UNION OF INDIA Vs. S V KRISHNA RAO

JUDGEMENT

(1.) THIS revision Is by the Union of India through the General Manager, South-Eastern Railway, Calcutta (hereinafter referred to as the 'railway Administration')against the order of the lower Court, dated 20-1-1967, passed under Section 20 of the Arbitration Act appointing Shri N. S. Tayabji, Chief Engineer (Construction), eastern Railway, Calcutta, as the arbitrator.

(2.) THE facts of the case are that the non-applicant S. V. Krishna Rao (herein-after referred to as 'the contractor') had entered into a contract dated 2-12-1963 with the Railway Administration for carrying out certain work at Manendra-garh Station. The contractor was also required to undertake certain additional work, the details of which are given in the application filed by the contractor under Section 20 of the arbitration Act. It is the case of both the parties that the General Conditions of contract framed by the Railway Administration formed part of the contract dated 2-12-1963. Condition No. 62 of the General Conditions provides that all disputes or differences of any kind arising out of or in connection with the contract, whether during the progress of the works or after their completion and whether before or after the determination of the contract, shall be referred by the Contractor to the railway and the Railway shall within a reasonable time after their presentation make and notify decision thereon in writing. This condition further provides that the decision and the directions issued by the Railway Administration shall be final. Condition No. 63 then provides for arbitration. That condition is in the following terms:

(3.) IN the written statement filed by the Railway Administration it has been stated that the contractor was not carrying out the work diligently and even after reminders the speed was not increased. Ultimately, the contractor abandoned the work and in those circumstances the Railway Administration was required to take it over for completing it departmentally. All the facts and circumstances alleged by the contractor were controverted. On the point of failure to act under Condition no. 63, the plea of the Railway Administration was that so long as the work was not completed, it was not possible to determine the amount of work that was left unfinished by the contractor and his claim till that stage was reached could not be properly determined. It was stated that the Railway Administration was always willing to take action under Condition No. 63 but was only waiting till the completion of the work. It was again reiterated before the Court that till the work was finished it was not possible to refer the matter for arbitration. In other words, the plea of the Railway Administration was that the application was premature.