HARSHA CONTRUCTION Vs. UNION OF INDIA

JUDGEMENT

(1.) Applicant seeks the appointment of a sole arbitrator in view of Section 11(6) of the Arbitration and Conciliation Act, 1996 to resolve the disputes between the parties inter se.

(2.) Pursuant to tenders called for by the respondents for construction of new bridge of 9 x 18.3m (clear span) with PSC girders on permanent diversion at KM 257/26-34 with SKM and UPD stations on Vijayawada-Gudur section of South Central Railway, the applicant submitted its tender, and the respondents accepted the tender on 7-1-2004. The initial value of the work was Rs.7,48,92,753/-. The work shall be completed within 165 days from the date of acceptance letter i.e., it shall be completed on or before 21-6-2005. An agreement to that effect was executed on 1-3-2004 in between the parties. During the execution of work, due to peculiar site conditions, according to the applicant, the scope of work was changed, on account of which certain additional works became necessary and the applicant had executed the said additional works also. During the period of execution of work, the price of steel was increased by almost 100%. Since the work pertains to the construction of a bridge with PSC girders, the quantity of steel consumption was enormously increased and on account of the increase in the price of the steel, the rates quoted by the applicant in the tender became unviable and therefore the applicant made several representations to the respondents to increase the rates. However, at the instance of the site engineer, who promised to take necessary steps to alleviate the applicant from the difficulties, the applicant had to complete the work by 19-7-2004. The respondents took over the bridge on the very same day. However, the request of the applicant was not considered by the respondents. Therefore, the applicant raised certain disputes on 9-7-2004 and requested the respondents to arrange payment and eventually the said disputes culminated in claims. On 2-12-2004 the applicant raised some more disputes and requested the respondents to settle the same. In response to the requests of the applicant the respondents constituted a pre-arbitration committee to resolve the dispute with regard to increase in steel and extra rates for pile driving and other disputes were not considered. The applicant, therefore, invoked the arbitration clause on 29-1-2005 and requested the first respondent to constitute an arbitral tribunal. The applicant presented its claim before the said committee, but however, it rejected the decision of the pre-arbitration committee. A request of the applicant in its notice dated 29-1-2005 was considered by the respondents and informed the applicant on 24-2-2005 that it was under consideration and the arbitral tribunal should be constituted strictly in terms of clause 64 of General Conditions of Contract (for short 'G.C.C.'). However, on 16-5-2005 the respondents rejected all the claims of the applicant and therefore, the disputes remained unresolved. Hence, the petition.

(3.) The respondents resisted the petition by filing a counter-affidavit.