AGGARWAL AND COMPANY Vs. STATE OF HIMACHAL PRADESH

JUDGEMENT

(1.) The work of "LSWW Solan (SH: Providing and laying of 200mm dia MSERW pipes in rising main in all the stages)" including the total cost of Rs. 32,35,685/- against agreement No. 22 of 1986-87 was awarded to Messrs. Aggarwal and Company, hereinafter referred to as the plaintiff on 9-2-1987. The work was to be completed within six months, that is, by 24-8-1987. Since the work could not be completed within the stipulated period, action was taken against the plaintiff in terms of Clause 2 of the agreement by levy of compensation at the rate of 10% of the contract amount. The plaintiff in spite of such action did not execute the work. Therefore, acting under Clause 3(a) of the agreement, the defendant rescind the contract and forfeited the security of Rs. 1,00,000/- deposited by the plaintiff at the time of allotment of work in his favour.

(2.) The action of the defendant resulted into a dispute. Consequently, the plaintiff sought for reference of dispute to arbitration within the meaning of Clause 25 of the agreement. The Engineer-in-Chief of the defendant acting under Clause 25 of the agreement vide his office order dated 17-5-1990 appointed Shri R. K. Kaura, the then Superintending Engineer, Arbitration Cell, H.P.P.W.D., Solan as the sole Arbitrator to go into the dispute between the parties and make his award.

(3.) Shri R. K. Kaura, before he could make his award resigned. Consequently, Shri D. N. Handa, Superintending Engineer, came to be appointed as sole Arbitrator vide office order dated 28-5-1992. Shri D. N. Handa also resigned and in his place Shri S. S. Juneja, Superintending Engineer was appointed as sole Arbitrator vide order dated 4-6-1993. The Arbitrator so appointed after having gone into the dispute between the parties, made his award on 21-5-1994 in the following terms :- Claims of the plaintiff ClaimNo.ClaimAmount awarded 1.Levy of 10% compensation amount to Rs.3,23,568/-Nil. The claim held to be not arbitrable.2.Refund of security deposit of Rs.1,00,000/-Rs. 1,00,000/-3.Interest on the amount of security deposit amounting to Rs.57,750/- at the rate of 18% per annum from 24-4-1987 till 10-7-1990 the date of filing of claim Petition.Interest amounting to Rs.31,667/- at the rate of 10% per annum.4.Loss of anticipated profits at the rate of 15% on the value of the work taken out of the hands of the plaintiff Rs.1,76,250/-Nil5.Damages suffered by the plaintiff on account of their failure to lift material from the manufacturers in spite of orders placed Rs.30,000/-.Nil6.Damages suffered by the plaintiff on amount of prolongatic of contract beyond the stipulated date of completion 23-8-1987 till the date of rescission of the work, i.e., 12-10-1989-26 months-at the rate of Rs.1500/- per month = Rs.52,000/-Nil7.Damages suffered by the plaintiff on account of delayed payments which are to be calculated as interest at the rate of 18% on the delayed payments.Rs.15,000/- COUNTER CLAIMS OF THE DEFENDANT1.Refund of excess payments made towards the 1st five running bills - Rs.5,34,578/-Nil 2.Compensation of Rs.3,23,568/- as assessed under clause-2 of the agreement.Nil. The claim held to be not arbitrable.3.Forfeiture of amount of security under clause 3(a) of the agreement -Rs.1,00,000/- Nil