Holding

The High Court was correct in setting aside the remittance order; the contractor is not entitled to a higher rate for the additional excavation as the contract provides no such provision and there is no error apparent on the face of the award.

Summary

The appellant, a contractor, claimed a higher rate for extra hard‑rock excavation under a government contract, invoking Clause 63 and alleged an error apparent on the face of the arbitral award. The arbitral panel had rejected the claim, and the trial court remitted the award for reconsideration under Section 16 of the Arbitration Act, 1940. The High Court set aside the remittance, holding that the contract did not provide for a higher rate and that there was no patent error in the award. On appeal, the Supreme Court affirmed the High Court, emphasizing that remission under Section 16 is discretionary and may be exercised only for omissions, indefiniteness, or clear errors, none of which were present. Consequently, the contractor was not entitled to a higher rate for the additional excavation work.

Issues considered

The applicability of Section 16 of the Arbitration Act, 1940 to remit an arbitral award for reconsideration
Whether the arbitral award contained an error apparent on its face justifying remittance
Whether the contract, via Clause 63 or any implication, entitled the contractor to a higher rate for additional excavation
Whether the High Court was justified in setting aside the trial court’s remittance order

Legislation cited

Arbitration Act, 1940s. 14, s. 16, s. 30, s. 33, s. 39

Subjects

ArbitrationSection 16Award remissionError apparent on the faceContract interpretationClause 63Additional excavationHigher rateDiscretionary jurisdiction

Judgment

A RAMACHANDRA REDDY AND CO.
v.
STATE OF ANDHRA PRADESH AND ORS.

FEBRUARY27, 2001

B [G.B. PATTANAIK, U,C. BANERJEE, BRIJESH KUMAR, JJ.]

The ArbitraJion Act, 1940 :

Section 16-Remission of award-Power of Court-Discretionary-Ex-
ercise of-When-Held, when there are omissions and defects in the award
c which cannot be modifiedorcon~cted-Appella!e Court---lnterference-When-
Held, when discretion misused by Trial Court.

Sections 16, SO and 33-Award-lnterference-Envr apparent on the
face of award-Meaning of-Held, when basis of award erroneous Courts not
to investigate beyond aivard of arbitrators and documents actually incorpo-
D raJed therein for purpose offinding out any alleged envr.

Contractor seeking higher rate for extra quantity of work-Agreement
not providing for escalated rate either expressly or imp/i,dly---Competent
Authority granting extension oftime but specifically intimating it will not make
contractor eligible for extra claim-Whether contractor entitled to higher
E
rate-Held, contractor not entitled to higher rate for additional excavation
work-Arbitrator being creature of agreement, cannot pass award beyond
tenns of agreement.

Appellant-Claimant was awarded excavation work under a contract
p by respondent. Dispute arose between parties which was referred to panel
of arbitrators which rejected claim item Nos. 1, 2 and 3 while allowing
claim item nos. 4 and 5. Claim Item No. 1 relates to increase in quantity of
hard rock abnormally and appellant claimed Rs. 93,76,000 for such extra
excavation. Claimant filed objection in the Civil Court under Section 16 of
the Arbitration Act, 1940 against award of arbitrators rejecting claim
G item Nos. 1, 2 and 3. Trial Court set aside award in relation to claim item
No. 1 and some others and remitted the same for reconsideration to panel
of arbitrators. Against the judgment of Trial Court, respondent preferred
appeal under Section 39 which was allowed by the High Court in so far as
it related to remitting claim item no. l while upholding other directions of
H the Trial Court. Aggrieved by the judgment of High Court, claimant-
186
RAMACHANDRA REDDY v. STATE 187
contractor has filed the present appeal. A
Appellant contended that High Court committed serious error in
re(erring to clause 59 as well as letters dated 15.7.1980 and 19.5.1983 while
refusing payment at higher rate for additional excavation work; that
arbitrators committed error apparent on the face of award;· that payment
at higher rate for additional excavation was implied in view of recommen- B
dations of Executive Engineer; and that contractor was entitled to he paid
at higher rate for additional excavation in accordance with Clause 63 of·
-t the agreement.

