NARMADA CONSTRUCTIONS Vs. WESTERN COALFIELDS LTD.

JUDGEMENT

(1.) THE appeals have been preferred by the contractor aggrieved by order dated 21.02.2002 passed in Civil Suit Nos. 18/2001 and 19/2001 refusing to modify/set aside separate awards passed by arbitrator on 26.03.1997.

(2.) FACTS are being referred from MA No. 1065/2002 as it is conceded at bar that decision of MA No. 1065/2002 would decide the issue raised in MA No. 1063/2002 on factual and legal aspects both.

(3.) SHRI V.R. Rao, learned senior Counsel, has submitted that Act of 1996 was not applicable, arbitration Clause was invoked before the Act of 1996 was made applicable, thus, counter -claim was not included within the connotation of dispute between the parties, thus, it was not permissible to entertain the counter -claim and render a decision thereupon. The appeal has been preferred under the Arbitration Act, 1940, in case the Act of 1996 is held applicable, appeal be treated as appeal under Section 37 of the Act of 1996. In that case it would be defect of labelling the appeal under the appropriate provision of the Act. On merits, he has further submitted that the arbitrator has erred in law in not allowing the loss of profit and infructuous expenditure. On the items which were not included under the escalation clause, escalation ought to have been granted as there was delay on part of WCL in carrying out the obligation under the agreement. There was failure to supply coal (ROM) for manufacture of bricks, thus, the claim made by the contractor has been wrongly rejected by the arbitrator. For allowing counter -claim, no reasons have been mentioned by arbitrator, it was necessary to pass a reasoned award as per Clause 13 of the agreement. There was no order of the competent authority passed with respect to levy of penalty of 10% as provided in Clause 6.2 of the agreement. Thus, it was not permissible to invoke the penalty clause, the counter -claim allowed by arbitrator on that count deserves to be set aside. He has also submitted that interest has been awarded on late payment of running bills, labour escalation has also been awarded by the arbitrator, there was failure to supply the cement and only on two occasions the contractor was permitted to utilize the cement issued for other work to the contractor by WCL. Contractor was not allowed to purchase the cement at the higher cost from the market, thus, there was failure on part of WCL to provide cement, coal as well as electricity, thus, loss of profit claimed by the contractor ought to have been awarded by the arbitrator including the other claims which were rejected.