DEO KUMAR SARAF Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an application for setting aside a speaking award dated 28-8-1986. The petitioner entered into a contract with the respondent for certain construction works and a work order was issued by the respondent on 6-1-1982. Subsequently a formal written contract was executed by and between the parties relating to the said contract. This contract contained an arbitration clause. The existence and validity of the contract and the arbitration agreement are admitted by the parties. The time to complete the work was admittedly extended till 25-2-1983.

(2.) Disputes and differences having arisen relating to the said contract, the petitioner had to stop construction work due to non-payment of his running bills as well as for other breaches of terms of the contract by the respondent. By a letter dated 4-2-1983, the respondent directed the petitioner to show cause by 25-2-1983 the delay in execution of the work. The petitioner showed cause by his letter dated 22-2-1983. Thereafter, the respondent by its letter dated 23-2-1983 imposed penalty of Rs. 10,000 on the petitioner and informed him that the said amount would be recovered from his security deposit. The respondent thereafter by its letter dated 25-2-1983 purported to rescind the said contract and forfeit the security deposit. By that letter, the petitioner was informed that the balance work would be completed by another agency at the risk and costs of the petitioner.

(3.) Under the circumstances, the petitioner requested the Chief Engineer, Eastern Zone, C.P.W.D. to appoint an arbitrator for adjudication of the disputes raised by the petitioner. By a letter dated 26-12-1983, the Chief Engineer, appointed an arbitrator for adjudicating upon the disputes raised by the petitioner as also the question of "counter-claim of the Government, if any". It is the petitioner's case that no demand for any counterclaim was ever made by the respondent before the reference was started and there was no occassion for the petitioner to deny the same. Therefore, there was no counter-claim nor any dispute regarding the same which could be referred to arbitration on 26-12-1983 as was done by the letter dated 26.12-193.