Respondent contended that the award did not contain any error C
apparent on the face of it; that contention regarding payment at higher
rate for additional excavation under clause 63 of the agreement was raised
for the first time and should not he allowed to be raised and alternatively,
that Clause 63 has no application for additional excavation since it applies
only to supplemental items and additional excavation is not a si;pplemen-
tal item; that claim for payment at higher rate for additional e:<cavation D
was not sustainable in view of letters of respondent dated 15.7.1980 and
· 19.5.1983 while allowing extension of time for completion of work; and
that judgment of Trial Court tantamounts to gross error of jurisdiction in
interfering with an award as ·no reasons have been given for remitting
claim item Nos. 1, 2 and 3 for reconsideration. E
Dismissing the appeal, the Court

HELD : I.I. Under the Arbitration Act, Section 16 is the provision
under which the Court may remit the award for reconsideration of an
arbitration and necessity for remitting the award arises when there are F
omissions and defects in the award, which cannot he modified or cor-
rected. Remission of an award is in the discretion of the Court and the
powers of the Court are circumscribed by the provisions of Section 16
itself. Ordinarily, therefore, a Court may be justified. in remitting the
matter if the arbitrator leaves any of the matters undetermined or a part
of the matter which had not been referred to and answered and that part G
cannot be separated from the remaining part, without affecting the deci-
sion on the matter, which was referred to arbitration or the award is so
indefinite and incapable of execution or that the award is erroneous on
the face of it. Discretion having been conferred on the Court, to remit an
award, the said discretion has to be judicially exercised and an appellate H.
188 SUPREME COURT REPORTS [2001] 2 S.C.R.
A Court would not he justified in interferin~ with the exercise of discretion
unless the discretion ha~ heen misn<.ed. [192-H; 193-A-C]
1.2. An error of law on the face of the award would mean that one can -i
find in the award or a document actually incorporated thereto stating the
reasons for a judgment some legal prepositions which is the basis of the
B award and which can be said to he error1eous. Documents not incorporated
directly or indirectly into the award cannot be looked into for the purpose
of finding out any alleged error. The courts are not to investigate beyond the
award of the arbitrators and the documents actually incorporated therein
and, therefore, when there would be no patent error on the face of the
c award, it would not be open for the Court to go into the proceedings of the
award. If the application for remittance filed by the claimants invoking
jurisdiction of the court under Section 16 is examined and if the order of the
Civil Court, remitting claim Item No. 1 is tested, the conclusion is irresist·
ible that no case for remittance had been made out and the trial Judge
exercised his discretion on the ground which does not come within the four·
D corners of the provisions of Section 16 of the Arbitration Act. In fact no
reasons had been ascribed for interference with the award, rejecting claim
Item No. 1 and for remittance of the same. [193·D·F)
2.1. The question of granting a higher .rate for any extra quantity of
work executed by the contractor would at all arise only when the contract
E provides for such escalated rate either expressly or by implication. When
there is no such acceptance by the competent authority, and there is no
provision In the contract, permitting such escalated rate. for the add!·
tional quantity of excavation made, the conclusion is irresistible that the
contractor will not be entitled to a higher rate for the additional excava·
F tion work. [197·A·B)
S. Harr:haran Singh v. Union of India, [1990) 4 SCC 647, distin·
guished. ....
National Fenilizers v. Puran Chand Nangia, [2000] 8 SCC 343, cited.
G 2.2. Arbitrator being a creature of the agreement, unless agreement
either specifically or inferentially provides for a higher rate to be awarded
for any additional or excess work done by the contractor, it would not he
permissible for. the arbitrator to award for the so called additional work at
higher rate. There is no letter from the competent authority, namely the
H Superintending Engineer that the contractor· would be paid at any higher
RAMACHANDRA REDDY v. STATE [PATTANAIK, J.) 189
rate for the additional excavation of rock, though the Ex~cutive Engineer A
had indicated that he has recommended to the Superintending Engineer.
But such recommendation of the Executive Engineer, who was not compe·
~
tent to decide the question of awarding a higher rate for the excess quantity
of excavation "ill not clothe any jurisdiction on the arbitrator to award the
contractor ata higher rate nor would it entitle the contractor to get a higher
B
rate for the claim in question or the basis of agreement. [196-C·D]

