ORISSA MINING CORPORATION LTD. versus PRANNATH VISHWANATH RAWLLEY

Citation: [1978] 1 S.C.R. 295 · Decided: 12-08-1977 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed

Judgment (excerpt)

ORISSA MINING CORPORATION LTD. 
v. 
PRANNATH VISHWANATH RAWLLEY 
. August 12, 1977 
[Y, V. CHANDRACHUD AND P. S. KAILASAM, JJ.J 
295 
Atbitratio11 Act, 1940 (10 of 1940)-S. 20-Scope of-Extra clai111, 01'er and 
above the claitn rnadei in the plaint and jfiown in the reference, 111ade before the 
arbitrator-Arbitratot-lf con1petent to er.tertain fresh clain1 without reference 
fron1 court. 
The respondent entered into a contract with the appellant for the transport 
of iron ore from quarry Nos. 1 and 2 being V.'orked out by the appellant, to the 
railway siding. At the instance of the appellant the respondent later transported 
iron ore from quarry No. 5 situated at a distance of about 2 KM from the other 
two quarries. Having failed to recover from the appellant the extra cost which 
was Rs. 68,582 for transport and a sun1 of Rs. 25,000 for constructing a road 
between q1:1arry Nos. 1 and 2 and quarry No. 5, the respondent filed in the court 
of subordinate Judge an application under s. 20 of the Arbitration Act, 1940. 
The dispute was referred to a sole arbitrator. 
Before the arbitrator the respondent made a claim of Rs. 68,582, apart from 
the claim for an identical amount made in the plaint. The arbitrator disallowed 
the claim for construction of the read but allowed the ttJditior.al claim of the 
respondent and gave an award for a sum of Rs. 1,16,570. 
The appellant's application alleging that the arbitrator acted without jurisdic-
tion in alJo,ving the additional claim of Rs. 68.582 was rejected by the Subordi-
nate Judge on the ground that there was no error apparent on the face of the 
record and that the arbitrator did not exceed his jurisdiction. 
The High Court dismissed the appellant's appeal. 
Allowing the appeal to this Court, 
HELD : When an agreement is filed in court and order of reference is m.ade, 
then, the claim as a result of the order of reference is limited to a particular 
relief and the arbitrator cannot enlarge the scope of the reference and entertain 
fresh claims without a further order of reference from the court. 
[2991-11 
In the instant case the arbitrator has exceeded his jurisdiction in embarking 
on the. extra claim. put for.ward before him by the respondent. 
When the claim 
had been specified in the plaint and when the reference was confined to the 
claim made in the plaint, the arbitralor would have to restrict his award only 
to that claim. 
[299F] 
The High Court has misconstrued the claim. There was no claim for trans-
port of iron ore between quarry Nos. 1 and 2 and the r;;iilway siding; the only 
claim was for the transport for the extra distance. 
[299A] 
E 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 769 of 1976. 
G 
Appeal by Special Leave from the Judgment and Decree dated 
20-2-76 of the Orissa High Court in M.A. 75/75. 
K. Saw/111ey and M. K. Garg for the Appellant 
G. B. Pai, Miss Uma Mehta and R. K. Mehta for the espondent. 
The Judgment of the Court was delivered by 
KAILASAM, J.-This appeal is preferred by the Orissa 
Corporation Ltd., (a Government of Orissa undertaking) by 
Mining 
special 
H 
B 
c 
:D 
.F 
G 
296 
SUPREME COURT REPORTS 
[ 1978] 1 S.C.R. 
lea>"e against the judgment and decree dated February 20, 1976 of 
the High Court of Orissa whereby the High Court upheld the judg-
ment of the Subordinate Judge, Rourkela 
refusing to set aside the 
award of the arbitrator directing payment of certain moneys to the 
respondent herein. 
The respondent is a partnership firm carrying on businesi. oL 
transport, mining 
loading 
and 
unloading etc. 
with its office at 
Rourkela. 
The appellant called for a tender for the work of raising 
of iron ore in Khandadhar Mines and transporting it to Barsuan Rail-
way siding, including wagon loading. 
An agreement was entered 
into between the appellant and the respondent for a period of 
one 
year with effect from May 25, 197 l. 
The estimated value of the 
contract was Rs. 6.77,040. 
The respondent under the terms 
of 
the contract was required to work in quarry Nos. 1 and 2 in Khanda-
dhar Mines but during the progress of the work. on the directions of 
the appellant, the respondent worked ln quarry No. 5 also which was 
at a distance of about 2 K.M. from quarry Nos. 1 and 2. 
As the 
respondent had to cover an extra distance between quarry Nos. 1 & 
2 and quarry No 5 he demanded extra cost for the transport. 
The 
respondent also demanded cost for construction of a road at 
the 
schedule rate provided by the St

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