DIWAN JODHARAM CONTRACTOR Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE appeals have been preferred by the contractor aggrieved by an order passed by the learned Court below refusing to appoint an arbitrator on the ground that contractor had failed to resort to the Clause 63 of General conditions of Contract, 1956 framed by the Engineering Department of Central railway, thus, occasion to appoint an arbitrator did not arise.

(2.) FACTS are similar in these appeals, they are being reflected from m. A. No. 259/96. An application was filed under Sections 8 and 20 of Arbitration act, 1940 by the contractor M/s Diwan Jodharam, he had undertaken work of electrification on Khandwa-Harsood Section, an agreement was entered into on 12-12-89 pursuant to acceptance of tender. The work was to be completed by 21-5-90, time was extended till 31-8-91, after the aforesaid period a sum of rs. 13,72,750. 73 paisa became due, out of which payment of Rs. 1,55,000/-remained towards running and final bill. Several times request was made to prepare running and final bill but the prayer was not acceded to. The Railway has also not refunded the earnest money, and security of Rs. 45,000/- and guarantee amount of Rs. 45,000/- was not released. Bank guarantee was encashed without intimation to the contractor, there was, thus, dispute between the parties as to payment of Rs. 2,20,000/ -. Notice was given on 20-3-92 but still the amount was not paid. Thus, prayer was made to appoint an arbitrator and to refer the dispute and difference. Reply was submitted by Union of India contending that as per Clause 63 of General Conditions of Contract the claim was not raised by the contractor before the Railway as such notice seeking appointment of an arbitrator was premature. In spite of extension of time, work was not completed by the contractor. Amount has to be paid by the contractor, security and bank guarantee were forfeited.

(3.) LEARNED District Judge, Hoshangabad, as per the impugned orders passed in these appeals has declined to appoint an arbitrator as contractor had failed to take recourse to Clause 63 of the General Conditions of Contract, 1956. Having failed to raise a dispute before the Railway, it was not open to contractor to seek appointment of an arbitrator. No claim was submitted as envisaged under Clause 63. Aggrieved by the impugned orders, these appeals have been preferred.