3. Clause 63 of the agreement relates to supplemental item, which
have been found essential, incidental and inevitable during the execution
of the work. The excavation of hard rock cannot be held to be a supple·
mental item and on the other hand, is an item of work tendered and c
accepted, and as such clause 63 will have no application to the claim item
No. 1. [196·El

4. The letters of the competent authority specifically intimated the
. contractor that the grant of extension of time will not in any way make the
contractor eligible for any extra claim due to escalation in rates of labour D
and materials or due to any other reasons under any circumstances. [197-D]

Ch. Ramalinga Reddy v. Superintending Engineer and Anr., [1999] 9
sec 610, relied on.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9405of1995. E
.... From the Judgment and Order dated i 3.4.93 of the Andhra Pradesh High
Court in C.M.A. No. 1784 of 1989.

P.P. Rao, K. Maruthi Rao, K. Prabhakar, Mrs. K. Radha, Mrs. Rani
Chhabra for the Appellant. F
Ms. K. Amreswari and G. Prabhakar for the Respondents.
,. The Judgment of the Court was delivered by

"" PATTANAIK, J. Claimants are the appellants against the judgment of
the Andhra Pradesh High Court, arising out of an arbitration proceeding. The G
North work excavation of approach channel of Srisailam Pr(lject had been
awarded to the claimants for different amounts indicated in the contract. The
contract itself contained an arbitration clause. Dispute being raised on different
-~ items of claim, those disputes had been referred to a panel of arbitrators and
the panel of arbitrators, ultimately passed an award where-under claim Items H
190 SUPREME COURT REPORTS [2001] 2 S.C.R.
A I, 2 and 3 stood rejected. So far as claim item No. 4 is concerned, the same
was allowed in part. Claim Item No. 5 was claim of interest and the arbitrators
allowed the interest @ Ii per cent per annwn ov~r the amount awarded. Claim
Item No. 6 was the claim of cost and the arbitrators liirected that each party
will bear its own cost. Against the awar.<l of the arbitrators, rejecting claim item
Nos. I, 2 and 3, the claimants filed an objection in the Civil Court and sought
B for remittance under Section 16 on the grotmd that the arbitrators have left
undetermined the claims of the claimants on item No. I, 2 and 3 on an enoneous
view of the relevant clauses of the agreement. Claimants also filed an appli-
cation under Section 14 to make the award in relation to claim allowed by the ).
arbitrators as a rule of Court. The State of Andhra Pradesh also filed a petition
C under Section 30 of the Arbitration Act to set aside that part of the award which
allowed the claim of the contractor to the extent of Rs.57,000/-. All these
applications which were registered as O.S. No. I 094/86, O.P. J04/87 and O.P.424/
87 were disposed of by a common judgment of the learned Vth Additional
Judge, City Civil Court, Hyderabad. The said learned Judge made the award
in relation to claim item No.4 a rnle of Court. But he set aside the award in
D relation to claim item Nos: 1,2,3 and Sand remitted the same for reconsideration
to the panel of arbitrators. Against the aforesaid Judgment of the Additional
Judge, City Civil Court, remitting the disputes/claims in relation to claim items
I, 2, 3 and 5 to the panel of arbitrators, tl1e State ofAndhra Pradesh prefened
appeals under Section 39 of the Arbitration Act. The High Court by the
E impugned judgment set aside tl1e order of the Additional Judge, so far it relates
to remitting the claim item No. I to the panel of arbitrators for reconsideration.
So far as claim item Nos. 2 and 3 are concerned, tl1e High Court upheld the
direction of tl1e Additional Judge, but, appointed a retired Chief Justice of the
Court as arbitrator to arbitrate the claim items 2 and 3 and a part of claim
item No. 5 relating to interest. In this appeal filed by the claimants, we are
F concerned only with claim item No.I. The legality of the award in relation to
claim items 2 and 3 are the subject matter of an appeal, which is pending in
this Court.

