P.K.BALASUBRAMANYAN, J. - (1.) LEAVE granted.
(2.) IN spite of service of notice and in spite of repeated conveying of information about the posting of the petition for special leave to appeal for final disposal, the respondent has not chosen to appear. We think we have waited enough for the appearance of the respondent and no further indulgence is warranted. Heard counsel for the appellant. The appellant invited tenders for construction of sheds near its Swimming Pool at an estimated cost of Rs.10.70 lakhs. Respondent No. 1 submitted its tender. The tender form submitted by the respondent contained the following clause: "Clause 25A. (1) If any dispute or difference of any kind whatsoever shall arise between the vice-Chancellor M.D.U. Rohtak, and the contractor in connection with or arising out of the contract, or the execution of the work that is (i) whether before its commencement or during the progress of the work or after its completion, (ii) and whether before or after the termination, abandonment or breach of the contract it shall in the first instance be referred to for being settled by the Executive Engineer in charge of the work at the time and he shall within a period of sixty days after being requested in writing by the contractor to do so, convey his decision to the contractor, and subject to arbitration as herein after provided, such decision in respect of every matter so referred, shall be final and binding upon the contractor. In case the work is already in progress, the contractor will proceed with the execution of the work on the receipt of the decision of the Execution Engineer-in-charge as aforesaid, with all due diligence whether he or Vice-Chancellor, M.D.U., Rohtak requires arbitration as hereinafter provided or not. If the Executive Engineer, in-charge of the work has conveyed his decision to the contractor and no claim to arbitration has been filed with him by the contractor within a period of sixty days from the receipt of letter communicating the decision, the said decision shall be final and binding upon the contractor and will not be subject matter of arbitration at all. If the Executive Engineer in-charge of the work fails to convey his decision within a period of sixty days, after being requested, as aforesaid, the contractor may, within further sixty days of the expiry of first sixty days from the date on which request has been made to the Executive Engineer in-charge request the Vice- Chancellor, that the matter in dispute be referred to arbitration, as hereinafter provided. (2) All disputes or differences in respect of which the decision not final and conclusive shall at the request in writing of either party, made in communication sent through registered A.D. Post, be referred to the sole arbitration to Vice-Chancellor, M.D.U., Rohtak at the relevant time. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant or that he had to deal with the matters to which the contract relates and that in the course of his duties as a Government servant, he had expressed his views on all or any of the matters in dispute. The arbitrator to whom the matter is originally referred being transferred or vacating his office, his successor-in-office, as such shall be entitled to proceed with the reference from the stage at which it was left by his procedure. In case the arbitration nominated by the Vice- Chancellor, M.D.U., Rohtak is unable to act as such for any reason, whatsoever the Vice- Chancellor,M.D.U., Rohtak shall be competent to appoint and nominate and other Superintending Engineer or Chief Engineer, as the case may be as arbitrator in his place and the Arbitrator so appointed shall be entitled to proceed with the reference. (3) It is also a term of this arbitration agreement that no person appointed by the Vice-Chancellor,M.D.U., Rohtak shall act as arbitrator and if for any reason that is not possible the matter shall not be referred to arbitration at all. In all cases where the aggregate amount awarded exceeds Rs.25,000/- the arbitrator must invariably give reason for his award in respect of each claim and counter claim separately. (4) The arbitrator shall award against each claim and dispute raised by either party including any counter claim individually and that any lump-sum award shall not be legally enforceable. (5) The following matters shall not lie within the purview of arbitration:- (a) Any dispute relating to the levy of compensation as liquidated damages which has already been referred to the Superintending Engineer and is being heard or/and has been finally decided by the Superintending Engineer in-charge of the work. (b) Any dispute in respect of substituted, altered, additional work/committed work/defective work referred by contractor for the decision of the Superintending Engineer, in-charge of the work if it is being heard or has already been decided by the said Superintending Engineer. (c) Any dispute regarding the scope of the work or its execution or suspension or abandonment has been referred by the contractor for the decision of the Vice- Chancellor,M.D.U., Rohtak and has been so decided finally by the Vice-Chancellor,M.D.U., Rohtak . (6) The independent claim of the party other than the one getting the arbitrator appointed, as also counter-claims of any party will be entertained by the arbitrator notwithstanding that the arbitrator had been appointed at the instance of the other party. (7) It is also a term of this arbitration agreement that where the party invoking arbitration is the contractor, no reference for arbitration shall be maintainable unless the contractor furnishes to the satisfaction of the Executive Engineer in-charge of the work, a