Full Judgment Text
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CASE NO.:
Appeal (civil) 3593-3596 of 1996
Appeal (civil) 3688-3691 of 1996
PETITIONER:
INTERNATIONAL CONSTRUCTION COMPANY
Vs.
RESPONDENT:
STATE OF ANDHRA PRADESH & ORS.
DATE OF JUDGMENT: 01/02/2001
BENCH:
S. Rajendra Babu & S.N. Variava.
JUDGMENT:
J U D G M E N T
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RAJENDRA BABU, J.:
These appeals arise out of orders made by the Andhra
Pradesh High Court in two appeals Nos. 1200 and 1201 of
1987 and Civil Revision Nos. 3120 and 3121 of 1987. By a
common judgment the High Court allowed the appeals and civil
revision petitions filed by the respondents and set aside a
portion of the award made by the arbitrators for a sum of
Rs. 9,66,000 on account of claims towards losses suffered
by the contractor on account of severe cyclone in Andhra
Pradesh in November 1977 and on account of reimbursement of
losses due to abnormal rains and unprecendented floods in
1978. The dispute arose out of two contracts awarded in the
year 1977 to the appellants for the purpose of earth work,
excavation and formation of embankments and construction of
aqueducts in the Nagarjuna Sugar Left Canals in District
Khammam in Andhra Pradesh The total value of both the
contracts is about Rs. 1.57 crores. The arbitrators made
an award which was made the rule of the court by the
Additional Judge, City Civil Court, Hyderabad. The High
Court, however, reversed a portion of the award, as stated
earlier. The contention put forth before us is that the
High Court has sought to interpret the clauses of the
agreement which it was not entitled to do so and could not
have reappraised the evidence particularly in respect to the
taking over of the site and that there was no heavy rain
fall in June 1978 as per statistics maintained by the
Rainfall Station at Wyra which is near the work site. It is
contended that the High Court also erred in holding that new
claims have been raised by the appellants. The stand of the
appellants is that no new claims had been made and the
claims already made were elaborated by making another
statement. It is further contended that the High Court also
erred in holding that certain claims were time-barred.
Clause 83 of the agreement, upon which much argument had
been addressed, is to the following effect :-@@
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83, CLAIMS AND DISPUTES
Any claims or disputes out of the contract should be
submitted in writing to the Superintending Engineer within
15 (fifteen) days from the date of cause of action, so that
the points at issue should be immediately verified at site
by the field officers, facts ascertained and a prompt
decision given. Claims raised subsequently at such a
distance of time as to make it impossible to verify the
facts are liable to be rejected. The tenderer shall
carefully note this stipulation.
The appellants had made representations to the
Government for reimbursement of losses suffered on account
of the cyclone of 1977 and abnormally heavy rains and floods
in June 1978 and the Government had in September 1979 agreed
to advance a loan of Rs. 4.67 lakhs which was subsequently
recovered from the running bills payments. The only two
claims that survive for our decision are Claim No. I(A) and
Claim No. II(A). Claim No. I(A) is towards reimbursement
of losses sustained by way of advances to labour on account
severe cyclone in November 1977 and Claim No. II(A) is
regarding towards reimbursement of losses sustained due to
abnormal rains and unprecendented floods in 1978. In order
to make a claim and raise a dispute there should have been
compliance with clause 83 of the agreement and on this
aspect there is no dispute. The claim should have been
submitted in writing to the Superintending Engineer within
15 days from the date of cause of action so that this aspect
would be verified. On the interpretation of clause 83, the
High Court held that condition No. 83 is a condition meant
for convenience of both the parties and does not lay down a
rule of limitation, much less a condition for the arbitrator
to entertain a claim. It is not necessary for us to examine
whether any new claim had been raised by the appellants or
not. All that we need to notice is whether, in fact, any
claim had been made in terms of condition No. 83 at all or
not. It is clear from the materials placed before us that
there had been floods and, therefore, the appellants had put
to loss but a claim or a dispute in terms of condition No.
