Civil Miscellaneous Petition No 265 19 of 1988
IN Civil Appeal No 2632 of 1987
From the Judgment and Order dated 1061985 of the Kerala High Court in WP No 210 of 1985 in OP No 897 of 1984
Mrs Baby Krishnan for the Appellant
AK Srivastava and CVS Rao for the Respondent
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
This is an application for making the award dated 17th February 1988 passed by Mr V Khalid a former Judge of this Court in a dispute referred to him by this Court s order dated 6th October 1987 final and to give consequential directions thereupon 117 On 7th April 1979 there was a contract for construction of the building in question
The contract consisted of two phases
The date of commencement of both the phases was 10th March 1979 the date of completion of phase l was 9th June 1980 and for phase Il 9th November 1980
The dispute arose about the handing over of the site
According to the appel lant the site was not handed over to him as agreed upon and therefore the work could not either be commenced or com pleted as stipulated
He therefore accused the respondent of obstructionist tactics also
According to the respondent however the claims put forward by the appellant were imagi nary excuses to gain time and that he put forward various demands for extension of time and for payment of compensa tion to which he was not entitled
Clause 70 of the general conditions of the contract provided for settlement of disputes by arbitration
The appellant resorted to this clause and addressed a letter dated 13th September 1980 to the Chief Engineer South West Zone Cochin informing him that if the said disputes were not settled to his satisfaction within 15 days from the date of receipt of the notice he would be taking appropriate steps to refer the disputes to arbitration in accordance with the said clause
This request of the appellant was turned down by the Chief Engineer as according to him work was in progress and the question of granting reasonable extension of time was under examination
Dissatisfied with this the appellant took the matter to the Engineer in Chief by his letter dated 14th October 1980 calling upon him to appoint an Engineer Officer as the sole arbitrator to adju dicate upon the disputes between the parties
This request was not acceded to
The relationship between the parties became strained
The respondent asserted that the appellant had abandoned the work and committed breach of contract
Thereafter the appellant vide a notice dated 4th October 1982 called upon the Engineer in Chief to appoint an Engineer Officer as the sole arbitrator
After further correspondence the Engineer in Chief by his letter dated 961983 appointed one Mr KCS Rao Chief Engineer Poona Zone as the arbitra tor in respect of the disputes
Mr Rao it is asserted entered into reference
The appellant asserted that Mr Rao was incompetent to function as arbitrator for it was he who had terminated the contract when he was officiating as the Chief Engineer of Sought West Zone
Aggrieved by this appointment he filed a suit in the Court of Subordinate Judge Cochin seeking leave to revoke the authority of the appointed arbitrator under section 5 of the  118 hereinafter referred to as the Act  and for appointment of another person as arbitrator under section 12 of the Act
It is not necessary to set out the various stages of litiga tion thereafter
Ultimately the matter came to this Court and by an order passed by this Court on 25th August 1987 in Civil Appeal No 263287 it was observed as follows  Having regard to the facts and circumstances of the case we are of the opinion that all the disputes mentioned in the Paper Book be arbitrated by a former retired Judge of this Court
We accordingly appoint Mr Justice vs Khalid Retd a former Judge of this Court as the Arbitrator
The Arbitrator will decide his remuneration as he thinks fit and the parties will pay the same in equal shares
The parties will also bear the costs and charges of holding the proceedings including the remuneration and other assistance of Stenogra phers etc
Councel for both the parties have no objection to the aforesaid order
The learned Arbitrator will enter into reference within a fortnight from the receipt of the copy of the order and will make the award within four months thereafter
Costs of the parties in the Arbitration proceedings will abide by the decision of the Arbitrator
The arbitrator entered upon the reference examined the documents heard the parties and considered the evidence
He made his award after inspecting the sites on 20th December 1987 and 21st January 1988
The claims of the appellants contractor were as follows 1
On account of losses caused due to increase in prices of materials and cost of labour and transport during the extended period of contract from 9680 work for under phase I and from 91180 for work under phase II
54761215 2
On Account of work done under the contract including fully executed and partly executed items at the origi nally agreed rates and for the cost of materials lying at site and taken over by the Department as well as for the value of machinery tools and plants lying over the site and taken over by Department
72709501 3
On account of losses caused due to added and infructuous expenditure on overheads establishments and 119 supervision during the extended period of contract upto 31281 the date of termination
12886400 4
On account of losses caused by way of gains prevented due to unlawful repudiation of the contract by the Depart ment and the consequent termination of the contract by the contractor
10442458 5
a Release of Bank Guarantee for Rs 125000 Bank Guarantee No G1980 dated 28480 issued by the State Bank of India Willingdon Island Conchin 3
