THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE B.N. RAO NALLA C.M.A.No. 3810 of 2002 JUDGMENT: (per Hon’ble Sri Justice B.N.Rao Nalla) Aggrieved by the common order dated 16.4.2001 to the extent of rejection of Claim Nos.3A, 4A, 5A and 11A in O.P.No.22 of 1994 on the file of Senior Civil Judge, Nellore, the first respondent therein filed the present C.M.A. However, after filing the C.M.A., respondent No.1, who is appellant herein died and his legal heirs 2 to 7 are brought on record. 2. For the sake of convenience the parties hereinafter be referred to as ‘appellant’ and ‘respondents’ as arrayed in this CMA. 3. The appellant is the contractor who entered into an agreement dated 11.4.1984 bearing No.7/SE/8586, with Superintending Engineer, Telugu Ganga Project, in connection with construction of “Off-take Sluice” for left side canal of Kandaleru Reservoir at K.M.0.990 of Earth Dam. 4. That the site was handed over to the appellant on 10.5.1985. The duration of contract period was 12 months. It was to be completed on or before 9.05.1986. The value of the work was estimated to be at Rs.6,44,686/- plus 8.41% excess over and above the estimated value to be assessed by the Department. As the work was not completed by 9.5.1986, the appellant sought extension of time on 6.6.1986 for a period of one year and the same was extended up to 15.8.1986. That on 4.11.1985, the appellant informed the Executive Engineer as to stoppage of work due to non supply of cement. The Deputy Executive Engineer instructed the appellant to stop the work by his letter dated 11.3.1986, as the appllant did not complete the work even during the extended period up to 15.8.1986 and also during the further extension period up to 31.3.1987. The reasons for not completing the work given are that the embedded parts have not been supplied to the appellant during the extension period up to 31.3.1987 and he requested the first respondent to close the contract and settle the accounts. That the first respondent accordingly approved the closure of contract. Whereupon, the appellant requested the Executive Engineer to finalise the bills duly deleting the balance items. The first respondent informed the appellant as to his completing the work items from 1 to 13, and remaining items from 14 to 20, which were held up due to non supply of embedded parts. 5. The learned Arbitrator was appointed by this court by order dated 26.10.1992 in C.R.P.No.1982 of 1991 as sole Arbitrator to settle the disputes and differences between the appellant and the first respondent. 6. The learned Arbitrator after considering the other claims also considered the Claim No.3A and granted a sum of Rs.48,200/- towards extra overhead charges as against the claim of the appellant. However, the learned Senior Civil Judge, Nellore after taking into consideration the material produced before him and the factual and legal aspects of the case, came to a conclusion that the appellant is not entitled to Claim No.3A of Rs.48,200/- holding that the appellant had failed to produce the relevant record such as Income Tax returns before the learned Arbitrator. That the learned Senior Civil Judge also observed that the appellant failed to produce any document before the learned Arbitrator in respect of his claim and the learned Arbitrator granted the said claim without calling for such records as to payment made by the appellant to his employees from time to time during the extended period and no work was turned out during such extended period. Further, the Arbitrator had also failed to put the burden on the first respondent to prove that the Contractor did not incur such overhead charges. As such, the learned Senior Civil Judge came to a conclusion that the learned Arbitrator exceeded his jurisdiction in permitting such claim. Claim Nos.4A and 5A: 7. Under Claim No.4A, the appellant claimed Rs.72,600/- towards idle and establishment charges considering that the labour and establishment had to be kept idle for total period of 101 days. The learned Arbitrator awarded an amount of Rs.54,500/- towards idle and establishment charges. The appellant also claimed under Claim No.5A, a sum of Rs.1,18,750/- towards idle machinery. The learned Arbitrator considered and granted the entire claim at Rs.1,18,700/- (rounding of figure) holding that the appellant had to keep the machinery idle for five months. However, the learned Senior Civil Judge after considering the record brought before him and after assessing the pros and cons of the matter, set aside both the claims. Though, the appellant failed to produce any record in support therefor, like vouchers or I.T. returns, Log extracts etc, the learned Arbitrator awarded the entire claims. Of course, the first respondent objected for considering the claims under 4A and 5A on the said grounds. Hence, the learned Senior Civil Judge set aside the said claims since they were not supported by any material and observed that in such a situation simply accepting the mere statement of the appellant without any supporting material, the Arbitrator should not have granted the said claims and in doing so he went beyond his jurisdiction. Claim No.11A: 8. The appellant claimed an amount of Rs.36,000/- under this claim “loss of profit on work prevented from execution”. The learned Arbitrator observing that the reasonable expectation of the profits is implicit under works contract and it’s loss to be compensated by way of damages granted the said claim in toto. However, the learned Senior Civil Judge, disagreeing with the award so far as the claim No.11A is concerned, set it aside observing that the said claim relates to a remote and indirect loss said to have been suffered by the appellant and no such claim is admissible in law, even if there is breach of contract by the first respondent and further that even the appellant himself intended to have termination of the work, granting of such claim by the learned Arbitrator was improper and the same amounted to an error on the face of award. 9. In the above facts and circumstances of the matter, the learned Senior Civil Judge after considering the entire material before him rejected the Claim Nos. 3A,4A,5A and 11A by giving sufficient reasons therefor. As such we do not find any infirmity or illegality in the impugned order dated 16.4.2001 so as to interfere under Section 39 of the Arbitration Act,1940, and as such, the C.M.A. is devoid of merit. 10. In the result, the C.M.A. is dismissed. No costs. ___________ V.V.S. RAO,J _______________ B.N. RAO NALLA, J .12.2009 Stp