Mithal, J. - (1.) AGAINST an award given by the Arbitrators the State of U. P. had filed certain objections under Ss. 30 and 33 of the Indian Arbitration Act. The objections were dismissed by the court below against which the present appeal has been preferred under Section 39 of the Act.
(2.) THE Government of U. P. had invited tenders for the construction of civil works for the prestigious Yamuna Hydel Schems, Dehradun, Stage-2. THE respondent, in collaboration with some other companies, submitted their tenders but as their rates were found to be high, the tender was given to some other tenderer. However the work could not be taken up by those contractors and, therefore, in 1965 the respondent was again approached by the Government to enter into a contract on a negotiated basis for carrying out the works in question. As a result of the negotiations finally on 5-2-1966 the contract papers were signed wherein it was envisaged that total works of the value of Rs. 15,64,80,298.50 will be executed by the respondent which will have to be completed by 31st March 1971. Although by 31-12-1970 the contractor had already carried out works for the value of Rs. 15.90 crores yet a major part of the contracted work still remained to be done. This escalation in the value of the work was caused due to numerous changes made in the initial design and also due to the variations made in the quantities of various items which the contractor was required to carry out at the works in question. In the deed of contract, there was a clause which made provision for deviation, alteration and addition to the work and it was stipulated therein that the contractor will not be entitled to deviate from the work without the previous written sanction of the Engineer in charge. The Engineer in charge, however, could, during the progress of the work, direct any deviation, alteration or addition to be made from, in or to the works or any part thereof. He could also direct curtailment of certain work and to direct execution of new or substituted work and any such deviation etc. could be directed without vitiating the contract. It was, however, made clear that the variation would not exceed 5% of the total cost of the work without affecting the agreed rates. For variations beyond the aforesaid limit a provision was made in the contract itself wherein a schedule was given to regulate the variation in rates.
(3.) ACCORDING to the respondent, the maximum limit up to which these variations could be made by the Engineer in charge was initially 5% without attracting corresponding variation of rates and for the next 15% above or below that, the rates could be varied as laid down in the Schedule given in Clauses 1.11 of the contract, and the Government had no right to make any deduction at all either for this 20% variation or for any variation in excess of it if the total variation was of an order of more than 20%. In this manner, according to the Contractor, the total variation stipulated under the contract could not exceed 20% either way. The Government, however, made certain deductions from the contractor's bills which was objected to by the contractor on the ground that the contract only envisaged variations within the limits set out in the Schedule and any variation going beyond that was not covered by Clause 1.11 (b) at all. In such a case, therefore, Clause 1.11 (b) would not be attracted and the parties could only negotiate about the rates payable in such an eventuality.;