Claim Item No. I relates to increase in quantity of hard rock abnormaJly
and on this head, the claimants had claimed Rs. 93,76,990/-. The claimants'
G
statement that was filed before the arbitrator, makes out a vague claim on this
·score without indicating the basis for the claim in question. In respect of the
aforesaid quantity of extra excavation on hard rock, the State of Andhra
Pradesh had made the payment in terms of Clause 25 of ScheduleC of Section
2 of the agreement as per its letter dated 21st October, 1981. Notwithstanding
H the said paymen~ the claimants had made the extra claim on the ground that the
RAMACHANDRA REDDY v. STATE [PATTANAIK, J.] 191
quantity of excavation of hard rock being abnormally high and much beyond A
the anticipated quantity i11dicated in the agreement and even much in excess of
the so-called 25 per cent of the work as per the GOMS No. 2289 dated
12.6.1968, the claimants are entitled to a separate rate for such extra excavation
and the arbitrators failed to exercise their jurisdiction in not granting the claim
and on the other hand, rejecting the same. The High Court in th~ impugned B
judgment however, referring to clause 59 of the agreement, which deals with
delay and extension of time and in view of the letters of the Superintending
Engineer dated 15th July, 1980 and 19th May, 1983, came to hold that the
contractor-claimant will not be entitled to be paid at any higher rate for such
additional excavation work and accordingly set aside the order of the learned
trial Judge, remitting the claim item No. 1 for being re-disposed of by the C
arbitrator.

Mr. P.P. Rao, the learned senior counsel, appearing for the appellant,
contended that the High Court committed serious error in referring to clause 59
as well as to the letter dated 15th July, 1980 and 19th May, 1983, in coming to
D
the conclusion that the claimant-conttactor will not beentitled to be paid at any
higher rate for the extra amount of excavation made by him. Mr. Rao further
submitted that under GOMS No. 2289 dated 12.6.1968, a deviation limit upto a
1naxi1num of 25 per cent being permissible, for any work in excess of that limit,
the contractor is entitled to claim a higher rate and that being the position, the
arbitrators had committed an error apparent on the award in refusing the claim E
and the High Court committed error in setting aside the order of remittance
passed by the Additional Judge. In support of this contention, relia'lce was
placed on the judgment of this Court in the case of S. Harcharan Singh v. Union
of India, [1990] 4 SCC 647. Mr. Rao also further urged that in view of the
recommendations of the Executive Engineer notwithstanding the continued F
objection of the claimant, expressing inability to continue with the abnormal
increase in the hard rock excavation, it must be held that the :i~ayment at a
higher rate for the additional or exc~ss quantity of excavation was implied and
faih._rre on the part of the arbitrator to consider the same, constitutes an error on
the face of the award and as such the learned Additional Judge was justified in
remitting the matter for reconsideration of the arbitrator. Mr. Rao lastly submit- G
ted that for this excess of excavation work, the contractor was entitled to be
paid in accordance with Clause 63 of the agreement, which has not been
noticed by the arbitrator and adjudged from that stand point, the High Court
also committed eJTor in setting aside the order of remittance made by the
learned Additional Judge. H
192 SUPREME COURT REPORTS [2001] 2 S.C.R.
A Ms. K. Amreswari, appearing for the respondent State of Andhra Pradesh,
on the other hand conte!1ded that rhe power of interference of the Court nnder
Sections 30 and 33 as well as under Section 16 is of a limited nature and the
Court would be justified in interfering with the reasoned award of an arbi-
trator, if the award contains any apparent error on the same. If the impugned
award is examined from the aforesaid stand point, the conclusion is irresist-
B
ible that it did not contain any error and, therefore, the interference of the
Court was not warranted. Ms. Amreswari further contended that the claimants
nowhere in the claim petition had made out a case that for the additional
quantity of excavation work, they are entitled to the rate as per clause 63 of
the agreement which was urged for the first time in this Court and, therefore,
c the said ~ontention should not be allowed to be raised. Ms. Amreswati further
urged that clause 63 will have no application for the extra item of excavation
made by the contractors since that clause applies to any supplemental item,
which are found essential, incidental and inevitable during the execution of
the work and by no stretch of imagination, the additional excavation which
D is the subject matter of claim in claim item No. 1 can be held to be supple-
mental item. Ms. Amreswari further submitted that for this additional quantity
of excavation the claimant having been paid for in accordance with clause 25
of the agreement, the·further claim of the contractor is not arbitrable at all
and, High Co.urt therefore. was fully justified in setting aside the order of
remittance made by the Additional Judge. Ms. Amreswari further contended
E that the claim for payment of higher rate for the work done beyond the
agreement is not at all sustainable in view of the positive letter of the
authotities dated 15th July, 1980 and 19th May, 1983, while allowing exten-
sion of time for completion of the work, as has been held by this Court in
the case of Ch. Ramalinga Reddy v. Superintending Engineer andAnr., [1999]
F 9 SCC 610, and, therefore, the High Court was fully justified in interfering
with the directions of the sub-ordinate Judge in remitting the said claim item
No.I for fresh arbitration. Mrs. Amreswati lastly submitted that a bare scru-
tiny of the order of the Vth Additional Judge, City Civil Court, Hyderabad,
remitting claim items Nos. I, 2 and 3 for reconsideration would indicate that
no reasons had been given for such remittance and on the face of it, the said
G judgment of the Civil Court tantamounts to gross error of jurisdiction in
interfering with an award and transgressing the scope and limitation provided
under Sections 30 and 16 and, therefore, the High Court was justified in
correcting the said en·or in appeal.

