IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MRS. JUSTICE K.HEMA MONDAY, THE 21ST JANUARY 2008 / 1ST MAGHA 1929 MFA.No. 114 of 2002(C) ---------------------- AR.OP.29/2000 of DISTRICT & SESSIONS COURT, ERNAKULAM .................... APPELLANT: RESPONDENT --------------------- M/S.HINDUSTAN GUNITING CORPORATION, ENGINEERS & CONTRACTORS, BLUE HILLA, 50/972 HIGHWAY, EDAPPALLY, KOCHI. BY ADV. SRI.P.N.KRISHNANKUTTY ACHAN(SR.) SRI.S.EASWARAN RESPONDENT: PETITIONER ----------------------- THE UNION OF INDIA, REPRESENTED BY THE COMMANDER WORKS ENGINEERS, NAVAL BASE, KOCHI-682 004. BY ADV. SRI.P.S.SREEDHARAN PILLAI, SCGSC SRI.JOHN VARGHESE, ASSISTANT SG SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR THIS MISC. FIRST APPEAL HAVING COME UP FOR ADMISSION ON 21/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J.B. KOSHY & K. HEMA, JJ. -------------------------------------------- M.F.A.No. 114 of 2002 -------------------------------------------- Dated this the 21st day of January, 2008. JUDGMENT Koshy, J: Appellant, a partnership firm, entered into a contract with Union of India for improvement of facilities by addition/alteration/repairs of North Jetty at Naval Base, Kochi. Before completion of the work, it was terminated alleging breach of contract on the part of the contractor. Thereafter dispute arose regarding the amount payable for the work done and arbitration request was made. Counter claims were also filed stating that for damages caused to the Union of India in entrusting balance work to other contractors etc. The sole Arbitrator was appointed and he awarded Rs.3,86,316/- for extra work done by the appellant under claims 3 and 5. That award was set aside under Section 34 of the Arbitration and Conciliation Act as beyond the scope of reference. It is not disputed that the sole Arbitrator was the agreed Arbitrator and there was arbitration clause in the agreement. Jurisdiction of the court in setting aside the award is very limited and it [MFA.114/02] 2 is only supervisory. Only on the grounds mentioned under Section 34 of the Act, award can be set aside. 2. The claims put forward were as follows: “a) Non payment of money for escalation charges for labour, material, transportation, fuel, loading and unloading etc. b) For damage and loss due to faulty planning and stopping the work causing loss and damages to the Contractor due to idling of tools and plants and machinery men and material labour force, supervisors and Engineers. c) Non finalisation of Star rates on account of change of specifications and sit conditions causing blockage of money and suffering progress of work in other sites as well. d) Loss of money due to payment of interest at the rate of 24% per annum to the creditors. e) Non finalisation of deviation orders and blockage of money due and payable to contractor. f) Loss of interest at the market rate of 24% per annum and profits with specific facts and figures. g) Non allotting and non placing of the work order for the total quantity of the work as per contract, which in fact, about 60% of work was allowed to be done and balance work was unilaterally omitted by department. h) Any unforeseen items at the time of submitting the statement of claims and urged at the time of argument. At the stage of submission of statement of case, Contractor has amplified these claims as following: i) Interest @ 24% per annum with effect from 20.2.96 till date of payment to the [MFA.114/02] 3 contractor for a claim amount of Rs.14 lakhs. ii)Loss incurred due to stoppage of work at Cohcin Port Trust and interest @ 25% per annum from Dec 1996 till date of payment : Rs. 5 lakhs iii) Interest paid loss due to Interest paid to the Bank towards O.D. Facilities for Rs.2.5 lakhs and its interest @ 24% per annum from Dec 1995 : Rs. 3 lakhs iv) Loss due to distress sale of Cochin Corpn. Bldg No.50/72/Highway Edapally Village, Kanayanur Taluk as the property worth Rs.8 lakhs was compelled to be sold to Rs.4 lakhs incurring a loss. : Rs. 4 lakhs” In the claim statement, for claims 3 and 5 together, amount claimed was for Rs.3.5 lakhs. Claims 3 and 5 were equal to clause (c ) & (e) of the of the arbitration reference earlier quoted. The Arbitrator granted Rs.3,86,316/-. It was found that guniting work was done in excess of the thickness prescribed and considering that, amount was awarded. According to appellant-contractor, guniting work was done in certain areas upto 70 mm thickness but in the contract there was specific prescription of guniting work upto 25 mm only. 50.3 Item 41 of Sch 'A' of page 16A of the Contract reads as follows: [MFA.114/02] 4 “Material and labour for chipping surface of RCC duck slab /beams/columns to an extent of loose concrete and providing wire netting of glavanised steel wire (Chicken mesh) 0.81 mm dia fixed to the exposed reinforcement with binding wire and guniting the surface with cement and sand mortar 1:3, 25 mm tick in two layers (15 mm -- 10 mm ) at a pressure of 2.5 kg/cm2 at nozzle tip including fair finishing the surface without using extra cement (Rates should be inclusive of all tools and plants, scaffoldings, staging pontoons, boats for use in sea water)”. Clause 22.32 of the contract further reads as follows: “Immediately after guniting, all excess gunite has to be knocked down without reducing the cover of reinforcement below the prescribed value of 25 mm for beams, columns. All exposed surfaces shall be finished fair without using extra cement.” So, the contract specifically states that gunite work should be 25 mm thickness in 2 layers and thickness in excess should be chipped off by the contractor. A joint site inspection showed that guniting thickness was upto 40 to 50 mm was beyond reinforcement rods actually existing. It is also seen that total quantity of cement used was also excess. A reading of the contract would show that guniting should be done upto 25 mm thickness. If the thickness is beyond the same it has to be chipped off. He left the work without chipping of the excess guniting adding more work to the principal. Awarding him additional amount to do prohibitory work is clearly beyond the [MFA.114/02] 5 scope of reference. There is no order or indication that contractor was asked to do excess work or do guniting work beyond 25 mm especially when contract specifically states if there is excess thickness of guniting work it should be chipped off. In such circumstances, on factual situation, the District Judge found that the amount cannot be awarded for excess work merely because guniting work was done in more thickness than what is mentioned in the contract. 3. Learned District Judge also found that claims 3 and 5 are equal to clause ( c) & (e) and reliefs granted are different and reliefs granted beyond the scope of reference under claims 3 and 5. Learned Judge found as follows: “I find merit in the contention that at any rate, additional guniting which was found available and which had not been knocked off. I must at this stage very carefully avoid the temptation to interfere with a finding of fact entered by the arbitrator. I have referred to this fact with the only intention of taking note that the direction issued by the arbitrator under claims 3 and 5 and that by issuing such a direction, as he did under claims 3 and 5, the arbitrator had denied to the petitioner an opportunity to substantiate their contentions effectively on this aspect. The notes of argument which I have extracted above clearly show that the direction issued under claims 3 and 5 are alien to the claims made under heads 3 and 5 by the respondent before the arbitrator. In this view of the [MFA.114/02] 6 matter I am of the opinion that the award is liable to be interfered with under Section 34(2)(1)(iv).” Therefore, that part of the award was set aside. We fully agree with the court below in the above finding. We see no ground interfere in the impugned judgment. Appeal is dismissed. Sd/- J.B.KOSHY, JUDGE. Sd/- Krs. K.HEMA, JUDGE.