STATE OF GUJARAT Vs. B B CHAUHAN

JUDGEMENT

(1.) This First Appeal is filed by the appellant - State of Gujarat against the judgment and order dated 17.01.1990 passed by the learned 4th Joint Civil Judge [S.D.], Vadodara rejecting Civil Misc. Application No. 151 of 1989 filed by the State of Gujarat for setting aside the award made by the Arbitrator on 21.07.1989 under Section 33 of the Arbitration Act in the Arbitration Case No. 1 of 1989 and also making the award as a `rule of court' in the Special Civil suit No. 434 of 1989.

(2.) By the impugned judgment and order, the learned trial Court passed a decree modifying the award passed by the arbitrator to the extent of reducing the interest for some period.

(3.) For appreciating the contentions raised in this appeal, it will be appropriate to state few facts pertaining to the disputes raised between the parties. The work of constructing of Up-stream parapet wall on top of earthen dam of Sukhi reservoir project was entrusted to the respondent vide L.C.B. Agreement No. 8/1987-88 and the work order was issued in favour of the respondent vide appellant's letter dated 17.12.1987 with the time limit of six months from the date of issue of work order. The actual date of commencement of work was 08.02.1988 and thus, the work was initially started late by 53 days and even, thereafter, it was alleged by the appellant that the respondent did not maintain proportionate progress of the work to complete the same within the time limit stipulated in the tender agreement. Since the opponent's work was very slow, the appellant addressed several letters dated 03.02.1988, 24.03.1988, 12.04.1988, 30.05.1988, 12.07.1988, 23.08.1988 and 29.10.1988 for acceleration of the work. It was submitted that upto 16.06.1988, the opponent had worked only 10% of the contract work and for that work, the opponent was paid Rs.54,861=22ps. and since no progress was made in completion of contract work, the appellant terminated the contract on 05.12.1988. It is also evident from the record that the respondent has also raised certain disputes with regard to non supply of material, drawings, detailed plans etc. and the said grievances were ventilated by the opponent vide its letter dated 02.02.1988, 15.02.1988, 28.03.1988 and 15.04.1988. The respondent thereafter made a demand for appointment of an arbitrator vide its letter dated 12.12.1988 invoking Clauses 51 and 52 of the agreement. The said demand was reiterated vide its other letters dated 28.02.1989, 28.03.1989 and 15.04.1989. It was the say of the appellant that none of earlier letters including letters dated 12.12.1988, 24.12.1988, 28.02.1989 and 28.03.1989 was received by the appellant and copies of those letters were first time received by the appellant along with respondent's letter dated 15.04.1989, in which the respondent has appointed one Mr. V.D.Patel, Retired, Superintending Engineer, Irrigation Department, Vasundhara Society, Vadodara as an arbitrator. Since the appointment of the arbitrator was not made in accordance with clauses 51 and 52 of the agreement, the said appointment was challenged by the appellant before the Civil Court, Baroda by way of Special Civil Suit No. 111 of 1989. Interim relief granted by the Court in the said proceedings was vacated on 30.06.1989 and the arbitrator made an award on 21.07.1989. On this date, the Special Civil suit No. 111 of 1989 challenging the appointment of the arbitrator was not finally disposed of and on that count, though the request for adjournment of arbitration proceedings was made by the appellant, the same was not accepted by the arbitrator and ex-parte award was passed by the arbitrator accepting more or less, the entire claim of the respondent. The detailed statement raising the claims on different counts and claims accepted by the arbitrator there against, which is part of the arbitration award, is reproduced herein under: