UNION OF INDIA Vs. MANCHANDA BROTHERS

JUDGEMENT

(1.) THE legality and the validity of the award dated December 14, 1976, by Brigadier Gur Dayal, arbitrator, against the Union of India, was challenged under Sections 30 and 33 of the Arbitration Act, 1940, (hereinafter called the Act) by the appellant on a number of grounds in the Court of the Subordinate Judge, First Class, Chandigarh, in their objection petition. The objection petition was dismissed by the Subordinate Judge by his judgment dated January 17, 1978. In the present appeal, the learned counsel for the appellant, has confined the challenge to the award in so far as the arbitrator allowed a sum of Rs. 1,91,170. 28 as reimbursement of extra expenditure incurred by respondent No. 1 (hereinafter called the contractor), on the sole ground that the arbitrator had committed a blatant legal misconduct as the award in this regard was beyond jurisdiction in view of clause 9 of the contract between the parties. In order to appreciate the contention, the relevant facts, in brief, may be enumerated as under,

(2.) M/s. Manchanda Brothers, M. E. S. Contractors and government builders, respondent No. 1, entered into a contract with the Government of India for the construction of certain buildings. Their tender having been accepted on August. 21, 1972, the work regarding the construction of quarters was to be completed in two phases. Phase I, was to be completed within nine months and Phase II within 18 months. With the issuance of the work order, construction work was commenced. However, subsequently, the execution of work with regard to the construction of some building was suspended on June 21, 1973 by Major Raghu Nandan, Garrison Engineer, vide his letter, Exhibit A. Thereafter, by another letter, dated September 4, 1973, Exhibit B, the execution of some other work was also suspended for some time. This suspension order was withdrawn later on and thereafter, the contractor completed the work some dispute having been raised by the contractor, Lieutenant-General J. S. Bawa, Engineer-in-Chief by his letter dated January 21, 1976, appointed Brigadier Gur Dayal as the arbitrator under the terms of the contract. Claim was filed by the contractor before the arbitrator in which objections were raised on behalf of the appellant. Evidence was adduced by both the sides an thereafter, the arbitrator, respondent No. 2, gave his award on December 14, 1976. As the contentions of both the parties involve the interpretation of this award, the same is reproduced below: ''whereas CERTAIN differences arose between the parties out of a contract in writing viz. CA No. CENWZ/chd-20/72-73 for provision of married accommodation for JCOs, HAVs, ORs, and NCs, E at Chandigarh between them, AND WHEREAS I was appointed the sole Arbitrator in the matter vide Engineer-in-Chief, Army Headquarters, Kashmir House, New Delhi. Letter No. 13600/wc/157/e8 dated 21 Jan. , 76. NOW, I BRIG. GUR DAYAL, having taken upon myself the burden of reference and having heard, examined and considered the statements of the parties and the documentary evidence produced before me by them. I Do HEREBY make and publish this my final award in writing of and concerning the matter referred to me. Dealing with each claim separately, award and direct as under:-A. Claims of The Claimant 1. Reimbursement of extra-expenditure in executing the work Rs. 4,06,355. 58. The claim is allowed for Rs. 1,91,170. 28 (Rupees one lac ninety one thousand one hundred seventy and paise twenty eight only ). 2. Compensation for idle labour due to shortage of cement Rs. 14,688. 00. The claim is rejected.

(3.) COMPENSATION of loss due to forfeiture of advances for steel windows Rs. 3,000. 00 The claim is rejected.