THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE G.V.SEETHAPATHY C.M.A.Nos.3693 of 2003 & 38 of 2007 Date of Judgment: 29-04-2010 CT in CMANo.3693 of 2003 Between Kehar Singh …Appellant and 1.Govt. of A.P. rep. By its Secretary Irrigation and Power Department, Secretariat Buildings, Hyderabad and others. ..Respondents The Court made the following Common Judgment: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE G.V.SEETHAPATHY C.M.A.Nos.3693 of 2003 & 38 of 2007 Common Judgment: (Per Honourable Sri Justice A.Gopal Reddy ) These two appeals arise out of a common order of the I Senior Civil Judge, City Civil Court, Hyderabad in O.P.Nos.4 and 5 of 2001, dated 24-03-2003 are heard together and disposed of by this common judgment. During the course of judgment, we refer the appellant in C.M.A.No.3693 of 2003 as “Contractor” and the appellants in C.M.A.No.38 of 2007 as “Employer”, for the sake of convenience. The Employer called for tenders for excavation of Yeluru Reservoir left main canal from KM 107.670 to KM 113.300 including CC lining. On accepting the tender of the Contractor, an agreement to the said effect was entered in Agreement No.12/81-82, dated 18-06- 1981. The work has to be completed within 15 months starting from 01- 10-1981 to 31-12-1982 divided into 5 quarters of three months each. After 31-12-1982 there were eight extensions. In spite of the same, work could not be completed; therefore, the same was terminated on 27-03-1989. As per the Employer, the Contractor could execute 61.47% of work for a value of Rs.24,74,000/-. Out of which during the agreement period he executed 24.52% of work for a value of Rs.9,86,712/-and the remaining work of Rs.14,87,000/- during the extension period. On termination of contract by the Employer on 27-03- 1989, the Contractor put-forward his claims. On rejection of the claims by the Employer by its letter dated 20-01-1992, the Contractor filed O.P.No.531 of 1983 on the file of I Senior Civil Judge, City Civil Court, Hyderabad for appointment of an arbitrator. On Court appointing the sole arbitrator the Contractor filed his claim statement under 18 heads for which the Employer filed rebuttal statement. The sole arbitrator passed the award on 23-09-1998. On filing the award, the Employer fled O.P.No.4 of 2001 under Sections 30 and 33 of the Arbitration Act, 1940 (for short “the Act”) to set aside the award; whereas the Contractor filed O.P.No.5 of 2001 under Section 17 of the Act to pass a judgment in favour of the Contractor in terms of the award making the award of the arbitrator as rule of Court and award future interest at 15% per annum from the date of decree or realization. Basing on the above pleadings the lower court framed the following points for consideration. 1. Whether the finding of the Arbitrator that the delay in execution of the work was not on account of fault of Contractor and that it was on account of defaults and delays committed by the Department? 2. Whether the Department committed several fundamental breaches as pointed out by the learned Arbitrator? 3. Whether there are any grounds as enumerated U/s.30 of the Arbitration Act to set aside the award to the extent of claims allowed by the Arbitrator, if so, to what extent? 4. Whether the claims 1, 2, 3, 5, 7 to 12, 16 and 18 allowed by the Arbitrator are tenable? 5. Whether the arbitrator has jurisdiction to ward pre-reference interest, pendente lite interest and post award interest? 6. To what relief? Learned Senior Civil Judge by the impugned common order, while making the award as rule of Court, partly allowed O.P.No.5 of 2001,which reads thus: 1. Claim No.1(A) allowed by the arbitrator for Rs.42,443/- with interest at 12% PA from 31-07-1987 till the date of decree is made rule of the Court; 2. Claim No.2(A) is partly allowed for Rs.9,79,300/- with interest at 12% PA from 15-03-1985 till the date of decree is made rule of the Court; 3. Claim No.5(A) allowed by the Arbitrator for Rs.8,000/- with interest at 12% PA from 24-06-1983 till the date of decree is made rule of the Court; 4. Claim No.7(A) allowed by the Arbitrator for Rs.2,43,362/- with interest at 12% PA from 1-1-1988 till the date of decree is made rule of the Court; 5. Claim No.8 (A) allowed by the Arbitrator for Rs.1,36,074/- with interest at 12% PA from 21-09-1984 till the date of decree is made rule of the Court; 6. Claim No. 9(A) allowed by the Arbitrator for Rs.53,155- is made rule of the Court. This amount does not carry any interest. 