H Under the Arbitration Act, Section 16 is the provision under which the
RAMACHANDRA REDDY v. STATE [PATTANAIK, J.) 193
Court may remit the award for reconsideration of an arbitration and necessity A
for remitting the award arises when there are omissions and defects in the
award, which cannot be modified or co1Tected. Remission of an award is in
the discretion of the Court and the powers of the Court are circumscribed by
the provisions of Section 16 itself. Ordinarily, therefore, a Court may be
justified in remitting the matter if the arbitrator leaves any of the matters
B
~detennined or-apart of the matter which had not been refened to and
answered and that part cannot be separated from the remaining part, without
affecting the decision on the matter, which was referred to arbitration or the
award is so indefinite as to incapable of execution or that the award is
• erroneous on the face of it. Discretion having been conferred on the Court,
to remit an award, the said discretion has to be judicially exercised and an c
appellate Court would not be justified in interfering with the exercise of
discretion unless the discretion has been misused. What is an error apparent
on the face of an award which requires to be corrected has always been a
subject matter of discussion. An error of law on the face of the award would
mean that one can find in the award or a document actually incorporated D
thereto stating the reasons for a judgment some legal propositions which is
the basis of the award and which can be said to be erroneous. Documents not
incorporated directly or indirectly into the award cannot be looked into for
the purpose of finding out any alleged error. The cow'ts are not to investigate
beyond the award of the arbitrators and the documents actually incorporated
therein and, therefore, when there would be no patent error on the face of the
El
,. . award, it would not be open for the court to go into the proceedings of the
award. If the application for remittance filed by the claimants invoking
jurisdiction of the court under Section 16 is examined from the aforesaid stand
point and if the order of the learned Civil Court, remitting claim Item No. I
is tested in the light of the discussions made above, the conclusion is irresist- F
ible that no case for remittance had been made out and the learned Ilia! Judge
exercised his discretion on the grounds which does not come within the four-
corners of the provisions of Section 16 of the Arbitration Act. In fact no
reasons had been ascribed for interference with the award, rejecting claim
Item No. 1 and for remittance of the same. The High Court being the Court
of appeal, was therefore, fully justified in exercise of its appellate power in G
correcting the enor made by the Civil Judge in remitting claim item No. I.

