tSection\t 14 to\tmake  the  award  in<br \/>\nrelation  to  claim allowed by the arbitrators as a rule  of<br \/>\nCourt.\t The  State of Andhra Pradesh also filed a  petition<br \/>\nunder  Section\t30 of the Arbitration Act to set aside\tthat<br \/>\npart  of the award which allowed the claim of the contractor<br \/>\nto  the extent of Rs.57,000\/-.\tAll these applications which<br \/>\nwere  registered  as  O.S.   No.   1094\/86,  O.P.104\/87\t and<br \/>\nO.P.424\/87  were  disposed  of by a common judgment  of\t the<br \/>\nlearned\t Vth Additional Judge, City Civil Court,  Hyderabad.<br \/>\nThe  said learned Judge made the award in relation to  claim<br \/>\nitem  No.4  a rule of Court.  But he set aside the award  in<br \/>\nrelation  to  claim item Nos.  1,2,3 and 5and  remitted\t the<br \/>\nsame  for  reconsideration  to\tthe  panel  of\tarbitrators.<br \/>\nAgainst the aforesaid Judgment of the Additional Judge, City<br \/>\nCivil  Court,  remitting the disputes\/claims in relation  to<br \/>\nclaim  items 1, 2, 3 and 5 to the panel of arbitrators,\t the<br \/>\nState  of Andhra Pradesh preferred appeals under Section  39<br \/>\nof  the\t Arbitration  Act.  The High Court by  the  impugned<br \/>\njudgment set aside the order of the Additional Judge, so far<br \/>\nit  relates to remitting the claim item No.  1 to the  panel<br \/>\nof  arbitrators\t for reconsideration.  So far as claim\titem<br \/>\nNos.   2  and  3 are concerned, the High  Court\t upheld\t the<br \/>\ndirection  of the Additional Judge, but, appointed a retired<br \/>\nChief  Justice\tof the Court as arbitrator to arbitrate\t the<br \/>\nclaim items 2 and 3 and a part of claim item No.  5 relating<br \/>\nto  interest.  In this appeal filed by the claimants, we are<br \/>\nconcerned  only\t with claim item No.1.\tThe legality of\t the<br \/>\naward  in  relation to claim items 2 and 3 are\tthe  subject<br \/>\nmatter of an appeal, which is pending in this Court.\n<\/p>\n<p>      Claim  Item No.  1 relates to increase in quantity  of<br \/>\nhard  rock  abnormally and on this head, the  claimants\t had<br \/>\nclaimed Rs.93, 76, 990\/-.  The claimants statement that was<br \/>\nfiled before the arbitrator, makes out a vague claim on this<br \/>\nscore  without\tindicating  the\t basis\t for  the  claim  in<br \/>\nquestion.   In\trespect of the aforesaid quantity  of  extra<br \/>\nexcavation  on\thard rock, the State of Andhra\tPradesh\t had<br \/>\nmade  the  payment  in terms of Clause 25 of Schedule  C  of<br \/>\nSection\t 2  of\tthe agreement as per its letter\t dated\t21st<br \/>\nOctober,  1981.\t  Notwithstanding  the\t said  payment,\t the<br \/>\nclaimants  had\tmade the extra claim on the ground that\t the<br \/>\nquantity  of  excavation of hard rock being abnormally\thigh<br \/>\nand  much  beyond the anticipated quantity indicated in\t the<br \/>\nagreement  and\teven much in excess of the so-called 25\t per<br \/>\ncent  of the work as per the GOMS No.  2289 dated 12.6.1968,<br \/>\nthe claimants are entitled to a separate rate for such extra<br \/>\nexcavation  and\t the  arbitrators failed to  exercise  their<br \/>\njurisdiction  in  not  granting the claim and on  the  other<br \/>\nhand,  rejecting  the same.  The High Court in the  impugned<br \/>\njudgment  however, referring to clause 59 of the  agreement,<br \/>\nwhich  deals with delay and extension of time and in view of<br \/>\nthe  letters of the Superintending Engineer dated 15th July,<br \/>\n1980   and   19th  May,\t 1983,\t came  to  hold\t  that\t the<br \/>\ncontractor-claimant  will not be entitled to be paid at\t any<br \/>\nhigher\t rate  for  such   additional  excavation  work\t and<br \/>\naccordingly  set aside the order of the learned trial Judge,<br \/>\nremitting  the claim item No.  1 for being re-disposed of by<br \/>\nthe arbitrator.