7. Claim No.10(A) allowed by the Arbitrator for Rs.2,36,000/- with interest at 12% PA from 1-9-1983 till the date of decree is made rule of the Court; 8. Claim No.11 (A) allowed by the Arbitrator for Rs.36,426/- with interest at 12% PA from 1-9-1987 till the date of decree is made as rule of the Court; 9. Claim No.11 (A) allowed by the Arbitrator for Rs.36,426/- with interest at 12% PA from 1-9-1987 till the date of decree is made as rule of the Court; 10. Claim No.12 (A) allowed by the Arbitrator for Rs.2,87,000/- with interest at 12% PA from 1-9-1987 till the date of decree is made as rule of the Court; 11. Claim No.16 (A) and claim No.18 (A) are partly allowed by fixing interest at 12% PA for all the three periods i.e. pre-reference period, pendente lite period and post award period. 12. Claim No.3 (A) allowed by the Arbitrator is rejected. 13. Modified award is accordingly passed with proportionate costs.” and dismissed O.P.No.4 of 2001 filed by the Employer without costs. Against the common order passed in O.P.No.5 of 2001, the Employer has not filed any appeal, but filed appeal—C.M.A.No.38 of 2007 against dismissal of O.P.No.4 of 2001 filed by it under Sections 30 and 33 of the Act; whereas the Contractor filed C.M.A.No.3693 of 2003 against disallowing some claims and reducing the interest awarded by the arbitrator. Against the modification of the awarded amount on various claims and reducing interest from 24% awarded by the arbitrator to 12%, no cross appeal as such has been filed by the Employer. Sri N.Subba Reddy, learned counsel appearing for the Employer while attacking the order of the lower court contends that clause 59 of Preliminary Specification to Andhra Pradesh Detailed Standard Specifications prohibits increased cost of execution for the work done after the agreement period. Therefore, award of the arbitrator under claim No.2 (A) for Rs.19,58,600/- as against Rs.23,61,500/-, as modified by the lower court to Rs.9,79,300/-, is prohibited. The Arbitrator travelled beyond the agreement and committed misconduct, which ought to have been set aside by the lower court. He similarly contends that under claim 8(A) awarding Rs.1,36,074/- as against claim of Rs.8,70,000/- claimed by the Contractor and interest at 24% per annum on the said sum at Rs.1,74,147/- towards cyclone damages is prohibited under clause 50 of Preliminary Specification to Andhra Pradesh Detailed Standard Specifications. He further contends that award of balance payment due for increased quantum of work in Hard Digit Rock (HDR) under claim No.10(A) and interest on the said sum by the arbitrator is prohibited. When the Supplemental Agreement is entered and amount paid as per the said Agreement, the Contractor is not entitled to claim No.12 (A). The arbitrator ignored the agreement and traveled beyond clauses in the agreement which is liable to be set aside. He lastly argued what applies to claim No.10A also applies to claim No.12A, wherein balance payment for embankment and interest thereon is claimed, which is liable to be set aside. In support of his submission he placed reliance on the following judgments: 1. CH. RAMALINGA REDDY v. SUPERINTENDING ENGINEER[1] 2. RAMACHANDRA REDDY AND COMPANY v. STATE OF ANDHRA PRADESH[2] Smt. Jhansi, learned advocate representing Sri B.Adinarayana Rao, learned counsel for the Contractor, fairly concedes that in view of prohibition contained in clause 59 of Preliminary Specification to Andhra Pradesh Detailed Standard Specifications, the Contractor is not entitled to claim Nos. 2(A), 2(B), 8(A), 8(B) and 12(A). The finding recorded by the arbitrator that the Supplemental