LAWS(ORI)-2007-1-7

NIRANJAN DAS Vs. UNION OF INDIA

Decided On January 18, 2007
NIRANJAN DAS Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) THIS is an appeal under Section 39, of the Arbitration Act, 1940. The Appellant -Contractor inter alia challenges the Order dated 05.12.2000 passed in Misc. Case No. 249 of 1999 arising out of T.S No. 225 of 1999 by the Learned Civil Judge (Senior Division), Bhubaneswar.

(2.) THE Appellant entered into a contract with the Respondent -Railways on 28.3.1990 for supply of 12000 -cum, of hard broken stone ballest of 50 mm size and to spread the same on the railway track in between Gorakha Nath -Rahama Station of Cuttack -Paradeep Section. It is submitted that soon after execution of the agreement the Appellant -Contractor commenced the work. He made necessary arrangements for collection and supply of hard broken ballest of the required size. It is alleged that though the Contractor was always ready and willing to execute the work but due to non -cooperation of the concerned Engineer of the Railways he could not proceed with the work, nor could complete the same within the time stipulated in the agreement. While matter stood thus, the agreement was cancelled on 12.9.1991. Due to such cancellation disputes cropped up between the parties and the matter was referred to arbitration. It is pertinent to mention here that in consonance with the terms of agreement two high -ranking officers of Railway Department were appointed as Arbitrators to decide the dispute. After receiving notice the Appellant filed his claim petition and Respondent -railway submitted their objection. The Arbitrators by a reasoned Order dated 23.12.1998 awarded a sum of Rs. 8,33,070/ - in favour of the Appellant apart from granting other ancillary reliefs. After the award was pronounced a petition was filed by the Appellant before the Learned Civil Judge (Senior Division), Bhubaneswar for making the award rule of the Court. The said petition was registered as T.S No. 225 of 1999. In the said case a petition was filed by the Respondent challenging the award, which was registered as Misc. Case No. 249 of 1999. The main ground on which the award was challenged by the Respondent was that, in the absence of any escalation clause the arbitrators acted illegally and with material irregularity in awarding a sum of Rs. 8,33,070/ - in favour of the Appellant towards escalation of minimum wages for the labourers. This petition was resisted by the Appellant but then the Court below relying upon the ratio of the decision of the Supreme Court in the case of State of Orissa v. Sudhakar Das (dead) reported in 90(2000) C.L.T. 198 (S.C.) held that in the absence of any escalation clause in arbitration agreement an arbitrator can not assume any jurisdiction to award any amount towards escalation and as such the portion of the award granting escalation towards wages is clearly not sustainable and there was a patent error. On the basis of such conclusion the award was made rule of the Court to the extent of Rs. 1,87,230/ -, in other words a sum of Rs. 6,45,840/ - awarded by the arbitrators was set aside.

(3.) THESE submissions are strongly repudiated by Learned Counsel for the Respondent. It is submitted that even according to the latest Supreme Court decision the conditions for awarding payment to the contractor on account of escalation of wages are (i) there should be specific clause to that effect; and the delay or laches on the part of the contractor in completion of the work if any should be explained. It is submitted that having not been satisfied, the Contractor was not entitled any amount on that head, and the Court below was justified in setting aside the award so far as claim on that account. In support of such submission Learned Counsel for the Respondent relies upon clauses 54 and 55 of the agreement.