\n<\/p>\n<p>      Mr.   P.P.Rao,  the learned senior counsel,  appearing<br \/>\nfor  the appellant, contended that the High Court  committed<br \/>\nserious\t error\tin referring to clause 59 as well as to\t the<br \/>\nletter\tdated 15th July, 1980 and 19th May, 1983, in  coming<br \/>\nto  the conclusion that the claimant-contractor will not  be<br \/>\nentitled  to be paid at any higher rate for the extra amount<br \/>\nof  excavation made by him.  Mr.  Rao further submitted that<br \/>\nunder GOMS No.\t2289 dated 12.6.1968, a deviation limit upto<br \/>\na  maximum of 25 per cent being permissible, for any work in<br \/>\nexcess\tof that limit, the contractor is entitled to claim a<br \/>\nhigher rate and that being the position, the arbitrators had<br \/>\ncommitted  an  error apparent on the award in  refusing\t the<br \/>\nclaim  and  the High Court committed error in setting  aside<br \/>\nthe  order of remittance passed by the Additional Judge.  In<br \/>\nsupport\t of  this  contention, reliance was  placed  on\t the<br \/>\njudgment  of  this Court in the case of <a href=\"\/doc\/468650\/\">S.  Harcharan  Singh<br \/>\nvs.  Union of India,<\/a> 1990(4) SCC 647.  Mr.  Rao also further<br \/>\nurged  that in view of the recommendations of the  Executive<br \/>\nEngineer  notwithstanding  the\tcontinued objection  of\t the<br \/>\nclaimant, expressing inability to continue with the abnormal<br \/>\nincrease  in the hard rock excavation, it must be held\tthat<br \/>\nthe  payment  at a higher rate for the additional or  excess<br \/>\nquantity  of excavation was implied and failure on the\tpart<br \/>\nof the arbitrator to consider the same, constitutes an error<br \/>\non  the face of the award and as such the learned Additional<br \/>\nJudge\twas   justified\t  in   remitting  the\tmatter\t for<br \/>\nreconsideration\t  of  the  arbitrator.\t  Mr.\tRao   lastly<br \/>\nsubmitted  that\t for  this excess of  excavation  work,\t the<br \/>\ncontractor was entitled to be paid in accordance with Clause<br \/>\n63  of\tthe  agreement, which has not been  noticed  by\t the<br \/>\narbitrator  and\t adjudged  from that stand point,  the\tHigh<br \/>\nCourt  also  committed error in setting aside the  order  of<br \/>\nremittance made by the learned Additional Judge.\n<\/p>\n<p>      Ms.  K.  Amreswari, appearing for the respondent State<br \/>\nof  Andhra  Pradesh,  on the other hand contended  that\t the<br \/>\npower  of interference of the Court under Sections 30 and 33<br \/>\nas  well as under Section 16 is of a limited nature and\t the<br \/>\nCourt  would  be justified in interfering with the  reasoned<br \/>\naward  of an arbitrator, if the award contains any  apparent<br \/>\nerror  on the same.  If the impugned award is examined\tfrom<br \/>\nthe  aforesaid\tstand point, the conclusion is\tirresistible<br \/>\nthat  it  did  not  contain any error  and,  therefore,\t the<br \/>\ninterference of the Court was not warranted.  Ms.  Amreswari<br \/>\nfurther\t contended  that the claimants nowhere in the  claim<br \/>\npetition  had  made  out  a case  that\tfor  the  additional<br \/>\nquantity  of excavation work, they are entitled to the\trate<br \/>\nas  per\t clause 63 of the agreement which was urged for\t the<br \/>\nfirst time in this Court and, therefore, the said contention<br \/>\nshould\tnot be allowed to be raised.  Ms.  