83 does not seem to have been addressed at all either in
claim No. I(A) or claim No. II(A). All that the
appellants stated in their letter dated 26.11.1977 is that
there had been severe cyclone and heavy rains as a result of
which communications dislocated and the appellants sent
their labour recruitment personnel to Bilaspur, Orissa,
Mahboobnagar and other labour recruitment areas and some of
the labour gathered were on their way to site when they were
held up due to the cyclone and were forced to return back
due to complete break down of communications after the
cyclone, but there are no details as regards how many
labourers have been engaged from different areas, as to who
they were and what arrangements had been made in regard to
them and the extent of loss suffered by them. That is the
dispute that is contemplated under clause 83 and such a
dispute had not been raised at all.
The appellants made a claim No. II(A) in the following
terms :-
CLAIM NO. II. TOWARDS REIMBURSEMENT OF LOSSES
SUSTAINED DUE TO ABNORMAL RAINS AND UNPRECENDENDED FLOODS IN
1978.
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The claimants submit that while the work was in good
progress, in June, 1978, there were heavy unprecedended
rains in the catchment of Pedavagu. These were found to be
the heaviest recorded in the preceding about 20 years, for
the month of June as could be verified subsequently from the
I.M.D. data (enclosed). This resulted in many floods one
following the other breaching all protective works in the
river bed and resulting in heavy siltation of the excavated
foundations, heavy erosion of the banking already formed,
and damage to machinery and loss of stacked materials, in
addition to idling of labour and transport vehicles. These
heavy rains had also an adverse effect on the cart track
used for conveyance of materials from the quarry to the
work-site. The cart track became slushy and loaded lorries
could negotiate the cart track only with reduced loads; it
also took extra time for each trip. This increased
enormously the cost of transportation.
The rainfall being unusually heavy for the month of
June, exceeded all expectations of the claimants based on@@
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which the protection arrangements had been formed. The@@
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total losses caused by the extraordinary heavy rains and
floods amount to Rs. 12,80,262/-. As the claimants
incurred these losses due to no fault of theirs, they are
entitled to be reimbursed.
Again it is not clear whether the appellants had raised
any dispute or a claim. Moreover, clause 42 of the
agreement reads as under :-
42. FLOODS :
In case of flash and untimely floods during the working
season i.e. resulting in over topping of protective work
and flooding of the work area, the contractor shall make his
own arrangement at his cost to shift the machinery
equipment, material and labour to a safe place. The work
shall have to be resumed after receding of floods and
necessary strengthening of protective work and dewatering
done by the contractor at his cost. Suitable extension of
time shall however be granted on such occasions for the loss
of working at the request of the contractor. The Department
is not liable for any loss or damage to the men, machinery,
work or materials on account of these floods and no
compensation whatsoever in this regard shall be paid to the
contract.
1. The silt, debrice, sand and other materials
accumulated in the working area during flash floods or
regular floods in the monsoon shall be removed by the
contractor as required for continuing the work at his cost,
by any chance, if any, excavated portion that could not be
filled with concrete and masonary by the contractor, get a
filled up during the monsoon period with earth and silt, its
removal will not be paid for again. The contractor will
have to re-excavate at his own cost.
2. It shall be distinctly understood that it is
entirely the responsibility of the contractor to make such
arrangements as may be required from time to time to project
the men, machinery, materials and the work under progress
and the work for which the measurements were recorded and
payment made, against damage either during working season or
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during the flood season and department accepts no liability,
whatsoever for any damage or loss of men, materials,
machinery and work or hindrance caused to the progress of
work except as provided in clause under contractors risk
and Insurance as mentioned herein.
In the event of such situation, as is pointed out, as to
what arrangement the appellants had made and what are the
claims in regard to the same and they had not made such a
claim before the department. These two findings are
sufficient for rejecting the claim made by the appellants
and the view taken by the High Court, therefore, is correct
and calls for no interference.
The appeals, therefore, stand dismissed. However, there
shall be no order as to costs.@@
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