R. Dwarakanath Reddy Vs. Government of Andhra Pradesh - Court Judgment

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arbitration - jurisdiction - award made by arbitrator on ground of some claims and rejecting few claims challenged - i additional judge viewed that court cannot sit in appeal over reasons of arbitrator and award in that respect is not liable to be interfered with - view taken by judge is in accordance with settled law and is in no way liable to be interfered with - it is for arbitrator to judge between rival claims - held, reason of award by i additional judge justified and award cannot be interfered with on any ground. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. lingaraja rath, j.1. all these four cases arise out of the common judgment delivered in o.s. no. 731 of 1985 and o.p. no. 342 of 1985 in relation to one arbitration award and hence are disposed of by this common judgment. 2. an award was made by the arbitrator on 30-5-1985 allowing only claim nos. 1, 2 and 5 of the claimant-contractor in respect of the earth work excavation and forming embankment of kakatiya canal from k.m. 181/0 to k.m. 182/0. o.p. no. 342 of 1985 was filed by the state to set aside the award and o.s. no. 731 of 1985 was filed by the contractor to make the award the rule of the court. common judgment was delivered by the learned i additional judge, city civil court, hyderabad setting aside the award so far as claim no. 2 was concerned and upholding it so far as claim nos. 1 and 5 were concerned. both the cases were thus partly allowed and decreed. c.m.a. no. 770 of 1988 has been filed by the contractor against the judgment in o.p. no. 342 of 1985 and he has also filed crp no. 3716 of 1988 against the judgment in o.s. no. 731 of 1985. likewise, c.m.a. no. 907 of 1988 has been filed by the government against the judgment in o.p. no. 342 of 1985 so far as it went against them and c.r.p. no. 1129 of 1993 has also been filed by the government as against the judgment in o.s. no. 731 of 1985 so far as it went against them. 3. in the present judgment the parties are referred to in the same description as they are found in c.m.a. no. 770 of 1988, the claimant-contractor being referred as the appellant and the government being referred as the respondent. 4. the case of the parties, in each case, is confined to claim nos. 1, 2 and 5 only. while it is argued by the appellant that the arbitrator's award in respect of claim no. 2 should have been also made the rule of the court, it is the case of the government that the award should have been set aside in its entirety rejecting not only claim no. 2, but also in respect of claim nos. 1 and 5. 5. so far as claim no. 2 is concerned, the award shows the claim as 'payment of extra rates of work done beyond the agreement time'. the claim on that count had been advanced as rs. 12,63,629/-. the arbitrator admitted the claim partly and made the award in that respect for sum of rs. 3,37,505/-. the learned i addl. judge considered the claim of both the parties and found the facts relating to the claim as being that the appellant had not completed the work within the agreed time for which it had been extended twice by the department. through his letters of 27-3-1980 and 22-6-1981, the appellant had sought extensions of time on the grounds that due to sklylab scare the labourers brought by him from outside had left the work spot about one and half months earlier than their scheduled departure, that due to shortage of fuel oils the progress was affected and that due to the limited supply of explosives the appellant could not progress earnestly which affected the progress of the work. in his second request for extension of time he mentioned the reasons as being the skylab scare anf that the reach from k.m. 181.00 to 181.500 was involved in rock excavation for which the required profiles took unduly long periods. on the first request, extension of time had been granted till 31-8-1980 through letter of 4-7-1980 wherein it was specifically stated that the grant of extension of time had no financial implication whatsoever. the second extension was granted through letter of 13-5-1983 also specifically mentioning that the grant of extension of time had no financial implication whatsoever to the government. the learned i addl. judge rejected the claim of the appellant and set aside the award for claim no. 2 taking the view that in the very orders of extension it had been made clear that it would have no financial burden on the government and that if the appellant was not agreed, he should have stopped the work and should not have executed it. evidently, the learned judge was of the view that having accepted the condition of not charging the government with additional financial liabilities, a claim in that regard was not sustainable. he also held that the grounds of extension sought for did not justify extension and that the government had never committed any delay in supplying the explosives. 6. but apart from such considerations of the learned judge, it is also seen that the claim no. 2 is specifically barred by preliminary specification no. 59 of the andhra pradesh standard specifications. it is admitted by the learned counsel for the appellant that p.s. 59 applies to the contractor in question. the provisions specifically lay down of any claim for compensation on account of delays or hindrances to the work from any cause whatever as not entertainable. the only relief in that regard is reasonable extension of time which may be allowed by the executive engineer or by the competent officer and such extension is to be granted if the cause of delay is beyond the control of the contractor. if the executive engineer fails to issue the necessary orders in the matter, the contractor is given the right to claim an assessment of the delay by the superintending engineer of the circle, whose decision is final