Summary
The Supreme Court partly restored an irrigation contractor’s award under the Arbitration Act, 1940. The contractual bar on delay compensation did not defeat the distinct extra-haulage claim, though its quantum remained subject to the contract; the Court used Article 142 to sustain the Sub-Court’s modified calculation. Foodgrain, cement and accumulated-material claims failed for their separate contractual or evidentiary defects. Interest on the restored claim was reinstated.
Issues
- Which claims were barred by the delay-compensation clause.
- Whether the extra-haulage award could be modified or restored.
- Whether proof supported the foodgrain and cement claims.
- Whether pendente lite interest was within arbitral power.
Provisions considered
- Section 15, Arbitration Act, 1940The specified correction and modification powers did not permit substitution of the arbitrator’s substantive rate determination on these grounds. The Court instead invoked Article 142 for the limited modified extra-haulage relief. (¶ 31–41)
Held
- Clause 59 barred compensation arising from delay or hindrance whatever its cause, while permitting time extensions. Extra hauling from a more distant quarry was a distinct expense claim, not inherently a delay claim, even when work continued beyond the original period. (¶ 25–30)
- Extra-haulage entitlement survived, but payment over and above the contracted allowance had to respect the supplemental-rate mechanism. Using Article 142 despite the limits on statutory modification, the Court sustained the Sub-Court calculation based on the Rs 13.75 conveyance rate. (¶ 31–41)
- The negotiated foodgrain terms had been overlooked below, but the contractor’s case still lacked material establishing availability with the department and actual additional payments or purchases. Escalated prices beyond the contract period also encountered Clause 59. The award on this claim was unsustainable. (¶ 42–63)
- Cement reimbursement at the contractual issue rate was not itself delay compensation, but theoretical requirements and deductions could not substitute for proof of outside purchases. Missing contractually required ledgers, vouchers and bills justified interference. Unused accumulated materials and an unproved assurance likewise did not establish compensation. (¶ 64–87)
- Under the 1940 Act, where the agreement did not prohibit interest and the dispute was referred, the arbitrator possessed discretionary power to award pendente lite interest. The Sub-Court’s exclusion based on an absence of power was erroneous. (¶ 88–90)
Result
Appeals partly allowed. Claim I restored as accepted by the Sub-Court, with interest as awarded by the arbitrator. Amount to be calculated and paid within two months of production of the certified judgment; other pressed claims rejected.