M.R.Mallick, J. - (1.) THE petitioner Union of India represented by the General Manager, Eastern Railway, has filed this application under section 30 read with section 33 of the Arbitration Act for setting aside the award made and published by the respondent nos. 2 and 3 dated 16th May 1981.
(2.) THE facts are briefly as follows: - THE Respondent no. 1 was entrusted with the construction work under the petitioner on accepting the tender submitted by the Respondent no. 1 through the Deputy Chief Engineer (Construction) on or about April 14, 1978. THE construction was in respect of earth work in embankment, extension of bridges, cabins etc. for third line work between Dankuni and Chandanpur Section-VIII. It is stipulated therein amongst others that the work should be completed within 12 months from the date of issue of the same i.e. by April 13, 1979. After the acceptance of tender there was a formal agreement by and between the parties on or about 28th January 1978. The Respondent no. 1 failed and/or neglected to complete the work as stipulated and at the instance and/or request in writing and several extension were granted, the last of such was upto March 31, 1983. The Respondent no, 1 in contravention of the express provision of the said agreement that the rates quoted by the tenderor and accepted by the Railway Administration must hold good in the completion of the work and are not subject to fluctuation raised a pretended dispute which the petitioner very much disputed. However, the Respondent no. 1 filed a Special Suit in the High Court at Calcutta being Special Suit No. 85 of 1986 and in terms of the order passed in that Special Suit, the General Manager, Eastern Railway in terms of the Arbitration Agreement appointed the Respondent nos. 2 and 3 as Arbitrators. The Respondent no. 1 in the statement of claim raised 10 items of claim. The Joint Arbitrators partially allowed the claim nos. 1, 2, 3, 7 and 8. The total amount of award was Rs. 2,80,113.80 p. Being aggrieved the Union of India on receiving the notice under section 14(2) of the Arbitration Act has filed this application. On behalf of the petitioner, it is submitted that the award of the Arbitrators specially the claim nos. 7 and 8 is vitiated because the Arbitrators granted compensation in respect of escalation in price of labour and materials, establishment as well as business loss on the alleged ground of prolongation of the contract period for more than 5 years when under the contract entered into between the parties, there was express stipulation against such claim of the contractor. It is also alleged that on 3rd May 1989 the Joint Arbitrators after the close of the case of the parties permitted the Respondent no. 1 to produce a series of documents, that the representative of the petitioner having objected to the production of such documents at such a late stage the Joint Arbitrators assured that those documents would not be taken into consideration in the award but the award made was published by the Arbitrators indicate that all the documents produced by the parties upto date were taken into consideration by the Joint Arbitrators and that the petitioner was thus being denied by the Arbitrators to contest and challenge those documents produced at the late stage by the Respondent no. 1. and the Arbitrators' act amounts to lack of fair play which vitiates the award.
(3.) ON behalf of the Respondent no. 1 all the above grounds have been seriously contested. It is submitted that the prohibition against claim for escalation of price in the general condition of contract or in the contract document would not be applicable after the expiry of the original terms of contract and that there were several decisions of the Supreme Court which clearly take the view that when due to laches on the part of the administration the contractor could not complete work within the stipulated period and the administration had to extend the period of contract then justice and fair play would demand that the contractor could be given adequate compensation towards the escalation of price.;