UNION OF INDIA Vs. CEMENTONE

JUDGEMENT

(1.) This is an application to set aside an arbitration award made on 27th September, 2006. The proceedings were conducted and the award made under the Arbitration and Conciliation Act, 1996. The learned sole Arbitrator, sole was appointed by the Hon'ble the Chief Justice of this Court on 1st July, 2004. This application is made by the Union of India on behalf of Eastern Railway Administration, under Section 34 of the above Act to set aside such award.

(2.) The Respondent is a registered partnership firm carrying on business in New Alipore in Kolkata. The Eastern Railway Administration entered into a contract with them on or about 20th February, 2002. This contract was reduced to a formal agreement between the parties on 5th April, 2002. The Respondent was to supply and load 20000 Cubic Metres of stone dust into railway wagons at inter alia Pakur. Rajgram and other quarries nominated by the railways. The railways needed such stone dust for restoration of about 24 Kms. of railway track. The rate at which the Respondent was to be paid was Rs. 72.50 per Metric ton. The duration of the contract was three months from 20th February, 2002. As is usual in railway contracts, apart from the signed contract document, the General and Special Conditions of Contract of the railways were incorporated into the contract. The work was ultimately completed on 29th November, 2002. It was required to have been completed by 19th May, 2002. This delay was made up by three extensions granted by the railways. Each letter of extension said that the contract was extended till a particular date "in terms of Clause 17(2) of the General Conditions of Contract" and that "the other terms and conditions of the original contract will remain the same as before". The terms of this extension are the subject matter of much dispute between the parties, which will be discussed in detail later.

(3.) Some terms and conditions of this contract are most significant for determination of this application. The first is Clause 25 of the Special Conditions which is as follows: