UNION OF INDIA Vs. ABHOY SARKAR

JUDGEMENT

(1.) THIS is an application under Sections 30 and 33 of the Arbitration Act for setting aside the award passed by Shri A. P. Bhattacharyya, the sole Arbitrator dated 2-5-1989.

(2.) THE facts are briefly as follows :- A contract for construction of platform wall, dismentaling of the old Station Building and other constructions between platforms Nos. 4A and 5 at Sealday Railway Station was given to the respondent by the petitioner representating the Eastern Railway. THE contract was entered into on 17/03/1978 after the respondent's tender was accepted by the letter dated 3/02/1978. THE work was scheduled for completion within six months. THE agreement in question incorporates schedules 'A' and 'C'. THE Schedule 'A' is the demolition work, Schedule 'C' is a construction of platform wall and Schedule 'B' included works other than a Schedule 'C'. THE rate agreed upon the Schedule 'B' was 130% of the above the schedule rate. THE contract could not be completed according to the respondent contractor within six months owing to the failure on the part of the Respondent-Railway to make over site for demolition. THE demolition had to be carried on phase-wise, owing to failure on the part of the Railways in making over possession and that there was also delay in execution of the work on the said agreement and such delay contended upon 31 months beyond the initial six months and in the meantime there had been escalation of cost and price rise which according to the claimant entitles him 298% above schedule rate. THE respondent claimed the said rate on the principal contract also for the period during which the work had been delayed i.e. for 31 months. THE respondent No. 1 claimed about Rs. 11 lacs and as his demand was not acceded to even if he had written several letters he filed Special Suit No. 23 of 1985. THE said suit was allowed and the General Manager, Eastern Railway was directed to refer the matter of Arbitration to the Joint Arbitrators. THE Respondent No. 1 thereafter filed an application under Sections 5, 11 and 12 of the Arbitration Act, 1940 in Matter No. 1362 of 1985 and by the order dated 30-7-1986 Mrs. Pratibha Bonnerjea, J. removed the Joint Arbitrators and appointed Sri A. P. Bhattacharyya, a retired Judge of the High Court as Sole Arbitrator. Before the Sole Arbitrator, the Respondent No. 1 filed a total claim against 14 items of Rupees 8,14,159.67 along with the interest from 19-6-1982 at the rate of 19.5% per annum. THE petitioners submitted a counter statement and contested each claim on the basis of the facts on record and relying documents filed respect thereof. THE learned Arbitrator thereafter allowed the (sic) to the extent of Rupees 2,76,639.58. He also awarded interest at the rate of 12% per annum from 19-6-1982 till the date of entering the reference i.e. on 2-8-1985.

(3.) THE said application has been contested by the respondent No. 1 by filing an affidavit-in-opposition. It is contended that it is not correct that the respondent No. 1 has failed and/or neglected to refuse to complete the work wrongfully or in breach of the contract and it is stated that the extension of time for completing the work was necessitated entirely due to defaults on the part of the petitioner and the respondent No. 1 was not responsible for the same. It is further contended that the award is not violative of any Clause of the contract and that Clause 16(2) of the General Condition of Contract does not contain any bar on the part of the Arbitrator to grant interest and that none of the Supreme Court decision debars the Arbitrators from granting pre-reference interest.