KUSUMA CONSTRUCTIONS Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an application filed by M/s. Kusuma Constructions, Vijayawada, seeking appointment of Sole Arbitrator to adjudicate the claims arising out of the Contract Agreement No. 110/DEN/I/ BZA/90 dated 25-12-1990 entered into between the Applicant and the South Central Railway.

(2.) The Applicant was allotted the work proposed trolley path in through yard and NRY yard to facilitate C and W staff to attend repairs to wagons etc" by the South Central Railway, vide acceptance letter dated 12-12-1990 at a value of Rs.2,87,762.00 and the period of completion of the work was three months from the date of acceptance i.e., 12-3-1991 and to be maintained for two months. According to the applicant, the Respondent-Railways asked the applicant to slow down the work as they were expecting change of cement concrete to black topping. Due to this, the applicant sought for extension of currency of the contract upto 30-11-1991 without penalty and the respondent agreed for the same. The applicant asked the respondent-Railway to pay + 35% above SSR or close the contract and pay the final bill for the work done stating that it suffered loss due to the above said change. By letter dated 29-10-1991 the Railways asked the applicant to attend its office on 4-11-1991 for negotiations to fix up rates for new/additional items. The applicant asked extension of the period upto 15-1-1992 to facilitate the Railway administration to speed up their decision and arrange payment. The contracted work was completed in September 1991, was measured and signed by the Contractor on 9-10-1991. The applicant requested the Railways for payment of the amounts on 6-12-1991 and issued several reminders. As per the advice of the Railways, the applicant asked for extension of agreement upto 31-10-1992. Again applicant was asked to seek extension upto 31-12-1992. Meanwhile an amount of Rs. 2,00,000.00 was released from the CC.I. Bill dated 24-12-1991 (valuing Rs. 2,77,341/-), but the CC.I bill was not finalised. Since 10-11-2002, the applicant has been requesting the Railways for balance payment of CC.I Bill and payment of N.S. Items and additional quantities carried out by the applicant. Pursuant to the letter 28-8-1996 of the DEN-I of the Railways, the applicant verified the final bill and wrote a letter on 12-9-1996 asking him to revise the deviation statement giving reasons therefor. By letter dt. 5-2-2001, the applicant asked the respondent Railways to settle the claims/ disputes under Clause 63 of the General Conditions of Contract. As the Railways failed to comply with the above said request of the applicant, on 10-6-2001 the applicant submitted another representation putting forth its claims for reference to arbitration under Clause 64-(l) (i) of General Conditions of the Contract. The respondent-Railways refused to refer the claims to arbitration stating that the additional items were executed without prior approval of the administration as provided under Clause 39 of the GCC and the applicant kept quiet for four and half years; that the applicant did not prefer its claims within 90 days from the date of intimation dated 28-8-1996 as provided under Clause 64 of GCC and that the deviation statement and final bill were ready and thus the claims are barred by limitation. Hence, the present application.

(3.) The respondents filed counter-affidavit disputing the claims of applicant, contending, inter alia, that the claims are barred by limitation and that the balance amount could not be paid because the applicant did not comply with standard procedure, and that the present arbitration application is not maintainable as the agreement dated 25-12-1990 specifically provides for a procedure under Clause 64 of the General Conditions of Contract.