MOGUL INDIA Vs. INDIAN RAILWAY CONSTRUCTION COMPANY LTD

JUDGEMENT

(1.) Through this revision, M/s. Mogul India Construction Company Limited, Palika Bhawan, Sector 13, R.K. Puram, New Delhi has assailed the order of Additional District Judge, Kapurthala dated 1.9 1997, who had dismissed their appeal against the order of Senior Sub-Judge, Kapurthala dated 19.7.1994 whereby he (Senior Sub-Judge, Kapurthala) had declined their (M/s. Mogul India) prayer for the appointment of Arbitrator. M/s. Mogul India made application under Section 20 of the Indian Arbitration Act, 1940. There was contract between M/s. Mogul India and Indian Railway Construction Company Limited for fabrication of steel structural steel work for M/s. IRCON, RCF site, Kapurthala. Work was allotted on 31.3.1987 and was required to be completed within 5 months but the work was actually complete in about 18 months due to failure on the part of Indian Railway Construction Company Limited to fulfil the conditions of the agreement. It was alleged that the Managing Director of Indian Railway Construction Company Limited, failed to make timely payments as per agreement for the work executed at site. Due to the tight financial position of M/s. Mogul India, the irritated labour damaged and stole the office equipments, tools from store including tools issued by the Indian Railway Construction Company Limited to them were damaged and stolen. The recovery of Rs. 18,000/- made from M/s. Mogul India's bills was illegal on account of damage/loss of tools due to the irritated labour for non-payment by the Indian Railway Construction Company Limited. M/s. Mogul India claimed to be entitled to the payments which they have detailed in the arbitration application. It was alleged that they are entitled to interest at the rate of 24% on all the payments from the date of completion of work i.e. 20.10.1989 to the date of final payment. It was alleged that there was arbitration clause in the agreement and, therefore, the matter in dispute was liable to be referred to the Arbitrator. The Central Government should appoint Arbitrator.

(2.) Respondent Nos. 2 and 3 opposed this application urging that there was no subsisting arbitration agreement between the parties in respect of contract agreement No.ICRC/KPT/ 124/M/s. Mogul India Ltd. dated 28.4.1987 in view of the accord and satisfaction arrived at between the parties duly confirmed by the petitioner by issuance of certificates dated 31.5.1989 and 1.6.1989 followed by their letter dated 6.6.1989 and they were receiving payment thereunder. It was also alleged that no legal valid or cognizable dispute was available with the petitioner. No legal or valid dispute had been framed by the respondents in view of submission of full ana final/no claim certificate signed by M/s. Mogul India. The alleged arrears referred to in para 4 of the petition is out of contract and the petitioner had already received full and final payment with regard to the completion of work. It was admitted that the work for fabrication and erection of 200 MT steel valued at Rs. 5 lacs was awarded to the petitioner. Material comprising of steel, tools, plants consumable and electricity were to be supplied by the respondents to the petitioner free of costs. Rates quoted by the petitioner in the agreement were confirmed and no claim for fluctuation in price was available under Clause 30 of the Contract Agreement. The petitioner completed work in November, 1988 though under the contract it was to be completed by 30.8.1987. There was no failure on the part of the respondents to" fulfil any condition of the agreement Recovery of Rs. 17.920/- was made on account of depreciated costs for loss of Iron's plant etc by the petitioner and thus the recovery of was made under para 32.3 of the Contract Agreement. It was alleged that petition was liable to be dismissed as there was no dispute which was liable to be referred to the Arbitrator.

(3.) On the pleadings of the parties, following issues were framed :