ORIENTAL STRUCTURAL ENGINEERING PRIVATE LIMITED Vs. RITES

JUDGEMENT

(1.) This is a petition under Section 11 of the Arbitration and Conciliation Act, 1996, filed by the petitioner praying for filing of the arbitration agreement in this Court and to refer the claims of the petitioner as set out in paragraph 20 of the petition to an independent arbitrator to be appointed by this Court. the aforesaid claims sought to be referred by the petitioner relates to claim of the petitioner of an amount of Rs.16,21,149.00 on account of short payment for lead in earth work items and also for payment of interest at 18% per annum on the aforesaid amount from the date of completion of work upto the date of payment and Rs.10,000.00 towards cost of the arbitration proceedings.

(2.) The petitioner entered into a contract with the respondent No.1 for extension of runway 14/32 for a length of 485 on at C.A. Bhubaneswar, under contract dated 28.4.1989. The aforesaid work was executed by the petitioner in terms of the agreement and completed the same on 15.9.1990. The petitioner thereafter submitted its final bill for the said works and the said final bill was prepared and finalised by the respondent No.1 in Septembe 1992 and intimation regarding the same was received by the petitioner on 8.9.1992.

(3.) As certain differences and disputes arose between the parties with regard to the claims of the petitioner arising out of and in relation to the aforesaid contract and the final bill, the petitioner sought for a reference of the aforesaid disputes in terms of Clause 25 of the agreement between the parties. The respondent No.2 referred the said differences and disputes to arbitration. The arbitrator in terms of the aforesaid reference entered into the reference and made and published his award on 20.3.1995. However during the pendency of the aforesaid reference before the arbitrator, the petitioner wrote a letter to the appointing authority of the respondent No.1 vide its letter dated 4.12.1992 to refer its claim of extra lead in earth work executed by the petitioner stated to have been inadvertently omitted to be included in the final bill. The aforesaid claim of the petitioner was not included in the final bill submitted by the petitioner to the respondent No.1 and it is stated that the said claim was inadvertently not included in the final bill and, therefore, was also not paid to the petitioner. However, subsequently, when the petitioner raised the aforesaid claim in its letter dated 4.12.1992, the same was referred to the arbitrator by the appointing authority of the respondent No.1. The arbitrator, however, while giving his award recorded his findings in respect of the aforesaid claim of the petitioner for an amount of Rs.16 lacs on account of short payment in lead in earth work items. The same was dealt with by the arbitrator as his findings in respect of Claim No.3. While giving his award, the arbitrator held that most of the earth work was completed well before July, 1990 and measurements of items of carriage were recorded by 17.7.1990 and the whole contract work was completed on 15.9.1990 and the claimant submitted his own final bill on 21.10.1991. The arbitrator found that the quantity taken by the petitioner in that bill and the quantity as finally shown in the bill passed by the respondent are the same and the said bill was passed on 8.9.1992. From the documents on record, particularly, on the reading of the letter dated 18.9.1992, the arbitrator found that even in the said letter dated 18.9.1992, which relates to passing of final bill, no complaint was made by the petitioner about anything being wrong in the measurement of item of carriage referred to above. On consideration of the documentary evidence and the submission of the petitioner, the arbitrator came to the conclusion that it is an admitted fact that the petitioner never lodged the aforesaid claim with the respondent, but, straightway requested the Director, HAA on 4.12.1992 to refer the aforesaid claim to the arbitrator. The arbitrator held that if the petitioner wanted payments left out from the final bills prepared and submitted by themselves, the word "final" would cease to have any meaning and would become redundant and further there was no assertion of right by the petitioner and rejection thereof by the respondent before it could qualify to be termed as a dispute only for the resolution of which the provisions of arbitrators exists in the Contract. It was finally held that as there was no dispute, no award is given in respect of the aforesaid claim. The aforesaid award passed by the arbitrator was made a Rule of the Court and the petitioner did not choose to challenge the aforesaid part of the award before the Court at the time of the same being made a Rule of the Court.