Let us now examine the contentions of Mr. P.P. Rao, the learned senior
counsel, appearing for the appellant. The learned counsel's contention in fact
centres round the question as to whether for the additional quantity of exca- H
194 SUPREME COURT REPORTS (2001] 2 S.C.R.
A vation work, the contractor would be entitled to at a higher rate in accordance
witl1 Clause 63 of the agreement. Mrs. Amreswari, appearing for the State was
fully justified in her submissions that this contention had never been raised
either before the arbitrator or before the subordinate Judge or even before the
High Court. In fact the claim petition filed before the arbitrator is rather
cryptic and absolutely vague, not indicating on what basis the additional
B
claim is made, though the foundation for the claim was there, namely there
had been an increased amonnt of excavation work beyond the agreement. It
is in this cmnection, Mr. Rao had relied npon the two decisions of this Court
in the case of S. Harcharan Singh v. Union of India, [1990] 4 SCC 647 and
National Fenilizers v. Puran Chand Nangia, [2000] (8) SCC 343. But before
C examining tl1e said contention, it would be appropriate for us to extract Clause
63, which was the sheet anchor of the argument of Mr. Rao. Clause 63 reads
as under:

"Cl.iS3. Payment for additions and deduGtions.foromi.1sions: (A) The
contractor is bound to execute all supplemental items that are found
D essential, incidental and inevitable during the execution of the work,
at the rates to be worked out as detailed below:

(a) For all items of work in excess of the quantities shown in schedule
A of the tender the rates payable for such items shall be either the
tender rates or the standard schedule of rates for the items plus or
E minus the overall tender percentage accepted by the competent au-
thority which ever is less.

(b) For items directly deducible from similar items in tl1e agreement,
the rates shall be derived by adding to or substracting from the
agreement rate of such similar items, the cost of difference in quantity
F of material or labour between the new items and the similar items in
the agreement, worked out with referencE to the Schedule of rates
adopted in the sanctioned estimate plus or minus the overall tender
percentage.
(c) For new items which do not correspond to any items in the
G
agreement, the rates shall be standard schedule rate plus or minus the
over all tender percentage.

The terms 'standard schedule of rates' used in the above sub-
clauses (a), (b) & (c) means the schedule of rates on which the
H sanctioned estimate was prepared.

•
RAMACHANDRA REDDY v. STATE [PA11'ANA!K, J.] 195
(d) In the event of the Execntive Engineer and the Contractor A
failing to agree on a rate for such additional work, the Executive
Engineer may, at his option either:

(i) employ other parties to cany out the additional work in the
same manner as provided for under clause 48, or
B
(ii) the contractor shall execute the work upon written orders
from the Executive Engineer and the cost of labour and materials plus
10 per cent thereon shall be allowed therefor, provided that the
vouchers for the labour and materials employed shall have been
delivered to the Executive Engineer or his representdtive within
seven days after such work shall have been completed. If the Execu-
c
tive Engineer considers that payment for such work on the basis of
the vouchers presented is unduly high, he shall make payment in
accordance with such valuation as he considers fair and reasonable
and his decision to the matter shall be final, if the amount involved
in additional payment is Rs. I 000 or less, for each occasion on which D
such additional works shall have been authorised. If such amount
exceeds Rs.1000, the contractor shall have the right to submit the
matter to arbitration under the provisions of the arbitration cJause 73.
(e)If, in the opinion of die Executive Engineer a rate for the additional
work is not capable of being properly arrived at prior to execution of
E
work, or if the work is not capable of being properly measured, then
the cost and payment tl1ereof shall be dealt with as provided for in
the preceding sub-clause (d)(ii)."