Amreswari further<br \/>\nurged  that clause 63 will have no application for the extra<br \/>\nitem of excavation made by the contractors since that clause<br \/>\napplies to any supplemental item, which are found essential,<br \/>\nincidental  and inevitable during the execution of the\twork<br \/>\nand  by no stretch of imagination, the additional excavation<br \/>\nwhich  is  the subject matter of claim in claim item No.   1<br \/>\ncan be held to be supplemental item.  Ms.  Amreswari further<br \/>\nsubmitted  that\t for this additional quantity of  excavation<br \/>\nthe  claimant having been paid for in accordance with clause<br \/>\n25  of the agreement, the further claim of the contractor is<br \/>\nnot  arbitrable\t at all and, High Court therefore was  fully<br \/>\njustified  in setting aside the order of remittance made  by<br \/>\nthe Additional Judge.  Ms.  Amreswari further contended that<br \/>\nthe  claim  for\t payment of higher rate for  the  work\tdone<br \/>\nbeyond\tthe  agreement is not at all sustainable in view  of<br \/>\nthe positive letter of the authorities dated 15th July, 1980<br \/>\nand  19th  May, 1983, while allowing extension of  time\t for<br \/>\ncompletion  of\tthe work, as has been held by this Court  in<br \/>\nthe  case of <a href=\"\/doc\/144266474\/\">Ch.Ramalinga Reddy vs.  Superintending Engineer<br \/>\nand  Anr.<\/a>   1999(9) SCC 610, and, therefore, the High  Court<br \/>\nwas  fully  justified in interfering with the directions  of<br \/>\nthe  sub-  ordinate Judge in remitting the said\t claim\titem<br \/>\nNo.1   for  fresh  arbitration.\t   Mrs.\t  Amreswari   lastly<br \/>\nsubmitted  that\t a  bare scrutiny of the order\tof  the\t Vth<br \/>\nAdditional  Judge,  City Civil Court,  Hyderabad,  remitting<br \/>\nclaim  items  Nos.   1, 2 and 3\t for  reconsideration  would<br \/>\nindicate  that no reasons had been given for such remittance<br \/>\nand  on the face of it, the said judgment of the Civil Court<br \/>\ntantamounts  to\t gross error of jurisdiction in\t interfering<br \/>\nwith  an  award and transgressing the scope  and  limitation<br \/>\nprovided  under Sections 30 and 16 and, therefore, the\tHigh<br \/>\nCourt was justified in correcting the said error in appeal.\n<\/p>\n<p>      Under the Arbitration Act, Section 16 is the provision<br \/>\nunder\twhich\tthe   Court  may   remit   the\t award\t for<br \/>\nreconsideration\t  of  an  arbitration\tand  necessity\t for<br \/>\nremitting  the\taward  arises when there are  omissions\t and<br \/>\ndefects in the award, which cannot be modified or corrected.<br \/>\nRemission  of an award is in the discretion of the Court and<br \/>\nthe  powers of the Court are circumscribed by the provisions<br \/>\nof Section 16 itself.  Ordinarily, therefore, a Court may be<br \/>\njustified  in remitting the matter if the arbitrator  leaves<br \/>\nany  of\t the  matters undetermined or a part of\t the  matter<br \/>\nwhich  had  not been referred to and answered and that\tpart<br \/>\ncannot\tbe  separated  from   the  remaining  part,  without<br \/>\naffecting  the decision on the matter, which was referred to<br \/>\narbitration or the award is so indefinite as to incapable of<br \/>\nexecution  or that the award is erroneous on the face of it.<br \/>\nDiscretion  having been conferred on the Court, to remit  an<br \/>\naward,\tthe  said discretion has to be judicially  exercised<br \/>\nand an appellate Court would not be justified in interfering<br \/>\nwith  the  exercise of discretion unless the discretion\t has<br \/>\nbeen  misused.