UNION OF INDIA Vs. DISTRICT JUDGE LUCKNOW

JUDGEMENT

(1.) Union of India through Executive Engineer, Lucknow Central Division - II, Central Public Works Department, Aliganj, Lucknow, has filed the present appeal under section 37 (1)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Act'), challenging the judgment and order of the District Judge, Lucknow dated 29.1.2010, whereby the objection of the appellant against the award of the arbitrator dated 16.3.2006, filed under section 34 of the Act, has been rejected.

(2.) Brief facts giving rise to present dispute are that appellant on 31.5.2001 invited item rate tenders from pre-qualified contractor for construction and electrical works of Regional Office Building for NABARD, Gomti Nagar, Lucknow. Nine contractors applied pursuant to it and five ultimately were shortlisted, including M/S J.S.M. Construction Co. through its proprietor Srikant Singh - respondent no.3 (hereinafter referred to as 'contractor'). The first call of the tender was invited on 15.1.2002 for the five shortlisted contractors but on account of various discrepancies, the same was rejected. Similarly, the second call of tenders invited on 10.4.2002 was also rejected. The third notice for call of tender dated 14.5.2002 was challenged by the respondent-contractor and the Writ Petition No.3031 (M/B) of 2002 was allowed on 2.12.2002, quashing the notice dated 14.5.2002 and fresh notice for inviting tenders were issued fixing 25.1.2003. The respondent-contractor also submitted its bid, which was lowest and consequently, it was accepted after negotiations and got communicated vide letter dated 9.5.2003. An agreement no. 2/EE/LCD-II/2003-04 dated 9.5.2003 was drawn and signed by the appellant and respondent-contractor. The estimated cost of the project was quantified at Rs.7,23,42,701 and the lowest tender of contractor, submitted and accepted, was to the tune of Rs.6,75,51,617/-. The work was to start on 19.5.2003 and stipulated date of its completion was 18.2.2005 i.e. after a period of 21 months.

(3.) Tender of respondent-contractor had been submitted on the prescribed tender document/format which included price escalation as a part of the tender itself. The tender of contractor, accepted by appellant, has been brought on record as Annexure-1. The tender encloses performa of schedules, relevant portion whereof containing schedule 'E', clause 10 CC as filled by the contractor in the tender, and definition clause 2(xi), are reproduced below:-