- (1.) R. B. Mehrotra, J. Tenders were invited for construction of a new barrage across river Ganga at Bhimgoda, district, Haridwar and head regulators of canals. The lowest of M/s Jainson Engineers Pvt. Ltd. was accepted. Thereupon an agree ment dated 23-1-1981 was entered into between the Governor of the State of U. P. (hereinafter called the 'government') represented by the Superintending Engineer, Irrigation Construction Circle, Rooricee of the one part and M/s Jainson Engineers Pvt. Ltd. , a company registered under the Indian Companies Act having Its registered office at J-2, Green Park, New Delhi for self and as sole proprietor of Arvind Construction Company (hereinafter called the 'contractor') of the other part. The contractor changed the name of the aforesaid Company from M/s. Jainson Pvt. Ltd. to Arvind Techno Engineers Pvt. Ltd. In the aforesaid agreement dated 23-1-81 it was provided that in case any dispute arises out in respect of the contract, it shall be referred to two arbitrators, one to be nominated by the Con tractor and the other by the Government who were to select an umpire by mutual agreement.
(2.) THE contractor Arvind Construction claimed to have performed and com pleted the work covered by the contract document in accordance with the drawings and specifications and conditions of contract, however, disputes and differences arose between the contractor Arvind Construction Company and the Government of U. P. touching and arising out and in respect of the aforesaid contract agreement and the subject-matter thereof. THE dispute was referred to the arbitration proceed ing and M/s. Arvind Construction Company vide letter dated 7-3-88 appointed Jus tice Avadh Behari Rohatgi, a retired Judge of Delhi High Court whereas the Government of U. P. vide order dated 6-6-88 appointed Justice O. P. Mehrotra, a retired Judge of Allahabad High Court. THE two arbitrators at the commencement of the reference appointed Justice K. B. Asthana, a retired Chief Justice of Al lahabad High Court as the Umpire. The two arbitrators, appointed to arbitrate on the dispute relating to the agreement for construction 01 new barrage across river Ganga at Bhimgoda and head regulators of the canal, entered into a reference on 25-6-88 and permitted the parties to submit statement of claims and counter claims alongwith supporting documents and on considering the claims and counter claims submitted by the par ties, gave an award on 46 items to the tune of Rs. 1,35,58,488-08 paise and thereon awarded interest from 1-8-84 to 17-3-89 i. e. the date on which the completion cer tificate was issued by the Government under clause 15. 5 (30-4-84) till the date of the award i. e. 7-3-89 at the rate of 14% per annum as provided under Schedule-1 Para 7-A of the Arbitration Act as amended by Section 24d of U. P. Civil Laws (Reforms and Amendment) Act 57 of 1976. Thus a total amount of Rs. 2,23,45,263. 08 was awarded to the claimant-contractor and it was directed that the said amount be paid by the State Government to the claimant contractor within 60 days from the date of the award, failing which the Government will be liable to pay interest at the rate of 6% per annum from the date of the award till the date of payment of decree of the court, whichever is earlier. While awarding the interest of 14% from the date the Government issued completion certificate till the date of the award, the Arbitrators took into consideration the factor that the Government charged interest on the mobilisation advance paid to the contractor @ 14% per annum. The interest was added as item No. 47 in the award, and in the award on all other items only the description of the claim, the amount claimed by the contractor and the amount awarded by the Arbitrator is mentioned. The State Government filed objections before the Civil Judge, Roorkee against the aforesaid award and raised as many as 49 grounds wherein it was con tended that since the amount involved was more than Rs. 2 crore 23 lacs, the award should have been a speaking award. The Civil Judge, Roorkee vide his detailed and reasoned order dated 23-1-90 dismissed all the objections raised by the State Government and directed that the award be maue the rule of the court and further directed that the State Government should pay further interest from the date of the award till the date of the rejection of the objections at the rate of 6% per annum on the amount of Rs. 1,25,58,488. 08. Aggrieved by the aforesaid order, the present first appeal from order has been filed on behalf of State of U. P.
(3.) WE have heard at length the teamed Standing Counsel for the appellant and Sri Ravi Kiran Jain, learned Senior Advocate and Sari S. K. Garg appearing for the respondent claimant. Learned Standing Counsel has strenuously contended - (i) that there was no basis or sufficient evidence oral or documentary to allow the claim amounting to Rs. 1,35,58,488. 08 and further, amount of interest at the rate of 14% on the aforesaid amount. The impugned award is unreasoned and is liable to be set aside on this count; (ii) that the Arbitrators exceeded their authority in decreeing the additional claim made by the Contractor, defendant at different stages in the proceedings. The Arbitrators failed to frame issues for this additional claim inspite of plaintiffs counsel specific request made to that effect during the course of the proceedings; (iii) that the Arbitrators misconducted themselves in law in not affording op portunity and permitting the applicant-plaintiff to file additional written statement to meet or to answer the additional claims made and submitted by the contractor-defendant at various stages of the proceedings; (iv) that the Arbitrators failed to appreciate the scope of awarding compensa tion as provided by Clause 2. 10 of the contract agreement which provided that in the event of any loss or damage of whatever amount of work prior to the issue of final completion certificate, the contractor-defendant is liable to make good the work without further cost to the Government and on that count contended that the arbitrator has misconducted themselves in awarding claims on item No. 12, 13, 14, 15, 24 and 29 in violation of the aforesaid agreement clause.;