RAJENDRA BABU - (1.) TWO works were assigned by the appellant for construction of 108 and 72 units of B Type quarters at Karmik Nagar, Dhanbad pursuant to a tender notice dated 4/13-7-1981. After certain negotiations between the parties, two work orders were issued by the appellant to the respondent on certain terms anad conditions mentioned therein valuing at Rs. 86.49,730.00 and Rs. 57,64,468.00 for the said two works on 14-3-1982 and two separate agreements were executed by the parties. The schedule dates for completion of the respective works were fixed as 24-3-1983 and 19-3-1983. The respondent sought for extension of time which was granted by the appellant. Disputes having arisen between the parties, the matter was referred to the sole arbitrator, Shri M. P. Sharma, the then Additional Chief Engineer. The arbitrator made two awards in respect of the two contracts on 14-5-1989, which were filed in the Court of the Civil Judge on 12-6-1990 in two Title (Arbitration) Suits Nos. 37/86 and 40/86. The learned Civil Judge held that the notice for Title (Arbitration) Suit No. 37/86 had been served upon the appellant on 28-8-1990 and the objections filed on 14-9-1990 could be examined as they had been filed in time. So far as Title (Artibtration) Suit No. 40/86 is concerned it appears that the service of notice on the respondent was made on 13-7-1990 of the filing of the award and the objections in question were filed on 18-8-1990 and thus apparently there being a delay of five days in filing the objections beyond the period of limitation prescribed under Article 119 of the Schedule to the Limitation Act, 1963 were not considered. On decress being passed in terms of awards appeals filed in the High Court having met with failure, these appeals have been preferred by special leave.
(2.) THE parties filed elaborate pleadings before the arbitrator in respect of both the agreements. The claim made in the first agreement is as follows: JUDGEMENT_147_SUPREME2_2001Html1.htm Claim made in the dispute arising out of second agreement is as follows: JUDGEMENT_147_SUPREME2_2001Html2.htm
(3.) IN addition to these pleadings, it appears that the arbitration asked both the parties to file certain joint statements and in this regard stated as follows: "... ..Before going into the merits of the case the parties were advised to file joint statement signed by them, showing the quantities, rates and the payments made for various items and balance payment due to the claimnt under various heads and other particulars on 26-4-1989. The parties submitted the joint statements duly signed by them containing details of bricks and cement supply statements, bill statements with details of delay in payment of R/A bills alongwith relevant dates of mesurements and other particulars, including payable amounts under various heads and measurements for extra items, rolling margin etc." The arbitrator noticed in the course of his award that the joint statements signed by both the parties is the backbone of the award. The arbitrator rather strangely made the two awards after making elaborate reference to the pleadings on either side but not deciding any one of the claims except the claim relating to payment of material escalation in the two claims. On that aspect of the matter, the arbitrator, after adverting to the pleadings, stated as follows: "... .Since the prices of buildings materials and labour cost sky rocketting and the value of rupee going down, the refusal to compensate increase in material cost on some ground or the other would lead to total financial disaster to the claimant. The payment of advances like mobilisation has been made against rebate of 11/2 Per Cent claimed by the O.P. and was meant for mobilising resources before commencing work. On the other hand very partly sum is payable against secured advance without hardly giving any financial assistance. The planning of procurement of material is linked with progress at site. Whereas during contract period the work hardly progressed 50 Per Cent and the payment for work done was restricted to 16 Per Cent how could the planned procurement availing secured advance could be made in such solution. The payment of material escalation for the increase in cost during the extended period of the contract would give some relief to disaster already caused financially to the claimant. On examination of the contract provision I find that the claimant had undertaken to complete the work at agreed rates within the stipulated period with the provision for extension of time to execute at the agreed rates till completion. This contention shall hold good provided the extended period is within a reasonable limit. In this case the original stipulated period is 12 months and actual completion is 26 months having extension element of 14 months which cannot be termed reasonable by any yardstick. The grant of extension of time is a poor consolation. It is not remedy for losses suffered on account of delay in supply of building materials committed to be supplied by the O.P." ;