UNION OF INDIA Vs. DEVCHAND CONSTRUCTION

JUDGEMENT

(1.) This appeal is filed under Section 37(b) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') challenging the legality and correctness of the judgment and order dated 26.02.2014 passed by the learned I Additional District Judge, Dakshina Kannada, Mangalore, in arbitration suit No.1/2009.

(2.) By the order under challenge, the Court below has allowed the proceedings initiated under Section 34 of the Act thereby setting aside the award dated 17.12.2008 and has remitted the matter to the arbitrator to consider the claim of the plaintiff in accordance with law.

(3.) Respondent No.1 herein plaintiff in the Court below was the lowest bidder and was entrusted with the work in connection with removal and dismantling old railway track, raise the level of embankment and reassemble the track. As per the plaintiff, work was required to be completed on or before 18.07.1999 and the work contract was entered for a sum of Rs.30,06,250/-. According to the plaintiff, major portion of the site was not handed over to him. Therefore, the work could not be completed within the prescribed period. In addition, the work was also hampered on account of monsoon having set in and other ancillary reasons. However, alleging that plaintiff had not completed the work within the time schedule, appellants herein respondents before the Court below stopped the plaintiff from completing the work and refused to return the security deposit and earnest money and also did not settle the final bill. This made the plaintiff to lodge a claim for Rs.31,12,090/-. Defendants 1 to 3 failed to settle the same. As there was an arbitration clause in the agreement entered into between the parties, plaintiff moved the High Court of Kerala seeking appointment of arbitrator. During the pendency of the proceeding before the High Court of Kerala, an arbitrator was appointed. Subsequently, plaintiff submitted a claim before the arbitrator making claims in respect of ten specific items to be settled in the arbitration proceeding including the costs for causing delay in setting the bill and dragging on the arbitration proceeding.