UNION OF INDIA Vs. HIMATSINGKA TIMBER LTD

JUDGEMENT

(1.) THIS is an application to set aside an award. The dispute is between the contractor and the Government. The contractor entered into a contract with the Government en March 14, 1951, for the sale of certain sleepers. The sleepers were supplied not within the data provided in the agreement. The contractor was paid for the goods at a rate lower than what is provided in the contract The contractor claimed that it was entitled to more. THIS was disputed. The dispute was referred to arbitration under the arbitration clause in the contract. The arbitrator in the instant case Mr. A. K. Gupta, Government Inspector of Railways give his award on December 26, 1961. The award is very short end is set out below in extenso: AWARD.

(2.) MR. Debt De, learned counsel appearing for the Government, contended first that this award ought to be set aside because the arbitrator has made an award of a time barred claim. It is alleged in the petition that final payment was received by the contractor as far back as 1953 and that more than seven years after the receipt of such payment and eight years after the supply of the sleepers this reference was made upon which an award in favour of the contractor was given. In the affidavit in opposition it is contended that subsequent to the payment of the sum at the rate of Rs. 56/- per sleeper there has been a large number of correspondence between the parties. According to the contractor, in the course of the correspondence there has been acknowledgment of liability so as to extend the period of limitation. The point was debated before the arbitrator who held that the claim was, alive and not time-barred. No point is made that this error of law is apparent on the fact of the award. No reason is given either in the award or in any connected paper so that the error of law if any may be apparent on the face of the award. MR. Debi Dey therefore did not challenge the award on that ground. MR. De contended that the arbitrator mis-conducted in the proceeding in making an award of a time-barred claim. In order to sustain this argument MR. De has to establish first that the claim is time-barred. In the Award Cash No. 252 of 1962 Union of India v. Salween Timber and Construction Co. Ltd., I made the following observation:

(3.) MR. De contended that in terms of the clause above referred to, a reduction of 21/2 per cent in rates has been made from the contractor's original bill. That being so, the discretion exercised by the Sleeper Control Officer cannot be the subject-matter of arbitration. The contention of the contractor is that the reduction of 21/2 per cent for each month's delay would be permissible only if no extension of time was granted. In the instant case there has been an extension of time and, therefore, no reduction was permissible. The dispute, therefore, is whether there was an extension of time granted by the Sleeper Control Officer. If, in fact, an extension of time was granted, no reduction of 21/2 per cent per month, from the original date of delivery would be permissible. If, on the other hand, time was not extended, such a reduction would be permissible. That was the dispute and, in my judgment, such dispute is covered by the arbitration clause. It cannot, therefore, be said that the dispute between the parties is taken out of the arbitration agreement by reason of the exception clause set out above, in the facts and circumstances of this case. In that view of the matter, the second point taken by MR. De also cannot be sustained.