HINDUSTAN CONSTRUCTION CO LIMITED Vs. GOVERNOR OF ORISSA

JUDGEMENT

(1.) Leave granted.

(2.) The award given by the Special Arbitration Tribunal (hereinafter referred to as 'the Special Tribunal') has been set aside by the High Court and the proceeding has been remitted to the Arbitration Tribunal for fresh adjudication. That order is under challenge in the present appeal.

(3.) On 16-7-1979, tenders were invited by the respondents for construction work of concrete-cum-masonry dam of Upper Kolab, Multi Purpose River Project, in the State of Orissa. The tender of the appellant having been accepted, an agreement was executed between the appellant and the respondent State for the execution of the said project. The work order was issued to the appellant on 2-1-1981. The work was to be completed by 30-9-1982. In terms of the agreement, escalation charges were to be paid to the contractor. The respondents granted extension for the completion of the project by end of the December, 1985. There is no dispute that work was completed before that date. However, escalation charges were paid by the Executive Engineer in the running bills only till 31-3-1985 after which no payment in this respect was made. Some other amounts also remained to be paid including the refund of security deposits, which led to the reference of the dispute to the Arbitration Tribunal, constituted under Section 41 A of the Arbitration Act, as introduced by Arbitration (Orissa Amendment) Act, 1982. A counter-claim was also filed before the Arbitration Tribunal, on behalf of the State. The Arbitration Tribunal having found that the dispute involved a claim for more that Rs. one crore, directed the State Government to exercise power under proviso to Section 41A(1) of the Arbitration Act (hereinafter referred to as 'the Act') as amended by the Arbitration (Orissa Amendment) Act, 1982 and to refer the dispute to the Special Tribunal. We do not express any view on the question whether the initial jurisdiction exercisable by the Arbitration Tribunal got lost on the opposite party laying a counter-claim exceeding Rs. one crore. That may have to be answered in an appropriate case. The State Government referred the dispute aforesaid by a Notification dated 6-5-1988 to the Special Tribunal, which had been constituted with a retired Judge of the High Court. The Special Tribunal issued notices to the parties on 14-5-1988 and had its first sitting on 28-5-1988. No party raised any dispute on the question whether or not the Special Tribunal had any jurisdiction. On 28-8-1988, the Special Tribunal extended the time for making the award by four months from the date of expiry of time i.e. from 27-9-1988, pursuant to a memorandum put in by both sides for such extension. On 27-9-1988, the four months' statutory time calculated from 28-5-1988 expired. But in view of the aforesaid extension on 28-8-1988 on basis of the memorandum put in by both sides for such extension, the Special Tribunal proceeded with the dispute. However, the award could not be given. On 18-1-1988, another joint memorandum was filed on behalf of both the parties before the Special Tribunal for extension of time for submission of the award by four months from 27-1-1989. With the consent of both the parties, the period for making the award was extended. On 10-2-1989, the Special Tribunal made and signed its award. Objection was filed on behalf of the respondents to the award. On 26-9-1989 the Subordinate Judge rejected the said objection and made the award Rule of the Court granting 6% pendente lite interest and 4% future interest. An appeal was filed on behalf of the respondent-State before the High Court. That appeal has been allowed by the High Court and the award of the Special Tribunal has been set aside. A direction has been given to the Arbitration Tribunal to proceed with the adjudication of the disputes afresh.