STATE OF MAHARASHTRA Vs. S.S. GADHOKE

JUDGEMENT

(1.) THE First Appeal and the Appeal From Order arise from one and the same proceeding and are otherwise inter-connected and that is how tagged together for hearing and final disposal. Accordingly, these two appeals are being disposed of by a common judgment.

(2.) A work contract bearing No.B-2/HO/I/CE of 1972-73 of upgradation of section X of National Highway 4 was executed between the appellant No.2 and the respondent-Company,a partnership firm carrying on business as Road contractors. Certain disputes and claims were raised by the respondent in the matter of execution of the contract, but however, it appears that the State Government did not accede to those claims. Invoking Clause 30 viz. Arbitration the respondent called upon the Superintending Engineer to settle the claims as Arbitrator. Upon failure of the Superintending Engineer vide Miscellaneous Application No. 559 of 1980, the Civil Judge, Senior Division, Pune, was moved who by order dated 2nd of March 1981, appointed V.N.Gunaji, Ex-Chief Engineer/Joint Secretary, Public works and Housing Department of the state of Maharashtra as the sole Arbitrator to adjudicate upon the disputes raised by the respondent. Shri Gunaji learned Arbitrator,by his Award dated 2nd of May 1983, granted substantial relief to the respondent in respect of some claims in an amount of Rs. 8,69,062.09.The Arbitrator, at the same time, directed interest at the rate of 15% per annum on the awarded sum from 1st of October 1977 till the date of full payment under the Award. It may be mentioned at this stage itself that the reason for awarding interest from 1st of October 1977 is that, that being a date on which the appellants had been paid the final bill in relation to the works in question. The Arbitrator after making and publishing his Award, filed the same in Court on 13th of June 1983. The respondent also filed Miscellaneous Application No. 379 of 1983 for making the Award the Rule of the Court vide special Civil Suit No.276 of 1983. Upon this event, the Court issued notices to the parties. Thereafter, the appellants moved an application being Miscellaneous Application No.430 of 1983 under Sections 30 and 33 of the Indian Arbitration Act, 1940 for setting aside the Award dated 2nd of May 1983 on several grounds. This Application under Sections 30 and 33 for setting aside the Award was rejected by the trial Court by the order dated 29th of September 1983 and that is how the application have come in Appeal against the order being A.O. No.252 of 1984. Once Miscellaneous Application No.430 of 1983 was rejected the trial court made a decree in terms of the award on the same day, against which the appellants have preferred the First Appeal being First Appeal No.246 of 1984.

(3.) TO appreciate these contentions, it is necessary to view few facts which transpired in the proceedings which need not only to be referred but need to be emphasized. Once the reference was made to the Arbitrator by the Civil Judge, Senior Division, the Award had not been rendered within the time-frame stipulated in schedule I of the Arbitration Act, with the result, the time for making the Award had to be extended. It appears that apart from the respondent, the Arbitrator had himself applied for extension of time. By the order dated 23rd April 1982, the trial court extended the period of the Arbitrator to make the Award by two months from 15th April 1982. This order of the trial Court was assailed in Civil Revision Application No.717 of 1982. By a very elaborate judgment, the learned Single Judge of this Court on 8th of March 1983, dismissed the Revision Application. The story, however, does not end there. In that Civil Revision Application, appellant No.1-state Government took up the contention viz. the jurisdiction of the Arbitrator to arbitrate upon the dispute urging that such disputes are not covered under the Contract and the appellants were, therefore, not entitled to the escalation of prices in bitumen and L.D.O. (Light Diesel Oil) and secondly, that Clause 30 of the Agreement does not contemplate reference of the disputes to Arbitrator.