\tWhat is an error apparent on the face of  an<br \/>\naward  which  requires\tto be corrected has  always  been  a<br \/>\nsubject\t matter of discussion.\tAn error of law on the\tface<br \/>\nof  the award would mean that one can find in the award or a<br \/>\ndocument  actually incorporated thereto stating the  reasons<br \/>\nfor a judgment some legal propositions which is the basis of<br \/>\nthe  award and which can be said to be erroneous.  Documents<br \/>\nnot  incorporated  directly  or indirectly  into  the  award<br \/>\ncannot\tbe  looked into for the purpose of finding  out\t any<br \/>\nalleged error.\tThe courts are not to investigate beyond the<br \/>\naward\tof  the\t arbitrators   and  the\t documents  actually<br \/>\nincorporated  therein and, therefore, when there would be no<br \/>\npatent\terror on the face of the award, it would not be open<br \/>\nfor  the court to go into the proceedings of the award.\t  If<br \/>\nthe  application  for  remittance  filed  by  the  claimants<br \/>\ninvoking  jurisdiction\tof  the court under  Section  16  is<br \/>\nexamined  from the aforesaid stand point and if the order of<br \/>\nthe  learned  Civil  Court, remitting claim Item No.   1  is<br \/>\ntested\tin  the\t light of the discussions  made\t above,\t the<br \/>\nconclusion  is irresistible that no case for remittance\t had<br \/>\nbeen  made  out\t and the learned trial Judge  exercised\t his<br \/>\ndiscretion  on\tthe grounds which does not come\t within\t the<br \/>\nfour-corners  of  the  provisions  of\tSection\t 16  of\t the<br \/>\nArbitration  Act.  In fact no reasons had been ascribed\t for<br \/>\ninterference with the award, rejecting claim Item No.  1 and<br \/>\nfor  remittance of the same.  The High Court being the Court<br \/>\nof appeal, was therefore, fully justified in exercise of its<br \/>\nappellate  power  in correcting the error made by the  Civil<br \/>\nJudge in remitting claim item No.  1.\n<\/p>\n<p>      Let  us  now examine the contentions of Mr.   P.P.Rao,<br \/>\nthe  learned  senior counsel, appearing for  the  appellant.<br \/>\nThe  learned counsels contention in fact centres round\tthe<br \/>\nquestion  as  to  whether  for the  additional\tquantity  of<br \/>\nexcavation  work,  the contractor would be entitled to at  a<br \/>\nhigher\trate in accordance with Clause 63 of the  agreement.<br \/>\nMrs.  Amreswari, appearing for the State was fully justified<br \/>\nin  her\t submissions  that this contention  had\t never\tbeen<br \/>\nraised\t either\t  before  the\tarbitrator  or\tbefore\t the<br \/>\nsubordinate  Judge  or even before the High Court.  In\tfact<br \/>\nthe  claim  petition filed before the arbitrator  is  rather<br \/>\ncryptic\t and absolutely vague, not indicating on what  basis<br \/>\nthe  additional claim is made, though the foundation for the<br \/>\nclaim  was there, namely there had been an increased  amount<br \/>\nof  excavation\twork  beyond the agreement.  It is  in\tthis<br \/>\nconnection,  Mr.   Rao had relied upon the two decisions  of<br \/>\nthis  Court  in the case of <a href=\"\/doc\/468650\/\">S.Harcharan Singh vs.  Union  of<br \/>\nIndia,<\/a>\t1990(4) SCC 647 and <a href=\"\/doc\/750984\/\">National Fertilizers vs.   Puran<br \/>\nChand Nangia<\/a> 2000(8) SCC 343.  But before examining the said<br \/>\ncontention, it would be appropriate for us to extract Clause<br \/>\n63,  which was the sheet anchor of the argument of Mr.\tRao.<br \/>\nClause 63 reads as under:\n<\/p>\n<p>      Cl.63.   