GAUTHAM CONSTRUCTIONS AND FISHERIES PVT LTD Vs. NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BOMBAY NABARD

JUDGEMENT

(1.) OP. No. 216 of 1990 was filed by M/s. Gautham Constructions & Fisheries Private limited, under S. 14(2) of the Arbitration Act, to direct the arbitrator to file the Original Award dated 24-5-1990 together with depositions and documents into this Court and to pass a decree in accordance with the Award directing, the first respondent therein to pay the petitioner a sum of Rs. 78, 02, 247.15 which includes the amount of award, interest awarded by the arbitrator and for costs.

(2.) O.P. No. 483 of 1990 was filed under S. 30 of the Arbitration Act to set aside the award of the arbitrator dated 24-5-1990 and for costs.

(3.) The facts of the petitioner in G.P. No. 483 of 1990 are as follows: The petitioner is a statutory body created by an Act of Parliament for the purpose of Agriculture and Rural Development. The petitioner had issued an advertisement inviting oilers for outright sale of residential flats and office buildings at Madras. The first respondent which is engaged in the business of constructions, submitted an offer for sale of the office building in Edward Elliots Road with a built up area of 50,000 square feet at Rs. 500/per square feet of built up area inclusive of the land on which the building is to be put up. After negotiations the offer made by the first respondent was accepted by the petitioner by its communication dated 16-4-1983 to purchase office accomodation measuring about 48,000 sq. ft. of built up area together with the land at the rate of Rs. 400/-per sq. ft. of built up area. Subsequently, the first respondent offered a site in Nungambakkam High Road for putting up the office building instead of the place selected at Edward Elliots Road. The first respondent addressed a letter on 4-7-1983 agreeing to the offer for sale of the land and building for office accommodation of about 48,000 sq. ft: at the same rate of Rs. 400/per sq. ft. of built up area and subject to the same conditions agreed to earlier with reference to the site at Edward Elliots Road. The petitioner accepted the said offer by letter dated 30-7-1983. As per the said agreements, the first respondent was to construct 48,000 sq. ft. of built up area comprised in the ground floor and 2 upper floors with open parking areas. In continuation of the aforesaid agreement, it was agreed by the first respondent to put up 48,000 sq. ft. of built up area in 3 upper floors apart from the ground floor being put up as a stilt for parking with no additional cost for the same. Pursuant to the aforesaid offer and acceptance, the parties entered into agreements dated 30-8-1983 under which the first respondent agreed to sell the office complex to be constructed on a portion of the extent of land, the portion measuring about 10 grounds, in Nungambakkam High Road with, a building of 48,000 sq. ft. built up area. As per the agreement the first respondent was to construct the buildings comprised in three floors besides stilts for parking with a total built up area of about 48,000 sq. ft. at Rs. 250/per sq. ft. of built up area on the terms and conditions prescribed in the said agreement. On the same day, the petitioner and the first respondent entered into a supplemental agreement under which the first respondent agreed to provide amenities and extra work/fittings in the said building as per the details set out in the annexure to the said agreement for a consideration of Rs. 150.'per sq.ft. of built up area totalling to Rs. 72 lakhs for the 48.000 sq. ft. agreed to be put up by the first respondent. It was further agreed that in case the built up area in the building after the final measurement is less than 48.000 Sq. ft. the price payable for the amenities shall be proportionately reduced at the rate of Rs. 150 per sq. ft. and in case it is more than 48.000 sq. ft. it shall be increased proportionately. Thus, according to the petitioner, the first respondent was to sell the office complex, comprising; of the land and building at the rate of Rs. 400/per sq ft. of built up area which was split under the two agreements referred to above According to the petitioner the offer and acceptance ana the letter of intent dated 16-4-983 the contract was to be a firm price contract. The first respondent was required to construct the said 48.000 sq. ft. of office space in three floors on the stilts. The stilts were not to be paid for separately. The first respondent changed the originally agre ed plan of construction by lowering the building to sub-soil level and reducing the height of each floor by 6? of about 1.74 grounds which the first respondent ought to have provided in addition to 10 grounds agreed upon, in order to comply with the Municipal Rules. Instead of putting up 48,000 sq. ft. in three floors with a stilt on the ground level, the first respondent chose to put up a basement for parking and constructed ground plus three upper floors of officer accommodation measuring an extent of about 48,000 sq. ft. The first respondent after having put upsuch building and receiving full payments as per agreed terms and handing over possession of the building to the petitioner, the first respondent made a claim in relation to the basement constructed by them on the ground that the said space constituted built up area for which they were entitled to be paid at the rate of Rs. 400/-per sq. ft. This claim was made in the final Bill dated 21-12-1987 which was not certified by the Architect. Since the said claim was patently illegal and opposed to the agreement, the petitioner refused to honour the said claim. In view of the refusal relating to the claim of additional cost for basement made by the first respondent the same was construed as a dispute and the matter was referred to the arbitrator for arbitration in terms of clause 44 of the principal agreement which provided for the settlement of disputes between the parties by arbitration. The second respondent, arbitrator entered upon the reference with regard to the said dispute. The first respondent made its claim under seven heads which included the main claim relating to the additional cost of Rs. 48,36,000/for the basement put up by them which was said to be in excess of 48,000 sq. ft. Of built up area. The petitione r filed reply Statement dated 13-10-1989. The petitioner repudiated each one of the claim and also made a counter claim for Rs. Sc5.63,781 plus interest and expenses under various heads.