PADMASHREE ENTERPRISES Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) APPELLANTS herein were awarded contract to carry out certain Civil Construction Work in regard to krishna Project. The appellants and respondents have for the purpose of complying with the terms and conditions of the said agreement entered into what may be referred to as Tender Contract and in the tender contract there were clauses No. 54 and 55 concerning reference of dispute to arbitration in case dispute arises between the appellants and respondents. As to which points could be referred to the Arbitrator is well discussed in clauses 54 and 55 of the tender contract and there is no dispute about it. The record also indicates that between the appellants and the respondents certain dispute arose in regard to the performance of the contract and the related aspects and as a result of that the appellants called upon the respondents to proceed to take steps to refer the dispute to arbitration and this was done in terms of letter dated 13. 6. 1985. The record also shows that in terms of clause 55 of the Tender Contract the respondents were required to inform names of three persons out of whom one could be accepted by the appellants as Arbitrator. The record shows that the Respondents did not communicate to the appellants the said three names. It is seen that thereafter on 10. 9. 1985 the appellants furnished to the respondents three names and requested the respondents to select one person for being appointed as Arbitrator in terms of Clause 55 of the tender contract. The said letter was replied to by the respondents by letter dated 24. 9. 1985 and the respondents took a stand that as the terms and conditions prescribed in Clause 55 of the tender contract were not complied with no further action can be taken for the purpose of referring the dispute to arbitration. That letter dated 24. 9. 1985 was treated by the appellants as the circumstance viz. "failure of Machinery"for the purpose of appointment of Arbitrator by consent of both the parties as envisaged under Rule 55 of the tender contract.

(2.) MR. S. S. BANHATI who was concerned with the present appellants instituted Misc. Application No. 581 of 1986 in the Court of Civil Judge, Senior Division, pune for appointment of the Arbitrator in accordance with the provisions of Section 8 of the Arbitration act, 1940 (for short said Act ). According to the appellants on account of various developments which took place between the appellants and respondents in the matter of referring the dispute to Arbitrator, the Arbitrator could not be appointed by consent and therefore the Court had power to appoint Arbitrator under Section 8 of the Arbitration Act, 1940, by exercising the powers conferred upon the Court in accordance with the provisions of Section 8 (1) (Clause a) of said Act. It must be mentioned that notice of this application was served upon the respondents and the learned Civil Judge, Senior division, Pune, by his Judgment and Order dated 27. 2. 1987 granted the said application and appointed shri R. G. Kulkarni, Superintending Engineer as the sole Arbitrator to decide the dispute (claims)raised by the present applicant.

(3.) RECORD shows that Mr. R. G. Kulkarni who was appointed as Arbitrator took charge of the dispute and performed the job as an Arbitrator. Before the Ld. Arbitrator Mr. Kulkarni the appellants put up their claim. The respondents herein also lodged their counter claim and the claim of the appellants as well as the claim of the respondents were attended to by the learned Arbitrator Mr. Kulkarni. It is seen that appropriate opportunity was given to both the sides to present their respective cases and the learned Arbitrator by his award dated 22. 10. 1998 gave his ruling and declared the award. Thereafter this award was filed in the Court at Pune on 31. 10. 1988. This was done by the appellant as a successful party was required to apply for decree in terms of the award. The application was filed by the present appellants requesting the concerned court for converting the award into decree. The application was numbered as Special Civil Suit No. 1091 of 1988.