UNION OF INDIA Vs. ARORA ASSOCIATES

JUDGEMENT

(1.) BY this petition filed under section 34 of the Arbitration Act and the petitioner challenges the award made by the learned Arbitrator dated 16th October, 2000. By that award the petitioner has been directed to pay an amount of Rs. 24,96,493. 70 with interest thereon to be calculated at the rate of 18% p. a. as from 13th December, 1996 till payment or realisation.

(2.) THE facts that are material and relevant for deciding this petition are that the petitioner invited tenders for carrying out work of resurfacing of platform Nos. 4 and 5 at Pune Railway Station. The respondent/claimant had submitted their tender, which came to be accepted. Acceptance of the tender was communicated by letter dated 29th November, 1995. As per that letter the work was to commence from 29-11-1995. On 15-1-1996 a contract was entered into between the parties. The total value of the work which the respondent was to carry out was Rs. 5,04,374. 87. According to the respondent after completion of the work allotted, as per the instructions of the officer of the petitioner, the respondent carried out further work on platform Nos. 4 and 5 beyond the work provided for in the tender. According to the respondent, during the period the work was being carried out, running bills were submitted to the petitioner for payment and payment of first and second running bills was made to the respondent. It appears that, according to the respondent, the work was completed on or before 2nd March, 1996. According to the respondent, on 21st March, 1996 he noticed that some of the work carried out by him was demolished by the petitioner without any intimation to the respondent. It appears that thereafter the respondent, though demanded the payment repeatedly payment was not being made, invoked the arbitration clause which was in the contract between the parties. After the arbitration clause was invoked the petitioner asked the respondent to sign a subsidiary agreement. This subsidiary agreement, according to the respondent, does not cover the entire work carried out by the respondent, but still that agreement was signed by the respondent under protest. Ultimately, as a result of invocation of the arbitration clause, this Court appointed the sole arbitrator. Before the sole arbitrator a statement of claim was filed by the respondent. According to statement of claim filed by the respondent before the learned Arbitrator, considering the payment made by the petitioner to the respondent the real dispute between the parties related to the payment claimed by the respondent on the basis of the document which is called by the respondent as second and final variation statement. According to the respondent, the work to which this second and final variation statement relates, though admittedly beyond the scope of the original contract was carried out by the respondent pursuant to the oral instructions from the officer of the respondent. Thereafter, this second and final variation statement was prepared by the respondent and it was submitted by the respondent for obtaining concurrence from the competent authority. According to the respondent, he was entitled to claim payment in terms of the second and final variation statement. The petitioner in the written statement denied their liability to make the payment according to second and final variation statement. According to the petitioner such a document did not exist. According to the petitioner, the second and final variation statement relied on by the respondent, of which xerox copy was produced before the arbitrator was not signed by any officer of the petitioner. It was further claimed that the work to which the alleged second and final variation statement relates was carried on by the respondent on his own and not on the order of the railway authority. This work, according to the petitioner, was already allotted to another contractor and therefore the respondent was not justified in carrying out that work and therefore he is not entitled to claim any payment for the work done.

(3.) BEFORE the arbitrator both the parties submitted documents. On behalf of the respondent, one of the partners of the respondent was examined as a witness. There was no oral evidence led on behalf of the petitioner. It appears that the learned Arbitrator also inspected the spot and thereafter after hearing the parties the learned Arbitrator made an award. The learned Arbitrator by the award has directed the petitioner to pay to the respondent an amount of Rs. 24,96,493. 70 with interest at the rate of 18% p. a. from 13th December, 1996 till realisation of the amount. Perusal of the award shows that before the learned Arbitrator the question about the authority of the respondent to carry out the work to which the second and final variation statement relates was questioned and authenticity and validity of that document was also questioned on behalf of the petitioner. The learned Arbitrator, however, relying on the document produced on record has held that the second and final varia tion statement was jointly prepared by the parties and was duly signed by the officers of the petitioner and therefore the petitioner is liable to make payment in accordance there with. The learned Arbitrator has also held that even if it is assumed that second and final variation statement is not proved by the respondent, then also because from the documents on record it is clear that the respondent had actually carried out the work pursuant to the instructions issued by the officers of the petitioner, the petitioner is liable to make payment for the work which is actually carried out by the respondent