UNION OF INDIA Vs. TRIMURTI ENTERPRISES

JUDGEMENT

(1.) HEARD counsel for the appellant and counsel for the respondents.

(2.) THIS appeal is directed against the order dated 12.5.2005 in Misc. Case No. 11 of 2003 whereby and where under an arbitration award dated 23.8.2003 rejecting the claim of the contractor respondent no. 1 and allowing the counter claim of the Appellant Railways by a Board of Arbitrators has been set aside with a consequential direction to the appellants to pay a profit amount of contract work at the rate of 10% on the entire contract amount of Rs. 1,09,20,000/ - with interest thereon with effect from 1.1.2008 and the appellants were further directed to refund the earnest money and security money with a compound interest from the date of deposit to the date of its payment within a period of three months.

(3.) IT is very significant to note here that out of three arbitrators, two of them namely P.N. Pandey was the nominee of the contractor whereas Mr. A.P. Singh was the nominee of the railway and as per the stipulation in the agreement, the presiding arbitrator was appointed with the consent of the two arbitrators and Mr. D.K. Dhusia was such presiding arbitrator. The three arbitrators of course were the officers of the railway which was well permissible within the terms of the agreement. This Board of Arbitrators is said to have contradicted the proceedings and the contractor during the pendency of such arbitration proceeding on finding that there was undue delay in the disposal of the arbitration proceeding had filed a request case under Section 11 of the Act before this Court being Request Case No. 6 of 2003 but the said request case was not pressed by the contractor as is recorded in the order of this Court dated 25.4.2003 on the assurance given by the counsel for the railway that the arbitration proceeding shall be concluded within a period of three months. The arbitrators thereafter are said to have given their award on 23.7.2003 wherein they had altogether rejected the claim of the contractor to the tune of Rs. 3,86,17,000/ - and had allowed the counter claim of the railway of Rs. 2,32,59,600/ -as against total claim of Rs. 4,10,79,267/ -. IT was this award dated 23.7.2003 which became the subject matter of the miscellaneous case before the Sub - Judge - I, Munger vide Civil Misc. (Arbitration) Case No. 11 of 2003 filed on 23.8.2003. Since the contractor had made all the three arbitrators parties by way of opposite party nos. 1, 2 & 3 in addition to the authorities of the railways as opposite party nos. 4 to 9. Two separate rejoinders were filed controverting the allegations made by the petitioner.