Payment\tfor  additions and  deductions\tfor<br \/>\nomissions:   (A)  The  contractor is bound  to\texecute\t all<br \/>\nsupplemental  items that are found essential, incidental and<br \/>\ninevitable during the execution of the work, at the rates to<br \/>\nbe  worked out as detailed below:  (a)For all items of\twork<br \/>\nin  excess  of\tthe quantities shown in schedule  A  of\t the<br \/>\ntender\tthe rates payable for such items shall be either the<br \/>\ntender rates or the standard schedule of rates for the items<br \/>\nplus  or minus the overall tender percentage accepted by the<br \/>\ncompetent  authority  which  ever  is  less.   (b)For  items<br \/>\ndirectly  deducible from similar items in the agreement, the<br \/>\nrates shall be derived by adding to or substracting from the<br \/>\nagreement rate of such similar items, the cost of difference<br \/>\nin  quantity of material or labour between the new items and<br \/>\nthe  similar  items  in\t the   agreement,  worked  out\twith<br \/>\nreference to the Schedule of rates adopted in the sanctioned<br \/>\nestimate  plus\tor  minus  the\toverall\t tender\t percentage.\n<\/p>\n<p>(c)For new items which do not correspond to any items in the<br \/>\nagreement, the rates shall be standard schedule rate plus or<br \/>\nminus  the over all tender percentage.\tThe terms  standard<br \/>\nschedule  of rates used in the above subclauses (a), (b)  &amp;\n<\/p>\n<p>(c)  means  the\t schedule of rates on which  the  sanctioned<br \/>\nestimate  was  prepared.  (d)In the event of  the  Executive<br \/>\nEngineer  and the Contractor failing to agree on a rate\t for<br \/>\nsuch  additional  work, the Executive Engineer may,  at\t his<br \/>\noption\teither:\t  (i)employ other parties to carry  out\t the<br \/>\nadditional  work  in the same manner as provided  for  under<br \/>\nclause 48, or (ii)the contractor shall execute the work upon<br \/>\nwritten\t orders from the Executive Engineer and the cost  of<br \/>\nlabour\tand  materials\tplus 10 per cent  thereon  shall  be<br \/>\nallowed\t therefor, provided that the vouchers for the labour<br \/>\nand  materials\temployed  shall have been delivered  to\t the<br \/>\nExecutive  Engineer or his representative within seven\tdays<br \/>\nafter such work shall have been completed.  If the Executive<br \/>\nEngineer  considers that payment for such work on the  basis<br \/>\nof  the\t vouchers  presented is unduly high, he\t shall\tmake<br \/>\npayment\t in  accordance with such valuation as he  considers<br \/>\nfair  and reasonable and his decision to the matter shall be<br \/>\nfinal,\tif  the\t amount involved in  additional\t payment  is<br \/>\nRs.1000\t or less, for each occasion on which such additional<br \/>\nworks  shall  have been authorised.  If such amount  exceeds<br \/>\nRs.1000,  the contractor shall have the right to submit\t the<br \/>\nmatter\t to   arbitration  under   the\tprovisions  of\t the<br \/>\narbitration  clause  73.   (e)If,  in  the  opinion  of\t the<br \/>\nExecutive  Engineer  a rate for the additional work  is\t not<br \/>\ncapable\t of being properly arrived at prior to execution  of<br \/>\nwork,  or  if  the  work is not capable\t of  being  properly<br \/>\nmeasured,  then the cost and payment thereof shall be  dealt<br \/>\nwith as provided for in the preceding sub- clause (d)(ii).\n<\/p>\n<p>      In  the  case  of <a href=\"\/doc\/468650\/\">S.  Harcharan Singh  vs.   Union  of<br \/>\nIndia,<\/a>\t1990(4)\t SCC  647, on which Mr.