Agreement was obtained in duress and coercion does not call for any interference. But she has not put forward any argument on the appeal filed by the Contractor for modification of the award. In view of the above submissions, the point that arises for consideration in these appeals is: “Whether the award passed by the arbitrator under claim Nos. 2(A), 2(B), 8(A), 10(A) and 12(A) and the interest awarded at 12% on the above claims as modified by the civil court is liable to be set aside or not?” Before we answer the point, as referred above, the legal hurdle which dissuade us from further deliberation on the above point has to be considered first. The Supreme Court in PREMIER TYRES LIMITED v. KERALA STATE ROAD TRASNPORT CORPORATION[3] after considering its earlier decision in SHEODAN SINGH v. SMT. DARYAO KUNWAR (AIR 1966 SC 1332), where appeal arising out of connected suit is dismissed on merits the other cannot be heard and has to be dismissed, held the effect of non-filing of appeal against judgment or decree in the connected suit is that it becomes final. The said finality can be taken away only in accordance with law. Thus, the finality of finding recorded in the connected suit, due to non-filing of appeal, precludes the Court from proceeding with appeal in other suit and accordingly upheld the order of the High Court, dismissing the appeal as barred by res judicata, as the finding recorded in the connected suit has become final. The Supreme Court in UNION OF INDIA v. PUNDARIKAKSHUDU & SONS[4] held as under: “As the appellant failed to get that part of the award which was made by the arbitrator in favour of the first respondent, set aside, the basic conclusion of the high Court cannot be faulted. The court upon setting aside the whole award could have remitted back the matter to the arbitrator in terms of section 16 of the Act or could have appointed another arbitrator, but at this juncture no such order can be passed as the award in part has become final.” and after referring its earlier judgment in PREMIER TYRES LIMITED (3 supra) dismissed the appeal without hearing on merits. Following the same, the Supreme Court in HARBANS SINGH v. SANT HART SINGH[5] upheld the finding of the High Court, once no appeal has been filed in the connected suit, it has to be taken that the finding recorded by the trial court as well as the first appellate court in the suit filed by the Managing Committee having attained finality. Since the findings recorded in the other suit have attained finality, therefore, the appellants in the present appeal cannot be heard to claim that the judgments and decree of the courts below are erroneous in any manner. In the present case, non-filing of appeal against the judgment and decree in O.P.No.5 of 2001 making the award as rule of Court has become final. The said finality can be taken away only in accordance with law. In effect, by non-filing of appeal against the judgment and decree in the connected OP, legal consequences follow when a judgment or decree in a connected suit is not appealed from. That finality of finding recorded in the connected suit, due to non-filing of appeal, precludes the Court from proceeding with appeal in other suit. Having regard to the fact that judgment and decree of the lower court, making the award of the arbitrator as rule of Court in O.P.No.5 of 2001, remains unchallenged by the Employer, we have no option except to dismiss the appeal—C.M.A.No.38 of 2007 filed by the Employer. Learned counsel for the Contractor has not put forward any argument with regard to modification of the award nor challenged the findings recorded in O.P.No.4 of 2001. In view of the same, C.M.A.No.3693 of 2003, filed by the Contractor to set aside the award, is also liable to be dismissed. In the result, both the appeals fail and they are accordingly dismissed. No order as to costs. ________________ A.GOPAL REDDY, J. _________________ G.V.SEETHAPATHY,J. 29-04-2010 Murthy [1] (1999) 9 SCC 610 [2] (2001) 4 SCC 241 [3] 1993 SUPP.(2) SCC 146 [4] (2003) 8 SCC 168 [5] (2009) 2 SCC 526