SOM DATT BUILDERS LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) These two appeals by special leave arise from the Judgment and Order dated June 3, 2005 passed by the High Court of Kerala and hence were heard together and are being disposed of by this common judgment.

(2.) The State of Kerala represented by the Chief Engineer, National Highway, Public Works Department awarded a contract to M/s. Som Datt Builders Limited (for short, contractor) relating to road work of National Highway-47. The works were : (i) four laning and strengthening of Alwaye-Vyttila; (ii) four laning and strengthening of Vyttila-Aroor; and (iii) four laning of Aroor-Cherthala stretches. The terms and conditions mentioned in the special and general conditions of the contract (Sections IV and III respectively) were integral part of the conditions specified in the contract. Under the contract, the contractor was to complete the works within forty-two months. That the work could not be completed within the agreed period is not in dispute. It is also an admitted position that the time for completion of work was extended on two occasions; in all by 25 months. The case of the contractor is that the extension of time was not for any fault of theirs and as a matter of fact they had to continue the site office in Cochin; that they also incurred additional expenditure in relation to their work at Cochin and that further expenditure towards equipment ownership charges in respect of the machinery worth crores of rupees continued to be employed for the work. The contractor, therefore, raised claims under diverse heads before the Engineer on February 22, 1998. According to the contractor, the Engineer took decision concerning claim No. 1 but the said decision was not implemented and regarding other claims, no decision was taken necessitating the contractor to seek reference of the dispute to arbitration.

(3.) On January 11, 1999 an arbitral tribunal comprising three Arbitrators was constituted and all claims of the contractor were referred for adjudication to the arbitral tribunal.