and binding. the further condition is that within 14 days of the occurrence of the delay or hindrance, the claim has to be lodged with the executive engineer in writing and otherwise no extension of time is to be allowed. thus, the only relief available to the contractor for any obstruction to the work because of delay or hindrance, for causes which are beyond his control, is extension of time as assessed by the executive engineer, only when a claim is lodged within the stipulated time. the final arbitrator in the matter is the superintending engineer and his decision is binding on the parties. the circumstance is thus taken out of the arbitration clause and the arbitrator has no jurisdiction to enter into it. the question was set at rest by the apex court in ch. ramalinga reddy v. supdt. engineer (1994(5) scale 12). the court considered the scope of clause 59 in the case and held an award for compensation on account of delays or hindrances to the work would not lie as falling outside the exceptions of p.s. 59 and the extension having been granted making it clear that no claim for compensation would lie. the judgment of the court in p. m. paul v. union of india : [1989]1scr115 , was distinguished pointing out that in that case there is no clause in the contract which had provided that the respondent would not be liable to pay compensation on account of delay in work from any cause, nor it had been stipulated, when extension of time was granted to complete the work, that no claim for compensation would lie. it is for such reason we must hold that the learned addl. judge rightly set aside the award so far as the compensation in respect of claim no. 2 is concerned. 7. claim no. 1 related to 'refund of excess recovery on the issue rates of explosives'. the arbitrator accepted the case of the appellant and directed the respondent to refund a sum of rs. 91,094/- as against the claim amount of rs. 2,30,752/-. clause 4 of schedule e of the agreement between the parties made the provision regarding supply of explosives i.e. gelatine, as follows : 'explosives if any, required for rock blasting will be issued by the department, if available, at the stores issue rates prevailing time to time and the cost thereof will be recovered from the contractor's bills. otherwise, the contractor should make his own arrangements for procuring them'. the respondent supplied imported gelatine to the appellant. admittedly, the value of the foreign explosive is more than indigenous gelatine. recovery was made from the appellant of the value of the gelatine at the higher rate because of supply of imported gelatine. the arbitrator gave reasons for allowing the claim as follows : 'the claimant signed the agreement agreeing for issue of explosives at the rates prevailing from time to time vide clause 4 under schedule e of the agreement. the respondent quoting this clause argued that the claimant is not entitled for any refund of excess recoveries due to issue of imported explosives. but during the arguments the claimants contended that the respondent forcibly issued imported explosives along with the indigenous explosives as no one was willingly coming forward to take imported explosives at much higher issue rates. the above fact is verified by perusing the issue statement of explosives filed by the respondent, pages 11-15 of r. 3. the issue of imported explosives is nowhere mentioned in the agreement. hence in view of the above circumstances, the claimant is entitled to get refund of excess issue rates charged by the respondent for imported explosives over and above the prevailing issue rates for indigenous explosives at the time of supply of imported explosives'. 8. the learned addl. judge took the view that the court cannot sit in appeal over the reasons of the arbitrator and the award in that respect is not liable to be interfered with. the view taken by the learned judge is in accordance with the settled law and is in no way liable to be interfered with. it is for the arbitrator to judge between the rival claims and if he found that explosives which were not bargained for by the appellant were forcibly supplied to him and that if indigenous gelatine was not supplied by the department he could have purchased the same in the market and could have utilised them; the court cannot step in and substitute its own reasons and opinion for that of the arbitrator. 9. claim no. 5 related to refund of recovery of rs. 25,000/- and interest at 21% per annum from 1-11-1981 to 30-6-1984 withheld by the respondent from the final bill of the appellant. the facts are that at the request of the appellant the respondent had deleted a portion of the work and had treated the same as authorised deletion. rs. 25,000/- due to the appellant on the final bill had been withheld till the balance work was completed for adjustment towards any extra financial involvement. the learned addl. judge upheld the award, which directed the respondent to refund the amount, taking into consideration the fact that in the proceedings of the 8th meeting held by the arbitrator on 5-5-1985 it was mentioned that the respondents had clarified to the arbitrator that they were completing the balance work without any extra cost to the department. he further took into account the fact that the respondent had not placed any material whatsoever to substantiate the contention that the work had not been completed till then and that there was also no material to show that the respondent was incurring any extra expenditure which is the condition precedent before the adjustment of the withheld amount. we find the reason to be eminently justified and the award not liable to be interfered with on that account. 10. because of the conclusions reached, we uphold the judgment of the learned i addl. judge, city civil court, hyderabad and dismiss both the appeals and both the revisions with costs. 11. order accordingly.