UNION OF INDIA Vs. KHULLAR

JUDGEMENT

(1.) THE Union of India through the Commandar Works Engineer, Bhopal has invoked the appellate jurisdiction of this Court under Section 39 of the Indian Arbitration Act, 1940 (for brevity 'the Act') questioning the defensibility and soundness of the order dated 18-8-1993 passed by the learned District Judge, Bhopal, whereby he has declined to entertain the objections preferred by the appellant under Sections 30 and 33 of the Act and made the award dated 17-12-1992 passed by the learned arbitrator rule of the Court.

(2.) THE respondent M/s. S. N. Khullar had entered into an agreement No. CWE/bpl/05 of 1982-83 with the appellant for construction of certain quarters at Bhopal. The construction work began on 3-3-1983 and it was completed on 2-9-1984. The final bill was submitted by the respondent on 28-7-1984 and the payment was made on 16-10-1984. As per the special condition No. 17 of the agreement the respondent submitted his Claim for the reimbursement/refund for the variation in prices of materials and fuels as per formula stated therein. The respondent submitted that bill as this Claim could not be submitted earlier due to non-availability of authenticated price indices. The Claim of Rs. 70,217/- was made on 10-9-1985 which was rejected by Garrison Engineer on 15-11-1985 on the ground that as per condition No. 65 of IAFW -General Conditions of Contract forming part of the agreement 'no further Claims shall be made by the contractor after submission of the final bill and there shall be deemed to have been waived and extinguished'. The Superintending Engineer by letter dated 17-5-1986 confirmed the order of the rejection passed by Garrison Engineer. The respondent invoked the arbitration clause as incorporated in the condition No. 70 of IAFW 2249 and the Chief Engineer, Jabalpur Zone and appointed Shri R. P. Mathur, SE as the arbitrator. He passed an award on 30-4-1987. The said award was set aside by the Vth Additional District Judge, Bhopal by order dated 30-8-1990. The plalntiff applied afresh for appointment of the arbitrator for decision of the dispute. The Chief Engineer vide his letter dated 20-12-1991 appointed Shri N. Wadhwani. S. O. (I) (E/m) as arbitrator for adjudication of the dispute. The items of the dispute were listed in Appendix A to this letter, which included (1) underpayment made in the final bill on account of escalation refund of additional security deposit, interest, cost of reference and cost of arbitration.

(3.) THE arbitrator entered upon reference and passed the award on 17-12-1992 allowing Rs. 69,183. 06 paise as 'reimbursement of under-payment towards the escalation on the prices of material and fuel as per special condition 17, Rs. 8,750/- as refund of additional security deposit. Rs. 47,217. 43 paise as interest from 13-4-86 to 19-12-1991 at the rate of 12% per annum on award against Claim item No. 1.