GUJARAT WATER SUPPLY AND SEWERAGE BOARD GANDHINAGAR Vs. UNIQUE ERECTORS GUJ PVT LIMITED
LAWS(GJH)-1988-4-7
HIGH COURT OF GUJARAT
Decided on April 29,1988

GUJARAT WATER SUPPLY AND SEWERAGE BOARD Appellant
VERSUS
UNIQUE ELECTORS (GUJARAT) PRIVATE LIMITED Respondents


Referred Judgements :-

GULAM KHAN V. MOHAMMAD HASSAN [REFERRED]
MEDITERANEAN AND EASTERN EXPORT CO. LTD. V. FORTRESS FABRICS LTD. [REFERRED]
CHANDRIS V. ISBRANDTSEN-MOLLER CO. [REFERRED]
ASSADULLAH MAKHDOOMI AND ORS. V. LASSA BABA AND ORS. [REFERRED]
M/S. KALINGA OTTO (P) LTD. V. M/S. CHARANJI KOCHHAR [REFERRED]
KANPUR MAHA NAGAR PALIKA V. M/S. NARAIN DAS [REFERRED]
LALA GOBIND RAM KAPOOR AND ORS. V. PREM PARKASH KAPOOR AND ORS. [REFERRED]
STATE OF PUNJAB V. AJIT SINGH AND ORS. [REFERRED]
THAWARDAS FHERUMAL VS. UNION OF INDIA [FOLLOWED]
SANTA SILA DEVI VS. DHIRENDRA NATH SEN [REFERRED]
GOPALKRISHNA PILLAI VS. MEENAKSHI AYAL [REFERRED]
FIRM MADANLAL ROSHANLAL MAHAJAN VS. HUKUMCHAND MILLS LTD [REFERRED]
UNION OF INDIA VS. BUNGO STEEL FURNITURE PRIVATE LIMITED [FOLLOWED]
UNION OF INDIA VS. JAI NARAIN MISRA [REFERRED]
ASHOK CONSTRUCTION COMPANY VS. UNION OF INDIA [DISTINGUISHED]
STATE OF MADHYA PRADESH SAITH AND SKELTON PRIVATE LIMITED THE STATE OF MADHYA PRADESH VS. SAITH AND SKELTON PRIVATE LIMITED :THE STATE OF MADHYA PRADESH:SAITH AND SKELTON PRIVATE LIMITED [FOLLOWED]
N CHELLAPPAN VS. SECRETARY KERALA STATE ELECTRICITY BOARD [REFERRED]
TARAPORE AND COMPANY VS. COCHIN SHIPYARD LTD [REFERRED]
HINDUSTAN STEEL WORKS CONSTRUCTION LIMITED VS. C RAJASEKHAR RAO [FOLLOWED]
MUNICIPAL CORPORATION OF DELHI VS. JAGAN NATH ASHOK KUMAR [REFERRED]
G S ATWAL AND CO VS. UNION OF INDIA [REFERRED]
V K MADHOK VS. UNION OF INDIA [REFERRED]
CHATURBHUJ SOHANLAL VS. CLIVE MILLS CO LTD [REFERRED]
RAMANATH AGARWALLA VS. GOENKA AND CO [REFERRED]
RAMSAHAI SHEDURAM VS. HARISHCHANDRA DULLCHANDJI [REFERRED]
UMRAOSINGH AND CO MAHANAGAR LUCKNOW U P VS. STATE OF MADHYA PRADESH [DISTINGUISHED]
EXECUTIVE ENGINEER R E DIVISION DHENKANAL VS. J C BUDHARAJ [REFERRED]
UNION OF INDIA VS. BUILDERS UNION [REFERRED]
STATE OF ORISSA VS. J N CHOUDHURY [REFERRED]
FERTILIZER CORPN OF INDIA VS. BHARAT PAINTERS [DISTINGUISHED]
SONEYLAL THAKUR VS. LACHHMINARAIN THAKUR [REFERRED]
SAKALCHAND MOTI VS. AMBARAM HARIBHAI [REFERRED]
UNION OF INDIA VS. D P WADIA [REFERRED]
JOLLY STEEL INDUSTRIES PVT LTD , POONA VS. UNION OF INDIA [FOLLOWED]





