VISHNU CONSTRUCTIONS Vs. CHIEF ENGINEER AIR FORCE

JUDGEMENT

(1.) This Arbitration Application is filed under Sec. 11 (5) and (6) of the Arbitration and Conciliation Act, 1996 (for short, 'the Act') by the applicant seeking to appoint an Arbitrator for resolution of disputes between the parties as per Agreement CA No.GE/AFA/57, dtd. 30/3/2010.

(2.) The case of the applicant is that the respondents entered into an agreement vide CA No.GE/AFA/57, dtd. 30/3/2010 for additions/alterations to building No.370 (Naidu Block) at AFA, Hyderabad with the applicant. The applicant started the work as per the said agreement to the pre-existed building where the work of tiles of size 300 x 300 had to be laid in 34 transit accommodations. Thereafter, respondents made changes in size of tiles from 300 x 300 to 400 x 400 size stating that 300 x 300 size tiles do not have an aesthetic look and assuring the applicant that additional expenditure that would be incurred due to change in scope of work shall be reimbursed. The respondents have also asked for laying of concealed pipelines in 34 inches, instead of surface run pipelines as per the aforesaid agreement, at an additional cost, which the respondents again promised to reimburse. Believing the respondents, the applicant completed the extra work entrusted to it. The applicant made numerous attempts to get the payment released for the additional work done, but on one pretext or other, respondents postponed the same. On persistent demands, the respondents revealed that the said items used for additional renovation are not scheduled items, as such they are unable to make payments. Thereafter, the applicant issued notice, dtd. 30/3/2013 to the 1st respondent asking for appointment of an arbitrator as per conditions 70 and 71 of IAFW -2249 within 30 days; that when the applicant tried to contact the respondents to settle the disputes amicably, respondents started ignoring the applicant. Hence, the applicant filed an application, dtd. 15/4/2013 before the 3rd respondent, duly marking a copy to the Central Chief Commissioner, New Delhi, seeking information under Sec. 6 of the RTI Act, 2005, with regard to documents pertaining to the work executed in Naidu Block (370). That the respondents issued reply to the above said letter stating that the final bill against contract quoted was signed by the applicant agreeing that there are no specific claims and "no further claim" certificate. That as per condition No.65 of IAFW-2240, no further claims shall be made by the contractor after submission of the final bill. Since no extra claims were listed in the final bill, the claims for the extra work has been waived off. In fact, the contemporaneous record evidences that no claims certificate was the outcome of coercion and undue influence, as the applicant was very much pressing for its claims on the date of final bill. As such no significance can be attached to the same. It is asserted that the applicant again sent a legal notice, dtd. 20/12/2013 to the 1st respondent, listing out the claims and also asking it to appoint an arbitrator as per conditions 70 and 71 of IAFW-2249 to resolve the disputes/claims. As per the terms of agreement between the parties, the applicant had fulfilled its obligation by completing the entrusted renovation work, for which the respondents ought to have made payments as per the agreed terms. The respondents have committed breach of the agreement by not making the payments. The applicant filed O.P.No.232 of 2014 before learned District Judge, Ranga Reddy District, for appointment of commissioner to inspect the work site and make note of the physical features of the work site, since the respondents are trying to make alterations in the work site in order to evade making payments in the above dispute. It is stated that the attempts of the applicant did not evoke any response and the applicant has no other alternative except seeking for appointment of arbitrator with a view to adjudicate the above mentioned dispute and consider the claim of the applicant.

(3.) Respondents filed counter stating that the applicant had signed the final bill without specific claims and also signed "No further claim" certificate at the time of submission of Final Bill and Final Bill amount was also received by the applicant without any protest. As per condition 65 of IAFW-2249 (General Conditions of Contracts), forming part of the contract agreement, no further claims shall be made by the applicant after submission of final bill and shall be deemed to have been waived and extinguished. Since the applicant sought appointment of Arbitrator only after lapse of two years from the date of receipt of Final Bill vide letter, dtd. 30/3/2013, initially without any specific claims, the respondents did not agree for appointment of Arbitrator and ultimately sought for dismissal of the application.