In the case of S. Harcharan Singh v. Union of India, [1990] 4 SCC 647,
on which Mr. Rao had strongly relied upon, this Court had quoted clause 12 F
of the agreement in paragraph 8 of the judgment and referring to tlie standard
folTll of contract of the Central Public Works Department, specifically pelTllit-
ting for a limit of variation called "deviation limit" up to a maximum of 20
per cent, it was held that the contractor has to cany out the work at the rate
stipulated in the contract upto such limit but for work in excess of that limit
he has to be paid at the rates to be detelTllined in accordance with clause 12A,
G
Wider which the Engineer in-charge can revise the rates, having regard to the
___._ prevailing market rates. The Court also refened to the letters of the Executive
Engineers, the Superintending Engineer and the Additional Chief Engineer
recommending that the additional work may be confined to 20 per cent and
for the extra quantity of additional work, he may be paid remWieration at the H
196 SUPREME COURT REPORTS [200 I] 2 S.C.R.
A increased rate taldng into account the increased cost of the execution of work
on account of peculiar nature of the work. We fail to understand how the
aforesaid decision will be of any assistance to the claimant in the present case, .
where there is no clause like Clause 12A nor is there any letter from the
competent authority agreeing to payment at a higher rate for the additional
work beyond the limit of 25 per cent as provided under the GOMS No. 2289
B dated 12.6.1968. Arbitrator being a creatnre of the agreement, unless agree-
ment either specifically or inferentially provides for a higher rate to be )
awarded for any additional or excess work done by the contractor, it would
not be permissible for the arbitrator to award for the so-called additional work
at a higher rate. In the case in hand, not only there is no letter from the
c competent authority, namely the Superintending Engineer that the contractor
would be paid at any higher rate for the additional excavation of rock, though
the Executive Engineer had indicated that he has reconunended to the Super-
intending Engineer. But such recommendation of the Executive Engineer,
who was not competent to decide the question of awarding a higher rate for
the excess quantity of excavation will not clothe any jurisdiction on the
D
arbitrator to award the contractor at a higher rate nor would it entitle the
contractor to get a higher rate for the chim in <JUestion on the basis of
agreement. Now coming to the very clause, upon \Vhich _t..1r. Rao relied upon.
we find that the said clause relates to supplemental item, which have been
found essential, incidental and inevitable during the execution of the war)<:.
E The excavation of hard rock cannot be held to be a supplemental item and
on the other hand, is an item of work tendered and accepted, and as such
clause 63 will have no application to the claim item No.l. Mr. Rao had also
relied upon the decision of this Court in ;\rational 17ertilizers v. Pu ran Chand
Nangia, [2000] 8 SCC 343, wherein tl1is Court had held that an imetpretation
F of a particular clause of rhe agree1ncnt must be such, so as to balance the
rights of both parties and when a variation clause permits the employer to
make variation in the work upto a specified limit, beyond the said limit, the
claimant could be paid at a higher rate. Tl:e Court in the aforesaid case v1as
examining the principle of integrity of the con!.ract and refused to interlcre
with the award merely because &rbitrator had granted an escalation. In the
G aforesaid case, the Court was examining whether it would be pemtissible for
interfering with an award which was a non-speaking one merely because the
arbitrator had awarded the claim at an escalated rate for the excess quantity
of Vi ork and since the award itself was a non-speaking a\vard, the court held
1

that it is not permissible to probe into the mental process of the arbi1rator and
H then interfered with the same. Then again the question of granting a higher
RAMACHANDRA REDDY v. STATE [PATTANAIK, J.] 197
>
rate for any excra quantity of work executed by the contractor would at all arise A
only when the concract provides for such escalated rate either expressly or by
implication as in the case of S. Harcharan Singh 1990(4) SCC 647, where the
competent authority had agreed for the sm1e by conespondence. But in the
case in hand, when there is no such acceptance by the competent autholity, and
there is no provision in the contract, permitting such escalated rate for the
B
additional quantity of excavation made and in view of our rejecting the con-
tention raised on the basis of clause 63, the conclusion is irresistible that the
contractor will not be entitled to a higher rate for the additional excavation
work and as such the High Court was fully justified in setting aside the
direction of the trial judge, remitting the claim item No. 1 for reconsideration
and we se.e no infirmity with the seid direction of the High Court to be C
interfered with. We also find sufticient force in the submission of Mrs.
Amreswali, relying upon the letters of the competent autholity, specifically
intirnating ihat the graut of extension uf ti1ne will not in any way make the
contractor eligible for aay extra claim due to escalation in rates of labour and
materials or due to any other reasons under any circumstances and the decision D
of this Court in Rarnalinga Reddy, [1999] 9 SCC 610 supports the aforesaid
contention. In the aforesaid premises, we do not find any merits in this appeal,
requiring our interference with the impugned jutlgmenl of the High Court. The
appeal fails aud is dismissed but in the circumstances there will be no order
as to costs.
E
A.K.T. Appeal dismissed.