DIVISIONAL RAILWAY MANAGER (WORKS) Vs. INDGUARD ENGINEERS

JUDGEMENT

(1.) Heard Mr.M.Udayakumar, learned Standing counsel for the Railway Administration and Mr.V.Surya Narayana Reddy, learned counsel for the first respondent.

(2.) This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, (Act), to set aside the award dated 25.06.2008 passed by the second respondent, sole Arbitrator, who was the Deputy Chief Engineer working in the Railway Administration.

(3.) The respondent was awarded a contract for construction of Foot over Bridges at Akkampet, Arambakkam, Kathivakkam, Annanur, Ekattur, Senjipanapakkam stations and an agreement was entered into between the parties on 17.04.2006. The currency period of the contract was between 10.01.2006 and 09.06.2009. The concerned officials of the Railway Administration advised the respondent on 14.09.2006 and 16.09.2006, to start the work. However, subsequently, the contract stood terminated on the ground that the first respondent has not commenced the work, by order dated 14.09.2006. It is thereafter, the respondent filed a claim petition before the authorities, which was referred for arbitration before the second respondent/sole Arbitrator. In the claim petition, the first respondent sought for relief under four heads namely, refund of earnest money deposit of Rs.50,000/-; amount advanced to labour and material etc at Rs.1,50,000/-; loss of profit at Rs.7,37,879/- and interest at 18% per annum. The Railway Administration filed a counter claim, claiming the difference in cost of original contract value and risk and cost, tender value at Rs.58,27,073/- and for cost of appointing site Engineer for a period of five months at Rs.10,000/-.