SAMANTARAY CONSTRUCTION Vs. STATE OF ORISSA

JUDGEMENT

(1.) BOTH these appeals are directed against the order dated 5th August, 2005 passed by the Learned District Judge, Cuttack in Arbitration Petition No. 150 of 2003. The facts and the points of law arising in connection therewith being same, both the appeals were heard together and are disposed of by this common Judgment.

(2.) M /s.Samantaray Construction Private Limited, the Appellant in Arbitration Appeal No. 49 of 2005, (hereinafter referred to as 'the contractors'), was awarded with the work of 'Construction of Mahanadi Barrage on the Right Side from the Right Divide Wall including Right Head Regulator', vide Agreement bearing No. LCB -2/1985 -1986. The total cost of the project was Rs. 5, 15,63, 1 06.00 and the date fixed for completion of the work was 11th November, 1987. The work, it is averred, was financed by the World Bank. After entering into the agreement the contractors commenced the work, but then they could complete only 24.99% of work within the time stipulated under the agreement. On the request of the contractors the time for completion of the work was extended by the concerned authorities up to 21st of March, 1988. Within the extended period also the contractors were able to complete only 36.81 % of work. At that juncture of time, it is alleged, invoking Clause 46 of the General Conditions of Contract, the agreement was terminated on 21st April, 1988. By that date, it is stated, only 47.67% of work could be completed by the contractors. The order terminating the agreement/contract was disputed by the contractors ensuing exchange of a number of correspondences between the parties. As the matter could not be settled amicably, the contractors raised a dispute claiming Rs. 6,99,00,000,00 (six crores ninety -nine lakhs). On such dispute being raised, the State Government appointed Shri Justice B.K.Behera, a retired Judge of this Court, to be the Special Arbitration Tribunal to adjudicate the dispute inter se between the parties arising out of the aforesaid agreement and give his award. During continuance of the arbitration proceeding before the Special Arbitration Tribunal, due to amendment of the Arbitration Act, the dispute was transferred to the State Arbitration Tribunal and the records were transmitted to the said Tribunal. The dispute remained pending before the State Arbitration Tribunal until.6th of April, 2001 when the Tribunal dropped the case as no extension of time was obtained for making the award. Aggrieved by such action of the State, Arbitration Tribunal, the contractors moved this Court for appointment of an Arbitrator under the provisions of the Act and Shri Justice Behera was once again appointed as the Arbitrator by order dated 21st. September, 2001 passed by this Court in MJC No. 233 of 2001. The said Judgment of this Court was challenged by the State before this very Court in a Writ application, being OJC No. 17163 of 2001. The Writ application was however not entertained by this Court.Thereafter the State filed an application for review and by order dated 15th February 2002 the review application being Civil Review No. 15 of 2002 was dismissed. Then the State moved SLP before the Supreme Court against the order of appointment of Shri Justice Behera as the Arbitrator and the order passed in the Review Petition. The SLP was dismissed by the Supreme Court on 30th September, 2002. Thus considerable time was consumed in the litigation with regard to appointment of Arbitrator and at last Sri Justice Behera proceeded with the arbitration.

(3.) THE claimants exhibited twenty -three documents which were marked as Exts.l to 23 while the Respondents exhibited thirty -one documents which were marked as Exts -A to X -1. Both sides also adduced oral evidence by examining one witness each. The claimants raised twenty -six items of claim and at the other hand the State raised ten counter -claims. The Arbitrator refused to pass any award in respect of claim item Nos. 1 to 4,6 to 16, 19, 20, 22 and 24 to 26 of the contractors and allowed their claim in respect of item Nos. 5, 21 and 23 besides allowing the claim in respect of item Nos. 17 and 18 in part. Similarly, out of ten counter -claims of the State, the Arbitrator rejected its claim item Nos. 1, 4, 8 and 9; and allowed claim item Nos. 2, 6, 7 and 10 besides allowing claim item Nos. 3 and 5 in part. Ultimately the Arbitrator passed an award in favour of the contractors to a tune of Rs. 4,45,27,453.00 (four crores forty -five lakhs twenty -seven thousand four hundred fifty -three) and in favour of the department to a tune of Rs. 1,37,16,892.00.