BRIJ ENTERPRISES Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) HEARD learned counsel for the parties in respect of application filed under Section 11 read with Section 10 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") for appointment of Arbitrator. It was submitted by the learned counsel that the applicant is a partnership firm and is a registered "A" class contractor engaged in the work of contractorship. The applicant was awarded work contract valuing Rs. 1,69,28,629/ - falling under the Executive Engineer, PWD District Division II, Bikaner for the "Construction of Mohangarh Sutharwala Road Crossing Jhunjhunuwala -Bahal Distributory" Km 0/0 to 28/0 (Job No. 29/4705/IGNP/St.II/Plam/91 -92) vide agreement No. 1/1991 -92 (Annex. 1) having arbitration Clause 23 in it wherein it has been provided that in case any sort of dispute arises in respect of said agreement, the matter will be referred to arbitrator.

(2.) IT was further stated that as per the work -order No. 1277 dt. 17.09.1991 the work was to commence from 01.10.1991 and was to be completed by 31.03.1993. Since the applicant could not complete the contract -work despite all his best efforts and sincerity because of departmental reason and natural calamities which was beyond the control of the applicant, extension of time was sought from the Department. Vide order dt. 27.06.1994 the period of completion of work was extended but a penalty of 1/8th % penalty (Rs. 21,160) was imposed on the applicant. The work was finally and satisfactorily completed on 15.10.1993. Thereafter, the contractor submitted escalation bill as per Clause 45 of the agreement (Annex. 1) for the payment of 12,41,863 and also demanded interest from 15.10.1993 till the date of actual payment. The abstract of para of Clause 45 of the agreement reads as under:

(3.) NOW the contention of the applicant is that despite exchange of numerous communications with the Department, payment of escalation bill amounting to Rs. 13,41,863/ - plus interest thereon from 15.11.2003 has not been paid to the applicant, upon which, a legal notice dt. 10.08.2005 (Annex. 11) in terms of arbitration Clause was given to the Chief Engineer, PWD, Jaipur alongwith bankers' cheque No. 033268 dt. 10.08.2005 for a sum of Rs. 1000/ - drawn on Union Bank of India, Jaipur Branch in favour of the Executive Engineer, Head Quarter PWD, Jaipur for referring the dispute to arbitrator as per Clause 23 of the Agreement, but of no avail. Further a registered reminder letter dt. 26.09.2005 (Annex. 12) was also sent to the Chief Engineer, PWD, Rajasthan, Jaipur in terms of the aforesaid contract for sending a penal of three names of the rank of Superintending Engineer as per Clause 23 of the agreement (Annex. 1) for the appointment of Arbitrator. It is in this background that an application has been moved before this Court with a prayer that the application may kindly be allowed and the matter be referred to Arbitrator.