L NAGIREDDY Vs. G M S C RLYS

JUDGEMENT

(1.) This is an application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short "the Act") for appointment of an arbitrator to resolve the dispute between the parties to the petition.

(2.) The undisputed facts are that the petitioner's tender was accepted for Castle Rock-Kulem Gauge Conversion from meter gauge to broad gauge - Earth work excavation/cutting construction of RCC retaining wall to facilitate extension of loops to full capacity at Dudhsagar Station Yard and Hubli section of South Central railway. The acceptance letter dt. 27-3-1997 itself shows that until formal agreement is executed the acceptance letter itself constitute a binding contract between the petitioner and Railways. The due date of completion of the agreement is 19-3-1997 and the agreement was entered into on 27-3-1997. The initial value of the contract work was Rs.40,37.450. According to the petitioner, due to changes and modification the value of the contract was put to one crore rupees approximately. While so the respondents by letter dt. 8-2-1999 asked the petitioner to stop the work. By another letter dt. 26-2-1999 the respondent directed the petitioner to seek extension of time for completion of the contract. In view of the same the petitioner made a claim finally on 10-5-1999 which is filed at page No.1 of the material papers to the application, in which he demanded to accept the claim and settle the matter and if for any reason the claims are disputed, consider the representation and to refer all the disputed claims for arbitration. As the respondents failed to refer the claims by appointing an arbitrator as per agreed terms of contract contained in Clause 64 of the General Conditions of contract and as the same was not complied with the present application is filed for appointment of an arbitrator by this Court.

(3.) In response to the notice the railway authorities filed counter admitting the agreement entered into by the railways on 27-3-1997. It is also contended in the counter that the contractor has been paid to the tune of Rs. 47,88,220.17 as per the work done which is more than the contract value of Rs. 40,77,450/- and there is no dispute whatsoever about the work carried out by the contractor. There is also no dispute whatsoever with regard to the claim as per the amended General Conditions of the contract. Clause 64(3)(a) of the General Conditions of Terms of contract indicates that where the claim is up to Rs. 3,00,000/- the Arbitrator(s)/Umpire so appointed, as the case may be, shall give the award on all matters referred to arbitration indicating therein break up of the sums awarded separately on each individual item of dispute and in case where the claim is more than Rs. 3 lakhs the Arbitrator (s)/Umpire so appointed as the case may be shall give intelligible award (the reasoning leading to the award should be stated) with the sums awarded separately on each individual item of dispute referred to arbitration. Clause 64(b) provides for appointing two arbitrators as required in clause (a) above. The railways contended that no officers other than the railway employees designated by the General Manager to be appointed as the arbitrator. Therefore they prayed that at best this Court can direct the General Manager for appointing arbitrator as pet the terms and conditions of the contract and not otherwise. Clause 64 of the General Conditions of the contract reads thus: