STATE OF PUNJAB Vs. MODERN CO-OPERATIVE SOCIETY

JUDGEMENT

(1.) The instant first appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (henceforth called 'the Act' for short) seeking to challenge the dismissal of the objections filed by the appellant under Section 34 of the Act by the Additional District Judge, Patiala.

(2.) In brief, the facts are that work was allotted by the appellant to the respondents for construction of 100 rooms for Nurses in new Rajindra Hospital, Patiala. The work was allocated by letter No. 262-66 dated 21.4.1992 and the value of the work was fixed at Rs. 54.88 lakh. The work was to be completed within a period of 1-1/2 years in the light of the terms and conditions specified in the agreement duly signed between the parties. As the respondents did not complete the work within the stipulated period a penalty of Rs. 5,48,000/- was imposed upon the respondents, vide letter dated 22.11.1993, which was subsequently reduced to Rs. 54,800/- by the Controlling Authority on 9.2.1994. On account of a dispute that arose regarding payment, the matter was referred to the Arbitrator Shri B.D. Gupta, Superintending Engineer, Patiala Circle No.1, who gave his award dated 6.2.1997. The award was remitted back by the Additional Civil Judge (Senior Division), Patiala, vide his judgment dated 6.6.1998 with a direction to the Arbitrator to pass a fresh and well reasoned award within a period of four months. The Arbitrator gave his award on 12.11.1998 allowing the claim of the respondents, while allowing 18% interest on the said amount.

(3.) Aggrieved against the said award, the appellant preferred objections under Section 34 of the Act for setting aside the award by taking the preliminary objections that the award had been passed beyond the period of four months and, therefore, the same would not be sustainable. It was also argued that the claim had been raised beyond the period of limitation, which has been specified in Clause 25-A of the agreement entered into between the parties. The objections were dismissed, which order has been challenged by way of instant appeal.