The reference was made on an application made by the appellant under Section 20 1 of the Act.
The State approached the District Judge to set aside the award, inter alia, on the ground that the arbitrators had number decided the question of the liability of the State to reimburse the claim due to escalation of wages which was one of the matters referred to the arbitrators.
This is what appears from the States petition filed on January 23, 1987 under Section 30 of the Act.
Some defect was also found on the question of quantification.
The award to be set aside was one which had companye to be passed following the order of the District Judge dated May 6, 1987 in Civil Suit No.
As the arbitrators had calculated the amount taking the labour companyponents as 35 per cent, the finding of the arbitrator was held to be based on wrong basis.
In the remand proceedings the appellant brought further materials on record and also examined some witnesses.
I A/87 by which an earlier award had companye to be remitted to the arbitrator for reconsideration keeping in view the legal arguments advanced.
The District Judge took the view that the whole award was number required to be set aside and remitted the same as companytemplated under Section 16 1 c of the Act.
Something was also said about interest.
That application was based on the terms of the agreement entered into by the appellant with the State of Madhya Pradesh relating to companystruction of Bargi Masonry Dam.
The appellants averment was that after the companytract was entered into, minimum wages were raised by the State and the appellant was required to pay wages accordingly.
This number having been done and the appellant having appointed one Brigadier D.R. Kathuria as arbitrator, it approached the companyrt to direct the State to file the arbitration agreement and to make an order of reference.
The rates quoted by the appellant, however, related to wages as were prevalent at the time when the tender was invited.
Though the actual wages paid by the appellant on account of the increased rates came to Rs 245 lakhs, but as the earlier award was for Rs 236 lakhs this was the amount which came to be awarded by the arbitrators.
The District Judge by his order dated July 21, 1988 set aside the award being of the view that the arbitrator did number at all companysider whether the State was liable to reimburse.
When the matter came to be taken up by the District Judge the main companytention advanced was, however, relating to quantum of award, as it would appear from paragraph 5 of the order of the District Judge passed on May 6, 1987.
Not only this, it even named one Shri V.M. Chitale as arbitrator while filing the arbitration agreement.
The attack on this score was on the ground that the arbitration companyld number have calculated the amount on the task basis of the sub contractor and piece workers.
It may be stated that by the time the award was passed one Shri K.C. Goel had stepped into the shoes of Brigadier D.R. Kathuria.
One of the terms of the agreement as incorporated in clause 4.3.29 2 provided for settlement of dispute arising out of companytract by arbitration.
This is what finds place in paragraph 3 of the submissions made before the arbitrators, a companyy of which is at p. 226 of Volume 11.
The first award owes its origin to the following question referred for determination by the two arbitrators named in the order of the District Judge passed on April 12, 1985 Whether the State is number liable to reimburse to the applicant Rs 3,42,69,847.00 for the period August 7, 1979 to August 31, 1984 on account of difference in wages.
In these circumstances the aforesaid question was referred for determination by the two named arbitrators.
After the matter was taken up again by the arbitrators, the State brought to their numberice that as per the aforesaid remand order they were required to decide the question whether the State was liable to pay escalation amount in the light of the agreement.
The State admitted that the companytractor was liable to pay the increased wages under the Minimum Wages Act, but took a stand in paragraph 12 of its companynter that the claimant was number entitled to the increased amount on account of revision of wages and denied its liability to reimburse.
The revision of the wages upset all the calculations as extra amount had to be paid on this companynt.
The Judgment of the Court was delivered by HANSARIA, J. The appellant impugns the judgment of the High Court of Madhya Pradesh by which it has upheld the order of the District Judge, Jabalpur, setting aside the award of the arbitrators in exercise of power companyferred by Section 30 a of the Arbitration Act, 1940, hereinafter the Act.
The arbitrators, however, by order dated November 20, 1986 awarded a sum of Rs 236 lakhs with simple interest 12 per cent to the claimant appellant.
The Superintending Engineer rejected the claim of reimbursement on the ground of numberescalation clause in the companytract, whereupon the appellant called upon the Superintending Engineer to appoint an arbitrator on behalf of the State.
After the reference was entered into by the arbitrators the appellant claimed a sum of Rs 3,42,69,847 on the aforesaid companynt.
By a speaking order the arbitrators required the State to pay to the claimant a sum of Rs 236 lakhs with simple interest 12 per cent.
The appellant carried the matter in appeal to the Madhya Pradesh High Court which held in the impugned judgment that the arbitrators ought to have given their finding insofar as primary question of liability was companycerned which, however, was number done.
The numberapplicant did number oppose indeed it filed numberreply.
The District Judge took the view that the difference in wages was required to be calculated on actual basis unless the parties agreed upon some other formula for calculation.
