UNION OF INDIA Vs. SURENDRANATH KANUNGO SI

JUDGEMENT

(1.) This appeal is directed against the judgment and order dated 9th March, 2004 passed by the learned District Judge while disposing of the application under section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred in short as the said Act). By the judgment and order impugned the learned Judge rejected the application of the appellant and upheld the award passed by the learned Arbitrator.

(2.) The facts of this case needs to be briefly stated as hereunder : The first respondent by a written contract was entrusted by the appellant to execute a portion of the civil works of extension of runway of the Air Port at Port Blair. The portion of the work given the first respondent essentially involved excavation of earth for a total cost of Rs. 14, 72,36,603/-. The said contract was entered into factually by and between the first respondent and the Executive Engineer, APWD on 29th December 1995. The said written agreement contained an arbitration clause being clause 25 of the condition of contract which will be referred to little later.

(3.) Undisputedly, the first respondent completed a portion of the aforesaid works covered by first to sixteenth running account bills and admittedly the payment in respect of the aforesaid bills has been made, of course with the intervention of the Court, as the disputes related thereto were referred to the arbitration followed by the award and affirmation of the same by the Court. Thereafter, the first respondent is said to have completed, the works of the running account bills numbering 75th and 148th were prepared in connection therewith for payment. The first respondent to recover price of the works done covered by the bills as above, had filed writ petition. The said writ petition was disposed of by the Hon'ble Mr. Justice P.C. Ghose on 17th January 2002. Justice Ghose was pleased to direct the Chief Engineer, APWD to appoint an Arbitrator to decide the market rate for the works done by the respondent No. 1. In terms of the aforesaid order the Chief Engineer of the APWD appointed the Additional Director General (SLP), CPWD one Shri Jagmohan Lai, Ministry of Urban Development, New Delhi as the sole Arbitrator, the second respondent, and he accepted this office of arbitration. The Arbitrator, second respondent thereafter entered upon reference on 16th August 2002 and gave direction upon the respective parties to file statement of claim counter statement and rejoinder in terms of order of Justice Ghose. The respondent thereafter, in his official capacity was due to and indeed retired on 30th September 2002. Even after retirement the learned Arbitrator proceeded with the arbitration and passed award upon ex parte hearing. It is stated in the petition that the consent was given for continuation with the arbitration proceedings even after his retirement, however, subsequently the second respondent was replaced by fresh appoint of personnel, on 24th December, 2002 instead of re-appointment in favour of the second respondent, as it was assured to be made previously. One Shri O.P. Gandhyan, Ministry of Urban Development and P.A., Calcutta was appointed sole Arbitrator in place of the second respondent. Such appointment was made in terms of the arbitration agreement which enables Chief Engineer to do so on vacation of office of substantive post by the Arbitrator initially appointed.