JAGANNATH CHOUDHURY Vs. STATE OF ORISSA

JUDGEMENT

(1.) This arbitration proceeding filed under Sec. 11 of the Arbitration and Conciliation Act, 1996 praying therein for appointment of Arbitrator in exercise of power under Sec. 11 of the Arbitration & Conciliation Act, 1996 for adjudication of the dispute between the parties.

(2.) In filing the application, the petitioner contended that the petitioner is a reputed Super Class Contractor Firm in the State of Odisha and is undertaking several construction work of road, bridges, canals etc. under different departments of the State Government and has successfully completed several such contracts, which are of very high value. In the process, the petitioner was awarded with the contract work "Construction of left bank canal from RD 50.50 Km. to 55.50 Km. with all structures other than H.R. and C.R." of Rengali Irrigation Project for a value of Rs.15,65,44,778.00. The parties entered into an agreement bearing Agreement No.LCB-2/97-98 having the date of commencement of the contract work as 31/12/1997 and the stipulated date of completion was 30/12/1999. It is the case of the petitioner that soon after execution of the agreement, the petitioner mobilized men, material and machineries at the work site and started execution of contract work. But during execution of the contract work, petitioner faced several hindrances like delay in acquiring the private lands, non-receipt of clearance from the forest department, delay in diversion of existing high power electric lines/towers from the canal alignment and frequent obstructions created by the local villagers. There also existed frequent change of drawing, designing and alignment of the work, non-payment of R.A. bills and escalation, variation in work/extra work also seriously affected the progress of the work. Finding the completion of the work beyond the control of the petitioner and that the delay of execution of the work was not attributable to the petitioner, the petitioner completed the work with the cooperation of the opponent not only by extending the date of completion of work till 31/12/2007 but with the benefit of price escalation from time to time. Considering the approach of the petitioner, the opponent also approved the deviation statement vide order No.31235 dtd. 21/11/2009. It is alleged that in spite of extension of time and awarding benefit of price escalation and approval of the final deviation statement, some dues in respect of the petitioner is still remain unsettled. The petitioner claimed that following Clause-43 of the condition of the contract, he is very much entitled to the benefit of price escalation on the basis of price index up to the last quarter of 2007 and the same is not paid to him. Considering the request of the petitioner in the matter of illegal deduction of certain amount, the objection of the petitioner was forwarded by the Executive Engineer to the Superintending Engineer vide its letter No.5035 dtd. 4/9/2010 and in the meanwhile the Superintending Engineer has forwarded the same to the Chief Engineer vide its letter dtd. 6/10/2010 for consideration. Unfortunately, it did not yield any result. Finding no resolution of the matter, petitioner invoked for settlement of the dispute under Clause 23 of the condition of Contracts and by letter dtd. 4/7/2012 requested the Engineer-in-Charge to expedite the action for payment of his legitimate dues, which also yielded no result compelling the petitioner to prefer appeal before the employer vide his letter dtd. 21/11/2012 and it is how pending before the Chief Engineer-opposite party no.2. Finding no response from the opponent, the petitioner claimed to have compelled to request this Court for invoking power under Sec. 11 of the Arbitration & Conciliation Act, 1996 for appointment of an arbitrator for adjudicating the dispute between the parties.

(3.) In response to the aforesaid action of the petitioner, the opposite party nos. 1 to 3 filing a common response in some and substance contended that the arbitration proceeding as led is not maintainable either in fact or law. The arbitration proceeding is also wholly misconceived. It is next pointed out by the opposite party nos.1 to 3 that the provision of Clause 23.1 of the conditions of Contract has no application to the facts of the present case. It is specifically submitted by the opposite party nos.1 to 3 that this clause is applicable in two contingencies i.e. (i) any work demanded from the contractor by the employer considered to be outside the scope of the contract or (ii) considers any drawing, record or ruling of the Engineer-in-Charge on any matter in connection with or arising out of the contract or the carrying out of the work to be acceptable. Clause 23 is clear as to in respect of which an arbitration can be preferred. It is further claimed that the disputes involved under Annexure-7 are not within the purview of Clause 23 of the terms of contract. It is further contended by the opposite party nos.1 to 3 that the Clause 23.1 does not permit settlement of future disputes consequently invocation of the provision of Clause 23.1 for settlement of dues is wholly misconceived. It is further contended by the opposite parties 1 to 3 that the work was completed on 1/12/2007 and the final bill was prepared on 8/12/2007 vide 51st Running Account Bill vide M.B.No.467/06. The 52nd and 53rd Running Account Bills were prepared only for price-escalation adjustment and payments have been made accordingly in the year 2010. The petitioner-contractor having accepted the amount determined by the authority unopposed and without indication of any further claim, he is now stopped to have any future claim and as such there is no requirement of appointment of an Arbitrator at this stage. In justifying their claim, the opposite parties 1 to 3 have also relied on three decisions, which are as follows: