IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD Dated: PRESENT THE HON'BLE MR JUSTICE B.PRAKASH RAO and THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY C.M.A.NO.1241 of 1999 & C.R.P.No.1727 of 1999 Between: Union of India, rep. by the Chief Engineer, Dry Dock & Visakhapatnam zone, Visakhapatnam. ..... APPELLANT(S) AND N.Ranga Raju ………Respondent HON’BLE SRI JUSTICE B.PRAKASH RAO AND HON’BLE SRI JUSTICE B.SESHASAYANA REDDY C.M.A.NO.1241 of 1999 & C.R.P.No.1727 of 1999 COMMON JUDGMENT: (Per Hon’ble Sri Justice B.Prakash Rao) Since these two matters arose out of a common order, they are taken up together for disposal. 2. Heard Sri A.Rajasekhar Reddy, learned Assistant Solicitor General and Sri Y.Sudhakar, learned counsel appearing on behalf of the respondent. 3. The appellant and the petitioner in these two matters is the Union Government of India who seeks to assail the correctness of the common order passed in O.P.Nos.41 and 288 of 1993, dated 05-01-1999 on the file of the I Additional Senior Civil Judge, Visakhapatnam. 4. The brief facts which gave raise to the present proceedings are that; for the purpose of construction of an accommodation at Dolphin’s Nose at Visakhapatnam, the tenders were called for by the appellant/petitioner and the tender of the respondent-contractor was accepted with certain conditions about the completion of work within one year etc. However, the same was not completed within the specified time, but that was completed by 31-07-1989. after the specified period was extended. Thereafter, disputes arose between the parties with regard to the value of the contract work. Accordingly, the matter was referred to the Chief Engineer who was appointed as sole arbitrator. He had gone into all the averments and objections of the appellant, and ultimately passed an award dated 28-12-1991 awarding in all a sum of Rs.4,47,255/- and costs in respect of the claim Nos.1, 2(a), 2(c), 2(d) and 8. 5. Challenging the same, the appellant has filed O.P.No.288 of 1992 under Sections 30 and 33 of the Arbitration Act to set aside the said award, whereas the respondent-contractor has filed O.P.No.41 of 1992 under Section 17 of the Arbitration Act to make the said award dated 28-12-1991 as a rule of the Court. 6. Several contentions were raised on behalf of the appellant in the Court below denying about the entitlement of any amounts by the respondent- Contractor on the ground that there is no basis or any justification for such claims and further, they do not arise out of the terms of the contract. Further, it is also pointed out that having regard to the extension of time granted, at the instance of the contractor himself, the question of awarding any amount does not arise. Even according to the other claims, it was stated that they are all totally baseless and even their escalation amounts could not be awarded as claimed apart from the interest also. 7. Supporting the award, the respondent-contractor filed a counter justifying his claim alleging breach on the part of the appellant and further having regard to the facts and circumstances of the case, he would be entitled to the claims as awarded by the arbitrator. 8. The case of the appellant in O.P.No.288 of 1992 is as mentioned in the counter in O.P.No.41 of 1992 and lies on a similar lines. Similarly, the case of the respondent-contractor in O.P.No.41 of 1992 is as mentioned in the counter filed in O.P.No.288 of 1992 and lies on the similar lines. 9. On the basis of pleadings and the other allegations contained in the respective pleadings in both the cases and taking both the cases together, the Court below has framed the following points for consideration: “1. Whether the petitioner in O.P.No.288 of 1992 is entitled for an order setting aside the award of the learned arbitrator relating to the claims 1, 2(a) (c) (d) and 8 respectively? 2. Whether the respondent/contractor is entitled for seeking an order to make the award as a rule of Court as prayed for in O.P.No.41 of 1992?” 10. Thereafter, taking into consideration the submissions from both sides and the documents set forth by them, the Court below did not find favour with the appellant in O.P.No.288 of 1992 and dismissed the same whereas allowed the petition in O.P.No.41 of 1992 filed by the respondent-contractor making the rule of the Court. Hence, this appeal and the revision. 11. Earlier, this matter was heard in detail on the various submissions made by the appellant and also from the respondent. Having found that there is a discrepancy in regard to the certain amounts stated to be entitled by the respondent-contractor and those amounts stated to have been paid by the appellant herein and in respect of which there being no discussions or any finding as such, this Court as per orders dated 14-11-2007, remitted the matter to the Court below for sending report with a finding which was specifically mentioned therein that an amount of Rs.4,45,262/- alleged to have been paid by the appellant herein does not find place in anywhere in the orders at any stage. 12. Subsequent to the said aforesaid orders, the Court below took up the enquiry by giving opportunity to both sides and submitted a report dated 26-09- 2008 which has been sent along with covering letters dated 26-09-2008 and 29-09-2008 to this Court. Later on, the matter was posted again for hearing by giving opportunity to both sides by filing any objections. However, since no objections were forthcoming, both the matters are taken up. 13. Heard again on the merits and perused the report of the Court below. 14. The shorn of all the details and facts as mentioned that the award is for a sum of Rs.4,47,255/- in respect of claims under claim Nos.1, 2(a) (c), (d) and 8. In this regard, the objection of the appellant was that certain amounts paid by it to an extent of 4,45,262/- has been given credit to. As per the report submitted by the Court below, which has taken into consideration the respective claims and objections and also the evidence produced from both sides especially P.W.1 and R.W.1 and further by due consideration of the submissions from both the counsel, it has found in the following terms: 12. I submit that it is an admitted fact by both the parties that the following amounts were already paid by Union of India viz., a) Escalation on account of increase in cost of material and fuel as per the formula provided in the contract agreement vide special condition 12 on pages 95 to 97 of the contract agreement. Rs.2,02,262-00 b Escalation on account of increase in labour wages as per Condition 63 of General conditions of contract Agreement (vide DO No.30) Rs.2,43,000-00 Total Rs.4,45,262-00 15. From the above, it is thus clear that now the amount of Rs.4,45,262/- has already been paid in the final bill by the appellant to the respondent- contractor and the same was received and there is no serious dispute on this amount in this bill. No objections have been filed nor any other materials have been pointed out to show the said finding as incorrect or otherwise vitiated. 16. Be that as it may, since the Court below also proceeds on the admitted position in the report, such payment does not necessary to dwell into the correctness thereof. Thus, by taking into account the said amount of Rs.4,45,262/-, paid by the appellant herein to the respondent-contractor, necessarily, it needs to be adjusted amongst the claims as awarded by the arbitrator in the award and as confirmed by the Court below. The total amount now comes to as per the award is Rs.4,47,255/-, and therefore, it is needless to say that the respondent-claimant would be entitled to the balance from out of the said total amount, after deducting the aforesaid amount of Rs.4,45,262/-. 17. In view of the above, both the Civil Miscellaneous Appeal and Civil Revision Petition are accordingly partly allowed holding that the amount of Rs.4,47,255/- is to be adjusted from out of total amount payable to the respondent-contractor as per the award. There shall be no order as to costs. _______________________ JUSTICE B.PRAKASH RAO Dated: ______________________________ JUSTICE B.SESHASAYANA REDDY KVR