ALIM AND CO Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) Both these appeals arise from the judgment and decree dated November 15, 1994 passed by the Additional District Judge No. 1, Bharatpur, making the award a rule of the court.

(2.) The relevant facts in brief, which have given rise to these appeals, are that M/s. Alim and Company (for short the Company) entered into a contract with the State of Rajasthan (for short the State) for the work of construction of high level bridge over river 'Banjara' on Jaipur Agra Road, National Highway No. 11, Kilometre 96/0/0 at Agra under Agreement No 19 of 1982-83 for a sum of Rs 1,07,83,700/- The disputes which arose in respect of the said contract were referred to the sole Arbitrator Shri Man Mohan Singh retired Additional Chief Engineer, P.W D. Rajasthan, who passed the award on August 29, 1991 by which Company's claim to the extent of Rs. 1,21,421.94 was allowed besides other directions regarding release of the performance guarantor bond and the other bank guarantee. The Arbitrator had also allowed the future interest @ 18 per cent from the date of award upto the actual payment or the date of decree whichever is earlier for making the award, a rule of the court under Section 17 of the Arbitration Act, 1940 (for short the Act). The Company filed an application under Sections 14, 17 and 29 of the Act before the District Judge, Bharatpur which was later on transferred to the court of Additional District Judge Court No. 1, Bharatpur who made the award a rule of the court.

(3.) The Company has challenged the impugned judgment and decree on the ground that the court acted illegally in reducing the interest from 18% to 12% per annum and also urged that direction regarding the bank guarantee be ordered to be set aside. Whereas the contention of the State is that entire judgment deserves to be quashed. Mr. K.S. Rathore, learned Additional Advocate General for the State canvassed that the court below had ignored the counter claim objections filed by the State. The Arbitrator has wrongly awarded the claim of Rs. 12,48,643.60 towards the escalation in terms of Clause 45 of the printed agreement PWD MF 107 inducted on September 21, 1983 subsequently disregarding the explicit contractual provision existing in the agreement in terms of Clause 60 of the Agreement No. 19. In fact escalation as per provision of Clause 60 of the original agreement No. 19 of 1982-83 was paid to the Company which was accepted by it without objection but the court below failed to appreciate this important aspect. The learned court below also failed to consider that Clause did not exist in the original agreement No 19 of 82-83 and the observation of the Arbitrator that remedy was available to the Company under the said Clause was against the record.