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TMI Blog2004 (4) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... ilised the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available on record. In the absence of any evidence, the arbitrator could not have awarded the same. Therefore, we have no hesitation in deleting a sum of ₹ 6,00,000/- awarded to the claimant. So far as interest that is payable is concerned, the arbitrator has appropriately considered the same and no real objection can be raised in this regard. As regards arbitration costs also there cannot be any serious dispute. Therefore, except for the sums coming under the heading No. 5, that is, Refund of Sales Tax and claim for payment of losses arising out of turn over due to prolongation of work, other part of the award having been upheld by us, the award made by the arbitrator shall stand modified accordingly. In similar terms in respect of second contract, for the very reasons stated in this part of the order, we disallow the claim for refund of sales tax and compensation for losses arising out of on account of prolongation of work. In other respects, we maintain the award ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tappan, 1993 (3) SCC 445, and State of Bihar vs. Hanuman Mal Jain, 1997 (11) SCC 40. In our view, none of these decisions can have any application to the situation arising in the present case. The office report was prepared on 18.02.2002 and the matter was listed before this Court on 11.03.2002 when this Court ordered that call after four weeks . On 02.04.2002 the learned counsel for the respondents filed a separate application in both the appeals under Section 17 of the Arbitration Act, while on 11.04.2002 the appellant filed an application under Section 15 read with Section 30 of the Arbitration Act raising objections to the passing of decree in terms of the award. Article 119(b) of the Limitation Act has been enacted to fix a definite time limit within which the validity of the award can be challenged after the award is filed in the court. The said provision prescribes a period of limitation of 30 days for making an application after the required notice regarding filing of the award in the court is given to the parties. If there is no material to show that a notice of filing of the award has ever been given to the parties, any period of limitation as prescribed in Article 119(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant, application filed by him cannot be rejected on the ground of limitation. Originally, though the respondent had made large claims totalling to a sum of ₹ 78,41,350.00, the same got slashed to ₹ 32,03,755.10p. Now, the subsisting claims are :- Claim No. Rs. 1. Payment of final bill 2,18,862.42 2. Payment of P.O.L. escalation 18,417.31 3. Compensation for making late Payment of running account bill 3,75,500.00 4. Payment of labour escalation 2,66,321.55 5. Refund of sales tax 35.050.95 6. Payment of extra items 8,77,115.82 7. Payment of material escalation 4,12,487.46 8. Keep back account N I L 9. Payment of compensation to loss arising out of turn over due to prolongation of work 10,00,000.00 ------------------- Total 32,03,755.10 ------------------- The arbitrator took notice of the fact that the difference in the original claim and the subsequent claim is to the order of ₹ 45,62,376/- which casts serious doubt as to the nature of the claim and the veracity of quantum of the claim. Out of the claims mentioned above, Shri Mukul Rohtagi, learned Additional Solicitor General who appears for the appellant, did not contest the award made by the arbitrator in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bill had not been paid and that clinched the matter in favour of the claimant. Thereafter having held that the final bill is yet to be paid, he proceeded to examine the quantum of the same. The final bill disclosed that as per the agreement, the value of the work is ₹ 86,43,730/- as against this amount, the actual cost of the work was ₹ 90,46,842.14, out of which a sum of ₹ 89,97,311.12 had been paid. Thus a balance of ₹ 49,531/- had not been paid. Therefore, he held that this part of the claim is allowed. In addition to this, he also stated that certain work had been done by him by way of extra works and made a claim of ₹ 91,013.72. There is a separate claim made by the claimant under claim No.6 as claim for extra work done. Claim made therein is to the extent of ₹ 1,02,350/-. On this aspect of the matter, the contention advanced on behalf of the appellant is that separate claim for extra works of items under claim No.6 includes the claim of ₹ 91,013.72 and the claim for extra items of work can be made only on the written order of the Engineer-in-Charge in terms of clause 11 of the agreement and, therefore, the contractor will not be enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this regard cannot be interfered. Only two items which had been allowed by the arbitrator which have been adverted to by us as a sum of ₹ 49,513.02 which was still to be paid and a sum of ₹ 91,013.72 as extra items of works which was disclosed in the measurement book. Therefore, we find no infirmity on this aspect of the claim. Claim Nos. 2 and 3 not having been disputed before us, we now proceed to consider claim NO.4. The arbitrator considered various aspects made under this head for claim for payment of labour escalation. The arbitrator took the view that the appellant alone was not responsible for prolongation of the works and there were lapses on the part of the contractor as well and both were responsible for the delay. The arbitrator, after into consideration that there was definitely a escalation between April 1983 and April 1984 in regard to wage bill of the claimant, took the view that as against a claim of ₹ 2,66,343/- awarded a sum of ₹ 1,30,000/-. When on the basis of the pleadings and overall view of the situation arising as to the rise in the cost of wages, having awarded a lumpsum amount under this head, we do not think it is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f would have been enough and the period for which the same had been maintained comes down to 18 months and with reference to the pleadings raised in this Court on earlier occasion took note of the fact that possession had not been given since April 1984. Therefore, he reduced the period to 14 months. He rejected the claim that for the whole period from April 1986 it had retained the services of plumber, electrician, carpenters, supervisory, etc. and watch and ward staff and he held that the flats were not in such a condition that the appellant could have taken possession and, therefore, the entire claim cannot be justified. Having taken into consideration the fact that the watch and ward staff could be three, he awarded a sum @ ₹ 10,000/- per month for 14 months. The learned Additional Solicitor General submitted that there is absolutely no basis for awarding this item as no material had been placed before the arbitrator. We cannot say that in assessing such a situation, the arbitrator has exceeded his jurisdiction or that there was no material at all before him in assessing the situation that there was some delay in handing over the flats and watch and ward had to be maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to be paid. While a sum of ₹ 12,00,000/- would be the appropriate entitlement, he held that a sum of ₹ 6,00,000/- would be appropriate. He also awarded interest on the amounts payable at 15% per annum. Here when claim for escalation of wages bills and price for materials compensation has been paid and compensation for delay in the payment of the amount payable under the contract or for other extra works is to be paid with interest thereon, it is rather difficult for us to accept the proposition that in addition 15% of the total profit should be computed under the heading 'Loss of Profit'. It is not unusual for the contractors to claim loss of profit arising out of diminution in turn over on account of delay in the matter of completion of the work. What he should establish in such a situation is that had he received the amount due under the contract, he could have utilised the same for some other business in which he could have earned profit. Unless such a plea is raised and established, claim for loss of profits could not have been granted. In this case, no such material is available on record. In the absence of any evidence, the arbitrator could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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