PURI CONSTRUCTION PVT LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) This appeal by special leave is directed against the judgment dated 31-5-1984 of a Division Bench of Delhi High Court passed in an arbitration matter. Several disputes between the appellant and the respondent arose out of a contract for execution of certain works, which were, under the orders of a learned single Judge of the Delhi High Court, referred for arbitration to a sole arbitrator, who gave an award directing the respondent to pay a sum of over 64 lacs of rupees to the appellant. A learned single Judge of the Delhi High Court made the award rule of the court. The Union of India filed an appeal which was registered as F.A.O. (O.S.) 67 of 1982 and was partly allowed by the Division Bench of the High Court.

(2.) The Government of India decided to hold a trade fair to be known as Third Asian International Trade Fair, scheduled to be opened in November 1972. More than a hundred countries from the different parts of the world, invited to participate in the Fair, were assured of getting space, by the first week of October, 1972, in two huge structures named as Hall of Nations and Hall of Industries, so that they could in time furnish their exhibits with proper lighting and other infrastructure. It was decided to entrust the construction of Hall of Nations and Hall of Industries through contractors and accordingly tenders were invited on 9-10-1971 by an open advertisement described by the parties as Notice Inviting Tenders (NIT in short). The appellant, Puri Construction (Pvt.) Ltd. (hereinafter referred to as the contractor), submitted its tender and was allotted the work. The contractor completed the work within the stipulated period and the Fair opened in time. The parties, however, disagreed as to the amount payable for the executed work and they seriously differed even about the terms relating to arbitrations. According. to the contractor the arbitration matter was entirely governed by the provisions of the Indian Arbitrations Act 1940, while it was asserted on behalf of the Union of India that it was only the Chief Engineer who was authorised to appoint a sole arbitrator under Clause 25 of the contract (NIT) on receipt of a formal request by a party. The contractor filed before the Delhi High Court an application under S.20 of the Arbitration Act on 30-5-1974 which was registered as Suit No. 329-A of 1974. By consent of the parties the High Court on 17-2-1975 referred the dispute to Sri M. K. Shivasubramaniam, Chief Engineer, Central Public Works Department, to act as the sole arbitrator. The suit was accordingly disposed of.

(3.) Only after a few days of hearing, Sri Shivasubramaniam was appointed as the Chief Engineer (Vigilance Cell) and could not thereafter proceed with the arbitration. The respondent then purported to appoint one Sri M. K. Koundinya as the sole arbitrator. The appellant contractor challenged the authority of Sri Koundinya by filing a miscellaneous petition in the High Court. Ultimately on 12-4-1979 Yogeshwar Dayal, J. (as he then was) appointed, as jointly suggested by learned counsel for the parties, Sri D. N. Endlaw, retired Chief Engineer, C.P.W.D. the sole arbitrator to continue with the arbitration proceeding. The dispute included mainly the claim of the contractor and several counter-claims by the Union of India. After a protracted hearing, Sri Endlaw made a non-speaking award and filed it in court on 29-5-1981. A case being Suit No. 551/A/81 was registered and notices were issued; and, the Union of India filed objections thereto. The case was disposed of by a judgment dated April 16, 1982 passed by G. R. Luthra, J. dismissing the objections and accepting the award. The Union of India challenged the judgment in appeal which was heard and disposed of by a Division Bench consisting of Rajinder Sachar and Jagdish Chandra, JJ. The present appeal is directed against their judgment.