b Refund of the retention amounts recovered by the Department from the Running Account Bills
Amount not indicated 6Interest on all the amounts due and payable
18 PA from 91281 till actual date of payment or realisation
The claims on behalf of the respondent were as under 1 Excess cost which had to be borne by the Department 191619882 on account of the defaults of the contractor and subsequent cancellation of the contract after adjusting other amounts due from the contractor under this contract
Cost of reference to Arbitration 700000 The arbitrator by his award asked the respondent to pay the following a On claim No I a sum of Rs20021618 with interest at 10 from 9121981 till the date of this Award
b On claim No 11 a sum of Rs24726969 with interest at 10 from 9121981 till the date of this Award
c Claim No III Disallowed
d Claim No IV Disallowed
e On claim No Va the respondent is directed to 120 refund the Bank Guarantee sum of Rs 125000 to the Cliamant with interest at 10 from the date of the encashment till the date of this Award
The remuneration of the Arbitrator is Rs75000
Rs50000 has already been deposit ed
The claimant and the Respondent are di rected to
remit the balance equally Rs 125000 each to the Arbitrator to his Madras address by Account payee Draft within two weeks of receipt of the notice under Section 14 of the 
11I The respondent is directed to pay to the Claimant by way of cost Rs 17500 to wards Arbitrator s remuneration and Rs 10000 towards Advocates  fees and cost
The respondent is directed to suffer their cost
The counter claims preferred by the Re spondent against the Claimant are disallowed
 A petition was filed on behalf of the respondent where in it was stated as follows Regarding petitioner s claim No 1 in the absence of any escalation clause it is not permissible to the Arbitrator to grant any escalation price as sought by the petitioner
On the other hand if the work is not complet ed within the specified time he has got right to ask for extension of time
Failure to grant extension of time the contractor can claim difference of prices
That is not the case here
Extension of time was granted and the Arbitrator after considering the contentions put forth before him has granted 20 of the escalation price which is not in accordance with the terms of the contract
Though the term of the contract envisages that the entire site should be handed over in time for comple tion of the work entrusted to him as referred to above in civil works before starting of the work the contractor is required to put up some preliminary work like construction of temporary store sheds temporary office which requires sometime and within that time if the other area or the site is not handed over the contractor has got grievances to complain against the Department
Further by not hand ing over the site how much damage or loss is sustained has not been 121 apprised off
Therefore it is submitted that Claim No 1 of the Contractor should have been considered as outside the scope of the con tract and hence the arbitrator has exceeded his jurisdiction Mr Ashok Srivastava counsel appearing for the Union of India submitted before us that this is a reasoned award and the learned arbitrator had granted a sum of Rs2 lakhs as escalation charges and costs
Mr Srivastava tried to urge that the right to get escalation charges and costs in the absence of escalation clause was not a matter referred to the arbitrator
In other words it was urged that the arbi trator had travelled beyond his jurisdiction in awarding the escalation cost and charges
It is difficult to accept this objection for reason more than one
It is well settled that an award can only be set aside under section 30 of the Act which enjoins that an award of an arbitratorumpire can be set aside inter alia if he has misconducted himself or the proceeding
Adjudicating upon a matter which is not the subject matter of adjudication is a legal misconduct for the arbitrator
The dispute that was referred to the arbitrator was as to who is responsible for the delay what are the repercussions of the delay in com pletion of the building and how to apportion the conse quences of the responsibility
In the objections filed on behalf of the respondent it has been stated that if the work was not completed within the stipulated time the party has got a right for extention of time
On failure to grant extension of time it has been asserted the contractor can claim difference in prices
In the instant case it is asserted that the extension of time was granted and the arbitrator has granted 20 of the escalation cost
Escalation is a normal incident arising out of gap of time in this inflationary age in performing any contract
The arbitrator has held that there was delay and he has further referred to this aspect in his award
The arbitrator has noted that Claim I related to the losses caused due to increase in prices of materials and cost of labour and transport during the extended period of contract from 95 1980 for the work under phase I and from 91180 for the work under phase II
The total amount shown was Rs54761850
After discussing the evidence and the sub missions the arbitrator found that it was evident that there was escalation and therefore he came to the conclusion that it was reasonable to allow 20 of the compensation under Claim I he has accordingly allowed the same
This was a matter which was within the jurisdiction of the arbitrator and hence the arbitrator had not mis 122 conducted himself in awarding the amount as he has done
