LOK NATH GROVER Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner and the respondent No. I entered into an agreement in respect of construction of Government Higher Secondary School at Kalkaji, New Delhi. The said agreement contained an arbitration clause which provided that in case the amount in dispute is more than Rs. 50,000.00 , the Arbitrator would give reasoned award. Disputes arose between the partics. They were referred to the sole arbitration of respondent No. 2. Since the amount in dispute was more than Rs. 50,000.00 , therefore, as per the term of the agreement, the Arbitrator was required to give a reasoned award. The Arbitrator has given reasoned award. The impugned award was made and published on 17th September, 1983. The said award was filed in the Court. Notice of filing of the award was issued to the parties. Objections to the said award have been filed by the petitioner only. The petitioner has partially challenged the award and that is regarding claims Nos. 3, 5, 22 and 23.

(2.) The main thrust of Mr. Gupta's arguments against the award to claim No. 3 had been that the Arbitrator ignored the terms of the agreement. He awarded that amount against Part-1 of Claim No. 3 in violation of Clause (e) of the Agreement. The stipulated quantity described in the Agreement contained in Clause (e) at page 2 which is reproduced as under reads that incase of deviation upto 50%, Contractor would be paid the agreed rates. However, for any excess work done or deviation beyond 50%, the contractor/objector gave undertaking and as per that undertaking any deviation beyond 50%, the petitioner was to be paid the rates as quoted by the second lowest. Clause (e) Time allowed for the work from the 15th day after the date of written order to commence 12 (Twelve) months. Should this tender be accepted, in whole or in part, I/we hereby agree (i) to abide by and fulfil all the terms and provisions of the said conditions annexed hereto and all the terms and provisions contained in notice inviting tenders so far as applicable, and/or in default thereof to forfeit and pay to the President of India or his successors in office, the sum of money mentioned in the said conditions. A sum of Rs. 20,000.00 is hereby forwarded in Treasury Challan Deposit at Call Receipt of a Scheduled Bank guaranteed by the Reserve Bank of India as earnest money.lf I/we fail to commence the work specified in the above Memorandum, I/We agree that the said President or his successors in office shall without prejudice to any other right or remedy, be at liberty to forfeit the said earnest money absolutely otherwise the said earnest money shall be retained by him towards security deposit mentioned against Clause (d) of the above mentioned Memorandum; (ii) to execute all the works referred to in the tender documents upon the terms and conditions contained or referred to therein and to carry out such deviations as may be ordered, upto a maximum of fifty per cent, at the rates quoted in the tender documents and those in excess of that limit, at the rates to be determined in accordance with the provisions contained in Clause 12A of the Tender Form.

(3.) The Arbitrator completely ignored the term of the agreement and the agreed rates. Instead while awarding the amount against this claim, he mininterpreted the undertaking given by the petitioner. Petitioner at no stage undertook to charge the rates as quoted by the second lowest for all deviations. It was only when the deviation was beyond 50% that he was to charge the rates as quoted by the second lowest. The Arbitrator instead of giving the rates as agreed for deviation upto 50% as stipulated in the agreement in fact awarded the rates as quoted by the second lowest for all deviations and thus minconducted the proceedings. This way the Arbitrator ignored the term of the agreement and alleged undertaking given vide Exhibit 'C-109'. Mr. Gupta in fact restricted his challenge only to Part-1 of Claim No. 3 amounting to Rs. 9,334.37 paise, which he stated was separable from other parts of claim No. 3 and even this claim No. 3 has no bearing on other claims.