STATE OF WEST BENGAL Vs. S N BHAKAT

JUDGEMENT

(1.) THE subject matter of appeal would relate to an order passed by the learned Single Judge, declining to set aside and/or interfere with an award published under the old Arbitration Law being the Arbitration Act, 1940. His Lordship, by judgment and order dated March 28, 2012 appearing at page 299-307 of the paper book, upheld the award except the claim No. 2 that was found to be repeated in claim No. 4. In effect, the learned Judge affirmed the award to the extent of Rs.7,19,038/- covering claim Nos. 3 and 4 that was allowed by the Arbitrator. Bringing the facts in a narrow campus, we would find, the appellant/State entrusted a partnership farm M/S. S.N. Bhakat & Company to execute a work on behalf of the State represented by Public Works Department, (hereinafter referred to as P.W.D.), Kharagpur Division for construction of residential quarters for nongazetted staff for Eastern Frontier Rifles. The tender value was Rs.22,06,011/-. As per the contract, the work was scheduled to be completed within eighteen months from the date of the work-order. Since the work-order was issued on April 13, 1983, the work was supposed to be completed by October 30, 1984 whereas the work was completed on December 31, 1985 as stated by the claimants ' witness. However, records would depict, the work was completed on January 15, 1986. State accepted delayed handing over of possession. State from time to time extended the time-schedule as we find from the record. Contemporaneous correspondence would show, State duly paid seventh Running Account Bill (hereinafter referred to as R.A. Bill) that was paid on August 5, 1986. The claimants thereafter wrote to the authority to treat seventh R.A. Bill as the final bill and refund their security deposit that was withheld as per the contract. Claimants would contend, they were compelled to write such letter as State was unusually delaying the process in releasing the security. State would however, contend, such letter must be construed as an event of accord of satisfaction of the final payment that would give rise to the dispute. The claimants raised subsequent claims for escalation and idle labour charge because of delay in completing the construction. According to the claimants, delay was due to delayed handing over of site by the P.W.D. as also delay in supplying rawmaterials. Significant to note, supply of principal raw-materials being cement and steel was the responsibility of the State. There had been delay in supply as found out by the Arbitrator. According to the State, there could not have been any further claim either on escalation or idle labour charges or otherwise that would be apparent from the claimants ' letter dated November 11, 1986 wherein they had informed the P.W.D. that they had completed the work on January 15, 1986 and received final payment against seventh R.A. Bill that might be treated as final bill as there were no further work beyond the last measurement done on January 7, 1986. Once the claimants treated the seventh R.A. Bill as final and requested release of security deposit, there could not be any additional amount payable to them. Moreover, they did not reserve their right contemporaneously that would make the subsequent claim for the additional cost not sustainable. The claimants would contradict such stand of the State by referring to its letter dated February 27, 1987 appearing at page- 242 of the paper book that would also rely upon communication made by the Assistant Engineer, P.W.D. appearing at page 240 and 241 wherein State admitted delay in delivery of the raw-materials. The claimants also relied upon their letters dated August 25, 1986 and February 15, 1987 appearing at page 51-52 of the paper book wherein they reserved their right to claim for damage because of delayed work.

(2.) ON the other claims, His Lordship observed, the Arbitrator in his wisdom dealt with the issue on the basis of the evidence led before him. The Arbitrator recorded reasons giving justification to the awarded sums although the law did not require justifying "every rupee under each head of claim ". The award could not be faulted. His Lordship upheld the award. Hence, this appeal by the State. Mr. Samrat Sen, learned counsel appearing for the State in his usual fairness restricted his challenge to claim Nos. 3 and 4 as also claim Nos. 9 and 10. Claim No. 3 would relate to escalation whereas claim No. 4 would relate to idle labour cost. Mr. Sen referred to the minutes of the arbitration dated August 11, 2006 and August 25, 2006 appearing at pages 71-73 to show, the seventh R.A. Bill was duly paid on August 5, 1986. The claimants subsequently requested to treat the same as the final bill and issued "No Claim Certificate " on August 25, 1986. Their first protest came through letter dated February 15, 1987 after about six months from the date of receipt of the final payments. Hence, there could be no case of duress that could be set as a shield to gain support to their additional claims.

(3.) FOOD Corporation of India Vs. Chandu Construction and Anr. reported in 2007 Volume-IV Supreme Court Cases page- 697.