THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE B.N. RAO NALLA C.M.A.Nos. 4430 and 4810 of 2004 COMMON JUDGMENT: (Hon’ble Sri Justice B.N.Rao Nalla) Aggrieved by the common order dated 4.08.2000, to the extent of O.S.No.111 of 1997 and O.P.No.4 of 1998, on the file of the III Senior Civil Judge, City Civil Court, Secunderabad, the first defendant in O.S.No.111 of 1997 and first respondent No.1 in O.P. No. 4 of 1998 filed these two C.M.As. 2. Since common questions of law and facts are involved and the parties are common, these Civil Miscellaneous Appeals are being disposed of by this common judgment. 3. For the sake of convenience, the parties hereinafter be referred to as ‘appellant’ and ‘respondents’ as arrayed in the CMAs. 4. The appellant is the contractor who entered into an agreement No.63/CE/C/SC/88 dated 6.9.1988 with the first respondent-Railways for doubling of track between Kosgi-Kupgal stations, earthwork in formation, construction, extension of bridges and execution of Miscellaneous works from Ch:6000 M to Ch:14500 M- Reach-II. The agreement contains specific clause wherein the parties can refer the disputes to arbitration, that General conditions of the contract would also form part of the agreement: that the work entrusted to the contractor was completed by 31.3.1991, that during the course of the work, certain disputes and differences arose between the parties; that they were referred to the joint Arbitrators under a letter dated 1.4.1996; that they have entered upon reference and the Arbitrators passed an award on 20.2.97 awarding a total sum of Rs.5,92,235/-. Aggrieved by the award, the first respondent-Railways filed O.P.No.4 of 1998 for setting aside the award and the appellant-contractor filed O.P.No.21 of 1997 to modify the award so far as the claim of interest is concerned, on the file of the III Senior Civil Judge, City Civil Court, Secundeabad. O.S.No.111 of 1997 was filed by the Arbitrators in the same court seeking it to issue notices to the defendants therein i.e. the appellant and the first respondent herein. 5. The plea of the appellant before the court below is that the Arbitrators refused to award interest on the ground it was not referred before them and it amounts to misconduct on their part; that he is entitled to interest at 24% per annum from the date of completion of the work i.e. from 1.4.1991 till the date of realisation and that the award passed by the Arbitrators is to be made rule of the court; that it is to be further modified awarding interest at 24% per annum from 1.4.1991 till the date of the award on the amount of Rs.5,92,235/- 6. On the other hand, the Railways admitted the execution of contract between them for Rs.26,56,115- 50ps vide agreement No.63/CE/C/SC/88 dated 6.9.1988 and the appellant-contractor completed the work on 31.3.1991. It is contended on behalf of the Railways that the original contract period was extended from time to time at the request of the contractor, that the work was delayed on account of the wrong planning of the contractor; that under claim No.1 the joint Arbitrators awarded a sum of Rs.3,14,736/- towards prices escalation during the extension of the contract period; that such awarding of compensation or damages is in violation of clause No.17(3) of the General Conditions of the Contract; that the Arbitrators awarded this claim under Section 73 of the contract Act; that it is not applicable to the facts of the case; that there is no basis for awarding 30% of the hire rates by the Arbitrators; that they have also awarded an amount of Rs.97,500/- under claim No.2 in respect of the alleged expenditure incurred by the appellant-contractor on idle labour and machinery, that awarding of such claim is beyond the scope of the agreement and contrary to clause No.17(3) of the General Conditions of the Contract; that the awarding of Claim No.3 to a tune of Rs.1,80,000/- is also contrary to Clause No.42 of the General Conditions of the Contract and therefore the award is liable to be set aside. 7. The learned Senior Civil Judge after taking into consideration the material produced before it and the factual and legal aspects of the case, came to the conclusion that the claimant is entitled to a sum of Rs.1,80,000/- in respect of Claim No.3 and set–aside the award in respect of Claim No.1 for Rs.3,14,736 and Claim No.2 in respect of Rs.97,500/-. Challenging the same, the appellant-contractor filed these C.M.As against O.P.No.4 of 1998 and O.S.No.111 of 1997. 8. Heard the learned counsel for the appellant-contractor and the learned counsel for the first respondent-Railways and perused the record. 9. The learned counsel for the appellant-contractor contended that since the award was passed on 20.2.1997 after coming into the force of the Arbitration and Conciliation Act, 1996, deciding the matter by setting aside the award by the court below under the provisions of Arbitration Act,1940, which was repealed, is erroneous and not sustainable under law. He also contended that the application filed in O.P.No.4 of 1998 is beyond the prescribed period of limitation and that the court below erred in numbering the suit on the basis of surmises and conjectures without there being any record before it. He further contended that the court below erred in striking down some of the claims of the appellant and thereby violated the proposition of law laid down by the apex court. He also further contended that the court below erred in awarding interest at the rate of 15% per annum and that the provisions of Clause 17(3) of the General Conditions of the Contract would not take away the jurisdiction and competence of the Arbitrators in passing the award, in the absence of referring certain specific claims. 