UNION OF INDIA Vs. K M CONSTUCTION

JUDGEMENT

(1.) Reconstructed papers have been filed by the Union of India and such reconstructed papers are to be treated as original till the originals are traced out.

(2.) The railways have challenged an arbitral award rendered under the 1940 Act primarily on three grounds. It is said that the agreement between the parties did not provide for any escalation and there was a letter issued prior to the agreement being executed in which the railways indicated to the contractor that no claim on account of escalation would be acceptable. The railways also question the authority of the arbitrator in disregarding a claim for return of material wrongfully retained by the contractor. Finally, the interest awarded by the arbitrator during the pendency of the reference has also been assailed on the ground that the agreement contained a prohibition on interest being paid by the railways to the contractor.

(3.) The contractor seeks to demonstrate that the amount awarded was as per the amended statement of claim. Though it appears from the award that the statement of claim had been amended, the amendment to the amount claimed on account of escalation is not evident from the records now available. The contractor has also agreed to the amount awarded to be scaled down from Rs. 4,69,388/- to Rs. 4,43,000/- as originally indicated in the statement of claim. The first aspect of the challenge is thus dealt with.