STATE OF GUJARAT Vs. R ENGINEER

JUDGEMENT

(1.) The present is an appeal under Section 39 of the Arbitration Act, 1940 read with Section 96 of the Civil Procedure Code against judgement and decree dated 10.2.1989 passed in Special Civil Suit No. 190 of 1988 (Exh. 22) by the learned Civil Judge (S.D.), Ahmedabad (Rural) at Mirzapur, Ahmedabad, rejecting the objections filed by the present appellant against the award made and ultimately published on 24.12.1987.

(2.) The facts necessary for disposal of the present matter are that the respondent contractor was awarded some earth work and lining for canal off taking from LBMC channel 0 to 10,000 metres as per agreement No. B2/2 of 1981-82. During the execution of the work various disputes arose which required settlement through arbitration. The estimated cost of the work was Rs. 19,10,704/- while the tender cost was Rs. 20,09,127/-. The work was to be completed within 24 months from the issuance of the work order. However, the work could not be completed within the stipulated time, extension was granted, ultimately the contract was terminated on 19.4.1984. According to the appellant, the contractor submitted his claim and demanded arbitration vide his letter dated 26.6.1984. However, according to the respondent such demand was made on 1.9.1984. According to clause 52 of the Agreement, the respondent was to respond immediately and in case of his failure, the contractor was authorised under law to send panel of arbitrators for selection of one by the respondent Chief Engineer and in case of further failure on the part of the Chief Engineer, the contractor was entitled to appoint one single arbitrator to arbiter upon the dispute.

(3.) According to the contractor despite letter dated 1.7.1984 the Chief Engineer did not do anything nor sent the list of arbitrators for selection of one by the arbitrator, by his letter dated 12.12.1984 the contractor sent the list of names and by his further letter dated 5.3.1985 a list of 5 more arbitrators was given by the contractor to the Chief Engineer for appointment. As the Chief Engineer failed in appointing arbitrator or selecting one out of the list, the contractor appointed sole arbitrator on 8.4.1985, to this appointment the Superintending Engineer objected but however on 23.5.1985 the arbitrator entered into the reference and conducted the preliminary meeting. Thereafter, certain notices were issued by the arbitrator to the department but the Superintending Engineer refused to participate in the matter. Ultimately, on 21.11.1987 the arbitrator observed that he may publish the award which was accordingly published on 24.12.1987.