security deposit of a sum determined according to details given below and the sum so deposited shall, on the termination of the arbitration proceedings, be adjusted against the cost, if any, awarded by the arbitration against the claimant party and the balance after such adjustment in the absence of any such cost being awarded, the whole of the sum will be refunded to him within one month from the date of the awards: JUDGEMENT_596_TLPRE0_2007Html1.htm The stamp fee due on the award shall be payable by the party as desired by the arbitrator and in the event of such party's default the stamp fee shall be recoverable from any other sum due to such party under this or any other contract. (8) The venue of the arbitrator shall be such place or places as may be fixed by the arbitrator in his sole discretion. The work under the contract shall continue during the arbitration proceeding. (9) Neither party shall be entitled to bring a claim for arbitration if appointed for such arbitrator has not been applied within six months. (a) of the date of completing of the work as certified by the Executive Engineer in-charge, or (b) of the date of abandonment of the work, or (c) of its non-commencement within 6 months from the date of abandonment or written orders to commence the work as applicable, or (e) of the completion of the work through any alternative agency or means after withdrawal of the work from the contractor in whole or in part and/or its recession, or (f) of receiving an intimation from the Executive Engineer in-charge of the work that final payment due to or recovery from the contractor had been determined which he may acknowledge and/or receive. Whichever of (a) to (e) is the latest. If the matter is not referred to arbitration within the period prescribed above, all the rights and claim of any party under the contractor shall be deemed to have been forfeited and absolutely barred by time even for civil litigation now with standing. (10) It is also a term of this arbitration agreement that no question relating to this contract shall be brought before any civil court without first involving and completing the arbitration proceedings as above, if the scope of the arbitration specified herein covers issues that can be brought before the arbitrator i.e. any matter that can be referred to arbitration shall not be brought before a civil court. The pendency of arbitration proceedings shall not disentitle the Vice-Chancellor,M.D.U., Rohtak to terminate the contract and make alternative arrangements for the completion of the work. (11) The arbitrator shall be deemed to have entered on the reference on the day he issues notices to the parties fixing the first date of hearing. The arbitrator may, from time to time, with the consent of the parties enlarge the initial time for making and publishing the award. (12) It is also a term of this arbitration agreement that subject to the stipulation herein mentioned, the arbitration proceedings shall be concluded in poor ordinance with the provisions of the Arbitration Act, 1940 or any other law in force for the time being." Obviously, this tender form was signed on behalf of respondent No. 1 when it was submitted to the appellant. It was dated 12.09.2003. The tender so submitted by the respondent was accepted by the appellant. It was stated in the letter of acceptance, dated 22.11.2003, singed on behalf of the appellant: "As approved by the tender committee in its meeting held on 12.10.2003 and further approved by the competent authorities, the acceptance of your tender for the work cited as subject, is further conveyed to you on behalf of the Registrar, M.D.U., Rohtak at the rates contained in your tender dated 12.9.2003. This is subject to the terms and conditions of the approved Detailed notice inviting tender (INIT) of the above works." (emphasis supplied) The date of start of the work was indicated to be "from the date of issue of this letter." The time limit was fixed as four months. It contained a further stipulation: "You are requested to contact the SDE (C-1) M.D.U. Rohtak for taking the work in hand. The document containing the detailed terms and conditions of the contract are ready and you are requested to attend this office on any working day for signing the same. No payment will be made to you unless you sign the contract agreement. The contract stands concluded with the issue of this communication." The respondent, admittedly deposited an earnest money of Rs. 10,700/-.
(3.) IT is the case of the appellant that the site was not demarcated. IT is common case that a document containing detailed terms and conditions of the contract as envisaged by the acceptance letter was not signed by the parties. In the letter dated 8.3.2004 the appellant informed the respondent that it had decided not to get the work executed. The letter also called upon the respondent to get the earnest money of Rs.10,700/- refunded. The respondent issued a notice to the appellant invoking clause 25A of the tender conditions quoted above, calling upon the appellant to appoint an arbitrator in terms of that clause on a claim that on acceptance of his tender, the respondent had made arrangements for commencing the work, had put up sheds, had engaged labourers and had procured materials and on cancellation, losses have been incurred and the respondent was entitled to recover the same from the appellant. The appellant took the stand that under clause 13 of the tender conditions, the appellant was entitled to decide not to proceed with the work and no claim, as made on the side of the respondent, was maintainable. Clause 25A had no application. The claims were also factually disputed.;