10. Per contra, the learned counsel for the first respondent submits that the trial court after taking into consideration the material available on record and also having regard to the provisions of the Arbitration Act and also General Conditions of the Contract, has set aside the claim No.1 for Rs.3,14,736/- and Claim No.2 for Rs.97,500/- by confirming the Claim No.1 for Rs.1,80,000/-. Therefore, interference by this court under the provisions of the Arbitration Act would not arise. 11. The appellant-contractor entered into contract agreement No.63/CE/C/SC/88 with the first respondent-Railways for execution of work for doubling of track between Kosgi- Kupgal stations-, earth work in formation, construction, extension of bridges and execution of Miscellaneous works from Ch.6000 M. to Ch.14,500 M.-Reach –II. The contract was completed on 31.3.1991. During the course of work, there were disputes between the parties and they referred the disputes before the Arbitrators. The Arbitrators awarded Rs.5,92,235/- to the appellant without interest. Aggrieved by the award, the first respondent filed O.P.No.4 of 1998 under the provisions of the Arbitration Act. The court below confirmed the award in respect of Claim No.3 and set-aside the award in respect of Claim Nos.1 and 2. 12. It is seen that the court below passed the common order by invoking the provisions of Arbitration Act, 1940, which was repealed, and the provisions of the Arbitration and Conciliation Act,1996 are in force by the date of passing the award i.e. 20.2.1997, but as a matter of fact, since the contract entered between the appellant and the first respondent was on 31.3.1991, the provisions of the Arbitration and Conciliation Act,1996 cannot be invoked with retrospective effect. So far as limitation in filing of O.P.No.4 of 1998 is concerned, the Arbitrators filed the suit for issuing notices to the appellant and the first respondent under Section 14(2) and 17 of the Arbitration Act. Notice was served in Form No.2 under Order 5. However, there was no proof before the court below that notice under Section 14(2) of the Arbitration Act was served on the Railways and they filed the O.P. beyond the limitation. Therefore, it cannot be said that the O.P. is filed beyond the prescribed period of limitation. 13. So far as claim No.1 with respect to payment of extra rate of 30% over the agreement rate for works executed beyond the original period of contract is concerned, it is seen that the contract work was to be completed by 4.5.1989, but the appellant has not completed the contract work within the stipulated period and sought extension from time to time subject to condition that the date of conclusion of the original agreement was extended without penalty and other conditions, stipulations and rates applicable to the original agreement would also be applicable to this agreement. It is pertinent to note that in the agreement it is specifically laid down that in the event of delay by the Railways to provide the necessary drawings or any other delay caused by the Railways due to any other cause whatsoever, the appellant- contractor would not be entitled to damages or compensation and the Railways may grant such extension of time as considered reasonable. Therefore, it cannot be said that Section 73 of the Contract Act is applicable to the Clause No.17(3) of the General Conditions of the Contract and the court below has not committed any error in setting aside Claim No.1. 14. Claim No.2 is with respect to incurring expenditure of idle labour and machinery. As discussed above, this claim is also contrary to the Clause No.17(3) of General Conditions of the Contract. Therefore, there is no infirmity in setting aside the Claim No.2. 15. Claim No.3 is with regard to expenditure incurred by the appellant for non-utilisation of land acquired for digging earth and vehicles and labour. A perusal of the record, goes to show that after considering the entire material, the court below came to the conclusion that there were variations in the quantities of work to an extent of 45%. Further, the respondent No.1 is not seriously contended that awarding of this claim is in violation of any terms and conditions of the agreement. Therefore, the court below having regard to the factual and legal aspects, awarded Rs.1,80,000/- against claim of Rss.3,30,000/- in respect of Claim No.3. 16. So far as awarding interest is concerned, the appellant has not made the claim before the Joint Arbitrators. He raised this issue for the first time before the court below. As per Section 29 of the Arbitration Act, the appellant is entitled to interest from the date of the decree till the date of realisation. The court below taking into circumstances of the case awarded the interest at the rate of 15% per annum from the date of the decree till the date of realisation. Further, when the appellant has not specifically urged for awarding interest before the arbitral tribunal, question of awarding pre-reference, pendente lite and post-award interest would not arise. 17. In the circumstances, both the C.M.As found to be devoid of merit and the same are dismissed. No costs. _______________ V.V.S. RAO,J ______________ B.N. RAO NALLA, J 08-12-2009 Stp