PATEL ENGINEERING CO LTD Vs. NORTHERN RAILWAY ADMINISTRATION

JUDGEMENT

(1.) The respondent, Northern Railway Administration, had awarded contract for the construction of single line B.G.Tunnel No.1 including cut and cover between Km.2.180 to Km.5.320 as per approved plan between Udhampur-Katra in connection with Udhampur-Srinagar-Baramulla Rail Link Project vide letter of award dated 3rd May, 2000. Certain disputes have arisen between the parties relating to the said contract inasmuch as, as per the petitioner, the respondent has unilaterally:

(2.) According to the petitioner, in this manner, the respondent has withheld Rs.1.08 crores of the petitioner. Since clause 62 of the general conditions of the contract provides for determination of disputes through arbitration, the petitioner, vide letter dated 27th October, 2004 invoked the arbitration in terms of the said provision. In the meantime, another issue of signing of corrigendum No.4 came up and the petitioner signed the same under protest as informed vide letters dated 3rd November and 17th November, 2004. The Chief Engineer of the respondent, however, conveyed that the corrigendum signed under protest was not enforceable and the claim be raised separately after finalization of the contract. According to the petitioner, since the respondent was refusing to pay the petitioner, the petitioner under duress had to sign the corrigendum No.4 but vide letters dated 22nd November, 2004 and 3rd March, 2005 reserved its right to deal with accordance with the contract and to refer the matter for arbitration. Thereafter, vide letter dated 9th May, 2005, the petitioner wrote to the respondent for negotiating the process of arbitration and appointment of arbitrator (s) as per the clause 64 of the general conditions of contract. However, vide letter dated 18th May, 2005, the respondent refused to refer the matter stating that they fell under the category of "excepted matters" as laid down in clause 63 of the general conditions of contract. The petitioner has, accordingly, filed this petition for appointment of an arbitral tribunal.

(3.) In the reply filed by the respondent, the defence raised is same, namely, disputes do not fall within the scope of arbitration clause and are "excepted matters". Since the disputes have arisen and there is an arbitration agreement between the parties as well, the only question, therefore, needs determination is as to whether disputes raised by the petitioner are to be treated as "excepted matters" and consequently beyond the scope of arbitration. A conjoint reading of Clauses 63 and 64 is necessary for this purpose. Therefore, it would be necessary to reproduce both the clauses in their entirety: