UNION OF INDIA Vs. BHARAT ENTERPRISE

JUDGEMENT

(1.) A contract was entered into between the parties for the repair of bathrooms and other allied works on 2/7/2001. It would appear that time was extended up to 19/1/2002. The respondent-Contractor submitted final bill on 13/2/2002. It contained a No Claims Certificate. The said amount claimed by the respondent apparently was not paid immediately. The respondent it would appear made several reminders regarding the non-payment of the final bill for a period of one year. Following many reminders by the respondent regarding the non payment of the final bill, according to the respondent, it sent a list of additional claims on 25/2/2003 and in the said letter, claimed that the letter and the Final bill should be considered as under protest. The respondent signed affidavit dtd. 24/5/2003 which according to the respondent was prepared by the appellant and which provided for the withdrawal of the letter dtd. 25/2/2003. An undertaking was also got signed from the respondent on 12/9/2003. Thereafter, respondent on 14/11/2003 revoked the affidavit and undertaking on account of non payment of the bill and purported to give the final notice invoking the arbitration clause contained in the contract for the non payment of claims due. It is, thereafter, on 25/11/2003, that the appellant made payment of Rs.100358.00. This was followed by letter dtd. 8/9/2004 by which the respondent sought to invoke the arbitration clause and appointment of arbitrator. Later, on 12/11/2007, a petition was moved under Sec. 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act for brevity) for appointment of an arbitrator. The same was allowed. A fresh agreement for arbitration was entered into on 22/11/2007 providing for appointment of a new Arbitrator. Suffice it to notice that a former District and Sessions Judge came to be appointed as sole arbitrator. The appellant filed an application under Sec. 16 for dismissal of the claims. The appellant invoked clauses 65 and 65A of the contract. This application, no doubt, was rejected on 4/3/2009 by the Arbitrator. Thereafter, the Arbitrator entered upon the merits of the matter and passed Award dtd. 16/7/2009. There were a total of 10 claims. The Arbitrator disallowed seven out of the ten claims while it allowed three claims. The claims were allowed with rate of interest which we need not notice at this stage. The petition filed by the appellant under Sec. 34 of the Act came to be allowed by the District Judge. It is this order passed by the District Judge under Sec. 34 which stands overturned by the impugned order in an appeal under Sec. 37 of the Act.

(2.) We have heard Col. R. Balasubramanium, learned senior counsel for the appellants, and Ms. Praveena Gautam, learned counsel for the respondent.

(3.) The only controversy which we are called upon to resolve is whether the impugned order is sustainable having regard to clauses 65 and 65A of the Contract.