\t  Rao  had  strongly<br \/>\nrelied\tupon,  this  Court  had\t quoted\t clause\t 12  of\t the<br \/>\nagreement  in  paragraph 8 of the judgment and referring  to<br \/>\nthe  standard  form of contract of the Central Public  Works<br \/>\nDepartment, specifically permitting for a limit of variation<br \/>\ncalled\tdeviation limit up to a maximum of 20 per cent, it<br \/>\nwas  held  that the contractor has to carry out the work  at<br \/>\nthe  rate stipulated in the contract upto such limit but for<br \/>\nwork  in excess of that limit he has to be paid at the rates<br \/>\nto  be determined in accordance with clause 12A, under which<br \/>\nthe  Engineer in-charge can revise the rates, having  regard<br \/>\nto  the prevailing market rates.  The Court also referred to<br \/>\nthe  letters of the Executive Engineers, the  Superintending<br \/>\nEngineer and the Additional Chief Engineer recommending that<br \/>\nthe  additional work may be confined to 20 per cent and\t for<br \/>\nthe  extra  quantity  of  additional work, he  may  be\tpaid<br \/>\nremuneration  at the increased rate taking into account\t the<br \/>\nincreased  cost\t of  the  execution of work  on\t account  of<br \/>\npeculiar  nature of the work.  We fail to understand how the<br \/>\naforesaid decision will be of any assistance to the claimant<br \/>\nin  the\t present case, where there is no clause like  Clause<br \/>\n12A  nor  is there any letter from the\tcompetent  authority<br \/>\nagreeing to payment at a higher rate for the additional work<br \/>\nbeyond\tthe limit of 25 per cent as provided under the\tGOMS<br \/>\nNo.2289 dated 12.6.1968.  Arbitrator being a creature of the<br \/>\nagreement,   unless   agreement\t  either   specifically\t  or<br \/>\ninferentially  provides for a higher rate to be awarded\t for<br \/>\nany  additional\t or excess work done by the  contractor,  it<br \/>\nwould not be permissible for the arbitrator to award for the<br \/>\nso-called  additional work at a higher rate.  In the case in<br \/>\nhand,  not  only  there\t is no\tletter\tfrom  the  competent<br \/>\nauthority,  namely  the\t Superintending\t Engineer  that\t the<br \/>\ncontractor  would  be  paid  at\t any  higher  rate  for\t the<br \/>\nadditional excavation of rock, though the Executive Engineer<br \/>\nhad  indicated that he has recommended to the Superintending<br \/>\nEngineer.    But  such\trecommendation\t of  the   Executive<br \/>\nEngineer,  who\twas not competent to decide the question  of<br \/>\nawarding a higher rate for the excess quantity of excavation<br \/>\nwill  not clothe any jurisdiction on the arbitrator to award<br \/>\nthe  contractor\t at a higher rate nor would it\tentitle\t the<br \/>\ncontractor to get a higher rate for the claim in question on<br \/>\nthe basis of agreement.\t Now coming to the very clause, upon<br \/>\nwhich  Mr.   Rao relied upon, we find that the\tsaid  clause<br \/>\nrelates\t  to  supplemental  item,   which  have\t been  found<br \/>\nessential, incidental and inevitable during the execution of<br \/>\nthe  work.  The excavation of hard rock cannot be held to be<br \/>\na  supplemental\t item and on the other hand, is an  item  of<br \/>\nwork  tendered and accepted, and as such clause 63 will have<br \/>\nno  application\t to the claim item No.1.  Mr.  Rao had\talso<br \/>\nrelied\tupon  the  decision  of\t  this\tCourt  in   <a href=\"\/doc\/750984\/\">National<br \/>\nFertilizers  vs.   Puran  Chand\t Nangia,<\/a>  2000(8)  SCC\t343,<br \/>\nwherein\t this  Court  had held that an interpretation  of  a<br \/>\nparticular  clause  of the agreement must be such, so as  to<br \/>\nbalance\t the  rights  of both parties and when\ta  variation<br \/>\nclause\tpermits\t the employer to make variation in the\twork<br \/>\nupto  a specified limit, beyond the said limit, the claimant<br \/>\ncould  be paid at a higher rate.  