JUDGEMENT

N.B.PATEL - (1.)HESE two appeals are directed against the common order dated the 17/06/1986 passed by the learned Civil Judge (S.D.) Ahmedabad (Rural) at Narol whereby he has disposed of Civil Misc. Application No. 231 of 1981 and Misc. Civil Application No. 158 of 1985. By this order the learned Judge has allowed Civil Misc. Application No. 231 of 1981 (filed by the present respondent) by accepting the award made by the Sole Arbitrator regarding the disputes between the parties arising from two Contracts. Misc. Civil Application No 158 of 1985 (filed by the appellant) urging that the award may be set aside has been dismissed by the learned Judge. Thus it is the composite order over-ruling the objections against the award and the coverting of it into the rule of the Court which is the subject-matter of tHESE two appeals filed by the Gujarat Water Supply and Sewerage Board (to be hereinafter referred to as the Board) against M/s. Unique Erectors (Gujarat) Pvt. Ltd. (to be hereinafter referred to as the Contractors).
(2.)ONE of the contentions taken up by the Board against the acceptance of the award was that it was pronounced beyond limitation period and the Contractors have filed Civil Application No. 1508 of 1987 urging that if necessary this Court may grant extension of time to make and publish the award (vide Sec. 28 of the Arbitration Act). We propose to dispose of both the appeals filed by the Board and also the Civil Application filed by the Contractors by this common judgment.
The facts leading to the filing of the two Misc. Civil Applications and then to these appeals may first be set out. By two Contracts entered into between the parties the Contractors undertook to provide fabricating laying and jointing 1000 mm. dia steel welded pipeline for a distance of 10.1 kms. and 7.4 kms. respectively. The two Contracts entered into by the parties were in Standard Form B-2 of the P.W.D. and they were contracts Nos. B-2/1 and B-2/2 of 1978-79. Disputes arose between the parties regarding the execution of the two Contracts each side alleging that the other had committed breach of the Contracts. The two Contracts under which the work was to be carried out contained an arbitration clause being Clause No. 30 in each Contract. The arbitration clauses in both the Contracts were identically worded. This arbitration clause (Clause No. 30) provided that if any disputes enumerated in any of the sub-clauses (i) to (viii) of Clause 30 arose between the parties the same shall be referred to a Sole Arbitrator. Since disputes did arise between the parties the Contractors filed Misc. Civil Application No. 231 of 1581 under Secs. 8 and 20 of the Arbitration Act in the Court of the learned Civil Judge (S.D.) Ahmedabad (Rural) at Narol for appointment of Arbitrator as per Clause 30 of the Contract and for reference of the disputes to the Arbitrator. Thereupon the Court appointed one Shri G. G. Vaidya as an Arbitrator and by his interim decision dated 5/05/1982 Shri Vaidya decided that the disputes (claims) mentioned in paras 10(g) to 10(i) of Civil Misc. Application No. 231 of 1981 were not arbitrable as they did not fall within any of the sub-clauses (i) to (viii) of Clause 30 of the Contracts whereas the rest of the disputes (claims) were arbitrable. The Board challenged this decision of the Arbitrator Shri Vaidya by filing Special Civil Application No. 2750 of 1982 before this High Court but this Special Civil Application was dismissed by this Court by its order dated the 16/03/1983 The Board then took the matter to the Supreme Court against the said decision of this Court by filing Special Petition (Civil) No. 9610 of 1983. While the matter was pending before the Supreme Court the parties submitted consent terms before the Court and the proceedings before the Supreme Court were thereupon disposed of in the same terms by an order dated the 30/01/1984 The Supreme Court set aside the order of the High Court and substituted in its place its own order in terms of the compromise submitted by the parties. By the consent terms the parties agreed to appoint Shri M D. Patel. retired Secretary P. W. D Gujarat State and then a sitting member of the Board as the Sole Arbitrator in place of Shri G. G. Vaidya to decide all the disputes between them concerning the works in question. It was also provided that the Board should also put up its counter-claim before this Sole Arbitrator and shall have a right to agitate all points both in fact and in law before the Sole Arbitrator including the question of arbitrability within the meaning of Clause 30 of the Contract. It was also provided in the consent terms that both the parties shall agree to extend time as and when necessary for completion of the arbitration proceedings. Execution by the parties of a formal agreement for arbitration defining the scope of arbitration was also envisaged by the consent terms The Sole Arbitrator Shri M. D. Patel was thereafter approached by letter dated 16/02/1984 addressed to him by the Secretary of the Board to enter upon the reference. A copy of the consent terms placed before the Supreme Court was enclosed with this letter addressed to the Arbitrator. It appears that a formal agreement dated the 31/03/1984 appointing Shri M. D. Patel as Sole Arbitrator to adjudicate upon and give his award as per the provisions of the Arbitration Act 1940 in respect of various claims of both the parties against each other in respect of both the works covered under the agreements Nos. B-2/1 and B-2/2 subject always to their admissibility under Clause 30 of the Contracts was arrived at between the parties. It appears however that this formal agreement did not bear the signature of anybody on behalf of the Contractors. Be this as it may Shri M. D. Patel entered upon the reference and the Contractors placed before him a statement of their claim under different items or heads totalling up to an amount of Rs. 4 92 20 685 The Board also submitted a statement of counter-claim under different heads aggregating to a total amount of Rs. 26 87 217 The proceedings before the Arbitrator culminated into a lump-sum award of Rs. 57 65 273 in favour of the Contractors. This award is dated the 8/07/1985 and it was on adjudication upon the claim and counter-claim submitted by the parties before the Arbitrator. The award was filed before the Court of the learned Civil Judge (S.D) Ahmedabad (Rural) at Narol and the Contractors moved the Court in Civil Misc. Application No. 231 of 1981 to make it the Rule of the Court and to pass a decree in terms thereof. On the notice of the filing of the award having been served upon the Board it filed Civil Misc. Application No. 158 of 1985 detailing its objections against the acceptability of the award and urging that the award be set aside. After hearing the parties as regards the objections raised by the Board against the award the learned Judge has rejected the said objections and has made the award the rule of the Court and has ordered that a decree for Rs. 57 65 273 with running interest at the rate of 17% per annum thereon from the date of the application i.e. the 6/08/1981 till the date of the decree as awarded by the Arbitrator and for further interest at the same rate from the date of the decree till realisation of the amount be drawn up against the Board. The judgment of the learned Judge resulting in this order is in challenge before us in the two appeals.

