HOUSING BOARD HARYANA Vs. COMFITS MARKETING

JUDGEMENT

(1.) The instant appeal has been filed seeking to challenge the order dated 11.02.2004 passed by the Addl. District Judge, Panchkula whereby, he has allowed the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for setting aside the arbitral award dated 04.12.2000, which was passed in favour of the appellants.

(2.) A few brief facts that are to be noted is that a contract dated 30.03.1995 was allotted by the appellants in favour of respondent No.1 for providing and fixing drapery rods and vertical blinds in the head office building of the appellants at Panchkula. The work as allocated, was not completed within the specified time, which led to the appointment of an Arbitrator, who gave his award dated 04.12.2000 in favour of the appellants herein. As per the award, an amount of Rs. 1,93,005/- lying with respondent No.1 was to be refunded to the appellants along with 12% simple interest and litigation expenses assessed at Rs. 10,000/-. Aggrieved against the said award, respondent No.1 challenged the same by way of filing objections under Section 34 of the Act before the Addl. District Judge, Panchkula, who set aside the award by an order dated 11.02.2004, which order has been assailed in this appeal.

(3.) Mr. Alok Jain, learned counsel appearing on behalf of the appellants contends that the award as passed, had taken into consideration the fact that respondent No.1 had not completed the work order placed upon it, while also noticing that 55% advance payment had already been released in favour of respondent No.1. It was noticed that work only worth Rs. 1,12,355/- had been executed, and therefore, the Arbitrator had rightly held that the balance amount of the advance payment was to be refunded along with 12% interest. It is also argued that the Addl. District Judge, Panchkula had erred in setting aside the award itself on the ground that appointment of the Arbitrator was beyond the period of limitation. It is further submitted that respondent No.1 itself was keen to complete the work, as would be noticed in the award and thereby, it could be said that the plea of the limitation stood waived. It was further argued that respondent No.1 herein filed a suit for specific performance, which would itself substantiate the fact that it was keen to complete the work as allotted to it, and therefore, once the work allotted had not been completed in terms of the tender, the appellants herein would be entitled to refund the balance of the advance payment. It is also argued that respondent No.1 herein had not raised the plea of limitation before the Arbitrator, and therefore, is estopped from its own conduct from raising this plea, since the plea of limitation is a mixed question of law and fact. In support of his argument, he relied upon judgment rendered in the case of Banarsi Das vs. Kanshi Ram, 1963 AIR(SC) 1165. It is also contended that the contract that had been allotted in favour of respondent No.1 was in connivance with the officers of the Housing Board, since the same has been awarded without inviting open bids and once it was found that there were several agencies available to execute the work at a lower price, an effort was made to renegotiate the terms as per Clause 14 of the contract, which stipulated that the amount of work can be increased and decreased due to any item omitted or substituted.