The Court in the aforesaid<br \/>\ncase  was  examining  the  principle  of  integrity  of\t the<br \/>\ncontract  and  refused\tto interfere with the  award  merely<br \/>\nbecause\t arbitrator  had  granted  an  escalation.   In\t the<br \/>\naforesaid  case, the Court was examining whether it would be<br \/>\npermissible  for  interfering  with  an award  which  was  a<br \/>\nnon-speaking  one merely because the arbitrator had  awarded<br \/>\nthe  claim  at an escalated rate for the excess quantity  of<br \/>\nwork  and  since the award itself was a non-speaking  award,<br \/>\nthe  court held that it is not permissible to probe into the<br \/>\nmental\tprocess\t of the arbitrator and then interfered\twith<br \/>\nthe same.  Then again the question of granting a higher rate<br \/>\nfor  any  extra quantity of work executed by the  contractor<br \/>\nwould  at all arise only when the contract provides for such<br \/>\nescalated  rate either expressly or by implication as in the<br \/>\ncase  of  S.   Harcharan Singh 1990(4) SCC  647,  where\t the<br \/>\ncompetent   authority\thad   agreed   for   the   same\t  by<br \/>\ncorrespondence.\t  But in the case in hand, when there is  no<br \/>\nsuch  acceptance by the competent authority, and there is no<br \/>\nprovision  in  the contract, permitting such escalated\trate<br \/>\nfor  the additional quantity of excavation made and in\tview<br \/>\nof  our\t rejecting  the contention raised on  the  basis  of<br \/>\nclause\t 63,  the  conclusion  is  irresistible\t  that\t the<br \/>\ncontractor  will  not be entitled to a higher rate  for\t the<br \/>\nadditional  excavation\twork and as such the High Court\t was<br \/>\nfully  justified in setting aside the direction of the trial<br \/>\njudge,\tremitting the claim item No.  1 for  reconsideration<br \/>\nand  we see no infirmity with the said direction of the High<br \/>\nCourt  to be interfered with.  We also find sufficient force<br \/>\nin  the\t submission  of Mrs.  Amreswari,  relying  upon\t the<br \/>\nletters\t of the competent authority, specifically intimating<br \/>\nthat the grant of extension of time will not in any way make<br \/>\nthe  contractor\t eligible  for\tany   extra  claim  due\t  to<br \/>\nescalation  in\trates of labour and materials or due to\t any<br \/>\nother  reasons\tunder any circumstances and the decision  of<br \/>\nthis  Court in Ramalinga Reddy, 1999(9) SCC 610 supports the<br \/>\naforesaid  contention.\tIn the aforesaid premises, we do not<br \/>\nfind  any merits in this appeal, requiring our\tinterference<br \/>\nwith  the  impugned judgment of the High Court.\t The  appeal<br \/>\nfails and is<\/p>\n<p>      dismissed\t but  in the circumstances there will be  no<br \/>\norder as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Ramachandra Reddy &amp; Co vs State Of A.P. &amp; Ors on 27 February, 2001 Author: Pattanaik Bench: U.C.Banerjee, Brijesh Kumar, G.B.Pattanaik CASE NO.: Appeal (civil) 9405 of 1995. PETITIONER: RAMACHANDRA REDDY &amp; CO. Vs. RESPONDENT: STATE OF A.P. &amp; ORS. DATE OF JUDGMENT: 27\/02\/2001 BENCH: U.C.Banerjee, Brijesh Kumar, G.B.Pattanaik JUDGMENT: PATTANAIK,J. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-42093","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ramachandra Reddy &amp; Co vs State Of A.P. &amp; Ors on 27 February, 2001 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ramachandra-reddy-co-vs-state-of-a-p-ors-on-27-february-2001\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ramachandra Reddy &amp; 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