KELKAR AND KELKAR Vs. INDIAN AIRLINES

JUDGEMENT

(1.) THIS appeal is directed against the judgment and order dated 1/11/1995 whereby the learned Single Judge dismissed the arbitration suit filed by the appellant herein under section 20 of the Arbitration Act, 1940.

(2.) FOR the sake of convenience we shall refer the present appellant as the contractor and the first respondent as the Indian Airlines. The Indian Airlines invited tenders in the year 1988 for construction of their building at Pune. The contractor responded to the said tender. Ultimately, the contract was arrived at between the contractor and the Indian Airlines for construction of indian Airlines building at Pune. The general conditions of the contract formed part of the terms and conditions of the said contract between the contractor and the Indian Airlines. The contract terms, thus, provided that all questions and disputes arising by and between the parties out of and/or in relation thereto shall be referred to the arbitration as provided therein. The contractor in the suit filed under section 20 of the Arbitration Act, 1940 (for short "act of 1940") averred that as per the contract, the work was commenced for construction of the Indian Airlines building and the work was carried out as per the specifications and drawings issued by the Architect appointed by the Indian Airlines. From time to time, the contractor submitted to the Indian Airlines the running bills in accordance with the progress of construction of the said building. The contractor completed the said construction work and immediately thereafter submitted its intermediate 10th running bill which was unilaterally treated by the Indian Airlines as the final bill. According to the contractor, the fact is that the final bill was submitted on 23/12/1993. The Indian Airlines failed to sanction the amount of the running bills and the final bill. It was, thus, submitted by the contractor that the dispute and difference having been arisen between the parties, the matter is required to be referred to the arbitrator under the contract. The contractor averred that by its letter dated 23/12/1993, it called upon the Indian Airlines to settle the dues within the time stated therein failing which the contractor would be compelled to refer the dispute to sole arbitration of the Managing Director, Indian Airlines who has been named as a sole arbitrator under the arbitration agreement. The Indian Airlines received the said letter but failed to comply with the requisition made therein. Thereafter by letter dated 1/02/1994, the contractor called upon the Managing Director, Indian airlines to act as an arbitrator. The Indian Airlines by letter dated 10th February, 1994 informed the contractor that since the matter pertains to the western Region, necessary action would be taken on receipt of details/present status. The contractor raised the grievance that since the Managing Director, indian Airlines has not entered upon the reference until date despite repeated requests, the contractor has been compelled to file the arbitration suit under section 20 of the Act of 1940.

(3.) THE arbitration suit was contested by the Indian Airlines. Inter alia, the plea was set up that the contractor having accepted the amount in full and final settlement of its claim, there does not exist any dispute as to any claim or any question arising out of the contract is required to be referred to the arbitration. With regard to the letter written by the contractor to the Indian airlines on 12-11-1993 that the contractor was forced to settle the claim, it was submitted by the Indian Airlines that it was an after thought and such matter cannot be adjudicated under the arbitration.