STATE OF GUJARAT Vs. SWASTICK CONSTRUCTION CO

JUDGEMENT

(1.) By way of present appeal, the State has challenged the judgment and decree dated 6/2/1989 passed by the learned Civil Judge (SD), Ahmeabad (Rural) at Mirzapur in Special Civil Suit No.129 of 1986 whereby the appointment of arbitrator is made pursuant to clause-30 of the tender agreement.

(2.) The facts of the present case are that the original plaintiff-respondent herein is the engineers and contractors and they were registered in "A" class with the said PWD. The Superintendent Engineer, Ukai, Civil Circle, Ukai invited the tenders publicly for the construction of RCC troughs on Ukai right bank canal. The Government accepted the tender of the plaintiff to the tune of 6.653% above the estimated costs of Rs.45,30,964/-. Thus, the tender of the plaintiff amounted to Rs.45,30,964/- plus Rs.3,01,451/- excess over the estimated amount. The acceptance was communicated by the Executive Engineer and plaintiffs were directed to pay Rs.45,310/- as security deposit for due performance of the contract. The said letter also mentioned that Rs.4,53,100/- was payable to the plaintiff. The work order was issued to the plaintiffs by the Executive Engineer on 3/3/1978 directing to complete the work within 16 months. However, the said work order did not accompany the working drawing as required by clause-13 of the tender agreement. As per work order, the work started from 3/3/1978 but all of a sudden, because of some disputes, work was stopped from 10/3/1978 to 24/3/1978. Thereafter, work was re-started on 6/4/1978 and the cross bund was washed away and therefore the water rushed in the canal and the site of the work and hence the work has to remain closed. The work done during the first season evaluated to the tune of Rs.5,00,000/- and the department as per terms of contract, deducted Rs.1/- lakh towards mobilization advance of Rs.4,53,000/- leaving a balance of Rs.3,59,000/- during the first season. The stuff which was made is known to be of special character. The soil as such is termed to be notorious type of soil and very dangerous and it cannot stand stationary even for a moment and therefore the position of excavated site could not remain constant and stationary for a longer type much less up to completion of work and therefore it was quite imperative and must that the measurement were taken as per cross section as envisaged as per condition of contract but the contractual requirement were safely avoided by the Field Officer for the reasons best known to them and instead of recording measurement by cross section recorded the measurement on visual observation and applied very rough method for the same by putting tape on width only. The process was even applied once in a month at the time of making the R. A. Bills payments. It is further stated that department committed fundamental breach of contract in not paying correctly and regularly to the plaintiff. The cement was supplied by the department. There was no condition in the contract for giving reduced rate. However, the plaintiff never refused to obtain the reduced strength by the same was never brought to the notice of the plaintiff. The work was carried out under strict supervision of the Field Officer and fault was on part of the department. Inspite of this the department has wrongly deducted Rs.25,000/- as reduced rate (F.R.). The work was delayed also by 2.5 months. It is stated that in order to avoid liability the department started writing incorrect communication complaining that the progress of work did not continue to the stipulated programme as per clause of the agreement and therefore on 2/3/1979 action was taken under clause-4 and cause-3(b) by withdrawing the portion of the work from 15 to 30 though the plaintiff had already done some work in these barrels and made commitments. The action of the department was wrong as per clause-4 and clause-3(a). It is further stated that though the plaintiff started work from January, 1979 when the site was given the department neglected to make the running payment for the months of April, May and June, 1979. The plaintiff approached the highest authority for due payment but no response was gathered and therefore the plaintiff prepared its own bill amount to Rs.3,10,000/- on 3/7/1979 and submitted the same to the Executive Engineer for making payment. The department thereafter wrongly prepared bill in August 1979 showing the minus payment against the said payment of Rs.3,10,000/- and the bill was therefore not paid. The department has wrongly asked the bankers to make amount of bank guarantee of Rs.3,50,000/- which was furnished towards mobilization advance. Therefore according to the plaintiffs, they are entitled to receive the claim to the tune of Rs.8,77,000/- and interest at the rate of 18% from due date till payment. To solve the said disputes by arbitration proceedings the application with a prayer to appoint arbitrator was made. After considering the case in detail, the learned Trial Court has allowed the suit and appointment of arbitrator is made as per the judgment and decree. Aggrieved by the same present appeal has been filed.

(3.) Learned counsel for the appellant has submitted that the judgment and decree passed by the learned Trial Court appointing an arbitrator is contrary to the expressed provisions of law and is also contrary to the provisions of clause-30 of the tender agreement. He has also submitted that the learned Trial Court has not appreciated that the suit was not maintainable in law as there was no issue to arbitrate inasmuch as the disputes raised by the plaintiff does not fall within the purview of clause-30 of tender agreement and therefore the suit was required to be dismissed. Learned advocate for the appellant also submitted that contention raised by the plaintiff regarding non-supply of the drawing and designs to the plaintiff was not true.