GRAM PANCHAYAT UGRA KHERI Vs. STATE OF HARYANA

JUDGEMENT

(1.) Leave granted. Heard both parties.

(2.) The Vamanapuram Block Panchayat, first respondent herein, entered into a "contract agreement" dated 15.3.1999 with the appellant under which the work of "RIDF-III, Pangode Sivakshetram - Thannichal Road improvements" was entrusted to her as per the articles of agreement, plans, specifications and conditions of contract approved by the Superintending Engineer, Commissionerate of Rural Development, State of Kerala. The Articles of agreement confirmed that the contractor had also signed the copy of the Madras Detailed Standard Specifications (for short 'MDSS') and addenda volume thereto in acknowledgement of being bound by all the conditions of the clauses. The MDSS which thus became a part of the contract between the parties, provided for settlement of disputes by arbitration vide Clause 73 which is extracted below:

(3.) Certain disputes having arisen in respect of the said contract, the appellant, by letter dated 28.12.2000, sought reference to arbitration of its claims aggregating to Rs. 13,06,936/- in terms of the aforesaid arbitration clause contained in the MDSS forming part of the agreement. The Block Development Officer, Vamanapuram Panchayat, sent a reply dated 4.1.2001 denying the claims and informing the contractor that if she did not resume the work, the contract would be terminated at her risk and cost. The respondents, however, did not deny the existence of the arbitration agreement in the said reply.