UNION OF INDIA Vs. HARCHARAN DASS GUPTA

JUDGEMENT

(1.) THE petitioner, Union of India (hereafter referred to as "the Union")challenges, under Section 34, Arbitration and Conciliation Act, (hereafter "the act"), the validity of an award of the Sole Arbitrator, appointed to decide the inter se disputes with the respondent; the award was published on 28th August, 2007 (hereafter called "the impugned award" ).

(2.) THE facts essential for deciding this case are that the Union accepted the tender of the respondent-contractor (hereafter "the contractor") for construction of a multistoried complex at S. P. Marg, New Delhi (SH, Auditorium building ). The contractor was awarded the work on 14-10-1995. In terms of the contract, the work had to commence on 24-10-1995; the time allowed for completion was 15 months. According to the agreement, the date of completion was 25-1-1997. The Estimated cost of the project was Rs. 1,97,05,973/ -. The project was actually completed on 14-3-2001 and the final bill was passed on 23-7-2001. The contractor demanded reference of disputes; the Union acceded, and referred them to Shri A. K. Singhal. The arbitrator was however changed, by this court; shri O. P. Gaddhyn was substituted as arbitrator; he vacated office and ultimately, the arbitrator, Shri P. S. Chadha, after considering the pleadings, materials and contentions, published the impugned award.

(3.) THE Union contends that the Arbitrator, while considering the Claim no. 1 on account of alleged wrong derivation of rates of extra/substitute item of work and granting the sum of Rs. 3,86,064/- (against a Claim of Rs. 7,50,00/-)erred by finding that the sanctioned rates for extra items and substituted items were less than the rates paid during the execution of the work. Mr. Saxena, learned counsel submits that the one hand, the Arbitrator agreed that the rates for items under this claim could not be derived under Clause 12 (i) (ii) (iii) (v); therefore, the Union, in terms of Clause 12 (v) of the contract on the basis of the market rates derived them correctly, along with the analysis, however, on the other hand, the award does not disclose any reasoning for discarding the sanctioned rates and in awarding the amount of Rs. 3,86,064/ -. Reliance is placed on the decision reported as Surajmull Nagarmull vs. Jute Corporation of India air 2001 Cal. 227 to say that the award is non-speaking.