JATAN BUILDERS Vs. ARMY WELFARE HOUSING ORGANIATION

JUDGEMENT

(1.) THE respondent, Army Welfare Housing Organisation (AWHO) has preferred these objections under Section 34 of the Arbitration and conciliation Act, 1996 (for short the Act) to challenge the arbitration award dated 20. 7. 1998 made by the Sole Arbitrator in favour of the petitioner/contraetor/claimant M/s. Jatan Builders.

(2.) THE parties entered into a construction contract wherein the petitioner-contractor agreed to construct multi-storeyed residential accommodation for the respondent at Nerul, New Mumbai. Disputes arose between the parties in relation to the said contract which were referred to arbitration in accordance with the arbitration clause contained in the said agreement.

(3.) BEFORE coming to the award and the objections thereto I may note a few facts. The contract in question was awarded in favour of the petitioner on 8/12. 3. 1991. The date of completion which was initially fixed as 18. 3. 1993, was revised to 31. 07. 1993 upon amendment of the Contract to include within its scope the construction of an additional floor. The time for completion was extended up to 15. 09. 1993 and thereafter up to 28. 02. 1994. However, these extensions were granted by the respondent without escalation. Finally, vide memorandum of Understanding (MOU) dated 24. 11. 1983 executed between the parties the time for completion was further extended up to 31. 03. 1994 and the petitioner was granted escalation on the basis of WPI as on 31. 08. 1993. On 31. 3. 1994, the consultant architects issued a completion certificate. The final bill was submitted by the petitioner to the respondent on 22. 9. 1995. 75% amount of the retention money i. e. Rs. 20 lakhs in the form of bank guarantee furnished at the behest of the petitioner was released by the respondent on 19. 10. 1995. Ad hoc payment of Rs. 28 lakhs was also released by the respondent on 15. 12. 1995. Further performance guarantees of Rs. 4. 50 lakhs and retention money of Rs. 7. 00 lakhs was released on 29. 2. 1997. On 10. 6. 1997, the respondent-objector communicated the approval of the final bill after a technical check for a balance amount of rs. 10,13,667. 71. The respondent required the petitioner to submit a no claim certificate. The same was submitted by the claimant-petitioner on 11. 6. 1987. Thereafter the balance amount of final bill was released on 13. 6. 1997. On 20. 6. 1997, the petitioner-contractor communicated that on reconciliation of the final bill with the technical check bill, large variation was noticed for which no details were provided by the respondent. While demanding certified true copy of the final bill to enable it to reconcile the accounts, the, petitioner withdrew the no claim certificate issued by it. On 6. 7. 1997, the petitioner forwarded its list of tentative claims and sought the release of the amounts. On 30. 7. 1997, the petitioner invoked the arbitration agreement contained in clause 134 of the General Conditions of Contract. The Chairman, AWHO accordingly appointed the Arbitrator who had made the impugned award.