It was submitted that if the contract work was not completed within the stipulated time which it appears was not done then the contractor has got a right to ask for extension of time and he could claim difference in price
This is precisely what he has done and has obtained a por tion of the claim in the award
It was submitted on behalf of the Union of India that failure to complete the contract was not the case
Hence there was no substance in the objections raised
Furthermore in the objections raised it must be within the time provided for the application under section 30 ie 30 days during which the objection was not specifically taken we are of the opinion that there is no substance in this objection sought to be raised in opposi tion to the award
Once it was found that the arbitrator had jurisdiction to find that there was delay in execution of the contract due to the conduct of the respondent the respondent was liable for the consequences of the delay namely increase in prices
Therefore the arbitrator had jurisdiction to go into this question
He has gone into that question and has awarded as he did
Claim I is not outside the purview of the contract
It arises as an incident of the contract and the arbitrator had jurisdiction
In that view of the matter the objections raised against the award cannot be sustained
No other objection was urged before us
The award therefore must be made the rule of the Court and there will be a decree in terms of the award and the respondent is directed to pay Rs 17500 as the arbitrator s remuneration and Rs 10000 as advocates  fees and costs
The Civil Miscellaneous Petition is disposed of accordingly
NVK Petition disposed of


Summary:
The appellant manufactures cotton fabric on power looms
By virtue of two notifications issued under Rule 81 of the Central Excise Rules 1944 unprocessed cotton fabric was exempt from excise duty as also additional duties
Since the appellant was using the process of calendering  the Cen tral Excise authorities held that the cotton fabric manufac tured by it ceases to be unprocessed
The collector of Central Excise directed the appellant to pay levy on the manufacture of the calendered cotton fabric and also levied a penalty of Rs 100000 under Rule 173
On appeal the Central Board of Excise and Customs affirmed the levy of duty but set aside the imposition of penalty
The appellant preferred an appeal before the Cus toms Excise and Gold Control Appellate Tribunal
The Tribunal held that calendering is a finishing process and it was not necessary for the process of calendering to be a process which belonged to the same genus as those enumerated in Sec
2fv to take the cotton fabric out of the exemp tion
It would be sufficient that of calendering is a process of cotton fabric even if it does not partake of the other processes specifically enumerated in the preceding expression in section 2jv2
In that view of the matter the Tribunal 215 dismissed the appeal preferred by the appellant
This appeal under Sec
35L of the Act is against the Tribunal s Order
On behalf of the appellant it was contended that plaincalendering process neither adds anything to the cotton fabric nor the effect brought about by it is lasting it was purely a temporary finish and that having regard to the nature of the process it is plainly manifest that it does not impart to the fabric either of the two ingredients necessary to bring the process into the family of processes envisaged by the preceding expressions in Sec 2fv
On behalf of the Revenue it was submitted that since the Tribunal had not specifically examined this aspect and recorded its finding thereon it would be appropriate to remit the matter to the Tribunal
Allowing the appeal and remitting the matter to the Appellate Tribunal for a fresh disposal the Court HELD 1
The expression ejus dem generis of the same kind or nature  signifies a principle of construction whereby words in a statute which are otherwise wide but are associated in the text with more limited words are by implication given a restricted operation and are limited to matters of the same class are genus as preceding them
If a list or string or family of genus describing terms are followed by wider or residuary or sweeping up words then the verbal context and the linguistic implications of the preceding words limit the scope of such words
But the preceding words or expressions of restricted meaning must be susceptible of the import that they represent a class
If no class can be found ejus dem generis rule is not attracted and such broad construction as the subsequent words may admit will be favoured
220F 221A B SS Magnhild owners vs Mc Intvre Bros  Co  Tribhuban Parkash Nayyar vs Union of India 1970 216 2 SCR 732 and UPSE Board vs Hari Shankar  relied on
Statutory Interpretation by Rupert Cross Statutory Construction by Francis Bennian relied on
The definition of manufacture obtaining in Sec 2f of the Central Excise Act was amended by Act 5 of 1986 giving it an extended meaning
220A Empire Industries vs Union of India 1985 Suppl
1 SCR 292 relied on
In the present case the expressions bleaching mercerising dyeing printing water proofing rubberising shrink proofing organdie processing  which precedes the expression or any other process  contemplate processes which impart a change of a lasting character to the fabric by either the addition of some chemical into the fabric or otherwise Any other process  in the section must share one or the other of these incidents
The expression any other process is used in the context of what constitutes manufacture in its extended meaning and the expression unprocessed in the exempting notification draws its mean ing from that context
222G H 223A