(3.)ON behalf of the Board a number of contentions were urged before the learned Judge against the acceptability of the award but Shri A. H. Mehta on behalf of the appellant-Board has not raised all these contentions before us and we shall deal with only those contentions which have been urged before us. The submissions urged before us by Shri A. H. Mehta on behalf of the Board may conveniently be divided under four heads viz. (i) Arbitrability issue (ii) Limitation (iii) Award of interest and the rate at which the same is awarded and (iv) Non-application of mind by the Arbitrator. It may be convenient at this stage to reproduce the award. It reads: @@@" AWARD In the matter of Arbitration Act 1940 AND In the matter of
1 fabricating laying and jointing 100 mm. dia 10 100 mm. long steel welded pipeline under Bhavnagar Water Supply Scheme based on Shetrunji Dam Agreement No. B-2/1 of 1978-79. AND 2. fabricating laying and jointing 100 mm. dia 7 400 mm. long steel welded pipeline under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam Agreement No. B-2/2 of 1978-79. In the matter of consent arrived at between M/s. Unique Erectors (Gujarat) Pvt. Ltd. and Gujarat Water Supply and Sewerage Board Gandhinagar appointing Shri M. D Patel as Sole Arbitrator to arbitrate upon all disputes and claims and counter claims arising from the above works. Claimants: M/S. UNIQUE ERECTORS (GUJARAT) PVT. LTD. a Company registered under the Companies Act 1956 having their registered office at 2nd floor Natraj Chambers Ashram Road Ahmedabad. Versus GUJARAT WATER SUPPLY and SEWERAGE BOARD having their registered office at Block GH Sector 16 Near Shalimar Cinema Gandhinagar. Whereas M/s Unique erectors (Gujarat) Pvt. Ltd. Ahmedabad and the Gujarat Water Supply and Sewerage Board Gandhinagar who are the parties to the contract for both the works above name have appointed me vide their letter dt. 16-2-1984 of Gujarat Water Supply and Sewerage Board as Sole Arbitrator to adjudicate upon their respective claims counter claims and to give my award in respect of various claims of both parties against each other in respect of both the said works covered under Agreement No. B-2/1 and B-2/2 of 1978-79. Now I M. D. Patel Sole Arbitrator and Chairman of M/s. Gujarat State Construction Corporation Limited and retired Secretary P. W. D. Government of Gujarat Ahmedabad. having taken upon the burden of the reference heard and examined and considered pleadings submitted on behalf of the parties and the documentary and oral evidences produced before me by them as also their oral submission and arguments. That by consent of the parties the time has been enlarged for publishing the award from time to time and lastly it has been extended upto 31/07/1985 I have also heard on the point of arbitrability of the claims and counter claims as per clauses of the contract agreement and after considering all the above aspects I do hereby make and publish this my final award in writing of all concerning matters referred to me. I hereby award and direct that the respondent M/s. Gujarat Water Supply and Sewerage Board shall pay to the claimants M/s. Unique Erectors (Gujarat) Pvt. Ltd. amount of Rs 57 65 273 (Ruppes Fifty seven lacs sixty five thousand and two hundred seventy three only) with interest to be calculated at the rate of 17% per annum (seventeen percentage per annum) in the above sum adjudged by with effect from 6/08/1981 the date on which the application was filed by the claimant for appointment of the arbitrator in the Court of Civil Judge (S.D.) at Narol till the date of actual payment or till the date of decree that may be passed by the competent Court of law whichever is earlier in full and final settlement of all claims/counter-claims raised before me in the present reference. Each party will boar its own costs In witness thereof I the said Shri M. D. Patel Sole Arbitrator in the above reference has put my band and seal this Eighth day of July 1985 Signed and sealed and delivered by the within named Shri M. D. Patel. Gandhinagar Dt. 8/07/1985 Sd/ (M. D. Patel) Sole Arbitrator Chairman, Gujarat State Construction Corporation Limited Gandhinagar. @@@

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